HomeMy WebLinkAbout2022-09-8747ORDINANCE NO. 2022-09-8747
AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY,
APPROVING AN INTERLOCAL COOPERATION AGREEMENT
AMONG THE COUNTY OF McCRACKEN, KENTUCKY, THE CITY OF
PADUCAH, KENTUCKY, AND THE MCCRACKEN COUNTY SPORTS
TOURISM COMMISSION FOR THE DEVELOPMENT AND
OPERATION OF THE PADUCAH-McCRACKEN COUNTY ATHLETIC
COMPLEX, AND AUTHORIZING THE MAYOR OF THE CITY OF
PADUCAH TO EXECUTE AND DELIVER SAID AGREEMENT AND ALL
LEGAL DOCUMENTS RELATED THERETO, AND TO TAKE ALL
SUCH FURTHER ACTIONS ON BEHALF OF THE CITY DEEMED
REASONABLE AND NECESSARY IN ORDER TO CARRY OUT THE
TERMS AND CONDITIONS OF SAID AGREEMENT.
WHEREAS, in that certain Memorandum of Understanding dated August 9, 2021, among
McCracken County, Kentucky ("County"), the City of Paducah, Kentucky ("City"), and the
McCracken County Sports Tourism Commission ("Sports Commission") [together the "Parties"],
the Parties committed to finance and develop a premier athletic complex of the type generally
described as the "Full Build Out" in the Master Plan Report of the McCracken County Sports
Tourism Commission dated February 5, 2021; and
WHEREAS, City desires to realize the economic benefits and quality of life
enhancements that are expected to result from the development of a high-quality athletic complex
that draws visitors to Paducah and McCracken County for sports tournaments and athletic events
while also meeting critical sports and recreational needs of local residents (the "Project"); and
WHEREAS, pursuant to Sections 65.210 to 65.300, inclusive, of the Kentucky Revised
Statutes, as amended, (the "Interlocal Act"), the Parties may join together to achieve the foregoing
objectives by cooperatively developing, financing, constructing, and operating the Project; and
WHEREAS, the Parties have negotiated and agreed to the terms and conditions of an
agreement pursuant to the Interlocal Act styled "Interlocal Cooperation Agreement for the
Development and Operation of the Paducah -McCracken County Athletic Complex" (the "Interlocal
Cooperation Agreement") which establishes and memorializes the respective rights and
obligations of the Parties in connection with the development, financing, construction and
operation of the Project; and
WHEREAS, the Interlocal Cooperation Agreement has been reviewed and approved by
legal counsel for each of the Parties and submitted for review of the governing bodies of each of
the Parties; and
WHEREAS, having reviewed, analyzed, and discussed the Interlocal Cooperation
Agreement, and having obtained the input and advice concerning the same from certain City
officers and employees, the Board of Commissioners of the City now desires to approve the same
and formally authorize the City's Mayor to execute the Interlocal Cooperation Agreement on behalf
of the City in a formal action;
NOW THEREFORE, BE IT ORDAINED BY THE FISCAL COURT OF THE
COUNTY OF McCRACKEN, COMMONWEALTH OF KENTUCKY, AS FOLLOWS:
Section 1. Authorization of Interlocal Cooperation Agreement. The City hereby
approves the Interlocal Cooperation Agreement in substantially the form attached hereto as Exhibit
1 and made a part hereof. It is hereby found and determined that the Interlocal Cooperation Act
furthers the public purposes of the City and that it is in the best interest of the citizens, residents and
inhabitants of the City that the City enter into the Interlocal Cooperation Agreement for the
purposes therein specified. The execution and delivery of the Interlocal Cooperation Agreement is
hereby authorized and approved. The Mayor of the City is hereby authorized to take all reasonable
and necessary actions to carry out the purposes of this Ordinance and to execute the Interlocal
Cooperation Agreement, together with such other agreements, instruments or certifications,
including the Ground Lease in substantially the same form as the Ground Lease attached as Exhibit
"B" to the Interlocal Cooperation Agreement, which may be reasonable and necessary to
accomplish the development, financing, construction, and operation of the Project, together with
such changes to the Interlocal Cooperation Agreement as may be approved by the Mayor on behalf
of the City, and as are not inconsistent with this Ordinance or substantially adverse to the City.
The approval of such changes by the Mayor, and that such changes are not substantially adverse
to the City, shall be conclusively evidenced by the execution of such Interlocal Cooperation
Agreement by the Mayor.
Section 2. Severability. If any section, paragraph or provision of this Ordinance shall be
held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such
section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance.
Section 3. Ratification of Prior Actions. All acts taken pursuant to the authority granted
in this Ordinance but prior to its effective date, if any, are hereby ratified and confirmed.
Section 4. Compliance with Open Meetings Laws. The Board of Commissioners of the
City hereby finds and determines that all formal actions relative to the adoption of this Ordinance
were taken in an open meeting of the Board of Commissioner, and that all deliberations of the
Board of Commissioners and of its committees, if any, which resulted in formal action were
conducted in meetings open to the public and in full compliance with applicable legal
requirements.
Section 5. Conflicts. All ordinances, resolutions, orders, memorandums of understanding,
orders or parts thereof in conflict with the provisions of this Ordinance are, to the extent of such
conflict, hereby repealed and the provisions of this Ordinance shall prevail and be given effect.
Section 6. Effective Date. This Ordinance shall be read on two separate days and will
become effective upon summary publication pursuant to KRS Chapter 424.
ATTEST:
.titer P"'
dsay Pari , City Clerk
Introduced by the Board of Commissioners on August 23, 2022
Adopted by the Board of Commissioners on September 7, 2022
Recorded by Lindsay Parish, City Clerk on September 7, 2022
Published by The Paducah Sun on September 9, 2022
Agree — ILA Athletic Sports Complex 2022
Ordinance prepared by Kent Price — McMurray & Livingston
INTERLOCAL COOPERATION AGREEMENT
FOR THE DEVELOPMENT AND OPERATION OF THE
PADUCAH-McCRACKEN COUNTY ATHLETIC COMPLEX
This Interlocal Cooperation Agreement (the "Agreement") is entered into as of this _
day of August, 2022 by and between the CITY OF PADUCAH, KENTUCKY ("City"), the
COUNTY OF McCRACKEN, KENTUCKY ("County"), and the McCRACKEN COUNTY
SPORTS TOURISM COMMISSION ("Sports Commission"). City, County, and Sports
Commission are referred to individually in this Agreement as a "Party" and two or more of them
are referred to collectively as "Parties."
RECITALS
WHEREAS, the County established the McCracken County Sports Tourism
Commission pursuant to KRS 91A.350, et seq., with a primary focus to promote sports tourism
within McCracken County, Kentucky; and
WHEREAS, by Amended and Restated Interlocal Cooperation Agreement entered into
as of August 13, 2020, but effective as of October 2, 2020, among City, County, Sports
Commission, Paducah Convention and Visitors Bureau, and McCracken County Convention
Center Corporation, the parties thereto charged Sports Commission with the "development,
design, construction, operation, maintenance, sales and marketing of tournament -worthy
sports facilities which will attract out-of-town tourists" as participants in and spectators of a
variety of sports, including but not limited to, baseball, soccer, softball and volleyball; and
WHEREAS, the City, County, and Sports Commission recognize the economic benefits
and quality -of -life enhancements that can be expected from the development of a high-quality
athletic complex that draws visitors to Paducah and McCracken County for sports tournaments
and athletic events while also meeting critical sports and recreational needs of local residents;
and
WHEREAS, in that certain Memorandum of Understanding dated August 9, 2021
between and among City, County, and Sports Commission (the "MOU"), the Parties committed
to finance and develop a premier athletic complex of the type described as the "Full Build Out'
in the Master Plan Report of the McCracken County Sports Tourism Commission dated
February 5, 2021 (the "Master Plan"); and
WHEREAS, the Parties desire to establish with more specificity the terms and conditions
under which the Athletic Complex (as defined herein) will be designed, constructed, funded,
equipped, operated, managed, and maintained;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS
AMONG THE PARTIES, IT IS AGREED AS FOLLOWS:
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ARTICLE I.
DEVELOPMENT OF ATHLETIC COMPLEX
Section 1.1 — Declarations.
(a) Declaration of Public Policy. The City, County, and Sports Commission hereby
declare that it is in the best interest of each Party to cooperate in the development of the Athletic
Complex which is declared to be a public project for public purposes within the meaning of the
Kentucky Revised Statutes. In accordance with this declaration, the Parties have entered into
this Agreement pursuant to the provisions of the Interlocal Cooperation Act, KRS 65.210 to
65.300, in order that the public policy goals inherent in the development and operation of the
Athletic Complex may be realized by the Parties and the residents of the City and County.
(b) Approval of Master Plan. The City and County hereby accept and approve the
Master Plan as previously approved by Sports Commission. A copy of the Master Plan is
attached hereto and incorporated herein as Exhibit "A."
(c) Pledge of Cooperation. The Parties agree that they shall cooperate as
necessary in pursuing the objectives of this Agreement and carrying out the terms and
conditions of this Agreement. The interpretation and application of each term and provision of
this Agreement shall be subject to the requirement that each Party act reasonably and in
compliance with the standards of good faith and fair dealing.
(d) Nature of Agreement. The City, County, and Sports Commission agree to
engage in a joint and cooperative undertaking only within the scope set out in this Agreement
and do not intend to create between or among any of them any relationship of surety,
indemnification, or responsibility for debts, claims, or liabilities incurred by any Party in their
operations, other than as specifically provided for herein. Furthermore, the execution of this
Agreement shall not constitute a waiver of any defense or immunity that a Party would
otherwise be entitled to under Applicable Law.
Section 1.2 — Contributions of Real Property.
(a) Bluegrass Downs Property. County agrees that when requested by Sports
Commission, County will demise to Sports Commission pursuant to a Ground Lease a
leasehold interest in the real property located on Downs Drive and being the 70.428 -acre parcel
designated as Tract 1 on the survey of K. Jett Wood, P.L.S. #3445 dated April 9, 2021, of
record in Plat Cabinet "M", page 1587, in the McCracken County Clerk's Office (the "Bluegrass
Downs Property"). The Ground Lease to be executed by the County will be substantially in the
same form as the Ground Lease, a copy of which is attached hereto as Exhibit "B", but may
include a new survey description of the Bluegrass Downs Property. The term of the County's
lease will coincide with the term of this Agreement as set forth in Article IV hereof. Except as
to matters disclosed on the aforesaid survey, County warrants to the other Parties that it is
possessed of fee simple title to the Bluegrass Downs Property, unencumbered by any
mortgage or lien, and that there exist no easements, restrictions, or property interests affecting
the Bluegrass Downs Property such as would interfere with or inhibit its use by Sports
Commission in the manner generally proposed in the Master Plan. During the term of this
Agreement, County will immediately take all appropriate action, at its sole cost and expense,
to defend its title to the Bluegrass Downs Property and to remedy any breach or third -party's
claim of breach of County's warranty made in this subsection. During the term of this
Agreement, County will not sell, lease, mortgage, convey, encumber, or otherwise dispose of
the Bluegrass Downs Property, or any interest in said real property, without the prior written
consent of the other Parties.
(b) Stuart Nelson Park Property. City agrees that when requested by Sports
Commission, City will demise to Sports Commission pursuant to a Ground Lease a leasehold
interest in the real property located on Stuart Nelson Park Road which real property is located
south of and adjoining City's Greenway Trail property and is commonly referred to as Stuart
Nelson Park (the "Stuart Nelson Park Property"). The Ground Lease to be executed by the
City will be substantially in the same form as the Ground Lease, a copy of which is attached
hereto as Exhibit "B", and will include a new survey description of the Stuart Nelson Park
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Property. The term of the City's lease will coincide with the term of this Agreement as set forth
in Article IV hereof. Except as to matters disclosed on any recorded survey of the Stuart Nelson
Park Property, City warrants to the other Parties that it is possessed of fee simple title to the
Stuart Nelson Park Property, unencumbered by any mortgage or lien, and that there exist no
easements, restrictions, or property interests affecting the Stuart Nelson Park Property such
as would interfere with or inhibit its use by Sports Commission in the manner generally
proposed in the Master Plan. During the term of this Agreement, City will immediately take all
appropriate action, at its sole cost and expense, to defend its title to the Stuart Nelson Park
Property and to remedy any breach or third -party's claim of breach of City's warranty made in
this subsection. During the term of this Agreement, City will not sell, lease, mortgage, convey,
encumber, or otherwise dispose of the Stuart Nelson Property, or any interest in said real
property, without the prior written consent of the other Parties.
(c) Valuation and Rent. The Parties acknowledge and agree that no rent or
monetary consideration will be exchanged for the respective leasehold interests granted by
City and County to Sports Commission and that the benefits expected to be derived by all
Parties by virtue of the construction and operation of the Athletic Complex are good, valuable
and sufficient consideration for the grant of said leasehold interests. The Bluegrass Downs
Property and the Stuart Nelson Park Property are sometimes referred to together herein as the
"Project Site."
(d) Environmental Matters. To the best of County's knowledge, information and
belief, the Bluegrass Downs Property is free of any Hazardous Materials and underground
storage tanks and its ownership of the property is in compliance with all Environmental Laws
in all material respects. To the best of City's knowledge, information and belief, the Stuart
Nelson Park Property is free of any Hazardous Materials and underground storage tanks and
its ownership of the property is in compliance with all Environmental Laws in all material
respects. The Parties acknowledge that both the Bluegrass Downs Property and the Stuart
Nelson Park Property contain certain low-lying areas and are in the vicinity of apparent streams
or watercourses. Accordingly, should it be determined in the course of developing the Athletic
Complex that the Project Site contains wetlands that, in the reasonable determination of Sports
Commission, must be remediated in order to accommodate the desired construction and
facilities, all costs and expenses of any such remediation, including the acquisition of wetlands
property not located at the Project Site, shall be treated as Development Costs (as defined
herein) regardless whether the wetlands to be remediated are located on the Bluegrass Downs
Property or the Stuart Nelson Park Property, or both. The provisions of this subsection (d) are
made supplemental to and not in derogation of the terms and conditions contained in the
Ground Leases to be executed by City and County.
(e) Stuart Nelson Park Road. The Parties agree that Stuart Nelson Park Road
should be widened and upgraded such that it will serve as an attractive, functional roadway
providing access to and from the Athletic Complex and that the costs of such basic
improvements should be shared by the City and County. Accordingly, the Parties agree that
they will cooperate in developing the design and plans for a "base road" with characteristics as
follows: (i) a standard two-lane right-of-way, (ii) curbs, (iii) gutters, (iv) a sidewalk on one side
of the road, (v) turning lanes at the U.S. 60 intersection, (vi) traffic signals at the U.S. 60
intersection, (vii) landscaping or beautification such as ornamental trees and other flora, and
(viii) attractive, appropriate signage. City and County will share equally the costs of designing
and constructing the base road. If City desires improvements to Stuart Nelson Park Road
beyond those characteristics set forth above for a base road, City shall be solely responsible
for the added costs of such improvements. Each of the Parties must approve the final design
plans before construction of the road improvements may proceed. The Parties acknowledge
that the cost of the improvements to be made to Stuart Nelson Park Road were not included in
the $42.5 million estimated cost of the Full Build Out option recommended in the Master Plan.
The costs and expenses for the base road improvements after deduction of any grants received
therefor will be paid as Development Costs even though Stuart Nelson Park Road is not a part
of the Project Site for the Athletic Complex. City's one-half ('/z) share of the base road
improvement costs shall be paid from City's Initial Contribution (as defined in Section 2.1(a)
hereof). Likewise, County's one-half ('/z) share of the base road improvement costs shall be
paid from County's Initial Contribution. Any costs for improvements made to Stuart Nelson
Park Road beyond base road improvements shall not be considered Development Costs and
shall be promptly paid by City when due outside the framework of this Agreement. City and
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County agree that on future mutually beneficial road projects for which City receives state
funding, said Parties will cooperate in good faith in the equitable application of such funding to
project costs.
Section 1.3 — Role of Sports Commission.
(a) Delegation of Responsibilities. Subject to the terms and conditions of this
Agreement, Sports Commission shall be responsible for performing the Development Work.
After the Completion Date of construction of the Project, Sports Commission shall be
responsible for operating the Athletic Complex. In performing its responsibilities, Sports
Commission shall always take into account the interests of City and County and balance the
interests of all Parties in good faith.
(b) Facility Management Agreement. Sports Commission has engaged Sports
Facilities Management, LLC to (i) advise and consult with Sports Commission in the
performance of the Development Work, (ii) provide comprehensive design review and
construction management services, and (iii) serve as the exclusive manager of the Athletic
Complex as it prepares for the grand opening and thereafter engages in its operations. The
foregoing services will be provided to Sports Commission under a Facility Management
Agreement dated as of December 28, 2021, between Sports Commission and Sports Facilities
Management, LLC (the "SFM Agreement"), the term of which extends for eight (8) years from
the grand opening of the Athletic Complex. A copy of the SFM Agreement is attached hereto
as Exhibit "C." City and County acknowledge that the Working Group (as defined in Section
1.4(a)) participated in the negotiation and development of the SFM Agreement and they hereby
endorse the selection of Sports Facilities Management, LLC as Manager of the Athletic
Complex and the performance of the SFM Agreement by the parties thereto in accordance with
its terms and conditions.
(c) Powers of Sports Commission. Sports Commission shall have all the powers
and authorities to perform the duties assigned to it herein as are granted by KRS 91A.350, et
seq., and other Applicable Law. Pursuant to KRS 65.240, Sports Commission shall also have
and exercise such powers and authorities as are held by all of the Parties as may be helpful or
relevant to Sports Commission's accomplishing of the joint and cooperative endeavor that is
the subject of this Agreement. For purposes of performing the Development Work, Sports
Commission shall have the authority to manage, control, administer and enter into contracts,
perform services, take actions and make all decisions necessary, appropriate or desirable for
the performance of such Work. The authority of Sports Commission to operate the Athletic
Complex after completion of the Development Work is more particularly set forth in Section 3.1
below. City and County acknowledge that the Development Work to be performed by Sports
Commission (with assistance by Sports Facilities Management, LLC) includes negotiation of
all agreements for the design and construction of the Athletic Complex. Neither City nor County
shall have any direct obligation or liability under any agreement relating to the Athletic Complex
without its express written consent. Nothing in the foregoing sentence shall be construed,
however, to limit City's and County's commitments under Section 2.1 to contribute capital for
the development of the Project or to fund operations of the Athletic Complex, if necessary,
under Section 3.6 hereof.
(d) Limitations on Authority. The obligations of Sports Commission and its powers
and authorities under this Agreement may be amended, revoked, withdrawn, or expanded by
proper action of both City and County. In such case, Sports Commission will cooperate in good
faith to amend this Agreement to incorporate the agreed changes specified by City and County.
Notwithstanding the powers and authorities granted in subsection (c) of this Section 1.3, Sports
Commission shall not make the following binding commitments (each, a "Significant
Commitment") or amend or terminate any Significant Commitment, in either case, without the
prior written approval of the other Parties: (i) any binding commitment that would materially
change the design or configuration of the Athletic Complex as set forth in the Construction
Plans as finally approved by the Parties; (ii) any binding commitment that constitutes a Material
Adverse Effect; (iii) material amendment or early termination of the SFM Agreement or an
agreement for operation of the Athletic Complex with a management firm that succeeds Sports
Facilities Management, LLC; (iv) purchase or acquisition of additional real estate for use in
connection with the Athletic Complex other than (A) any real property acquired to remediate
any identified wetlands concerns, and (B) any parcels of real property located adjacent to the
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Project Site that become available and that Sports Commission determines would be beneficial
to the operation of the Athletic Complex and which are paid for by Sports Commission with its
own funds; (v) sale, lease, mortgage, or other disposition of all or part of the Athletic Complex;
and (vi) a material amendment to or deviation from any approved Annual Business Plan or
budget.
(e) Designation of Administrator. For purposes of the designation required by
KRS 65.250(2)(a), Sports Commission shall be the administrator responsible for the joint or
cooperative undertaking that is the subject of this Agreement. No interlocal agency within the
meaning of KRS 65.230(1) is created pursuant to this Agreement.
(f) Books and Records. Sports Commission shall cause to be kept proper books,
records, accounts, ledgers, time sheets, estimates, schedules, contracts and other documents
(whether in physical or electronic form) related to the Development Work. Unless the Parties
agree otherwise in writing, the tasks described in this subsection shall be performed on behalf
of Sports Commission by the Paying Agent as defined in Section 2.1(b) hereof. Accounting
information shall be recorded in accordance with generally accepted accounting principles.
During ordinary business hours and upon reasonable notice to Sports Commission and Paying
Agent, City and County may inspect and copy, at their expense, the books and records of
Sports Commission.
(g) Shared Risk. Each Party recognizes that (i) the development of the Athletic
Complex involves a degree of risk and is subject to many contingencies, including the prices
of commodities, costs of constructing or operating the Athletic Complex, the terms of
Construction Contracts, the availability or time for delivery of various materials, equipment, and
products, or other factors which could adversely affect the economic viability of the Athletic
Complex; (ii) the Parties have agreed that they will share the development risks relating to this
Project in accordance with this Agreement, and (iii) Sports Commission makes no
representation that the costs, expenses or any other amounts, or the milestones or other dates
contained in the Master Plan, any budget, schedule, pro forma, or estimated development plan
can or will be realized, and Sports Commission shall not have any liability to the other Parties
therefor except as may be set forth herein.
Section 1.4 — Proiect Working Group.
(a) Development Role of Working Group. Each of the Parties has heretofore
designated one or more representatives to participate in the planning of the development of
the Athletic Complex project. Each of the Parties has also been given access to the online
portal of electronic records maintained by Sports Commission pertaining to development of the
project. The Parties acknowledge that access to the portal has not been limited to only the
designated representatives of each Party, but has also been made available to any person for
whom a Party has determined it is advisable to have such access. The Parties hereby ratify
their previous establishment of the project development committee for the Athletic Complex
(the "Working Group") and their respective designations of representatives to the Working
Group. Through the Completion Date, the Working Group shall continue to serve in an advisory
role to provide a consultative process for the development of the Project and a means for Sports
Commission to provide information about the status of (1) the Development Work, including
the status of negotiations with construction contractors and vendors, (2) the then -current drafts
of construction budgets and schedules, (3) the estimates of Construction Costs and other
Development Costs, and (4) other matters concerning the Development Work on the Athletic
Complex project about which any of the Parties has inquired. The Working Group will also
have access to reports and recommendations prepared by the Project's design professionals
and Sports Facilities Management, LLC, the firm providing design, development, construction,
and pre -opening management and consulting services to Sports Commission pursuant to the
SFM Agreement.
(b) Functioning of Working Group. Each Party may designate up to two (2)
individuals to serve on the Working Group as its representatives. A Party may change its
representatives to the Working Group by giving notice to the other Parties of the new
representative(s). A representative appointed by Sports Commission shall serve as the chair
of the Working Group. No actions of the Working Group shall be binding on any of the Parties;
however, Sport Commission shall be entitled to rely on the joint representation of both
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representatives to the Working Group of a Party as to said Party's position on a particular issue
pertaining to the design and development of the Athletic Complex. Actions of a Party's
representatives shall be binding on that Party. During the period from the Effective Date
through the Completion Date, the Working Group shall meet as needed, but at least monthly,
to review the status of the Development Work and discuss any anticipated problems or
concerns in connection therewith. It is expected that meetings of the Working Group will
generally coincide with regular meetings of the Sports Commission. Special meetings of the
Working Group may be called at any time by at least two (2) of its members. Meetings may be
held in person or by video teleconferencing or other means permitted by Applicable Law. For
avoidance of doubt, the Working Group shall not have authority (i) to override or amend any
provisions of this Agreement or (ii) to create any contractual obligations binding on City, County,
or Sports Commission. The Working Group shall keep written records of all meetings in such
form as may be required by Applicable Law or as the Working Group may otherwise deem
appropriate. Any expenses incurred by any member of the Working Group shall be the
responsibility of the Party appointing such member.
(c) Post -Development Role. As the Development Work nears completion, the
Working Group will remain operative, but its focus will transition to providing advisory and
consultative services and information exchange to and with the Sports Commission and the
other Parties with respect to the operations and management of the Athletic Complex as is
generally described in Article III below.
Section 1.5 — Project Approval Process.
(a) Final Drawings and Bid Packages. After the Effective Date, Sports
Commission will engage a team of design professionals to work collaboratively with the Sports
Commission, Sports Facilities Management, LLC, and the Working Group to develop final plans
and drawings of the outdoor sports facility proposed to be constructed. The Parties
acknowledge that the final plans and drawings will necessarily involve changes to the layout,
materials, amenities, preliminary design, offerings, appearance and other features of the
athletic complex as generally described and depicted in the Master Plan dated February 5,
2021. The final design of the Project will honor in a fitting manner the legacy of Stuart Nelson
Park and the life of Dr. William Stuart Nelson with facilities and design features developed after
input from community stakeholders. The final design of the Project may also include features
such as (i) a new Dog Park, (ii) a number of relocated holes of the existing Disc Golf Course,
(iii) hard surface public sports courts, and (iv) a sprayground and/or children's playground. The
athletic complex and associated facilities represented by the plans and drawings as finally
approved by the Parties in the manner specified below are referred to herein as the "Athletic
Complex." If the final design of the Athletic Complex does not include a Dog Park on the Project
Site that is at least comparable in size and amenities to the existing dog park on the Stuart
Nelson Park Property, then the Parties agree to fund the construction of a dog park at a location
in Noble Park to be selected by City (the "Noble Park Dog Park"). Although not located on the
Project Site, the design and construction costs of the Noble Park Dog Park, if built, will be paid
as Development Costs under this Agreement, but only to the extent such costs do not exceed
the current costs that would be incurred to replicate the quality of the existing dog park on the
Stuart Nelson Park Property (i.e., comparable chain link fencing, lighting, access, and other
amenities). For the avoidance of doubt, the Noble Park Dog Park, if built, will be designed by
the Project's design team, but constructed by the City with the design and construction costs
paid as Development Costs to the extent set forth in the immediately preceding sentence and
with City responsible for all construction costs in excess of that amount should City desire the
Noble Park Dog Park to have higher quality amenities than are found in the existing dog park.
City shall be responsible for the performance and costs of all maintenance and repair of the
Noble Park Dog Park. Upon Sport Commission's approval of the proposed final plans and
drawings for the Athletic Complex, the Sports Commission will present the plans and drawings,
along with the bid packages for the associated Construction Work and a list of approved bidders
(collectively, the "Construction Plans"), to the City and County for consideration. City and
County shall have twenty (20) Business Days thereafter in which to either approve or
disapprove the proposed Construction Plans. If City or County, or both, fail to timely approve
the proposed Construction Plans, the Parties will diligently work to make revisions to the
Construction Plans such that they will be acceptable to all Parties. If revised Construction
Plans are not approved by all Parties within sixty (60) Business Days from the date on which
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the original Plans were presented, this Agreement shall be terminated unless the Parties agree
to an extension of the termination date.
(b) Bids and Contract Price. Upon the Parties' approval of the Construction Plans,
as originally presented or revised, the Sports Commission will put the Construction Work for
the Athletic Complex contemplated by the approved Construction Plans out for bids. The
Sports Commission will work with its design team, Sports Facilities Management, LLC and the
Working Group to evaluate all bids received and develop an estimated total of the Development
Costs for construction of the Athletic Complex (the "Estimated Total Cost"). The Sports
Commission may thereafter formally recommend to the City and County a package of the best
evaluated bids and associated Construction Contracts for completion of the Work contemplated
by the Construction Plans and inform said Parties of the Estimated Total Cost. City and County
shall have twenty (20) Business Days from receipt of such recommendation in which to either
approve or disapprove the proposed package of bids and Construction Contracts. If the
Estimated Total Cost is no greater than the $42.5 million cost estimated by the Master Plan,
City and County pledge to approve the package of recommended bids and Construction
Contracts unless there are material concerns about the selection of a bidder, the amount of
one or more of the bids or the quality or capability of one or more of the bidders. For purposes
of the immediately foregoing sentence, a "material concern" is one for which there exists
reasonable grounds to believe that the selection of the bidder or the bid itself involves fraud,
corruption, collusion, substantial mistake, or illegality. If City or County, or both, fail to timely
approve the recommended package of bids and the Estimated Total Cost, the Parties will
diligently work to revise the Construction Plans and negotiate corresponding changes to the
bids received such that such revised Construction Plans and bids and the modified Estimated
Total Cost will be acceptable to all Parties. If the Parties reach agreement on the revision of
Construction Plans, bids, and/or the Estimated Total Cost, the Estimated Total Cost, as so
revised and approved by the Parties, shall become the "Total Cost" for development of the
Project. If no revised Construction Plans, package of bids and an Estimated Total Cost are
approved by all Parties within sixty (60) Business Days from the date on which the package of
recommended bids was first presented to City and County, this Agreement shall be terminated
unless the Parties agree to an extension of the termination date.
(c) Change Orders. Upon the recommendation of the Project's architect and Sports
Facilities Management, LLC, Sports Commission may request or agree to a change order
pertaining to a Construction Contract without express authorization by City and County so long
as the sum of the cost of the change order and the cost of all previously authorized change
orders does not exceed two (2%) percent of the Total Cost (as originally approved) and the
change order is not expected to result in a material delay in the construction schedule.
Proposed change orders not falling within the parameters of the preceding sentence or that
would result in a material change to the type or quantity of athletic fields incorporated in the
approved Construction Plans must be approved by each of the Parties. If requested by Sports
Commission, City and County agree to expedite consideration of any change orders requiring
their approval, even if a special meeting must be called for the purpose of such consideration.
The amounts of all change orders approved pursuant to this subsection will be added to Total
Cost (as originally approved) for purposes of the calculation of the Second Contribution to be
made by City and County under Section 2.1(d) below.
(d) Termination Costs.
(i) Early Termination. If, prior to Sports Commission's presentation to City
and County of the Construction Plans referred to in subsection (a) of this Section 1.5, either
City or County terminates this Agreement, withdraws from participation in the development of
the Project, or otherwise refuses to perform its obligations under this Agreement, such Party
shall (A) reimburse the other Parties for all amounts previously contributed by each such other
Party for the payment of Development Costs, and (B) be solely responsible for all Development
Costs payable thereafter (including any costs associated with early termination of the SFM
Agreement and any contract with design professionals engaged by Sports Commission) as a
result of the development of the Project being halted.
(ii) Later Termination. In the event that this Agreement is terminated under
this Section 1.5 after Sports Commission's presentation to City and County of the Construction
Plans, City and County shall absorb all Development Costs paid by each to the date of
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termination. If this Agreement is terminated (A) under Section 1.5(a) by virtue of one Party's
refusal to approve Construction Plans that have been approved by the other Parties, or (B)
under Section 1.5(b) by virtue of one Party's refusal to approve the Construction Plans, bids,
and Estimated Total Cost that have all been approved by the other Parties, then in either case,
the Party that fails or refuses to make the approval under Section 1.5(a) or 1.5(b), shall be
solely responsible for all Development Costs payable thereafter (including any costs associated
with early termination of the SFM Agreement and any contract with design professionals
engaged by Sports Commission) as a result of the termination of this Agreement. If both City
and County fail or refuse to make the approvals under subsections (a) or (b) of Section 1.5
referred to in the preceding sentence, then City and County shall each pay half of all
Development Costs payable thereafter (including any costs associated with early termination
of the SFM Agreement and any contract with design professionals engaged by Sports
Commission) as a result of the termination of this Agreement.
ARTICLE II.
FUNDING OF PROJECT
Section 2.1 — Payment of Design and Construction Costs.
(a) Initial Contributions. Within ten (10) days after the Effective Date, City will place
in a restricted account owned by City the sum of $12.5 million to be devoted to payment of the
Development Costs of the Athletic Complex as provided herein. County will likewise place
$12.5 million in a restricted account owned by it within ten (10) days after the Effective Date.
The $12.5 million contributed by City and County is referred to herein as the "Initial
Contribution" of each of said Parties. City and County shall be entitled to any interest earned
on their respective accounts. City and County shall each notify the other Parties that the
accounts have been established, are fully secured, and have been restricted to the payment of
the Development Costs as they come due. City and County shall notify the Paying Agent (as
defined below) of the procedure to be employed by Paying Agent to requisition drafts from the
accounts for transfer of funds from the accounts to the Paying Agent.
(b) Paying Agent. The Parties hereby designate McCracken County, Kentucky, to
be "Paying Agent" for construction of the Athletic Complex, with the Paying Agent to have the
authorizations and responsibilities provided for in this Agreement. County shall be referred to
herein as Paying Agent when performing the duties or taking the actions described in this
subsection. The primary role of Paying Agent is to serve as the paying agent for payment of
the costs of the Development Work for the Project, including Construction Costs and other
Development Costs. To that end, Paying Agent shall receive, hold, and administer all funds to
be contributed by the Parties under this Agreement (to wit, the Initial Contributions and Second
Contributions of City and County, and the Excess Operating Revenues and Committed TRT
Receipts of Sports Commission) from which Development Costs are to be paid by Paying
Agent. Paying Agent shall receive the funds in accordance with the terms and conditions of
this Agreement and hold the funds for the benefit of the Parties in an account or accounts
separate from the other funds of the County. Paying Agent shall also be responsible for
performing all accounting, regulatory compliance, and recordkeeping functions as may be
required or desirable in connection with the development of the Athletic Complex, including all
such functions pertaining to or arising from the funding sources of City and County and the
procurement of labor, services, and materials in connection with the development. The
undertaking in the prior sentence shall include, but not be limited to, Paying Agent's
maintenance of documentation pertaining to the expenditure or investment of tax-exempt
municipal bond proceeds used to finance the development until three (3) years after the final
redemption of the municipal bonds. Paying Agent shall also perform such other administrative
functions to which the Parties may agree from time to time during the term of this Agreement.
By written agreement of all Parties, the Parties may name City, Sports Commission, or an
independent third party to serve as Paying Agent in the place of County upon such terms and
conditions as the Parties may specify in such written agreement.
(c) Payment of Development Costs.
(i) Obligation to Pay. Each of the Parties hereby promises timely to pay its
share of the Development Costs in the in accordance with the terms and conditions of this
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Agreement. Each of the Parties further promises timely to make each of the fund transfers for
the development and operation of the Athletic Complex in accordance with the terms and
conditions of this Agreement. All transfers of funds required of a Parry under this Agreement
shall be made by such Party's timely delivery of its check in the required amount.
(ii) Project Cost Estimates. Promptly after the Effective Date, Paying Agent
will notify the Parties of all Development Costs then due and owing. Paying Agent will also
then notify the Parties of the total amount of Development Costs that are estimated to become
due and payable within the three -Month period following the Month in which the Effective Date
occurs. For planning purposes, Paying Agent will thereafter provide the Parties on a quarterly
basis with an estimate of the Development Costs expected to be paid during the upcoming
three Months. All such estimates of quarterly Development Costs will be developed by
Manager in consultation with Sports Commission's design team.
(iii) Payments by Paying Agent. Sports Commission shall include a
requirement in all Construction Contracts and other agreements for the provision of goods,
services, labor, or other Development Work that all invoices and requests for payment of
Development Costs must be submitted to Manager by the 25th day of each Month. Manager
(in consultation with Sports Commission's design team) shall prepare a monthly statement of
Development Costs payable and submit the same (along with copies of all invoices,
applications for payment, and supporting backup documents and information) to Sports
Commission, City and County by the 30th day of the Month accompanied by Manager's
recommendation for payment. At their earliest convenience, but in no case later than ten (10)
Business Days of receipt of each monthly statement of Development Costs payable, City and
County will each cause a draft of its one-half (A) share of the total of such Development Costs
to be delivered to Paying Agent. Paying Agent will then promptly issue payment for all such
Development Costs recommended for payment from the account or accounts maintained by it
for the payment of Development Costs.
(d) Additional Capital Contributions. As design and construction of the Athletic
Complex progresses, Sports Commission will periodically advise City and County of its best
estimate of the amount of additional capital that City and County will need to contribute to
complete the construction and other Development Work and the date on which such additional
capital contributions will first be needed. Unless the Parties agree in writing to a different
amount, City and County shall each make available to Paying Agent for payment of
Development Costs to be incurred through final completion of construction and the grand
opening of the Project, one-half ('/) of the amount determined as follows: the Total Cost
(including the cost of all change orders approved pursuant to Section 1.5(c) hereof) less the
$25 million total of the Initial Contributions. The additional capital infusions to be made by City
and County pursuant to the preceding sentence shall be referred to herein as the "Second
Contribution" of each. Sports Commission will notify City and County in writing at least five (5)
months in advance of the date by which the Second Contribution of City and County must be
made available to Paying Agent for the payment of Development Costs. City and County shall
each have the right to obtain financing for its Second Contribution obligation that is acceptable
to such financing Party in its sole discretion. It is anticipated, however, that the financing for
the Second Contributions of both the City and County will be obtained through City's issuance
of municipal bonds for the benefit of both City and County on terms and conditions to be
mutually agreed to by said Parties. Should County desire to participate in the City's tax-exempt
financing, City and County pledge to work together in good faith to develop a financing plan
that accommodates the needs of both Parties and contains terms and conditions such that the
financing is expected to be favorably received in the bond market. In such event, County's
payment obligations to City may be separately memorialized in a promissory note payable by
County to the order of City and comprising a general obligation of County pursuant to Chapter
66 of the Kentucky Revised Statutes. In any event, City agrees to cooperate with County to
the extent necessary to enable County to obtain any approval required by Section 66.310 of
the Kentucky Revised Statutes for such financing. City and County shall keep Sports
Commission advised of the status of their financing plans and shall notify Sports Commission
as soon as each Party's funds for its Second Contribution have been deposited in such Party's
account or accounts mentioned in subsection (a) of this Section 2.1. The transfer of funds by
City and County to Paying Agent for payment of Development Costs from the Second
Contribution of City and County and the process for monthly payment of Development Costs
by Paying Agent shall be handled in the same manner as for the Initial Contributions as set
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forth in this Section unless the bond ordinance, trust indenture or other financing document of
the City and County requires a different procedure, in which case that procedure will be
employed.
(e) Timely Payment. City and County shall make all transfers of funds to Paying
Agent for which they are invoiced by Paying Agent hereunder as and when due without
demand, counterclaim, setoff, deduction or defense, and each such Party waives, to the extent
permitted by Applicable Law, all rights now or hereafter conferred by statute or otherwise with
respect to any such demand, counterclaim, setoff, deduction or defense. City or County shall
make each required transfer of funds on or before the due date so that Sports Commission will
incur no late charge or additional cost to a Construction Contractor or other party providing
Development Work as a result of an untimely payment by City or County. If a Party in good
faith disputes whether any amount is owed for which it has received an invoice, a statement of
Development Costs payable, or a notice to transfer funds from Paying Agent (each, a "Payment
Demand"), such Party shall nevertheless pay the Payment Demand within the time specified
in this Agreement and within ten (10) Business Days of receipt of such Payment Demand
provide the other Parties with a detailed written description of the dispute. After compliance
with the dispute resolution provisions of Article VI of this Agreement, an aggrieved Party may
take any action permitted by said Article VI to resolve the dispute. If, upon resolution of the
dispute it is determined that the disputed Payment Demand was not properly due, the Payment
Demand shall be corrected and a refund shall be made by Paying Agent of any amounts
erroneously transferred by City or County pursuant to such disputed Payment Demand.
(f) Services of Paying Agent. The Parties agree that the costs and expenses,
including overhead, incurred by Paying Agent in connection with providing the services
required of it hereunder will be borne by County. City and County acknowledge that
performance of such duties as are assigned herein to the Paying Agent without remuneration
or reimbursement of the attendant costs and expenses is in keeping with the practice of City
and County on previous joint projects and the expectation of said Parties in the handling of
future joint endeavors.
(g) Private Use. Sports Commission shall not enter into any contract to provide
operations or maintenance services for the Athletic Complex that would result in private use
within the meaning of Section 141 of the Internal Revenue Code such as could affect the tax-
exempt status of any existing or future bonds issued by City or County in connection with the
Project. Sports Commission shall submit to City and County any contract involving the
management of any portion of the Athletic Complex or the use or lease of any portion of the
Athletic Complex for a period greater than six (6) months entered into after the date of this
Agreement and, with respect to each contract so submitted, City and County shall be solely
responsible for identifying to Sports Commission and the other Party any provisions that do not
meet the requirements of this Section. Sports Commission shall not be responsible for
determining whether any such contract is in compliance with this subsection as to the City or
County. City and County shall promptly consult with bond counsel or other relevant counsel to
ascertain whether such contract is in compliance with this subsection and promptly shall
provide to the other Parties suggested changes which would permit the contract to be in
compliance with this subsection or a statement that the contract is in compliance. City and
County acknowledge that they have each examined the SFM Agreement and have determined
that the SFM Agreement does not raise private use concerns.
Section 2.2 — Payment of City and County Contributions.
(a) City's Debt and County's Debt. The portion of City's bond issue or other
financing (the "Bonds") that represents the debt service on the Second Contribution of City is
referred to herein as "City's Debt." The portion of City's Bonds or other financing by the County
that represents the debt service on the Second Contribution of County is referred to herein as
"County's Debt." The Bonds shall clearly indicate the portion of the indebtedness, if any, that
pertains to the financing of any project or use other than the Athletic Complex and the debt
service schedule applicable to any such other project or use. Neither the County nor Sports
Commission shall be responsible for payment of any portion of the debt service on the Bonds
other than for the portion thereof pertaining to City's Debt and County's Debt, and then only to
the extent and in the manner provided for herein.
Page 10 of 23
(b) Sources of Payment.
(i) The Parties agree that the debt service on the City's Debt on a given
payment date shall be paid as specified in this Agreement from the sources and in the order of
priority, as follows: (A) One-half ('/2) of Municipal Revenues (as defined in subsection (g) of this
Section 2.2), if any, then being held by Paying Agent; (B) the portion of any Excess Operating
Revenues (as defined in subsection (e) of this Section 2.2) then being held by Paying Agent
on City's behalf; (C) One-half ('/z) of the Committed TRT Receipts (as defined in subsection (c)
of this Section 2.2) for the Month(s) since the immediately preceding payment date; and (D)
contributions by City in the amount necessary to make up the balance of debt service owed on
any particular payment on City's Debt not covered by the funding sources referred to in clauses
(A), (B), and (C) immediately above.
(ii) Debt service on the County's Debt on a given payment date shall be paid
as specified in this Agreement from the sources and in the order of priority, as follows: (V)
One-half ('/z) of Municipal Revenues, if any, then being held by Paying Agent on County's
behalf; (X) the portion of any Excess Operating Revenues then being held by Paying Agent on
County's behalf; (Y) One-half (Yz) of the Committed TRT Receipts for the Month(s) since the
immediately preceding payment date; and (Z) contributions by County in the amount necessary
to make up the balance of debt service on any particular payment on County's Debt not covered
by the funding sources referred to in clauses (V), (X), and (Y) immediately above.
(c) Committed TRT Receipts. Beginning with the Month that precedes by twelve
(12) Months the Month in which the date of the first payment of principal and interest is owed
on City's Debt or County's Debt, whichever date first occurs, and in each succeeding Month
thereafter until City's Debt and County's Debt have been paid in full (from whatever source or
sources), Sports Commission shall deposit into a separate restricted account of the Paying
Agent eighty (80%) percent of the transient room tax payments actually received by it in said
Month (the "Committed TRT Receipts"). The monthly transfer of the Committed TRT Receipts
into the account of Paying Agent shall be made by the Treasurer of the County by withholding
the Committed TRT Receipts from the total transient room tax payments for the Month that the
Treasurer would otherwise transfer to Sports Commission and transferring same to the Paying
Agent's account. The Treasurer shall then remit the balance of the transient room tax
payments for the Month directly to Sports Commission. Each Month, the Paying Agent shall
set aside one-half (Yz) of the Committed TRT Receipts received for payment of the City's Debt
and shall set aside the other one-half (%) for payment of the County's Debt. The Parties agree
that the Committed TRT Receipts may be used only for reduction of the City's Debt and
County's Debt as provided herein. Accordingly, no part of the Committed TRT Receipts may
be used for payment or reimbursement of City or County for the Initial Contribution made by
either of said Parties. After the City's Debt has been paid in full and any payments by City to
cover Shortfalls for Months up to the Month in which the City Debt is paid have been reimbursed
in accordance with Section 3.5(c), no additional Committed TRT Receipts will be set aside for
payment of City's Debt and any balance of Committed TRT Receipts then remaining in the
Paying Agent's account with respect to City's Debt will be transferred to Sports Commission
for any lawful use. After the County's Debt has been paid in full and any payments by County
to cover Shortfalls for Months up to the Month in which the County Debt is paid in accordance
with Section 3.5(c), no additional Committed TRT Receipts will be set aside for payment of
County's Debt and any balance of Committed TRT Receipts then remaining in the Paying
Agent's account with respect to County's Debt will be transferred to Sports Commission for any
lawful use. Notwithstanding anything in this subsection (c) to the contrary, the balance of the
Committed TRT Payments, if any, held by Paying Agent on the twentieth (20th) anniversary of
the initial issuance of the Bonds or thereafter acquired by Paying Agent shall not be used by
Paying Agent or the Parties for making payments on either the City Debt or County Debt
regardless of whether any balance remains owing on the City Debt or the County Debt on said
twentieth (20th) anniversary. Any Committed TRT Receipts held by Paying Agent on said
twentieth (20th) anniversary shall be used by Paying Agent for the reimbursement of any
payments made by City and/or County to cover Shortfalls for Months up to and including the
Month in which said twentieth (20th) anniversary occurs. The balance of any Committed TRT
Receipts at that time, if any, shall be transferred to Sports Commission in full and Committed
TRT Receipts shall thereafter no longer be withheld from the transient room tax payments
otherwise payable to Sports Commission.
Page 11 of 23
(d) Annual Audit and Budget Process. An audit of the books, records, and
financial statements of the Sports Commission shall be performed on an annual basis by a
qualified independent certified public accounting firm. If required by Applicable Law or
governmental accounting standards or if requested by a Party, the annual audit shall include
audit of the annual financial statements to be submitted by Manager, in which case the auditor
shall be selected and paid for in accordance with the provisions of the SFM Agreement (or its
successor management agreement). By March 1 of each year, the Manager of the Athletic
Complex will be required to submit to Sports Commission and the Working Group an Annual
Business Plan containing detailed information regarding Manager's anticipated operation of the
Athletic Complex for the upcoming Fiscal Year. The Annual Business Plan will contain a
proposed annual operating budget and supporting budgets and schedules such as a cash flow
budget, a capital expenditures budget, and a staffing model. City and County acknowledge
that they will have not less than 45 days from receipt of the Annual Business Plan in which to
submit comments, concerns, and proposed changes (through the Working Group) concerning
any aspect of the proposed Annual Business Plan. Sports Commission will consider all such
comments, concerns, and proposed changes in deciding whether to approve the Annual
Business Plan as submitted or propose a revised Annual Business Plan. Should Manager
submit a revised Annual Business Plan in response to any comments and changes proposed
of Sports Commission, City and County shall also be accorded a reasonable period of time in
which to submit comments, concerns and proposed changes (through the Working Group) to
Sports Commission concerning the proposed revised Annual Business Plan. Once an Annual
Business Plan is approved by Sports Commission, the annual operating budget for the Athletic
Complex will be included in the annual budget submitted by Sports Commission to County for
approval as required by Applicable Law. The budget information for operations of the Athletic
Complex contained in the approved Annual Business Plan will be utilized to determine Excess
Operating Revenues for a given Fiscal Year in accordance with the following subsection (e) of
this Section 2.2.
(e) Excess Operating Revenues. "Excess Operating Revenues" shall mean the
amount, if any, by which the revenues attributable to business operations of the Athletic
Complex in a particular Fiscal Year exceed the actual expenses for said Fiscal Year for
operation of the Athletic Complex (including approved budget reserves for contingencies,
capital improvements and replacements, and depreciation). In the initial period of operations
of the Athletic Complex, the Fiscal Year shall be deemed to run from the grand opening of the
Athletic Complex through the next June 30. At the conclusion of each Fiscal Year, Sports
Commission shall deliver to Paying Agent any Excess Operating Revenues for the Fiscal Year
to be divided into two equal parts and with each half to be held in separate subaccounts for the
payment of City's Debt and County's Debt, respectively, as provided in subsection (b) of this
Section 2.2. If at any time, the amount of Excess Operating Revenues held by the Paying
Agent in the subaccount pertaining to payment on City's Debt exceeds 1.5 times the amount
of the next debt service payment on City's Debt, the amount in excess of 1.5 times such next
debt service payment amount shall be returned by Paying Agent to Sports Commission for use
for any lawful purpose. If at any time, the amount of Excess Operating Revenues held by the
Paying Agent in the subaccount pertaining to payment on County's Debt exceeds 1.5 times the
amount of the next debt service payment on County's Debt, the amount in excess of 1.5 times
such next debt service payment amount shall be returned by Paying Agent to Sports
Commission for use for any lawful purpose. Upon payment in full of the City's Debt, the
obligation to set aside one-half ('/) of the Excess Operating Revenues for payment of the City's
Debt shall cease and any amounts then being held for such purpose by Paying Agent shall be
released to Sports Commission for any lawful use. Upon payment in full of the County's Debt,
the obligation to set aside one-half (%2) of the Excess Operating Revenues for payment of the
County's Debt shall cease and any amounts then being held for such purpose by Paying Agent
shall be released to Sports Commission for any lawful use.
(f) Payment Procedure. At least twenty (20) Business Days prior to each
scheduled debt service payment date on the City's Debt and the County's Debt, Paying Agent
will notify the City and County of the Committed TRT Receipts and Excess Operating Revenues
it is holding that are available to apply towards such debt service payment and the anticipated
amount, if any, of City and County contributions that will be needed for purposes of making
such payment. Paying Agent will within fifteen (15) Business Days of such payment date,
transfer the appropriate amount of Committed TRT Receipts and Excess Operating Revenues
to the City and County, or to the Trustee of the Bonds, paying agent, or other person as directed
Page 12 of 23
by the applicable City or County bond ordinance, trust indenture or other financing document.
If contributions from the City and/or County in excess of the amounts transferred by Paying
Agent are required to make a particular payment on the City Debt or County Debt, City and
County shall each be responsible for paying the respective amount owed by each orfor delivery
of such required contributions to the Trustee of the Bonds, paying agent, or other person as
directed by the applicable City or County bond ordinance, trust indenture or other financing
document so that the debt service payment can be timely made.
(g) Municipal Revenues. For purposes of this Agreement, "Municipal Revenues"
shall mean an amount equal to all funds received by City from taxes on payroll payable only by
virtue of the location, construction, operation, or development of the Athletic Complex within
the Athletic Complex's boundaries, as set forth in the attached Ground Lease, through the
calendar quarter in which the City Debt and County Debt have both been paid in full. Within
sixty (60) days after the close of each calendar quarter, City shall remit to Paying Agent all
Municipal Revenues received during the preceding calendar quarter. Municipal Revenues
received prior to the initial payment dates on the City Debt and County Debt shall be used by
Paying Agent for payment of Construction Costs. Municipal Revenues received thereafter shall
be applied by Paying Agent in equal parts towards payment of City's Debt and County's Debt
as provided in subsection (b) of this Section 2.2. Along with each quarterly remittance by City,
City shall provide to Paying Agent and the other Parties a report in an agreed format detailing
(i) the sources and amounts of all Municipal Revenues received by City during the quarter and
(ii) the delinquent payroll taxes owed to City that, if paid, would constitute Municipal Revenues.
One-half (Yz) of any such delinquent payroll taxes collected by City after the City Debt and
County Debt have been paid in full shall be paid to Sports Commission within sixty (60) days
of their receipt by City.
Section 2.3 — Gifts and Grants.
The Parties will work cooperatively to identify, seek and secure major gifts, grants,
donations, sponsorships, and funding of all varieties, including naming rights opportunities
("Outside Funding") that may be available from public and private sources for the development,
construction, operation, and/or maintenance of the Athletic Complex. Outside Funding does
not include the relatively small gifts, donations, and sponsorships that would typically be made
or contributed by individuals and local businesses to support the on-going operations and
programming offered at the Athletic Complex. All Outside Funding obtained will be held,
administered and applied in strict accordance with the instructions, restrictions, and
requirements of the person or entity providing the Outside Funding. Unless specifically
provided otherwise in writing by the provider of the Outside Funding, a particular item of Outside
Funding will be applied by the Party receiving the Outside Funding in a manner that benefits
all Parties to this Agreement in an equitable manner (such as reduction of the City Debt and
County Debt or funding of a capital replacement account for Sports Commission). Based on
the general principles set forth in this Section 2.3, the Working Group will develop more specific
guidelines identifying what constitutes a small gift, donation, or sponsorship which will be
applied to fund the operations of Sports Commission at the Athletic Complex versus a major
gift, grant, donation, or sponsorship that would qualify as Outside Funding to be applied
equitably for the benefit of all Parties. The guidelines to be developed by Working Group will
further specify how gifts, donations, or awards of Outside Funding will be held, applied, and
administered by the Parties and Paying Agent (in the absence of specific instructions,
restrictions, and requirements of the providers of the Outside Funding). The guidelines will be
deemed final and binding upon their approval by the Mayor of City and the Judge Executive of
County as evidenced by the signatures of such public officials thereon. Each Party represents
to the other Party that as of the date of its execution of this Agreement, it has not solicited any
Outside Funding or secured a commitment from any third party to provide Outside Funding.
The Parties agree to consult bond counsel before entering into any naming rights agreement
to ensure the execution and delivery of such agreement would not endanger the tax-exempt
treatment of any bond or debt incurred by City or County for purposes of financing the Athletic
Complex.
/e1A9N]14=1llI
OPERATION OF ATHLETIC COMPLEX
Page 13 of 23
Section 3.1 — Guidelines for Operations.
Sports Commission shall operate and manage the Athletic Complex through
engagement of a competent, professional management firm unless both City and County agree
in writing that Sports Commission may self -operate and manage the Athletic Complex. In either
case, the Athletic Complex shall be operated so as to achieve the sports tourism, economic
impact and local recreation goals and objectives as set forth in the Master Plan while adhering
to the fiscal operational parameters identified in the Master Plan. Accordingly, the Parties state
their intention and acknowledge their agreement that the Athletic Complex shall be operated in
a business -like manner so as to be cost neutral, thereby minimizing or eliminating the need for
periodic operational subsidies from City and County. To that end, the Parties further
understand and agree that, in accordance with the Master Plan, user fees and field rental rates
for events such as tournaments, league play, local recreation, and private rentals will be
commensurate with market rates. City and County each expressly acknowledges its
understanding that to the extent its recreational programming may be moved to the Athletic
Complex and offered to the public at below-market rates that do not fully recover the costs of
providing the programming, the City or County, as the case may be, will be required to
underwrite the offering of such programming through payments to Sports Commission (through
Manager) not otherwise provided for in this Agreement. The Parties further acknowledge and
agree that for the Athletic Complex to be financially viable, all revenue sources identified in the
Master Plan and its pro forma and in Manager's Pro Forma dated as of March 2022, a copy of
which is attached hereto as Exhibit "D", as are deemed necessary or advisable may be pursued
and employed by Sports Commission and its facility management firm, including but not limited
to, market-based fees and rental rates for use of the Athletic Complex and sales of alcohol at
selected events.
Section 3.2 — Delegation of Management.
Pursuant to the SFM Agreement, Sports Commission has engaged Sports Facilities
Management, LLC, to handle preparations for the grand opening of the Athletic Complex and,
thereafter, to act as the sole and exclusive manager, operator, and promoter of the Athletic
Complex. The comprehensive management services to be provided by Sports Facilities
Management, LLC include, but are not limited to: (i) Sales, (ii) Staffing, (iii) Public relations and
marketing plans, (iv) Program development and management, (v) Event booking and
management, (vi) Event economic impact and financial tracking, (vii) Monthly financial
reporting, (viii) Human resources oversight (i.e., payroll, health insurance, workers comp., etc.),
(ix) Legal and risk management advisory services, (x) Bookkeeping and other financial tracking
and monitoring, (xi) Computer and IT services, and (xii) Marketing on a national, regional, and
local basis. At the termination of the SFM Agreement, Sports Commission may renew the SFM
Agreement, enter a new contract with Sports Facilities Management, LLC, or engage a different
professional management firm to operate the Athletic Complex.
Section 3.3 — Certain Key Matters.
Prior to the grand opening of the Athletic Complex, Sports Commission, its design team,
and Working Group, will work with Manager to develop policies and commitments concerning
key matters pertaining to operation of the Athletic Complex (each, a "Key Matter"). Such Key
Matters include (i) the programming to be offered for local recreational and sports league
purposes (such as soccer, youth baseball and softball, and adult softball); (ii) the user fees and
rental rates that could be expected to apply to such offerings for local recreational and sports
league purposes; (iii) access to the Greenway Trail from the Project Site; (iv) access to and
use by the public of certain areas of the Project Site and their associated amenities such as
Stuart Nelson Plaza, the Disc Golf Course, and any Dog Park, Spray Park, or public sports
courts included in the final design; and (v) other similar matters or concerns identified by the
Working Group. The policies and commitments pertaining to the Key Matters will be
incorporated into the Annual Business Plan developed by Sports Commission and Manager
for operating the Athletic Complex. The Working Group shall keep the policies and
commitments made with respect to the foregoing Key Matters under review and shall monitor
the performance of the Manager in implementing said policies and commitments. The Working
Group shall regularly provide Sports Commission with its evaluations of suggested changes to
the policies and commitments pertaining to the Key Matters, particularly during the period each
year when the Manager's proposed Annual Business Plan is presented to Sports Commission
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for review and revision. Sports Commission shall consider in good faith all comments and
proposals of the Working Group, but Sports Commission is ultimately the entity responsible for
approving or insisting on changes by Manager with respect to any of the Key Matters.
Section 3.4 — Administration of Management Agreement.
Sports Commission will be the administrator of the SFM Agreement under which
Manager will manage the Athletic Complex. Although Sports Commission is generally charged
with operating the Athletic Complex, Sports Commission does not control the manner in which
Manager performs its day-to-day management of the Athletic Complex. Instead, subject to the
Annual Business Plan and the terms and conditions of the SFM Agreement, Manager is an
independent contractor responsible for determining the means, methods, techniques, and
practices under which it carries out its exclusive management obligations. The SFM
Agreement requires Manager to regularly make a number of reports to Sport Commission,
including a monthly "budget to actual" review and other financial reports. All bank account
transactions and other financial operating information are to be made available to Sports
Commission under the SFM Agreement. So that City and County can be fully informed on the
operations of the Athletic Complex, Sports Commission will regularly provide to Working Group
copies of all financial and other reports made by Manager concerning the operation of the
Athletic Complex and will permit Working Group to participate in calls or meetings in which
Manager reports on finances or other operating issues.
Section 3.5 —Support of Operations.
(a) Revenue Shortfalls. In any Fiscal Year for which unrestricted revenues received
by the Sports Commission on account of operation of the Athletic Complex are reasonably
projected to be insufficient to cover Sports Commission's expenses attributable to the Athletic
Complex for the remainder of the Fiscal Year or for some portion of the remainder of the Fiscal
Year (a "Shortfall"), City and County shall each make up one-half (%) of the Shortfall by making
payment directly to Sports Commission or its designee from general funds of the City or County
or other funding source. If Sports Commission in good faith determines that such a Shortfall
will occur during the course of a given Fiscal Year, Sports Commission may send notice to City
and County of the estimated amount of a Shortfall for each of the remaining Months of the
Fiscal Year. The notice shall also state any Months of the remainder of the Fiscal Year for
which Sports Commission projects there will be no Shortfall. Sports Commission shall
thereafter update on a monthly basis its estimate of a Shortfall, if any, projected to occur in
each of the remaining Months of the Fiscal Year. City and County shall each pay to Sports
Commission one-half ('/2) of the estimated Shortfall. City and County shall each have the option
of paying as much or little of its one-half ('/2) share of the total projected Shortfall for the
remainder of the Fiscal Year as it desires in one or more payments so long as Sports
Commission receives the full amount of City's and County's respective one-half ('/2) share of
any Shortfall projected for a given Month before the first calendar day of said Month. The
Sports Commission shall provide to City and County any information, records, or documents
reasonably requested by said Parties in connection with a notice to cover an actual or estimated
Shortfall. The Working Group shall be kept fully informed of all Sports Commission discussions
concerning the possible need for funds from City and County to cover an anticipated Shortfall.
(b) Unused Shortfall Contributions. If, at the conclusion of a given Fiscal Year,
Sports Commission incurred no net Shortfall of unrestricted revenues over expenses
attributable to operation of the Athletic Complex, Sports Commission shall promptly refund to
City and County any amounts paid by each of said Parties towards the estimated Shortfall
during the course of the Fiscal Year. If at any point Sports Commission determines that funds
previously transferred by City or County to cover an anticipated Shortfall likely are no longer
needed during a given Fiscal Year, Sports Commission promptly shall return so much of the
funds to City and County (in equal shares) as Sports Commission reasonably determines will
not be needed to cover a Shortfall in the given Fiscal Year.
(c) Repayment of City and County. For any Month for which City covers a
Shortfall, the full amount so paid by City for the Month shall be reimbursed to City by Sports
Commission in the manner specified in Section 2.2(b) after all debt service on City's Debt has
been paid in full. Likewise, for any Month for which County covers a Shortfall, the full amount
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so paid by County for the Month shall be reimbursed to County by Sports Commission in the
manner specified in Section 2.2(b) after all debt service on County's Debt has been paid in full.
Section 3.6 — Use of Excess Oueratina Revenues.
After City's Debt and County's Debt have been paid in full, if there are Excess Operating
Revenues in any Fiscal Year, Sports Commission may utilize so much of the Excess Operating
Revenues as it determines is prudent for the purposes and in the order of priority, as follows:
(i) reduction of user fees and/or rental rates for local recreational and league usages of the
Athletic Complex; (ii) assistance to disadvantaged residents of City or County designed to allow
their participation in programming at the Athletic Complex; and (iii) any other programs or
usages to further the sports tourism endeavors of Sports Commission.
ARTICLE IV.
DURATION AND TERMINATION; AMENDMENTS
Pursuant to KRS 65.260, this Agreement shall be effective upon the date of filing with
the Kentucky Secretary of State of this Agreement after it has been approved and executed by
the Kentucky Department for Local Government (the "Effective Date"). Unless earlier
terminated as provided in this Article IV, this Agreement shall continue in effect for a term of
twenty (20) years. This Agreement shall automatically renew thereafter for four (4) additional,
five (5) year periods, unless notice is given in writing by City or County to terminate this
Agreement, which notice must be given no less than eighteen (18) months before the end of
the initial twenty (20) year period, or given no less than twelve (12) months before the end of
any of the five (5) year renewal terms. This Agreement may be earlier terminated at any time
byjoint action of City and County; provided, however, that in the event of such early termination,
City and County shall be jointly and severally liable for all expenditures and costs pertaining to
the Athletic Complex incurred by Sports Commission up to the date of termination as well as
those costs and expenses thereafter incurred or arising by virtue of City's and County's
termination of this Agreement, including all costs under any Construction Contract, the SFM
Agreement or other management agreement, vendor or supplier agreements, or other
agreement or liability pertaining to the Athletic Complex. Upon termination of this Agreement,
after payment of all valid debts and obligations arising from the design, development, operation,
and existence of the Athletic Complex, the Parties shall negotiate an agreement for the
disposition of all property of the Project. If no agreement is reached within sixty (60) days, then
(i) the Stuart Nelson Park Property and all fixtures thereto shall be deemed the property of City;
(ii) the Bluegrass Downs Property and all fixtures thereto shall be deemed the property of
County; and (iii) all personal property of the Project, whether tangible or intangible, shall be
transferred to Sports Commission. This Agreement may be amended or any of its terms
modified only by a written document authorized, executed and delivered by each of the Parties.
ARTICLE V.
MISCELLANEOUS PROVISIONS
(a) The Recitals hereinabove are true and correct and are incorporated herein.
(b) This Agreement shall be binding upon the Parties hereto and upon their respective
permitted successors and transferees.
(c) Nothing expressed or implied herein is intended or shall be construed to confer upon
any person, firm or corporation other than the Parties hereto any right, remedy or claim
by reason of this Agreement or any term hereof, and all terms contained herein shall be
for the sole and exclusive benefit of the Parties hereto, their successors and permitted
transferees. There are no intended third -party beneficiaries of this Agreement.
(d) No officer or employee of any Party hereto shall be subject to any personal liability for
any debt or contract created by this Agreement or as a result thereof.
(e) The Parties agree that they shall, at any time upon the request of another Party, make,
execute, and deliver or cause to be made, executed, and delivered to the requesting
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Party any and all other further instruments, certificates, and other documents as may, in
the reasonable opinion of requesting Party, be necessary or desirable in order to effect,
complete, perfect, or otherwise fulfill the obligations of the Parties under this Agreement.
(f) This Agreement and the rights and duties of the Parties arising out of this Agreement
shall be governed by, and construed in accordance with, the laws of the Commonwealth
of Kentucky without reference to the conflict of laws rules thereof. EACH OF THE
PARTIES HERETO KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER DOCUMENTS ENTERED INTO IN CONNECTION THEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHER
VERBAL OR WRITTEN), OF THE PARTIES HERETO.
(g) If one or more provisions of this Agreement, or the applicability of any such provisions
for any set of circumstances shall be determined to be invalid or ineffective for any
reason, such determination shall not affect the validity and enforceability of the
remaining provisions of this Agreement.
(h) The waiver by any Party of a breach, default or violation of this Agreement shall not
operate as or be constructed to be a waiver of any subsequent breach, default or
violation hereof.
(i) This Agreement may be executed in one or more counterparts and when each Party
hereto has executed and delivered at least one counterpart, this Agreement shall
become binding on all Parties and such counterparts shall be deemed to be one and the
same document.
Q) This Agreement and the language contained herein have been arrived at by the mutual
negotiation of the Parties. Accordingly, no provision hereof shall be construed against
one Party in favor of another Party merely by reason of draftsmanship.
(k) The MOU shall be superseded and of no more force and effect as of the Effective Date
of this Agreement.
(1) City agrees to waive all charges to Sports Commission for permits in connection with
the construction and other Development Work on the Project. City also commits to
expedite all inspections required in connection with design or construction Work
performed on the Project by or on behalf of Sports Commission.
(m)If requested by Sports Commission, City and County will give due consideration to
authorizing the transfer of the rights and obligations of Sports Commission under this
Agreement to a nonprofit corporation or a limited liability company wholly owned by
Sports Commission and, if such authorization is provided, will take all actions and
execute all documents reasonably requested by Sports Commission to effect such a
transfer of rights and obligations.
ARTICLE VI.
DISPUTE RESOLUTION
Section 6.1 — Dispute Resolution.
Except for an action seeking a temporary restraining order, an injunction, or an order to
compel compliance with this dispute resolution procedure, a Party can invoke the dispute
resolution procedures in this Article VI at any time to resolve a controversy, claim, or breach
arising under this Agreement. Each Party will bear its own costs for dispute resolution activity.
Section 6.2 — Initial Meeting.
At any Party's written request, each Party will designate knowledgeable, responsible,
senior representatives to meet and negotiate in good faith to resolve a dispute. The
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representatives will have discretion to decide the format, frequency, duration, and conclusion
of these discussions. The Parties will conduct any meeting in-person or via conference call, as
reasonably appropriate.
Section 6.3 — Executive Meeting.
If, thirty (30) days after the first in-person meeting of the senior representatives, the
Parties have not resolved the dispute to their mutual satisfaction, the highest executive officer
of each Party will meet and negotiate in good faith to resolve the dispute. To facilitate the
negotiations, the Parties may agree in writing to use mediation.
Section 6.4 — Unresolved Dispute.
If, after thirty (30) days from the first executive -level, in-person meeting, the Parties have
not resolved the dispute to their mutual satisfaction, any Party may invoke any legal means
available under Applicable Law to resolve the dispute except for trial by jury, including
enforcement of any default and termination procedures provided in this Agreement. EACH OF
THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER DOCUMENTS ENTERED INTO IN CONNECTION THEREWITH, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OF THE PARTIES HERETO.
Section 6.5 — Confidential Settlement.
Unless the Parties otherwise agree in writing, communication between or among the
Parties under this Article VI will be treated as confidential information developed for settlement
purposes, exempt from discovery and inadmissible in litigation. Nothing in the foregoing
sentence shall be construed to prohibit a Party from disclosing any such communication under
this Article VI to the extent disclosure is required by the Kentucky Open Records Act.
Section 6.6 — Business as Usual.
During any dispute resolution procedure or lawsuit, the Parties will continue providing
services to each other and performing their obligations under this Agreement.
Section 6.7 — Accrual of Fees.
All fees, charges and payments provided for in this Agreement will continue to accrue
pending dispute resolution procedures unless the dispute specifically involves a dispute over
the application of the fee, charge or payment.
ARTICLE VII.
Capitalized terms used not otherwise defined in this Agreement shall have the following
meanings:
"Agreement" means this Interlocal Cooperation Agreement for the Development and Operation
of the Paducah -McCracken County Athletic Complex dated as of the Effective Date, among
the City of Paducah, Kentucky, the County of McCracken, Kentucky, and the McCracken
County Sports Tourism Commission.
"Applicable Law" means any applicable statute, common law, treaty, rule, code, ordinance,
regulation, governmental approvals, interpretation, certificate or order of any governmental
authority, or any judgment, decision, decree, injunction, order or the like of any court, arbitrator
or other governmental authority.
"Athletic Complex" has the meaning ascribed to it in Section 1.5(a) hereof.
"Bluegrass Downs Property" has the meaning ascribed to it in Section 1.2(a) hereof.
Page 18 of 23
i
"Bonds" has the meaning ascribed to it in Section 2.2(a) hereof.
"Business Day" means a day of the year that is not a Saturday, Sunday or a day on which
banks are required to close in Kentucky.
"City" means the City of Paducah, Kentucky.
"City's Debt" has the meaning ascribed to it in Section 2.2(a) hereof.
"Committed TRT Receipts" has the meaning ascribed to it in Section 2.2(c) hereof.
"Completion Date" means the date of final completion of Work on all physical assets of the
Project.
"Construction Contract" means (a) a contract with a qualified contractor for the performance of
Work related to the design, engineering, or construction of the Athletic Complex, and (b) any
purchase orders for all or part of the Athletic Complex, including for furniture, fixtures and
equipment for use at the Athletic Complex.
"Construction Costs" means the aggregate sum of all costs and expenses to perform the
Construction Work through the Completion Date (i.e., final completion of all physical assets of
the Project) (including design, engineering, procurement, testing, start-up and initial operation
until the Completion Date) in accordance with the Construction Contracts. Such costs and
expenses shall include all payments under the Construction Contracts, all amounts included in
any Project budget approved by the Parties, costs for preparing the Project Site, power and
water for construction, utility costs, insurance and taxes required to be paid prior to the
Completion Date, various fees payable in connection with services rendered prior to the
Completion Date, including legal and consulting fees and disbursements, construction
management expenses, operation and maintenance costs, but only to the extent incurred prior
to the Completion Date. Construction Costs do not include the cost of capital (including interest
during construction), or any debt incurred by a Party to finance or refinance its payment
obligations under this Agreement, including Construction Costs.
"Construction Plans" has the meaning ascribed to it in Section 1.5(a).
"Construction Work" means Work performed during the period commencing on the Effective
Date and concluding on the Completion Date
"County" means the County of McCracken, Kentucky.
"County's Debt" has the meaning ascribed to it in Section 2.2(a) hereof.
"Development Costs" means the costs and expenses incurred by or on behalf of Sports
Commission in connection with the Development Work, the costs of acquiring and maintaining
any real property interests, and the costs and expenses of obtaining, defending and
maintaining Governmental Approvals. For the avoidance of doubt, Development Costs shall
include all costs and payments payable by the Sports Commission under the Construction
Contracts and the SFM Agreement.
"Development Work" means the Work in furtherance of this Agreement performed during the
period commencing on the Effective Date and concluding on the Completion Date.
Development Work includes (i) all activities that are customarily undertaken by the developer
of an outdoor athletic complex and associated facilities and includes the performance of Sports
Commission's obligations under this Agreement, the acquisition or maintenance of
Governmental Approvals, the acquisition of real property (including easements, rights-of-way
or other interests in property), the negotiation of and performance under Construction Contracts
and other agreements related to the Development Work, and (ii) all activities contemplated by
a budget approved by the Parties.
"Effective Date" has the meaning set forth in Article IV of this Agreement.
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"Environmental Laws" means any Applicable Laws in effect relating to the remediation,
generation, production, installation, use, storage, treatment, transportation, release, or
threatened release of Hazardous Materials, or noise control, or the protection of human health,
safety, natural resources, or the environment.
"Estimated Total Cost" has the meaning ascribed to it in Section 1.5(b) hereof.
"Fiscal Year" means the one-year period beginning on July 1 of each year and running through
the following June 30.
"Excess Operating Revenues" has the meaning ascribed to it in Section 2.2(e) hereof.
"Force Majeure" means any cause, whether of the kind enumerated below or otherwise, that is
not within the reasonable anticipation or control of the Party claiming the right to delay or
excuse performance of any obligation (except the obligation to make payment) on account of
such cause and which, in any event, is not a result of the negligence or intentional misconduct
of the Party claiming delay or excuse on account of such cause, including acts of God, acts of
the public enemy, condemnation actions, changes in Applicable Law, delay in or failure of
issuance of a Governmental Approval, insurrections, wars or war -like action (whether actual
and pending or expected), restraints of government (civil or military), blockades, embargoes,
strikes, lock -outs, labor unrest or disputes, unavailability of labor or materials, epidemics,
lightning, earthquakes, fires, hurricanes, storms, floods, wash -outs, explosions, civil
disturbance or disobedience, riot, sabotage, terrorism and threats of sabotage or terrorism.
"Hazardous Material" means any wastes, substances or materials: (a) which are hazardous or
toxic or radioactive or petroleum or petroleum products; (b) which are as of or prior to the date
of execution of this Agreement, defined as "pollutants", "hazardous materials", "hazardous
wastes", "hazardous substances", "toxic substances", "radioactive materials", "solid wastes", or
other similar designations in, or otherwise subject to regulation under, any Environmental Laws;
or (c) which contain, any polychlorinated biphenyls (PCBs), methyl -tertiary butyl ether (MTBE),
asbestos or asbestos—containing materials, or lead-based paints.
"Hazardous Materials Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, the Resource
Conservation and Recovery Act, 42 U.S.C. §6901 et seq., the Toxic substance Control Act, 15
U.S.C. §2601, the Federal Oil Pollution Act, 33 U.S.C. §2702, or any similar state or municipal
law.
"Initial Contribution" has the meaning ascribed to it in Section 2.1(a) hereof
"Key Matter" has the meaning ascribed to it in Section 3.3 hereof.
"Manager" means Sports Facilities Management, LLC, a Florida limited liability company,
during the period of time that the SFM Agreement remains in effect, or the successor
management firm engaged by Sports Commission to manage the Athletic Complex thereafter.
"Master Plan" means the Master Plan Report of the McCracken County Sports Tourism
Commission dated February 5, 2021.
"Material Adverse Effect" means an event, violation, inaccuracy, circumstance or other matter
that has, had or could reasonably be expected to have a material adverse effect on (a) the
development, construction or operation of the Athletic Complex, the assets of the Project, or
the financial condition of Athletic Complex, (b) an operating budget or Annual Business Plan,
or (c) the ability of any Party to perform any of its respective obligations under this Agreement.
"Month" means a calendar month commencing on the first day of such Month and ending on
the last day of such Month.
WOU" means the Memorandum of Understanding dated August 9, 2021, between and among
City, County and Sports Commission.
"Municipal Revenues" shall have the meaning ascribed to it in Section 2.2(g) hereof
Page 20 of 23
"Noble Park Dog Park" shall have the meaning ascribed to it in Section 1.5(a) hereof.
"Outside Funding" shall have the meaning ascribed to it in Section 2.3 hereof.
"Paying Agent" has the meaning ascribed to it in Section 2.1(b) hereof.
"Project" means the Project Site leased to Sports Commission and all of the assets, tangible
and intangible, acquired (or, prior to the Completion Date, expected to be acquired) by Sports
Commission from time to time in connection with the design, development, procurement,
construction, permitting, operation, management and maintenance of the Athletic Complex, all
in accordance with and subject to the terms and conditions of this Agreement and the SFM
Agreement.
"Project Site" means the real property included in the Bluegrass Downs Property and the Stuart
Nelson Park Property and all real property interests associated with or appurtenant to either of
said properties.
"Purchase Order" means any purchase order for furniture, fixtures and equipment ("FF&E) or
operating supplies and equipment ("OSE) procured, in either case, for use at the Project.
"Second Contribution" has the meaning ascribed to it in Section 2.1(d) hereof.
"SFM Agreement" means the Facility Management Agreement dated as of December 28, 2021
between Sports Facilities Management, LLC and McCracken County Sports Tourism
Commission.
"Shortfall" has the meaning ascribed to it in Section 3.5(a) hereof.
"Significant Commitment" has the meaning ascribed to the term in Section 1.3(d) hereof
"Sports Commission" means the McCracken County Sports Tourism Commission.
"Stuart Nelson Park Property" has the meaning ascribed to it in Section 1.2(b) hereof.
"Total Cost" has the meaning ascribed to the term in Section 1.5(a) hereof
"Work" means all necessary or desirable work, services, equipment, materials and supplies
arising out of or in connection with the development of the Project, including Project Site
preparation, acquisition and maintenance of Governmental Approvals, acquisition of rights-of-
way, design, engineering, permitting, procurement construction, hiring training, management,
administration, inspecting and other services, all items, materials, and equipment whether or
not such items, services, materials, or equipment are expressly specified in this Agreement, as
recorded in the accounting records for the Project.
"Working Group" has the meaning ascribed to it in Section 1.4(a) of this Agreement
IN WITNESS WHEREOF, the parties have signed this agreement as of the day and
date first above written.
[Signatures of the Parties appear on the following page]
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CITY OF PADUCAH, KENTUCKY
George P. Bray, Mayor
Attest:
By: _
Title:
McCRACKEN COUNTY SPORTS
TOURISM COMMISSION
Jim Dudley, Chairman
Attest:
By: _
Title:
McCRACKEN COUNTY FISCAL COURT
0
Craig Z. Clymer, Judge Executive
Attest:
By: _
Title:
Page 22 of 23
APPROVAL
Office of the Governor
Department for Local Government
100 Airport Road, Third Floor
Frankfort, Kentucky 40601
The foregoing Interlocal Cooperation Agreement for the Development and Operation of
the Paducah -McCracken County Athletic Complex is in proper form and is compatible with the
laws of the Commonwealth of Kentucky. Therefore, it is approved and certified for filing with
the Kentucky Secretary of State on this the _ day of September, 2022.
OFFICE OF THE GOVERNOR
DEPARTMENT FOR LOCAL GOVERNMENT
M
Title:
Date:
Page 23 of 23