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South Bend Redevelopment Commission <br />Regular Meeting –January 15, 2010 <br /> <br />5. OLD BUSINESS <br /> <br />A. Airport Economic Development Area <br /> <br />(1) continued… <br /> <br />out. The city will provide casualty insurance <br />and will self insure for liability. Kitson will <br />provide various liability insurances. <br /> <br />The term of the contract will be three years, <br />with a two-year extension unless notice is <br />given. If the contract is terminated without <br />cause, Kitson will receive $40,000 if during <br />the first year, $30,000 if during year two, and <br />$20,000 during year three. <br /> <br />Kitson will receive a monthly management <br />fee of $8,000 and $2,000 per month for <br />accounting. There is an incentive fee of 5% <br />of the gain in gross revenue over the average <br />2009 and 2009 gross revenue (average is <br />$1,520,000). This differs from the proposed <br />incentive fee the Commission approved at <br />the time it awarded the proposal because of <br />the tax exempt bonds on the course. We <br />aren’t allowed to tie incentive fees to net <br />profits on the course. It meets legal <br />requirements to tie it to gross revenue. There <br />will also be a discretionary incentive fee of <br />up to 25% of the incentive fee. It will be up <br />to the Commission to establish evaluation <br />criteria and determine whether any fee is <br />appropriate in a given year. <br /> <br />Reimbursable expenses are capped at <br />$10,000 per year. A separate fee for strategic <br />planning is $10,000, payable in two $5,000 <br />installments, based on milestones being <br />achieved. Minimum maintenance standards <br />are included in the contract in Exhibit A; and <br />operations policies are Exhibit B. <br /> 8 <br /> <br />