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    15.    
City Council Regular
Meeting Date: 11/06/2019  
Subject:    Consider Approval of Food and Beverage Service Agreement with MHC Bunker Hills
From: Matt Stemwedel, City Manager

INTRODUCTION
Staff requests that the City Council renew a food and beverage service agreement with MHC Bunker Hills to operate the restaurant and event center at Bunker Hills Golf Club.
DISCUSSION
The City Council authorized a memorandum of understand (MOU) with Morrissey Hospitality Companies (MHC) to act as a management consultant for the food and beverage operation at Bunker Hills Golf Club on October 12, 2014. Subsequently, the City Council approved a food and beverage services agreement with MHC Bunker Hills to operate the restaurant and event center at Bunker Hills Golf Club through 2019.

At this time staff is requesting the City Council consider approval of a new five-year agreement that would commence January 1, 2020 and would be effective until December 31, 2024. The proposed agreement is nearly identical to the existing agreement with a couple of exceptions. First, the bonus structure provided for under Article 5.3-A was revised to include an opportunity for MHC to receive a 10% bonus on annual Net Operating Income (NOI) over $50,000. The existing contract allows MHC to receive 25% above $300,000 NOI.  Additionally,  language was added under Article 7.2 that would allow the City to cancel the contract at its discretion if Gross Operating Profit (GOP) doesn’t reach $250,000 at minimum. GOP doesn’t factor in capital depreciation and some other fixed charges. No other significant changes are being proposed, including the management fee (3% of gross revenues).
RECOMMENDATION
Staff recommends authorizing execution of the Bunker Hills Golf Club Food and Beverage Service Agreement with MHC Bunker Hills.

Attachments
MHC Bunker Hills Food and Beverage Services Agreement
Exhibit A - BHGC Upper Level
Exhibit A - BHGC Lower Level

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