Title
a. Consider approving a two three-year management agreement between Monterey County and Sports Car Racing Association of the Monterey Peninsula (SCRAMP) retroactive from January 1, 2017, for management services at the Laguna Seca Raceway Area (LSRA); and
b. Authorizing the Chair of the Board to execute the Agreement. (REVISED VIA SUPPLEMENTAL)
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Consider approving a two three year management agreement between Monterey County and Sports Car Racing Association of the Monterey Peninsula (SCRAMP) retroactive from January 1, 2017, for management services at the Laguna Seca Raceway Area (LSRA); and
b. Authorizing the Chair of the Board to execute the Agreement.
SUMMARY/DISCUSSION:
The Sports Car Racing Association of the Monterey Peninsula (SCRAMP) has a long history of operating and managing the race track and other facilities located within the Laguna Seca Recreational Area (LSRA). SCRAMP’s most recent concession agreement expired on March 31, 2014 and since then it has operated and managed the race track on a month-to-month basis.
The County has been negotiating with responding parties for a long-term concession agreement; however, with the 2017 racing season quickly approaching, the County needs operation and management services. For this purpose, the County and SCRAMP reached mutually acceptable terms for the operation and management of the LSRA. The short-term agreement supplants the holdover agreement under which SCRAMP and the County have operated.
SCRAMP will receive an annual Management Fee from the County for the performance of its services, an amount equal to SCRAMP’s annual actual management costs. To insure adequate cash flow for SCRAMP to perform its obligation under the agreement, the County will provide SCRAMP a Management Fee Advance of $270,000 on the last day of each month for the length of the agreement. At the end of each calendar year, the County and SCRAMP will reconcile the Management Fee Advance to the actual management costs and the County will either deduct or add the difference thereof to the annual Management Incentive Fee. The Management Incentive Fee is equal to twenty percent of annual net operating income (NOI). The NOI derived from LSRA, excluding the Management Incentive Fee, will belong to the County. SCRAMP will provide the County an Annual Operation Plan that will include an annual budget and be linked to the annual improvements pursuant to Short Term Capital Improvement Program (STCIP). The agreement’s termination is December 31, 2019.
OTHER AGENCY INVOLVEMENT:
County Counsel has reviewed the Agreement as to form. Parks Department-RMA was advised on this matter.
CEQA
This item is exempt from the California Environmental Quality Act pursuant to California Code of Regulations Section 15301; Operation and Maintenance of Existing Facilities.
FINANCING:
There is no impact to the General Fund. To insure adequate cash flow for SCRAMP to perform its obligation, the County will provide SCRAMP a Management Fee Advance of $270,000 on the last day of each month for the length of the agreement, SCRAMP shall deposit all funds earned at LSRA in a County designated account. The County will provide SCRAMP with operating funds to be replenished as necessary to insure adequate cash flow for LSRA operations. It is anticipated that event and track revenue will accrue at a sufficient rate to finance all LSRA operations and the Track Assignment will be utilized to upgrade and improve the facility.
Prepared by: Approved by:
___________________________ __________________________________
Juan P. Lopez Dewayne Woods
Associate Administrative Analyst County Administrative Officer
Attachment: Operations and Management Agreement with the Sports Car Racing Association of the Monterey Peninsula (SCRAMP)