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Home My WebLink About2026-05-27 26-175 OrderCITY COUNCIL ACTION Council Meeting Date: Item No: Responsible Dept: Requested Action: Summary Committee Action Meeting Date: For: Against: City Manager City Solicitor Finance Director Map/Lot: Introduced for: Order Committee: Action: Staff Comments & Approvals Date: Item No: Assigned to Councilor: FOURTH AMENDMENT TO PRE -OPENING SERVICES AND MANAGEMENT AGREEMENT This Fourth Amendment to Pre -Opening Services and Management Agreement (this "Amendment") is made effective as of July 1, 2026 (the "Fourth Amendment Effective Date"), between the City of Bangor, Maine ("City"), and Global Spectrum, LP, a Delaware limited partnership doing business as OVG360 (f/k/a Spectra Venue Management) ("Manager"). WHEREAS, the City and Manager are parties to a certain Pre -Opening Services and Management Agreement, dated November 30, 2012, as amended on July 1, 2016 (the "First Amendment"), and again on July 1, 2020 (the "Second Amendment"), and again on July 1, 2023 (the "Third Amendment, and together, as amended, the "Agreement"), pursuant to which the City engaged Manager to, among other things, manage and operate a multipurpose sports and entertainment arena, a convention center, and a fairgrounds (collectively referred to in the Agreement and in this Amendment as the "Facilities"); and WHEREAS, the City and Manager now desire to amend the Agreement, effective as of the Fourth Amendment Effective Date, as set forth below. NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows: 1. Capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the meaning given to such terms in the Agreement. 2. In addition, the parties have agreed that the Fixed Management Fee shall be adjusted and a new Incentive Fee calculation has been agreed. In accordance with each of the foregoing updates Section 3.2 and 3.4 of the Agreement shall be deleted in their entirety and replaced with the following: "Section 3.2 Fixed Management Fee. In consideration of Manager's performance of its services for each Operating Year of the Term beginning on and after July 1, 2026, as described in Section 2.1(b) above, City shall pay Manager a Fixed Management Fee. For the Operating Year beginning on July 1, 2026, and continuing through June 30, 2027, the Fixed Management Fee shall be equal to (i) Eight Thousand U.S. Dollars (US $8,000) per month; plus (ii) three and one-half percent (3.5%) of net revenue from food and beverage sales ("Food and Beverage Sales") in each Operating Year. In each subsequent Operating Year, the subsection (i) portion of the Fixed Management Fee shall be increased over the corresponding Fixed Management Fee from the previous Operating Year in accordance with the percentage increase in the CPI over the previous twelve (12) month period (i.e., the difference, expressed as a percentage, between the value of the CPI published most recently prior to the July 1 Page 1 of 4 commencement of the preceding Operating Year and the value of the CPI published most recently prior to the July 1 commencement of the Operating Year for which the CPI adjustment will apply), except that the percent increase shall be no more than 4% in any single year. The Fixed Management Fee shall be payable to Manager in advance (in respect of subsection (i)) and in arrears in respect of subsection (ii)), on the first (1st) day of each month during each Operating Year of the Term, with the applicable percentage of Food and Beverage Sales based on the financial results from the second preceding calendar month; provided that subsection (i) shall be prorated as necessary for any partial month. Manager shall be entitled to pay itself such amount from the Operating Account." "Section 3.4 Incentive Fee. (a) In addition to the Fixed Management Fee, Manager shall be entitled to receive an Incentive Fee each full or partial Operating Year of the Term. For purposes of this Agreement "Net Non -Sponsorship Operating Income/Loss" shall mean Revenue (excluding only Revenue from the sale of Commercial Rights) less Operating Expenses during each Operating Year. The Incentive Fee shall be equal to the sum of each of the following subparts (i) through (iii): (i) A percentage of bottom line improvement in Net Non - Sponsorship Operating Income/Loss, in each Operating Year, as follows: Net Non -Sponsorship Operating Income/Loss each Operating Year < (negative)$850,000 > (negative) $850,000 and < (negative) $750,000 > (negative) $750,000 and < (negative) $600,000 > (negative) $600,000 Percentage to be paid to Manager 0% 25% of improvement between negative $850,000 and negative $750,000 33% of improvement between negative $750,000 and negative $600,000 40% of improvement above negative $600,000 For avoidance of doubt (A) the (negative) Net Non -Sponsorship Operating Income/Loss figures above represent a loss equal to the (negative) amount identified, with the percentage due to be calculated based on the percent of any incremental improvement (smaller negative number) to such amount as set forth above, and (B) the foregoing step scales shall be applied on an Page 2 of 4 incremental basis, as opposed to being retroactive back to dollar 1 of improvement; plus (ii) One Dollar ($1.00) per paid attendee to concerts (major or minor) and/or Broadway shows (as classified by the Facility in its financials) in the Facility in excess of 30,000 attendees, measured cumulatively within each Operating Year; plus (iii) Up to ten percent (10%) of the Fixed Management Fee for the Operating Year in question, based on the results of customer service surveys, as follows: Average Survey Score Amount due to Manager 90% or higher 10% of Fixed Management Fee 80% to 89.99% 5% of Fixed Management Fee Below 80% 0% of Fixed Management Fee The survey instrument shall be administered by an independent third party jointly selected by the City and Manager. Such third party's cost shall be an Operating Expense." 3. The parties have agreed the Term of the Agreement shall be extended to end on June 30, 2031. To effectuate such change, Section 4.1 of the Agreement is hereby deleted in its entirety and replaced with the following: "The term of this Agreement ("Term"), unless sooner terminated pursuant to Section 4.2 below, shall expire on June 30, 2031." 4. The parties have agreed on a new capital contribution by Manager for mutually agreed revenue generating capital projects. The parties also acknowledge that the prior Manager's Capital Contribution and Manager's Fund Contribution, each as defined in Section 12.3 of the Agreement, as incorporated pursuant to the Third Amendment, have full amortized, and no further amounts remain due and owing in connection therewith. Accordingly, Article 12.3 and Article 12.5 of the Agreement shall be deleted in their entirety and replaced, as of the Fourth Amendment Effective Date with the following (for avoidance of doubt, Article 12.4 shall remain unchanged): "12.3 Manager Contributions. No later than August 31, 2026, Manager shall pay to the City the sum of Five Hundred Thousand Dollars ($500,000) ("Manager's Capital Contribution"), which the City shall use towards mutually agreeable revenue generating capital projects. Page 3 of 4 12.5 Amortization and Buyback of Manager's Capital Contribution. Manager's Capital Contribution shall amortize on a straight line, monthly, non -cash basis over a five (5) year period, commencing on July 1, 2026. In the event of expiration or termination of this Agreement for any reason whatsoever (including a termination by the City due to a breach or default by Manager) prior to full amortization of Manager's Capital Contribution, the City shall pay to Manager, unconditionally and without set-off, the unamortized portion of each of the foregoing existing as of the date of such expiration or termination; provided, however, that in the event this Agreement is terminated as a result of an uncured material breach by Manager, City shall be entitled to reduce such amount solely by the direct, reasonable, and documented out-of-pocket costs actually incurred by City prior to termination in remedying or mitigating such breach. The payment of any such amount (including invoices and associated documentation evidencing any deductions incurred in accordance with the foregoing) shall be made to Manager no later than thirty days after the effective date of expiration or termination of this Agreement." 5. To the extent the Agreement is inconsistent with the foregoing terms, the Agreement shall be deemed to be amended hereby. All references to the Agreement in the Agreement or in any other document referencing the Agreement shall be deemed to refer to the Agreement as amended hereby. Except for the modifications set forth above, all remaining provisions of the Agreement shall remain unmodified and in full force and effect. 6. This Amendment shall be governed by and construed in accordance with the laws of the State of Maine, without regard to conflicts of law. IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date below, to be effective as of the Fourth Amendment Effective Date. GLOBAL SPECTRUM, L.P. d/b/a OVG360 By: Global Spectrum, LLC its general partner M. Brian Rothenberg President Page 4 of 4 CITY OF BANGOR, MAINE LI-M Carollynn J. Lear City Manager IN CITY COUNCIL MAY 27, 2026 CO 26-175 Motion made and seconded for Passage of Consent Agenda Vote: 8—0 Councilors Voting Yes: Beck, Carson, Deane, Faloon, Fish, Leonard, Mallar, Hawes Councilors Voting No: None Passed � �.� ,�..� � �� :,w�,�N � ��.� . � ��;�� ,, CITY CLERK