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City to hire bond-specialist counsel to review Heyday management agreement for Family Entertainment Center
Summary
Council authorized up to $10,000 from the Family Entertainment Center budget to hire Clark Kimball to review the proposed management agreement between the Seminole Utilities Board and Heyday, citing concerns about jeopardizing tax-exempt bond status.
The city approved an engagement to retain outside counsel to review the proposed management agreement between the Seminole Utilities Board (SUA) and Heyday for the Family Entertainment Center, citing concerns that certain contract language could jeopardize tax-exempt financing.
Officials said the management contract requires specialized legal review because certain operational provisions could threaten the tax-exempt status of bonds issued to build the center. Staff recommended retaining attorney Clark Kimball for a review, with a cost estimate of $10,000 to be paid from the center's budget. The council approved the engagement on a roll-call vote.
City staff and the council also received a project update: 95% design drawings for the exterior and site plan were shown, and staff said 100% construction documents were expected shortly. The site was described as fronting Highway 9, with parking, arcade space and a climate-controlled patio overlooking a canyon. Bidding was projected to begin in late March with construction starting in April, pending final budget adjustments and value engineering.
Why the legal review: City attorneys and staff said the IRS scrutinizes management agreements connected to tax-exempt bond financings. One council member summarized the risk: "It could jeopardize the tax exempt status," a staff member said, explaining the rationale for outside counsel.
Next steps: Counsel will review the management agreement and advise changes required to protect the bond structure and tax status. Staff said the review would be funded from the Family Entertainment Center budget and that final management terms will be adjusted as necessary before execution.
Ending: Project leaders said the building and site are near final design and bidding; council members said a careful legal review is warranted to avoid future tax or debt complications.
