RUTH ECKERD HALL ROYALTY THEATER MEMORANDUM OF UNDERSTANDINGRuth Eckerd Hall Royalty Theater Memorandum of Understanding
This Memorandum of Understanding is made and entered into this qk- day of
2008, between the CITY OF CLEARWATER, a municipal corporation of
( the State of Florida, hereinafter referred to as the ("City") and RUTH ECKERD
HALL, INC., a Florida non-profit corporation, hereinafter referred to as ("Ruth
Eckerd Hall").
This Memorandum of Understanding is entered into by the City and the Corporation for
the purpose of formalizing the intent of the Parties relating to the responsibilities and
obligations regarding the purchase, rehabilitation, operation and maintenance of the
Royalty Theater and the Lokey building (403 and 401 Cleveland Street).
It is the intent for Ruth Eckerd Hall to eventually take on the responsibility of the
renovation and operation of the Royalty Theater. To that extent:
1. The City will assume the purchase contracts for the 403 (purchase price of
$975,000.00) and 401 (purchase price of $1,335.000.00) Cleveland Street and
will purchase said properties and cover all closing costs.
2. The City and Ruth Eckerd Hall will develop lease and management
agreements similar to the existing agreement for the operation of Ruth Eckerd
Hall recognizing however that it is not the intent that the City subsidize the
ongoing operations of the Theater following rehabilitation of the facility.
3. Ruth Eckerd Hall estimates the total project cost to be $14.2 million broken
down as follows: $2.4 million for purchase and closing costs, including Ruth
Eckerd Hall out of pocket due diligence expenditures (not to exceed
$13,920.00), $6.8 million for construction and renovation and $5 million for
an endowment fund.
4. Ruth Eckerd Hall Boards have voted to move forward with a campaign to
raise $8 million of the $14.5 million needed for this project. Ruth Eckerd
Hall's $8 million commitment is contingent upon a total City/public
commitment of $6.2 million toward the project. The City's obligation to
contribute the $3.8 million for renovation and construction costs is contingent
upon Ruth Eckerd Hall raising its $8 million commitment and the City and
Ruth Eckerd Hall entering into and lease/management agreement for the
facility as provided herein.
5. Ruth Eckerd Hall and the City will work cooperatively to identify and obtain
other public funding sources of $3.8 million, which will reduce the City's
contribution toward the construction and renovation, beyond the initial
purchase price and closing costs of $2.4 million.
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6. In addition, presenting some performances in the Capitol/Royalty Theater
during the pre-construction period will help generate interest in the project.
During the pre-construction period, Ruth Eckerd Hall will lease the facility
from the City for $1.00 for each use. Ruth Eckerd Hall will be responsible for
all costs associated with each event, including staffing, set up and clean up.
The net profit for each event will be split equally between the City and Ruth
Eckerd Hall. The City will assist Ruth Eckerd Hall in getting the facility ready
for use prior to commencement of remodeling. The City will advance/provide
funding following closing not to exceed $250,000 (to be netted from the
above cost estimates from the City's/public funding total of $6.2 million) for
cleaning the theater, clearing the theater of unwanted and unnecessary debris
and clutter, purchasing stage, lighting, sound and projection equipment and
other necessary items to ensure a comfortable and safe environment with
adequate equipment to be able to mount performances, and preliminary
architectural and construction manager services. Equipment purchased would
be able to be used in the final project. Ruth Eckerd Hall would carry
appropriate insurance up to entertainment and performing arts industry
standards for such use of the theater and shall indemnify and hold harmless
the City for any losses that occur as a result of Ruth Eckerd Hall's use of the
theater.
7. It is estimated that it will take a minimum of two and a half years to raise the
$8 million noted in number 4, commission construction drawings and
complete the renovation and construction of the facility.
8. The City will work with Ruth Eckerd Hall to vacate the alleyway behind the
Capitol/Royalty Theater to allow for expansion of the stage house by the time
construction is to commence. The Parties recognize that there are factors
outside of City control that affect the vacating. In the event the alley cannot
be vacated, it is the intent of the Parties to move forward with the
rehabilitation under a modified plan.
9. Ruth Eckerd Hall will accept responsibility for the construction and not seek
any additional funding beyond what is stated in this document for the
construction and renovation of the theater and the adjacent building.
10. In raising endowment funds, it is the intent for Ruth Eckerd Hall to operate
the facility without any ongoing annual subsidy from the City.
11. Until such time as Ruth Eckerd Hall is ready to commence the construction
and renovation of the facility and execute a lease/management agreement, the
City shall be responsible for any monthly operating costs, which we expect to
be minimal (utilities-electric, water, sewer, minor maintenance and
insurance).
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12. Rent (at this time approximately $5,500 per month in a triple net lease)
collected from the tenant that occupies 401 Cleveland Street shall be paid to
and retained by the City commencing as of closing.
13. Once the renovation of the Capitol Royalty Theater is complete, Ruth Eckerd
Hall will be responsible for the ongoing annual maintenance for the normal
operation of the facility including, but not limited to normal wear and tear for
sound, lighting and theatrical equipment, theater seating, electrical and HVAC
system maintenance, etc. Since the construction will install mostly new
systems and equipment, it is believed that there would be no major capital
improvements required for at least five years. The City will provide funds for
major capital improvement items including roof, total HVAC systems, etc. A
list will be established and mutually agreed upon of the types of capital
improvements that would be part of the City's capital improvement budget.
CITY OF CLEARWATER, FLORIDA
rank V. Hibbard
Mayor
Approved as to form:
Pamela K. Akin
City Attorney
RUTH ECKERD HALL, INC.
r
Robert Freedman
President and CEO
Attest:
Cy a E. Goudeau
Cit Jerk
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