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HomeMy WebLinkAbout04- RSBA & Assoc. Consultant Agreement CONSUL T ANT AGREEMENT THIS AGREEMENT is entered into between the City of Bozeman, hereinafter referred to as the "City," and RSBA & Associates, hereinafter referred to as the "Consultant," in consideration of the mutual benefits, terms and conditions hereinafter specified. 1. Proiect Desie.nation The City hereby retains the Consultant to provide a market study in order to assist the City in the study ofthe feasibility of establishing the Story Mansion located in the City of Bozeman, Montana as a lodging and hospitality facility. The Consultant will provide services as set forth below. 2. Scope of the Assie.nment The study will be concerned with the determination of the current and potential future demand for hotel accommodations in the market area, an assessment of existing and potential future competitive supply, and the share of the market that could reasonably be attained by the proposed project. The study will be in several phases as described in the f()lIowing paragraphs: A. Site Review Evaluate the site and the surrounding area with respect to the following factors: l. Accessibility and visibility 2. Future utilization and environment 3. Relationship to sources of demand f()r lodging accommodations 4. Relationship to area amenities 5. Relationship to competitive lodging facilities 6. Advantages/Disadvantages of the site versus the major lodging competitors in the marketplace B. Area Review Gather and analyze relevant economic data regarding the market area to determine whether the overall economic environment in the area appears suitable for a hotel development. Correlations between key economic factors and the demand for hotel rooms will be examined. The Consultant will utilize any available forecasts of theses indicators in the evaluation of potential future demand. C. Primary Research Perform primary market research in the area consisting of interviews with key demand generators, inspection and evaluation of competition, and discussions with persons familiar with development patterns and local hotel market in Bozeman, Montana. The Consultant shall conduct interviews with the representatives of the following: 1. Major employers in the market area; 2. Potentially competitive hotels; 3. City Officials in the areas of zoning, development, and transportation; 4. Bozeman Convention and Visitors Bureau; 5. Individuals from Montana State University with participation in visitor lodging; and 6. Individuals knowledgcable in the real estate market in Bozeman, Montana. D. Preparation of Supply and Demand Estimates Prepare estimates ofthe future growth in the demand for and the supply of hotel accommodations in the Bozeman location. The Consultant shall analyze historical growth in demand, and the characteristics of each of the principal segments of demand for hotel rooms. Finally, using the information gathered in the research, the Consultant will estimate growth rates in demand for each market segment and project demand for each o[the next five years expressed in hotcl room night's demand. The Consultant will provide an assessment ofthc competitive supply in the market area, the historical growth and futurc additions to the supply of hotel accommodations in the Bozeman location and prepare an estimate of future supply and demand, the cxpected markct area occupancies for hotel rooms, and a ratio of total area supply and demand, the expected market area occupancies t(Jf hotel rooms, and a ratio oftotal area supply which the proposed hotel is likely to offer. E. Market Share Estimates Upon completion ofthe estimate of market area supply and demand for the future, the Consultant will estimate the share ofthc market which the proposed hotel should reasonably be expccted to capture, by market segment, for it's five years of operation. Operating the hotcl as an independcnt or franchise will be a factor to consider as it related to dcvelopment of the hotel. F. Facilities Recommendations The Consultant will prepare recommendations for facilities which, in its opinion, will bcst meet the dcmonstrated and future market demand for the proposcd hotel. These recommendations will include at a minimum: 1. Number of mix of guest rooms and suites 2. Food and beverage concepts and sizes 3. Detailed description of banquet and meeting facilities including pre-function and circulation space necessary to properly service the needs of the demand anticipated [or the proposed project 4. Related services and amenities, such as fitness center, business center, recreation facilities, parking and other services designed to enhance the appeal of the proposed property. This will include a review of the site with the City's designated architect, if any. These recommendations are intended to provide the City's architect and planner with the basis f(Jr a design program for the proposed hotel and will serve as a basis for the estimate of operating results. G. Averae:e Dailv Rates The Consultant will review and analyze actual room rates achieved in the market area over the past several years, prepare a recommended room rate structure and estimate an average daily room rate for the proposed hotel. These estimates will take into consideration the type of demand serviced by the hotel, discounting policies for group and volume business, contract demand and other factors impacting the potential rate achieved by the planned hotel. These rates will be stated in constant and inHated dollars. H. Estimated Operatine: Results The Consultant will estimate occupancy, average daily rate, sales and operating expenses for each of the first five years of operation for the proposed property. This estimate will include all revenues and expenses and will result in a "bottom line" of income before rent, depreciation, interest, taxes on income. T. Manae:ement and Ownership Structures/Options The Consultant will identify potential structures f(Jr oversight management. 'rhis may include third party management on behal[ of current or designated ownership or lease structure by an experienced owner/operator. 3. Report and Limitations The foregoing information will be presented in a report, which is intended for the City's internal use and to discuss the development with perspective partners. It is not intended for use or to be considered suitable for use in obtaining financing, a franchise or management agreement. Five copies of the report will be delivered to you at the conclusion ofihe study. The report will be subject to the following limitations: I. The Consultant will have no obligation to update its tindings regarding changes in the market conditions or project concepts which occur subsequent to the completion of the Consultant's fieldwork. 2. The reports and the materials submitted may not be used in any prospectus or printed material used in connection with the sale of securities. 3. The scope of the studies and reports perfcmned in connection with this agreemcnt need not include the possible impact of zoning or other environmental regulations, licensing requirements, or other such matters unless they have been brought to the Consultant's attention and are disclosed in the report. 4. Time for Performance The Consultant hereby agrees to conduct the tield work necessary to produce a written report. The Consultant further agrees to produce said report not later than April 2, 2004. 5. Pavment a. Payment for the work provided by Consultant shall be a total amount not to exceed Seven Thousand Five Hundred ($7,500.00) Dollars unless expressly agreed in writing by both parties. An initial payment of One Thousand Five Hundred ($1,500.00) Dollars shall be paid within thirty (30) days of the City's execution ofthe Contract. The remaining portion shall be paid upon the completion of and the City's receipt of the written report. b. In addition to the foregoing, the City will be responsible for all expenses directly related to the project, including but not limited to air travel, ground transportation, overnight accommodation and board, telecommunications, and potentially the cost of the data from Smith Travel Research. c. Notwithstanding the fee payment schedule set t()rth above, it: at any time while performing this assignment, it becomes necessary to suspend work for a period of 30 day s or more, then the Consultant will be entitled to bill for that portion completed up to the suspension (less any retainer paid) at the rate of Three Hundred Fifteen ($315) Dollars per hour. However, in no event shall the amount exceed the contract amount set forth in this agreement. d. If payment tor professional fees and out-of pocket travel and related expenses is not received within thirty (30) days of the billing date, RSDA & Associates reserves the right to suspend all work until payment is made and apply a service charge of 1.5 percent per month or fraction thereof to the total unpaid sum. 6. OWNERSHIP AND USE OF DOCUMENTS All final documents, drawings, specifications and other materials produced by the Consultant in connection with the services rendered under the terms ofthis agreement shall he the property ofthe City whether the project for which they are made is executed or not. The Consultant shall be permitted to retain copies, including reproducible copies, of drawings and specifications for information, reference and use in connection with Consultant's endeavors. 7. Comvliance with Laws The Consultant shall, in performing the services contemplated by this service agreement, faithfully observe and comply with all federal, state and local laws, ordinances and regulations that are applicable to the services rendered under this agreement. 8. Indemnification The parties hereto hereby mutually agree to indemnify, defend and hold harmless the other, its offices, agents and employees from and against any and all claims, losses or liability or any portion thereof, including attorney's fees and costs arising from any damages, injuries, losses or expenses of any kind arising out of or related to the work associated with this agreement. 9. Warranty The Consultant makes no representation or warranty as the accuracy or completeness of the information and analysis provided and included in presentation materials and/or reports given to the City(if any), including but not limited to estimates provided under the terms of this agreement. The information provided to the City will be intended solely for the City's use and shall not be relied upon for any other purposes, or by any other entity without our prior consent, which will not be unreasonable withheld. Neither the Consultant's presentation material nor reports (if any), nor any reference to the Consultant's firm, may be included or quoted in any offering circular or registration statement, prospectus, sales brochure, appraisal, loan, or other similar agreement or document. 10. Insurance The Consultant will secure and maintain in force throughout the duration of this contract comprehensive insurance in the amount of One Million Five Hundred Thousand ($1,500,000) Dollars. 11. Indcvendent Contractor The Consultant and the City agree that the Consultant is an independent contractor with respect to the services provided pursuant to this agreement. Nothing in this agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither Consultant nor any employee of Consultant shall be entitled to any benefits accorded City employees by virtue of the services provided under this agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or for providing the Consultant workers' compensation coverage or otherwise assuming any duties of an employer with respect to Consultant, or any cmployee of Consultant. 12. Covenant Aeainst Continecnt Fees The Consultant warrants that he has not employed or retained any company or person, other than a bonafide cmployee working solely for the Consultant, to solicit or secure this contract, and that it has not paid or agreed to pay any company or person, other than a bonafide employee working solely for the Consultant, any fee, commission, percentage, brokerage fee, gifts or other considcration contingent upon or resulting from the award or making of this contract. For breach or violation ofthis warranty, the City shall have the right to annul this contract without liability or in its discretion or deduct from the contract price of consideration or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift or contingent fee. 13. Discrimination prohibited The Consultant, with regard to the work performed by and under this agreement, will not discriminate on the grounds ofrace, color, national origin, religion, creed, age, sex or the presence of any physical or sensory handicap in the selection and retention of employees or procurement of materials or supplies. 14. Assie:nment The Consultant shall not sublet or assign any ofthe services covered by this agreement without the express written consent ofthe City. 15. Non-Waiver Waiver by the City of any provision of this agreement or any time limitation provided for in this agreement shall not constitute a waiver of any other provision of the contract. 16. Termination The Parties any terminate this agreement at any time by giving ten (10) days written notice at the addresses contained herein. 17. Disputes Any dispute arising out of the terms or conditions of this agreement shall be adjudicated within the Eighteenth Judicial District of Montana. Further, this agreement shall be construed under Montana Law. 18. Notices All notices required herein shall be sent to the following: City of Bozeman 411 East Main P.O. Box 1230 Bozeman, MT 59771-1230 Rick Swig, President RSBA & Associates 400 Spear Street, Suite 106 San Francisco, CA 94105 19. Attorney's Fees In the event it is necessary for either of the parties hereto to bring any action to enforce the terms and covenants of this agreement, it is agreed that the prevailing party shall be entitled to reasonable attorney's fees including fees and salary paid to the City Attorney or other in-house counsel. 20. Intce:rated Ae:reement This agreement, together with any written amendments, represents the entire and integrated agreement between the City and the Consultant and supersedes all prior negotiations, representations, or agreements, written or oral. This agreement may be amended only by written instrument signed by both City and Consultant. DATED this 17th Day of February ,2004. CITY OF BOZEMAN ./;7 /] RSBA & ASSOCIA TE~ Riek Swig, President J-/7 / df anagcr ATTEST': (i~./ ~ Robin Sullivan Clerk of the City Commission