HomeMy WebLinkAbout1K CITY COUNCIL STAFF REPORT
DATE: FEBRUARY 24, 2022 CONSENT CALENDAR
SUBJECT: APPROVE AMENDMENT NO. 2 TO CONCESSION LEASE AGREEMENT
NO. A5855 WITH LAMAR AIRPORT ADVERTISING COMPANY
FROM: Justin Clifton, City Manager
BY: Aviation Department
______________________________________________________________________
SUMMARY:
This action will approve Amendment No. 2 to Concession Lease Agreement No. A5855
authorizing a one-year agreement extension for the Palm Springs International Airport
advertising concession operated by Lamar Airport Advertising Company and the
reinstatement of the Minimum Annual Guarantee (MAG) which was temporarily
suspended as a result of Covid-19.
RECOMMENDATION:
1. Approve Amendment No. 2 (Attachment A) to Agreement No. A5855 with Lamar
Airport Advertising Company for a one-year contract services agreement extension
from April 1, 2022, through March 31, 2023.
2. Authorize the City Manager or his designee to execute all necessary documents.
BUSINESS PRINCIPAL DISCLOSURE:
According to the Business Principal Disclosure (Attachment B) Lamar Airport Advertising
Company is a corporation registered in the state of Nevada and its officers are Brent
McCoy (CEO), James R. McIlwain (Secretary), and Jay L. Johnson (Executive V.P./CFO.)
Lamar is a publicly traded company (LAMR).
BACKGROUND:
The Palm Springs International Airport entered into the current advertising program
agreement with Lamar Airport Advertising Company in 2017, following the assumption of
the original agreement held by Corey Advertisement which was issued in 2015 for a
period of five years.
Item 1K - 1
City Council Staff Report
February 24, 2022 -- Page 2
A5855 – Amendment No. 2, Airport Advertising Concession Agreement Extension
In 2020, a two-year extension was granted to Lamar Airport Advertising through
Amendment No. 1, approved by City Council at their March 19, 2020, meeting. A key
justification for the extension was that the airport terminal expansion underway and the
anticipated design of a new Consolidated Car Rental (CONRAC) facility which would
provide new advertising venues, thus rendering a new RFP ill-timed.
The terms of Amendment No. 1 included a $200,000 program investment for equipment
maintenance and capital improvements, and payment to the airport of 50% of gross
revenues, and 55% when revenues exceed $800,000.
As a result of the drop in passenger counts due to COVID-19, the Minimum Annual
Guarantee (MAG) was first reduced in April 2020 according to Article 5.01 of the
Agreement, and subsequently waived.
STAFF ANALYSIS:
The total enplanements and deplanements for calendar year 2021 reached 2,092,943, or
16% higher than in CY2013, the MAG benchmark year designated in the original
agreement. Furthermore, since June 2021, passenger traffic has surpassed 2019 totals
for seven consecutive months and Airport staff anticipates this trend to continue as air
service to PSP has increased.
Lamar’s sales have augmented in 2021 and Airport staff considers this is an adequate
time to reinstate the MAG as of April 1, 2022, for the remainder of the extension period
designated under Amendment No. 2.
Agreement No. 1 covering the period of April 1, 2020, to March 31, 2022, included
Lamar’s responsibility to invest $200,000 for capital improvements. To date, this
obligation remains partially unfulfilled, and Airport staff wishes to include the request that
the remainder of this sum be invested during the term of Amendment No. 2. This one-
year extension period will allow operations to continue while staff evaluates the need for
a new Request for Proposal for City Council’s approval.
FISCAL IMPACT:
The Airport’s advertising revenue reached $335,422.39 in 2021 and Lamar expects sales
for the remainder of 2022 and 2023 to continue increasing.
REVIEWED BY:
City Attorney Mark Velasquez
Department Director Harry Barrett Jr.
City Manager Justin Clifton
ATTACHMENTS:
A. Amendment No. 2 to Airport Display Advertising Concession Agreement.
B. Lamar Business Disclosure Form.
Item 1K - 2
55575.38160\34834206.1
AMENDMENT NO. 2 TO CONCESSIONS LEASE AGREEMENT NO. A5855
LAMAR AIRPORT ADVERTISING COMPANY
AT THE PALM SPRINGS INTERNATIONAL AIRPORT
THIS AMENDMENT NO. 2 (“Amendment”) TO THE PALM SPRINGS INTERNATIONAL
AIRPORT CONCESSION AGREEMENT No. A5855 (“Agreement”) is made and entered
into as of the 1st day of April 2022, by and between the CITY OF PALM SPRINGS, a
charter city and municipal corporation organized and existing under the laws of the State
of California (“City”) and LAMAR AIRPORT ADVERTISING COMPANY, a corporation
organized and existing under the laws of the State of Nevada (“Concessionaire”).
RECITALS
1.Whereas City and Concessionaire are parties to that certain Airport Advertising
Concession Agreement, that commenced on April 1, 2015, (the “Agreement”),
pursuant to which City granted to Concessionaire various rights related to the use
of the Palm Springs International Airport for the operation of an Airport Advertising
Concession business.
2.Whereas the term of the Agreement expired on March 31, 2020, and City and
Concessionaire entered into Amendment No. 1 on April 1, 2020 , extending the
Agreement until March 31, 2022.
3.Whereas on March 19, 2020, the City agreed to suspend the MAG in accordance
with article Section 5.01 of the Agreement due to the decrease in passenger
service as a result of the COVID-19 pandemic.
4.Whereas the City and Concessionaire mutually desire to extend the term and
amend certain other provisions of the Agreement including reinstating the MAG.
NOW, THEREFORE, in consideration of the mutual covenants and promises in this
Amendment, the parties hereto covenant, agree and bind themselves as follows:
1.The term of the Agreement shall be extended from April 1, 2022, through March
31, 2023.
2.The Minimum Annual Guarantee shall be reinstated as defined in the original
Agreement which states:
“Article 1.01 (14) Minimum Annual Guarantee
“Minimum Annual Guarantee” means the Minimum concession fee payable
by Concessionaire to City of Three Hundred Thousand Dollars ($300,000)
Item 1K - 3
55575.38160\34834206.1
for the First Agreement year and Three Hundred and Fifty Thousand Dollars
($350,000) for each successive Agreement year during the Term in the
manner provided in Section 5.01 of the Agreement.”
3. Concessionaire will expend the full remainder of the $200,000 investment for
the program equipment agreed upon in Amendment No. 1 which states:
“Amendment No. 1 - Section 2.01
Lamar Alliance Airport Advertising agrees to invest up to $200,000 for the
program equipment, per Exhibit “A” (Attached)”
4. Applicability
This Amendment is attached to and made a part of the Agreement. In the event
of any contradiction or inconsistency between the terms and provisions of this
Amendment and the terms and provisions of the Agreement to which it is
attached, the terms and provisions of this Amendment shall control and be
interpreted in such a manner as to override any provisions of this Amendment
from being given full force and effect. All defined terms not specifically defined
in this Amendment shall be given the same meaning as the defined terms in
the Agreement. All other terms and conditions contained in the Agreement shall
remain unchanged.
5. Joint Authorship
This Amendment has been entered into as an act of free will, without duress,
and no presumption of authorship shall attach to same, and any ambiguity in
the terms and conditions of this Amendment shall not be attributed to one party
over the other.
(SIGNATURE PAGE FOLLOWS)
Item 1K - 4
55575.38160\34834206.1
SIGNATURE PAGE FOR AMENDMENT NO. 2 TO LEASE NO. A5855
BETWEEN THE CITY OF PALM SPRINGS
AND LAMAR AIRPORT ADVERTISING COMPANY
CITY OF PALM SPRINGS LAMAR AIRPORT ADVERTISING COMPANY
Approved By:
____________________________________
Signature
_________________________________ _____________________________________
Justin Clifton Name
City Manager
__________________________________ _____________________________________
Date Title
Attested By:
_____________________________________
Signature
__________________________________ _____________________________________
Anthony Mejia Name
City Clerk
_____________________________________
Title
Approved as to Form:
__________________________________
Jeffrey S. Ballinger
City Attorney
Corporations require two signatures. One
signature must be from the Chairman of the
Board, President, or any Vice President. The
second signature must be from the Secretary,
Assistant Secretary, Treasurer, Assistant
Treasurer, or Chief Financial Officer.
Item 1K - 5
Item 1K - 6CITY OF PALM SPRINGS PUBLIC INTEGRITY APPLICANT DISCLOSURE (Palm Springs Municipal code 2.60) Who Must FIie? Applicants,as defined in Palm Springs Municipal Code 2.60. Applicants means a person or entity that applies for a City approval determined by a vote of City Officials. Why Must I FIie? The City's residents have the right to know the identity of interests that attempt to influence the decisions of City government. as well as the means employed by those interests, to mitigate the unnecessary impact of disclosure upon the confidentiality of the applicant ownership, and the administrative burden on staff in securing the disclosure of business principals from applicants. When Must I File? You must register before beginning your work in the City. You ·must keep your registration updated, amending it in writing to reflect new business no more than ten (10) days after a new engagement begins or an old ends. What If I Do Not File? In the event that an applicant fails to comply, the application will of the applicant in question shall be deemed incomplete for all purposes, the City shall not process or in any way consider the applicant of the applicant in question. What If I Have Questions? If you have any questions about how to complete this form, please contact: City Attorney, Jeffrey S. Ballinger (email:Jeff .Ballinger .. C@palmspringsca.gov) PENALTIES Falsification of information or failure to report information required to be reported may subject you to administrative action by the City. 5
Item 1K - 7• • PUBLIC INTEGRITY APPLICANT DISCLOSURE Name (Print last, first, middle initial) E-mail Address Newman, Brigham W. bnewman@lamar.com Position/Title SR. Director-Airports V.P. Address 100 Hartsfield Centre Pkwy. Suite 500. AUanta. GA 30354 Work Phone: Reporting Status Cell Phone: (404) 606-1990 New Disclosure: Update: Every applicant that is not an individual natural person. or comprised exclusively of natural persons with no outside investors, must disclose to the City the identity of each natural person who holds or occupies a significant position with respect to that applicant entity or any entity that owns an interest or derives profits with respect to the applicant entity, i.e., a sub-entity. In addition, every applicant must disclose to the City the identity of each owner or investor who has both of the following: (i) an ownership interest in the applicant entity with a value of two thousand dollars ($2,000.00) or more, and (ii) a material financial relationship with ·any official who has the opportunity to vote upon, or advocate for a particular result or outcome with respect to the application in question. A "significant position" shall be defined as follows: i. Officers and Directors (in the instance of a corporation); ii. Members and Managers (in the instance of limited liability company); or iii. Trustees and other Fiduciaries (in the instance of a trust or another organization). A "material financial relationship" shall be defined as a relationship between an owner or investor on one hand, and a voting or potentially advocating official on the other hand, whereby the official has an interest in the outcome of the City's action upon the application in question arising from or related to any of the following: 1. Any business that the owner or investor in the applicant and the official do together during the year prior to the filing of the application; 2. Any income that the official has earned from the owner or investor in the applicant entity during the year prior to the filing of application; 3. One or more gifts, that the owner or investor in the applicant has given to the official during a year prior to the filing of the application with a total of more than fifty dollars; 4. Any money or value that the official will or might reasonably be anticipated to gain or lose. based upon the ownership interest of the owner or investor in the applicant entity. in relation to the outcome of the City's action upon the application. 6
Item 1K - 8• • Organization/ Type of organization: Ownership Interest: Position: No ~include ·the address, city and state where the longer he organization is located) held: 1 Lamar Transit, LLC Sole and 5321 Corporate Boulevard 100% Managing Member Baton Rouge, LA 70808 2 0% C.BrentMcCoy-President Kevin P. RelUy, Jr-ExecutM ,V.P. 3 Sean ReDly -Executiw V.P. 0% Jay L. Johnson • Executive \. .P./C.F.O. 4 Brigham W. Newman -V.P 0% Casey Sexton-V.P. 5. James R. Mcilwain -Secrata ry 0% Connor B. Eglin • Asal Seen tary 6. Wendi 8. Loup -Asst Secre1 ary 0% Jay L. Johnson -Treasurer James R. Mcilwain -Asst Tr itasurer I DECLARE UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE REGOING IS TRUE AND CORRECT. On the basis of Information contained In this report, I conclude that the filer Is In compliance with Palm Springs Municipal Code Section 2.60, except as noted In the "comments" box below. Comments: Signature and Title of Agency's Final Reviewing Official 7
Item 1K - 9• City of Palm Springs Public Integrity Disclosure Supplementary Instructions In an effort to ensure we capture the required business entity Information In accordance with the attached Instructions, we provide you these supplementary Instructions to dearly Identify the required Information, and the format the Information should be provided. If you, as the applicant, are a business entity (I.e. a corporation or limited Hablllty company), and It Is also comprised of other business entitles as its members or havtn1 a financial Interest, all other such business entities must also be disclosed, includin1 those entitles other business entities, If any. Ultimately, the City's disclosure document (attached) requires a listing identifying all natural persons having any financial Interest over 5% of the business entities (and any other business entities comprising your business entity) As an example, Applicant Is: Acme Brothers, Inc., a talifornia corporation, whose officers are: John Doe, Jill Doe, and Jay Doe, which Is owned 50% by Acme Brothers, LLC, a Callfornla limited liability company, and John Doe (25% Interest) and Jill Doe (25" Interest). Acme Brothers, LLC, is managed by Acme Brothers 2, Inc., a Califomia corporation, whose officers are: George Doe, Bill Doe, and Jane Doe, which is owned 100% by Acme Brothers 2, LLC, a callfornla limited liability company, which ts managed by George Doe, with George Doe and Jane Doe having 50% Interest each. The full business entity disclosure In this example would resemble the following: 1. Acme Brothers, Inc., a California corporation a. Officers: John Doe, JIii Doe, and Jay Doe b. Ownership: i. 50'6 Acme Brothers, LLC, a California limited liability company ii. 25% John Doe Iii. 25" Jill Doe 2. Acme Brothers, LLC, a California llmlted liability company a. Managers: Acme Brothers 2, Inc., a California corporation b. Ownership: 100% Acme Brothers 2, Inc., a Califomla corporation 3. Acme Brothers 2, Inc., a californla corporation a. Officers: George Doe, Bill Doe, and Jane Doe b. Ownership: 100% Acme Brothers 2, LLC, a talifornla limited llabllity company 4. Acme Brothers 2, LLC, a California limited Hablllty company a. Managers: George Doe b. Ownership: I. 50% George Doe II. 50% Jane Doe 8
Item 1K - 10• The full disclosure listing of natural persons with financial interest in Acme Brothers, Inc., a californla corporation, would represent the following: 1. John Doe, 25" 2. JIii Doe, 25" 3. Geor1e Doe, 25" 4. Jane Doe, 25% In order for you, as an applicant, to disclose to appropriate City officials any potential conflict of interest, It Is crltlcal that all managers, members, corporate officers, and all natural persons having any financial Interest of 5% or more be Identified. Failure to identify all such persons may be cause for any action approved by the Oty to be declared null and void. 9