The City Council on Tuesday gave the city manager permission to sign a master agreement that governs construction and operation of a $450 million multipurpose arena and sports facility at Will Rogers Memorial Center.
The council action comes a year after voters approved taxes to help pay for the project and the August council vote approving a resolution that spells out how the city will meet its financial commitment for the arena. The city and Event Facilities Fort Worth are expected to sign the 40-page agreement Wednesday, allowing for construction to begin in earnest.
Event Facilities Fort Worth, the nonprofit group chaired by Fort Worth financier Ed Bass that will lease and operate the arena, had already verbally approved the document. Event Facilities was created in 2000 and supports the Fort Worth Stock Show and Rodeo at Will Rogers.
The two sides have been meeting for several months hashing out the agreement, which essentially gives Event Facilities the lead in the development and construction of the 15,000-seat arena. The city, though, said it will have input at every step and will make some approvals, including the facility’s name.
The city is paying for half the cost of the arena, planned for the corner of Harley Avenue and Gendy Street in the Cultural District. Event Facilities is paying the other half and any costs above that.
Under the agreement, Event Facilities will select the project’s general contractor, but because the project has public funding, it will have to follow public bidding processes, said Susan Alanis, an assistant city manager. An adjacent parking garage being completely funded with private funds does not fall under the same rules, she said.
The city and Event Facilities will now sign a lease. According to the master agreement, Event Facilities will pay $1 in annual rent and assume all the financial risk for operating the arena. It’s intended for the group to break even and that any profits be reinvested in the facility. The lease initially will be for 30 years and include two, 20-year options.
Event Facilities has already spent about $38.7 million on the project and the city has set aside $14.2 million in seed money, pulling money from several funds to do so. The city’s portion is being paid for through several channels, among them taxes on ticket sales, stall rentals and parking at the new arena, as well as local and state hotel taxes.
The city is now required to issue $225 million in bonds for the project by Dec. 31, 2017, the same time Event Facilities is required to pony up its half, the agreement says. One account is being established for the money; and while Event Facilities will control it, the city will have access to it and audit the records, the agreement says.
Event Facilities is also facing a May 31 deadline to file conceptional drawings of the arena, the agreement says.
Event Facilities will not be allowed to mortgage the facility, nor will it be able to sublease it. And while the agreement says the arena will be the main venue for the city, the agreement doesn’t stop the city from building another venue if it wants to.
“The parties recognize that Fort Worth is a rapidly growing community and may be appropriately served by additional or larger venues in the future, so long as they do not jeopardize the success of the arena complex,” the agreement says.
“We are all highly motivated to ensure that the multipurpose arena succeeds so we would not want to be a competitor,” Alanis, the assistant city manager, said. “However, this is a growing community and demand may change. We have agreed that we would endeavor to work out a solution with the arena group to avoid any harm to this important project in the event that future councils do see a demand to participate in a similar facility.”