AGENDA CAPTION:
Title
Consider approval of Resolution 2021-59R, approving a first amendment to the San Marcos Conference Center Side Agreement with JDHQ Hotels, LLC for the purpose of extending the date for JDHQ’s completion of certain improvements under the Conference Center property improvement plan by two years; authorizing the City Manager, or his designee, to execute this amendment on behalf of the city; and declaring an effective date.
Body
Meeting date: March 16, 2021
Department: City Manager’s Office
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Fiscal Note:
Prior Council Action: Resolution authorizing the City Manager to execute the San Marcos Conference Center Side Agreement with JDHQ Hotels LLC. (a subsidiary of Atrium Hospitality) - June 19, 2018.
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Background Information:
In June 2018, City Council authorized the City Manager to execute the San Marcos Conference Center Side Agreement with Atrium Hospitality (Atrium). This agreement outlined certain improvements to the Conference Center to be completed no later than December 31, 2021. Per the agreement, Atrium did complete the podium signage requirement to reflect the City’s ownership and replaced carpet in the Conference Center in early 2020. Due to the effects of COVID-19 on the travel and tourism industry, Atrium has approached the City asking to amend the Agreement to allow for a two-year extension to December 31, 2023 to complete the remaining improvement items.
Atrium shared that their business, along with the rest of the hospitality industry, suffered significantly through 2020. Similar to the City, Atrium took some extraordinary measures to weather the crisis. Some of these included: furloughing over 90% of associates, all remaining salaried employees took salary cuts, some hotels were closed, and all open hotels severely limited operations.
Amending the agreement to allow additional time for the required improvements also allows Atrium to make improvements making them well positioned to facilitate hybrid meetings. In addition to planning and training resources, a significant capital investment is required to increase the excess bandwidth at the hotel and conference center. Atrium believes that this capital investment in technology will allow for a quicker recovery due to current and future meeting trends related to COVID-19 concerns and allow them to resume their growth path for the duration of the lease term.
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Recommendation:
Staff recommends approval.