Welcome to Scribd. Sign in or start your free trial to enjoy unlimited e-books, audiobooks & documents.Find out more
Download
Standard view
Full view
of .
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
Primary and Major Issues - Management Agreement

Primary and Major Issues - Management Agreement

Ratings: (0)|Views: 4|Likes:
Published by CityStink Augusta

More info:

Published by: CityStink Augusta on Nov 05, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

10/31/2014

pdf

text

original

 
Tee Management Agreement Major Issues at 11/2/2012
Page 1 of 5
Primary Issues1.
 
Differences in 2007 and 2009 Commission Approvals and theseDocuments. No cost cap. Unlimited conduit to Augusta General Fund.
2.
 
Cost shifting between agreements. Electric utility example. Beer inventoryexample. $300,000 a year for 50 years = $15,000,000
( Augusta
s Laney WalkerImprovement cost calculation method)
3.
 
Kitchen built under Tee Agreement where ARLLC supplies equipmentswitches to 50 year Conference Agreement where Augusta supplies andrepairs kitchen equipment with no revenue from Conference Center.4.
 
No accounting provisions for backcharged labor to Hotels or any othercredits, refunds, rebates, or other benefits going to Augusta.5.
 
Cross indemnification between Tee and Conference Center
 –
severabilityissues. WHO IS LIABLE?6.
 
Too many ways to circumvent Annual Plan, including that an unknown,
unknowable “Standard” trumps ever
ything, including Annual Plan.7.
 
Fringe benefits and bonuses, including for LLC PRINCIPALS, are unlimited.8.
 
Accounting and auditing envision most of the accounting off TEE Centerbooks, without rights of audit to ALL HOTEL ACCOUNTING records on areal time basis.9.
 
Conventions can be booked using Tee Exhibition Hall while usingConference Center where Augusta gets no revenues.10.
 
When Augusta signs these contracts, it assumes extraordinary indemnityprovisions immediately so that it would have to advance payments to theManager to defend the Manager from actions by Augusta
Page by Page Primary and Secondary Issues
Page 1Augusta's Agreements are with Augusta Riverfront LLC. How can there be an assignment to this newACCMLC entity without the contract between Augusta and ARLLC existing first?
 
Who are the members of ARLLC and ACCMLLC?Why does the 2007 Term Sheet reflect duties of ARLLC to BUILD, but the Management Agreement citesthat only Augusta is "to construct"?Page 2
 
Tee Management Agreement Major Issues at 11/2/2012
Page 2 of 5ARLLC owns the hotels. ARLLC manages the Conference Center. Another LLC, ACCMLLC, is the TeeCenter Manager. Then, ARLLC is under its wholly owned Subsidiary ACCMLLC as caterer?Page 3The CORE treats the kitchen as being the "Conference Center Annex," combines it with the existingConference Center, then defines the combination as the "Expanded Conference Center." In otherdocuments the kitchen becomes part of the 50 year Conference Center deal.Page 4There is no mention of credits, rebates, refunds, and other offsets to costs. All of these things shouldinure to the Owner and the contract should say so, enforced by full rights of audit.Since salary costs include "accrued and vested fringe benefits...other compensation OF WHATEVERNATURE...and for the avoidance of doubt,Salary Costs may also include bonuses for employees" AND SHARED EMPLOYEES MAY INCLUDE "officers,managers or MEMBERS OF THE MANAGER," doesn't this create liability for Augusta for costs of unknown magnitude for LLC Owners' benefit's package?Page 5"For the avoidance of doubt, such standard shall equal to the higher of (a) the condition of theConference Center, and (b) the standards of Marriott Corporation" THIS IN CONJUNCTION WITHREQUIREMENTS THAT FUNDING EXCEED PLAN TO MEET 'STANDARD CREATES UNLIMITED, UNKNOWNLIABILITY FOR A
 
Author: Al Gray Subject: Sticky Note Date: 10/29/2012 6:46:52 AM"Manager shall have discretion and control, free from interference, interruption or disturbance, in allmatters relating to management and operation of the TEE Center, including, without limitation.... and, ingeneral, all activities necessary for operation of the TEE Center." ISN'T THIS LANGUAGE TOO POWERFULagainst Augusta?Page 6The 2007 Term Sheet which serves as the partnership agreement says "The City of Augusta ("Augusta")and Augusta Riverfront LLC ("LLC") are interested in entering into a joint venture to own, build andoperate a Trade, Exhibit and Event Center ("Trade Center")." WHAT HAPPENED? These contracts
dropped all references to ARLLC building, when ARLLC’s Simon actively participated by signing off on
change orders.Page 7Use a regional CPI?Page 8
 
Tee Management Agreement Major Issues at 11/2/2012
Page 3 of 5In the event of termination, since accounting is on an accrual basis as set forth in this contract, wouldn'tAugusta get accounts receivable?Isn't this an overt warning that there are tremendous conflicts of interest in the agreement. Forexample, wouldn't the parent of the manager(manager being ACCMLLC and parent being ARLLC.) whohas the conference center at a mere 5% of revenues/expenses and gets ALL CATERING Revenues at theConference Center to set rates in the conference center prejudicial to the Tee Center. THERE HAVE TOBE RIGHTS TO AUDIT ALLHOTEL CONTRACTS AND CONFERENCE CENTER CONTRACTS BY AUGUSTA toprevent the implied conflict of interest from possibly becoming real.Page 9Policies and procedures generally are of secondary authority to the contract and exist concurrently withthe contract. Shouldn't they be executed at the same time?Page 10Once again, there is no provision in sections relating to accounting and costs referencing backchargingtime spent on Manager's other businesses back to the manager. There are no provisions that credits,rebates, and refunds inure to the owner, Augusta.Augusta will be paying for replacement Kitchen Equipment under this provision, even though thekitchen equipment is under the Conference Center agreement for 50 years.An expenditure to meet the "Standard" could exceed 95% of the capital account at the beginning of thefiscal year (95% of $100,000 or $95,000?)Page 11
"Manager is hereby authorized, without Owner’s prior approval, to enter into contracts, i
n its own name
or as Owner’s agent, with vendors orservice providers of its choice"
Is no competitive bidding required.Augusta is going to indemnify ACCMLLC if it enters into a contract with an affiliated company?Page 12The account deposit requirements can be used to require the owner to deposit funds during the lastquarter without taking into account the $250,000 to be deposited January 1?Page 13'Standard' supersedes the Plan.Noted that "otherwise authorized hereunder" can cover debts, liabilities,and obligations that the Manager claims are necessary to meet "Standard"Page 14Shouldn't Augusta be constantly provided with the rental rates for its conference center, so as todetermine whether there is an imbalance that could steer business to the Conference Center and away

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->