ORDINANCE NO. 060226
Authorizing the City Manager to
execute a fifth amendment to the Kansas City Arena Development Agreement with
Anschutz Kansas City Arena, LLC (AKC) and Anschutz Entertainment Group, Inc.
(AEG); authorizing the City Manager to execute a first amendment to the
Kansas City Arena Management Agreement with AKC; authorizing a first amendment
to a Development Agreement with the National Association of Basketball Coaches
Foundation (NABC); authorizing a $ 530,000.00
amendment to an agreement with Bryan Cave, LLC, for legal services relating to
the Kansas City Downtown Arena project; authorizing the City Manager to
direct AKC to amend a construction manager at risk (CM@Risk) contract with
M.A. Mortenson Company (Mortenson) for the Downtown Arena project with an
approved Final Guaranteed Maximum Price (FGMP) of $178,319,302.00; estimating
revenue in the amount of $76,140,103.00; appropriating it to the Arena
Improvements account of the Downtown Arena Project Series C Fund; authorizing
the expenditure of previously appropriated funds in the amount of
$178,319,302.00; finding it is in the best interests
of the City to waive certain requirements of Article II, Chapter 38,
Code of Ordinances; stating the intent of the City to
reimburse itself; and recognizing an emergency.
WHEREAS, the City,
AKC, and AEG entered into the Kansas City Arena Development Agreement
(Development Agreement) dated as of March 17, 2005, as amended; and
WHEREAS, the City
Council approved entering into the Kansas City Arena Management Agreement
(Management Agreement) with AKC on March 31, 2005; and
WHEREAS, the City
Council approved entering into a Development Agreement with NABC on November 3,
2005;
WHEREAS, the City and
Mortenson entered into the CM@Risk contract dated as of May 11, 2005, as
amended, for the construction of the Sprint Arena Project; and
WHEREAS, the City and
AKC entered into an Assignment of Construction Management Agreement dated as of
July 26, 2005, whereby the City assigned its rights under the CM@Risk contract
to AKC; and
WHEREAS, the Citys MBE/WBE program
has an overall goal of achieving 22% MBE/WBE participation on its City
construction projects; and
WHEREAS, the City believed the
Sprint Arena Project presented many opportunities for the Citys MBEs and WBEs
to participate in the construction of the Project; and
WHEREAS, the Citys Fairness in
Construction Board set a goal of 20% MBE and 12% WBE participation for the
Sprint Arena Project; and
WHEREAS, despite its efforts,
Mortenson has been unable to achieve the projects goal of 20% MBE and 12% WBE
participation for the Sprint Arena Project; and
WHEREAS, after Mortenson submitted
the Contractor Utilization Plans for the Sprint Arena Project, Mortenson and
its subcontractors continued to work to increase MBE and WBE participation for
the Sprint Arena Project; and
WHEREAS, Mortenson through its
efforts after its initial Contractor Utilization Plan submission has been able
to increase overall MBE/WBE participation on the Sprint Arena Project to 20%;
and
WHEREAS, rejection of all bids,
rebidding certain packages or awarding to the second low bidders for this
Project will most likely result in delaying the date of substantial completion
of the Project, potential delay claims of existing contractors, increased bond
interest costs and would not assure increased MBE/WBE participation; and
WHEREAS, the City Council does not
want to increase Project costs or delay the opening of the Sprint Arena which
is now scheduled to coincide with the start of the 2007 NBA and NHL seasons;
WHEREAS, the City Council will
exercise its discretion under the MBE/WBE Ordinance Section 38-91(2) and finds
it is in the best interests of the City to waive certain MBE/WBE ordinance
requirements and contract requirements; and
WHEREAS, that due to the unique
nature of this Project and the critical scheduling of this project, the City
Council authorizes an amendment to the contract to reflect these changes and
other changes in the Mortensons contract;
WHEREAS, the City,
AEG, and Mortenson have established the FGMP for the construction of the
downtown arena project; and
WHEREAS, the City
Council accepts the FGMP agreed upon by the parties and wishes to exercise its
option for Phase 2B under the CM@Risk contract, as amended; and
WHEREAS, the
City authorizes the City Manager to direct AKC to enter into a third amendment
to the CM@Risk contract with Mortenson to effectuate the Citys exercise of its
option for Phase 2B; NOW, THEREFORE,
BE IT ORDAINED
BY THE COUNCIL OF KANSAS CITY:
Section 1. That
the City Manager is authorized to execute a fifth amendment to the
Development Agreement with AKC and AEG to develop, build and manage the Kansas
City Downtown Arena. The amendment is approved in substantial form as that on
file in the office of the City Manager and is incorporated herein by reference.
Section 2. That
the City Manager is authorized to execute a first amendment to the Management
Agreement with AKC to manage and operate the Kansas City Downtown Arena. The
amendment is approved in substantial form as that on file in the office of the
City Manager and is incorporated herein by reference.
Section 3.
Authorizing the execution of a first amendment to a Development Agreement with
NABC to construct a National Basketball Experience and Hall of Fame in the
Kansas City Downtown Arena. The amendment is approved in substantial form as
that on file in the office of the City Manager and is incorporated herein by
reference.
Section 4. That
the City Manager or his designee is authorized to enter into an contract
amendment not to exceed $530,000.00 with Bryan Cave LLC for legal services
relating to the Downtown Arena project, to be paid from funds previously
appropriated to Account No. AL-3410-897770-B. The amendment is approved in
substantial form as that on file in the office of the City Manager and is
incorporated herein by reference.
Section 5. That
the City Manager is authorized to direct AKC to enter into an amendment to the
CM@Risk contract with Mortenson for the completion of the Sprint Arena project
with an approved FGMP in the amount of $178,319,302.00 subject to AKCs and the
Citys issuance of the Notice to Proceed pursuant to section 2.05 of the
Development Agreement and AEGs and AKCs execution of the 5th
Amendment to the Development Agreement. The amendment is approved in
substantial form as that on file in the office of the City Manager and is
incorporated herein by reference.
Section 6. That
the revenue in the following accounts of the Kansas City Downtown Arena Project
Series C Fund is hereby estimated in the following amounts:
AL-3410-120000-590000 Proceeds
from Sale of Bonds $12,912,082.00
AL-3410-120000-460000 Interest
on Investments 10,000,000.00
AL-3410-120000-483151 Contribution
from AEG 53,228,021.00
TOTAL $76,140,103.00
Section 7. That
the sum of $76,140,103.00 is hereby appropriated from the Unappropriated Fund
Balance of Fund No. 3410, the Kansas City Downtown Arena Project Fund to the
following account:
AL-3410-897770-B Arena
Improvements $76,140,103.00
Section 8. That
the City Manager is hereby authorized to expend an amount up to $178,319,302.00
from funds previously appropriated to Account No. AL-3410-897770-B as and for
consideration of the aforesaid contract amendment with Mortenson and related contingencies.
Section 9. That the Mayor and City
Council find that the rejection of all bids, rebidding certain packages or
awarding to the second low bidders for this project will most likely result in
delaying the date of substantial completion of the project, potential delay
claims of existing contractors, increased bond interest costs and would not
assure increased MBE/WBE participation.
Section 10. That pursuant to Kansas
City Code of Ordinances Section 38-91(2), the Mayor and Council hereby finds it
is in the best interests of the City to waive certain requirements of the
MBE/WBE program, Chapter 38, Code of Ordinances, for this contract and hereby
authorizes the contract with Mortenson to be amended to reflect the necessary
changes.
Section 11. That the City
declares its intent to reimburse itself for certain expenditures made within
sixty (60) days prior to or on and after the date of this ordinance with
respect to the Kansas City Downtown Arena Project with the proceeds of bonds
expected to be issued by the City. The maximum principal amount of bonds
expected to be issued for the Project is not to exceed $12,912,082. This
constitutes a declaration of official intent under Treasury Regulation 1-150-2.
Section 12.
That this ordinance, making provision for the current expenses of the municipal
government, is recognized as an emergency measure within the provisions of
Section 15, Article II, of the Charter of Kansas City, and shall take effect in
accordance with that section.
_____________________________________________
I hereby certify that there is a balance,
otherwise unencumbered, to the credit of the appropriation to which the
foregoing expenditure is to be charged, and a cash balance, otherwise
unencumbered, in the treasury, to the credit of the fund from which payment is
to be made, each sufficient to meet the obligation hereby incurred.
___________________________________
Debra
R. Hinsvark
Director
of Finance
Approved
as to form and legality:
___________________________________
Nelson
V. Munoz
Assistant City Attorney