Anchorage Assembly: Worksession re Proposed Management Contracts for the Sullivan, Boeke and Dempsey Ice Arenas

Those are both on our agenda for June 23rd. We will get into the meat of them, but first we'll do introductions. So I'll start with Ms. Park. If you can introduce yourself. Janice Park.

Jared Gerker. Zach Johnson. Sydney Schout. Anna Brawley. And any members on the phone?

Okay, not hearing any right now. Keep an eye out for that. We're also joined by members of the administration, members of the public, and we'll hear from folks. So when you do speak, we'll ask you to introduce yourself on the record. Also joined by Assembly Counsel and Clerk's Office folks in the back.

So with that, I'm going to turn it over to Mr. Fauzi to set the stage. Thank you. Well, thank you, Madam Chair. I'm Bill Fauzi, the Chief Administrative Officer. I want to start by saying thank you to the Assembly for pulling together this last-minute quick work session on a sunny day before a holiday weekend.

We have been working very hard in the administration to get us out of the posture that we have been uncomfortably living in for the last few months and to land this plane in a way that I think should be successful for the community. And so what I have here today, just a few slides, to talk us through the documents which are being published with the addendum to the agenda for Tuesday's meeting that will give proposed new management contracts to the Sullivan, the Boakey, and the Dempsey Ice Arenas. By way of reminder, we find ourselves here today in part because we know that we had challenges with the contract arrangement that we previously inherited. There was an internal audit report that came out in February of 2026 It came out with a number of findings, but for present purposes, I think it's important to emphasize that the existing incumbent contractor said that they really could never agree to assume the contract obligation to pay for the utility costs at the Sullivan Arena, and they wanted to renegotiate the contract. Practically, the way for us to renegotiate the contract is not to sole source a new contract to an incumbent bidder, but to get involved in a new request for proposal process.

And so that's the posture that we have been slightly uncomfortably living in for a while, where we issued a formal notice of default that was not cured to the incumbent operator while launching simultaneous requests for proposals for someone to propose to operate the Sullivan Arena and the Boakey and the Dempsey Ice Arenas, or both. Now I'm happy to say that we have concluded that process, and we posted requests for recommendations to award publicly on Monday, and then are putting these two Assembly items before you for the agenda on Tuesday. I want to talk through both of them, which is more or less a narration of the documents you have in front of you, and then create a space for the proposed operators to make some introductions and describe a little bit about their visions and interests, and then of course answer any questions you may have at this moment. So let's begin with the Sullivan. We are proposing through this Assembly document to award the management contract to All In 49 LLC.

That is the name that you may not already know, but All In 49 is a newly established entity that was formed by the ownership and membership of the management team of the Anchorage Wolverines. The proposal in its essential terms is that we would borrow a model that we have used for the convention centers and say, we recognize that the Sullivan Arena has not operated profitably since before COVID Mm-hmm. And the last contracts have all presumed that the facility can be self-sustaining. But our understanding now really is that the facility needs a subsidy to operate. And what we've proposed in this negotiation is to pay a capped net operating deficit of $613,500.

It would increase 2% annually. And of course, we would pay up to that amount. If the facility can operate more profitably than that, we would only pay the net operating deficit. That's the way the convention centers operate. Thank you.

Rate. We would do that for 5 years unless we're sooner terminated on 6 months' notice, with 5 additional 1-year renewal options. The magnitude of that net operating deficit is similar to the annual utility cost for the building that we are incurring now, notwithstanding the current contract language. The scope of services that would be provided are effectively the same as those which have been traditionally provided by any operator of the Sullivan. You can see it here: scheduling and booking, marketing, motion, ticket sales, concessions operations, ice making and maintenance, janitorial, etc., etc.

We have put a new emphasis in this contractual go-round on preventive maintenance for all the facilities that we are proposing to have new operations contracts for. The municipality has always had some kind of involvement in preventive maintenance, but it really hasn't been formalized or systematized in the way that we're attempting to do now, meaning that in addition to all of the usual annual reporting that we would get with our contractors, we would agree on an annual preventative maintenance plan, which would be submitted to us, and we'd work together on that maintenance operations. And the good news is, I think all of the folks here are equally invested in the facilities being in good working repair. I will also say that the contract with the proposed Sullivan operator says they will have to comply with our municipal ice time allocation policy, which I will say more about when we get to the Bokeh and Dempsey side of the equation. The existing arrangement for the Sullivan has been that 5% of the gross revenues of the facility are put into the capital reserve.

We'd keep that, but newly we would say that will move to 6% if the per-ticket surcharge mechanism that is currently in code is ever repealed. And that's a coming attraction. This is not yet into the assembly agenda, but I anticipate bringing to you in some short order an item which is not essential for the contract, but which I think will serve us better in the long run. In 1983, when the facility was brand new, there was hardwired into code a per-ticket surcharge for events at the Sullivan. There are only two facilities that have an arrangement like this.

One is the Sullivan, the other is Performing Arts Center. Everything else is just handled in the contractual arrangement. And at the time, if you pull those documents, the surcharge was based on the fact that the municipality provided a lot of services in support of events for free at the Sullivan, and they didn't have a way of collecting any revenue for traffic control That is not the model that the Sullivan Arena has operated in for at least a decade. Now all the traffic control services are directly borne by the operator. So the surcharge mechanism instead has just funded capital reserve accounts.

And I think all sides have agreed that it's sort of administratively complex for no particular reason. So I think we can land in a roughly similar place by just saying, we'll keep the capital reserve similarly healthy but we don't really need to let that, we need to hardwire a $1 surcharge that goes to us and a $1 surcharge that goes to the operator. So that'll be coming to traction. All In 49 is affiliated with the Wolverines, and that may require some special mention. In some ways, the Wolverines have become the anchor tenant of the Sullivan Arena, and that did create some additional thoughts for us.

One thing that I will say that was actually a happy development is that the contract requires that major users— agreements with major users be at market rates and be disclosed to the municipality. So we are keeping an eye on that relationship. With that, I wanted to make some space for the potential operators to introduce themselves, say a little bit about their involvement in the facilities today and their vision going forward. So if it's okay, I would now like to turn to Isaiah Freeman.

Thank you, Chair. Thank you, Assembly members, for this opportunity. Just, I want to make it real brief. I know everybody's time is really valuable. We're excited about this opportunity.

As the anchor tenant for the Sullivan, the Wolverines the last 2 years have had seen a lot of success in that building as far as the crowds and the general fan interaction. And the reason why we created this All In '49 is we want to be all in for the state of Alaska. In this facility. We really want it as— yes, it's a hockey facility, but it's so much more. And our vision is trying to get as many things in there as possible, whether it's hockey, trade shows, conventions— we've even thrown around TED Talks, all sorts of different things.

Why limit ourselves to anything? And we really, being in there for such a long time, and the staff that we have that's very experienced in events and event management and booking events, trying to find all the little niches in the state of Anchorage, in the city of Anchorage, but also in the state of Alaska and bringing them into the city for more economic impact and things like that over the course of this contract. So we have feelers out there for some large-scale concerts. Those one probably wouldn't be booked, obviously, this calendar year or in 2027, but we do see that. [FOREIGN LANGUAGE] progressing into late 2027, 2028.

But we're really excited about this opportunity, and again, we have really knowledgeable staff and excited staff to take this challenge on and be a real anchor for the community of Anchorage.

Do you want to mention your involvement in the concessions to date, or is that not worth mentioning? Oh, well, I can mention— Bill brought up a good point. Concessions right now, we've been talking with UAA, we've been talking with ASAA, ASD already, and Anchorage School District for moving games over into the Sullivan Arena, especially during some dead periods during the weeknights, like a Monday or Tuesday, because I know they do have some games over there, allowing more time at Ben Boeke to be able to have more rental opportunities for youth programs and things like that. So we definitely have some ideas. I've had— since the intent to award has gone out, my phone has been very popular and lots of messages saying, "We want to book this.

We want to book this. We have this trade show. We have these different types of things." So really excited for this possibility and really getting into everything and putting that calendar together and making it as full as possible for everybody. Thank you.

Thank you. I will just note that we were joined in the room at 3:18 by Member Baldwin-Day and 3:21 by Member Handeland. And I'll see, do you want to take questions now? Or do you? OK, so members, do you have questions?

Mr. Johnson. I have a question for Mr. Fawzy. So you mentioned that there will be 5 or 6% annually going for the gross revenues into the Capital Reserve. I don't remember the specifics, but as I recall, you know, last time we talked about the Sullivan, there was some backlog of maintenance or deferred maintenance perhaps. Do we feel fairly confident that this will be sufficient to cover the projected costs?

Or I mean, I guess sort of what I'm getting at is like, what's the risk that we're going to have a future conversation in the near term about more money to keep the facility operational? That is a great question. As I see here now, I can't give you chapter and verse on what the recent contributions to the Sullivan Capital Reserve have been. I will say Taylor Tracy, who is our principal administrative officer, is actually out of the office here today. She would probably have that at the tip of her tongue.

I am not aware of any reason now to think that we are on the cusp of entering into an agreement where we'll have to come back to you hat in hand and say there is more money that we need to pour into the facility. And that may actually tee up a little bit of another slide I wanted to show you after we boil off the first questions on the Sullivan agreement itself. Thank you. Okay, thanks. Ms. Kau.

Yeah, thank you. This question is for Mr. Fawzy as well, and I think just wanting— I appreciate you trying to move with efficiency through this presentation, but I do want to step back a little bit and just understand kind of the urgency. Is there a deadline or something that is requiring this to happen so quickly? Yes, thank you for that question. I probably should have more directly emphasized I think I reserved some space at the end to talk about it.

But the answer to the question is, we have been in a posture with the current operator where they have been in an uncured default since March, meaning we can terminate that contract at will. That has commercially resulted in that operator being unsure of when its operations end, meaning that they have not booked a lot of activity. I think at this point there is one event in the parking lot that is booked after July 1st. And they've let a lot of staff go. Mm-hmm.

They're kind of mothballing the organization. Meanwhile, in order to ready these facilities, both the Sullivan, the Boakey, and the Dempsey, a lot of work has to happen in July and August to prepare for the fall and winter seasons. And maybe we'll hear a little bit more about that on the ACIMM side too, but that involves putting ice back in the facilities and also importantly doing the scheduling under the Municipal Ice Allocation Policy, which typically happens in July and September. Mm-hmm. In support of that fall start on.

So what we have negotiated with both of the operators is a potential July 1st start date. And that is because we are trying to get to the goal line quickly so that we can end this period of limbo and uncertainty and provide certainty for everyone. Right now, a person who wants to use these facilities doesn't really know who they're supposed to be contracting with. Now, I understand that introducing it now and then putting it on an addendum for possible action on Tuesday is a bit of a tall order. And I think if we are unable to get assembly action on Tuesday, there are other options that we could talk about.

One is that we could do some special meeting after July 23rd. A potentially— an available but potentially less desirable option is pushing the start dates of the contract back. We'd have to work that out, but that will have practical ramifications on the ground. Unfortunately, it just, there was no elegant way to do this handoff because if we had done it earlier, we would have been in the season where there were a lot of users who had already booked and paid for the event. Doing it now is, we think, is least disruptive as we could, but it did create this moment where we have to kind of move quickly.

So that is a great question and I hope that answers it.

Ms. Park, then Ms. Baldwin-Day.

Thank you. To Mr. Fawcett, as a result of these people, basically the other entity being in default and being unclear about who's responsible for the facility, does that subject the city to liability? I don't think so, Member Park. What I mean to say about that is it is clear that they are still our contractor.

They're our contractor until we terminate the contract. But commercially, it became very difficult for them to woo any of these people who are now calling Mr. Freeman and say, "I will put you in the facility in September," because I think they also knew, having seen that we launched a request for proposal process, there was no certainty that they would continue to be the operator through September. I think the state of limbo has, as far as I'm aware, not put us in any additional posture of liability. Okay.

Thank you. Ms. Baldwin-Day. Yeah, thank you. Thank you all for being here. I have a couple of questions, and they're related.

So I'd like to go back to Member Johnson's question. The former, or I guess still current operator of the facility expressed to us that there were Several hundred thousand dollars worth of work in needed repairs and replacements at the Sullivan, and that those included major concession area work, walk-in coolers and freezers, compressors, LED visual displays, life safety upgrades, security systems, ice rink equipment, sound system components, etc. And I did not do any homework to verify the validity of those claims that were made. So I'm curious, I really want to be sure that if there— that we have a plan for addressing those things that does not leave a new operator on the hook for potentially significant investment that they did not plan for. And so I'd like to understand with a little bit more granularity what that means or what that looks like if in fact that list is accurate.

And then related to that is the conversation that I raised in our second work session on this topic, which was When do we get to the end of the useful life of the Sullivan Arena? And how, you know, has that been part of the conversation here? You know, bringing a new operator in, understanding that this facility is now upwards of 40 years old, and at some point we'll be arriving at a place where addressing deferred maintenance is no longer a viable option, and then we consider a total repurpose or reuse. Those— I'd like to hear from whomever would like to speak to that about those questions. Well, I'll take the first crack.

On the first question, some and maybe all of the things that you listed there, I believe, were raised in the context of the current operator saying these were deficiencies in the building that I went ahead and paid for things to fix and for which I would like to be reimbursed. So those were not open items, and we are still going to be involved in conversations about that because they were purchases that were made, as noted in the internal audit, that were outside of Title VII and beyond the contract. There, of course, are a lot of deferred maintenance needs at the Sullivan. The building is old, but there is a capital reserve account, and the major capital repairs remain our responsibility, as they always have been. But you did now force me to finally move the slide and say one other thing that we have kept in mind is this question of what is the forever solution, both for the Wolverines and for the Sullivan Arena.

And there are two things I want to seed the conversation with now. And the first is the Parks and Recreation Department has launched a Chester Creek Sports Complex master planning process. So there's already some big visioning about what that's going to look like going forward. And we're also aware that the university has had a dream of building its own ice arena. Mm-hmm.

In part because of the way their NCAA rules work, in part because their facility is from 1972 and smaller than Sullivan Arena. And I will tell you that we have some representatives from UAA in the audience because we know, all in '49 Wolverines and university, that our fates are absolutely linked here. And it wouldn't make sense to pour $15 million into the Sullivan if the university and Wolverines are going to help build us a new facility on campus somewhere. So I think in some ways, we are all thinking of this as— Yeah. A great solution that aligns a lot of interests and keeps the community active, the facility activated for the community in a really way that can help with Anchorage pride, but also is potentially a little bit of an interim solution as we think about what is the long-term answer here.

Because I don't know that the Sullivan at age 50 is going to be the place that we want to continue to make these investments in. So I don't have a better answer than that for now, but it is definitely part of the conversation. Thank you. No, I think that's useful. And, you know, especially as we are collectively staring down the barrel of an FY '27 budget, you know, the $600,000 subsidy, you know, a year doesn't feel like much in like the grander scheme of the entire municipal budget.

But in a scenario where we're sort of pinching for pennies in the couch cushions, it is of concern that we're going to be in a situation where we're subsidizing those operations, and rightfully so. I will note that that number is lower than what we are currently currently paying for the utilities in that space. So that's great news. But I do think it begs the question, you know, how many more years can the municipality continue to subsidize operations in an aging structure when we do perhaps have other options coming online? So thank you, appreciate that.

Next, I have myself in the queue. So I have been here long enough to remember the first contract discussion, and I know what we don't have before us today is the actual language of the contract. I'm not asking for that, but I remember the initial discussion and several members raising concerns at that time about provisions in the contract. So I guess that is context to say just in general to Mr. Fawzy and to the prospective operators, or I guess mostly to Mr. Fawzy, is this an essentially standard Muni contract? Are there things that you feel are noteworthy to flag that are deviations from what we normally —because I know that was a non-zero part of the first time around.

Yes, I think I can answer that by saying in the main it is a pretty standard contract. Most every municipal contract follows a template form where there is a Part 1, which is standard terms but can be more bespoke, and then a Part 2, which is all of our boilerplate of required language and sort of usual legal integration clauses and forum selection clauses, and we're following that too. This— the contract that we have negotiated here started on— well, we were— we had the template that we— that the previous contract existed on. It was cumbersome inasmuch as it were something like 3 or 4 appendices and whole quotes from municipal code. So it is cleaned up and we have given it a sort of full spit shine.

I don't know that there's anything that feels to me like a unique feature to pull out other than the one that I've already identified, which is that we have tried to put a greater emphasis on the preventative maintenance side by systematizing the way that will work. Thank you. And then my other question specific to the contract, I remember a lot of discussion the first time about essentially both— profit's not the right word, but kind of the shared risk, shared liability, as well as sharing in the benefits if this is, you know, generating income. I understand at this point it does need a subsidy, but just wondering, can you generally characterize kind of what that shared risk, shared liability looks like for—. Yeah, on that front, it operates very similar to the convention centers, as I mentioned.

If All In 49 can shoot for the moon, hit the grand slam, and the facility operates profitably, they can keep those profits. If, as we presume, the facility will operate at some net operating deficit, then we will pick up the amount of that net operating deficit, but only to the extent that it is less than $613,500.

And then we'll pay the actual amounts.

Thank you. Next, I have Mr. Hindeland. Yeah, I'm not sure if you mentioned this before, but I guess the current operator, did they submit a proposal at all, or was it— So I'm looking. The Title VII rules that we have say that none of these documents are public until the assembly approves. So I'm not sure I'm supposed to tell you the answer to that question, but we can figure that out.

That's completely fine, and I just wanted to point out when you use grand slam, you could have used hat trick. Hat trick, that's right. I need to move— yes, that's right.

Okay, I don't see questions from members at this point, so I think Oh, sorry, Miss Baldwin-Day, go ahead. Thank you. Yeah, relating, relating to the, to the audit, I'm curious if we actually have a physical inventory of municipally owned property at this time, because that was one of the things that came out in the audit was that the contractor had never performed or submitted an actual physical inventory of the municipally owned property in the space. And I would hope that our new contractor would begin with an accurate inventory that could then be maintained. So I'm curious about the status of that item.

I will say we have made some progress, but we do not have a complete physical inventory of our capital assets. I think we are anticipating that if these contracts are approved, there'll be initial walkthroughs where we really come to an agreement on what is in the building and get everything labeled. Anticipating a potential next question, no, we still do not have the audited financials from the current operator, although we were told that we would receive them by the as end of today. So we will see. Thank you for anticipating my second question.

I appreciate that.

What is our recourse with respect to that audited financial report? Well, I think we have the usual mechanisms, which is we can try to bring people into voluntary compliance. If there is not voluntary compliance, and of course there are legal mechanisms that are available to us as well.

All right, thank you very much. Okay, with that, I am now going to pivot to the Boakey and the Dempsey Arenas, and our recommendation of award is to award management of those facilities to the Anchorage Community Ice Management, or ACIM, which is a partnership with the Anchorage Hockey Association. So, who is the Anchorage Hockey Association? Well, this gives me a little bit of a special delight. The articles of incorporation for the bylaws for the Hockey Association were filed all the way back in 1961 by its principal founder, Dempsey Anderson, the man himself.

So wherever Dempsey is, maybe he's smiling somewhere. The scope of services is again what you would expect and not materially different from what we have done in the last several iterations of this event scheduling, ice allocation, marketing, promotion, concessions, operations, etc., etc. And here we have a nominal compensation of $10, but a one-time transition grant of $450,000. And that is for a few reasons. One is the— this is a new entity that is coming into the facility at its lowest moment of revenue, because these facilities are very seasonal.

So there are costs to put in the sheets of ice now that must be incurred ahead of the revenues being realized in November, December.

January. And the term of the contract would be similarly 5 years with 5 one-year options. What is different about this one is that we are moving to a nonprofit model. And here, the Hockey Association and ASIM, which they'll tell you about more directly in a moment, is really attempting to create a facility— an entity that is really wedded to the material health of these facilities themselves. And if ASIM ever ceases to operate those facilities, they give us back the operating cash that they have.

So if this works well, as we all hope it does, and ever we do come to part ways with each other, there's a way in which this $450,000 could operate in the nature of an advance. We also were mindful in these negotiations that there's significant deferred maintenance in the Bokeh and Dempsey facilities themselves, which impacts the attractiveness to the community, the functionality of these, and ASIM really brought to us a desire to focus on that first before we are knocking out replacing the dehumidifiers and other larger capital programs. And to facilitate that emphasis on near-term facility maintenance, they have proposed in their operating budget to spend much more on day-to-day monthly maintenance than has been occurring in the facilities in recent years. And they need time to sort of get their loan that's gonna get them off the ground paid off. And so the consequence of that is that in addition to that one-time grant, they're also proposing to pause the 5% deposits into the capital reserve through 2029.

We think that is okay. The capital reserve right now is approximately $1.3 million. We've been squirreling away something like $150,000 annually in recent years. So I think we can weather a temporary pause in a way that will get us a better facility appearance and functionality by the time that comes back online in 2029. And as I said, they are not proposing to take a management fee or to pay any kind of dividend so that all of the money goes back into the facilities.

And I here wanted to contrast that the move to a nonprofit model In the long run, should this work out, and we are all very hopeful that it does, could pay significant returns to the municipality. Our present agreement has said that we pay a management fee of $300,000 a year plus half of the gross profits to the operator. So in recent years, about $100,000 a year of revenue generated from the facility leaves the facility and stays with the operator. All of those funds in this model would stay trapped ASEM for the benefit of the facilities in the community. I mentioned that I was going to say more about the municipality's ice time allocation.

Here, again, we're proposing to award to an entity which has a strong affiliation with a dominant user of the facility. And I suppose that that could trigger some questions about how the facilities get scheduled and used. And the comfort I wanted to provide is that we do have a municipal control on how those facilities get scheduled according to this policy. This is something that we may be talking about more, a lot more next summer or somewhere down the line. So I'll give you this quick bit of history.

The municipal ice allocation policy we have now largely dates to 1999. And it was the result of a lawsuit where the Alaska Firebirds, which was a girls' competitive hockey team, after years of trying, said, We can't get enough ice time, or we can't get quality ice time. Time. And they sued under our own municipal Title V, and the court said, you're right, and ordered us, the municipality, to have a nice allocation policy, which despite the order happening in 1997 doesn't get ratified by the court till 1999. And that policy is largely unchanged since 1999.

John Rada, the former director of Parks and Recreation, took a run at updating it in 2019 or thereabout, but then COVID hit and he retired. So there are probably improvements to be made or updates to be made to the ICE allocation policy, but for now, we are— the proposal from ACM is that they're not gonna materially modify any of the ICE time schedules without written approval, and ultimately, the policy itself remains in the control of the municipality. With that, I would similarly like to make time for the folks at King Simmons to say a few words. Thank you, Mr. Falzy, Chair Brawley, and the rest of the Assembly members for being here today. I'll be relatively brief.

I feel like Bill's done a great job explaining our mission and why we sit here today as a nonprofit, as a part of the Anchorage Hockey Association. We're the main user group, and obviously we do understand potential for, you know, some level of a conflict of interest. We have structured ASIM very specifically to combat as many of those concerns as is possible. By doing just what Mr. Fauzi mentioned in terms of following the same interpretation of the ice allocation policy that's been utilized for the past 5 years, specifically since COVID with the other management group in place, and working with the municipality to make sure that that ice allocation policy is updated as it needs to be. We also have a strong committee of volunteers that represent a broad cross-section of the community.

That actually drive the operation of this subsidiary of the Anchor Taki Association. So while it is affiliated and it operates under the strength and stability and leadership of AHA, it is a separate entity that follows the leadership of the general manager, Graham McManaman, and then the 7-member committee that represents, again, a broad array of people that don't ultimately have, you know, the same incentive that we do in terms of like an individual team or program. So we feel very strongly about the leadership of this group. Thank you. And we look forward to partnering with ASIM and its staff to make sure that these facilities are taken care of, that all the— all of the revenues that are generated in the facilities stay in the facilities for the sake and the benefit of the Anchorage community.

We look forward to expanding services, expanding available operating hours, adding a whole host of programs that are ultimately going to be a real bright spot for this community. And I think these buildings are going to turn into something that are a beacon of light and energy and positive activity. Thank you. So thank you.

Hi. Good afternoon, Chair Brawley. Thank you and the rest of the Assembly for being here on a Thursday. My name is Jeanne Carey, and I'm the president of the Anchorage Hockey Association. The Anchorage Hockey Association board recognized that we cannot meet our mission to provide youth hockey in Anchorage, which we have been doing for 65 years, unless we have these municipal rinks to operate in.

So, these municipal rinks, about 75% is programming for youth, and half of that is purchased by our association. We are the Anchorage Hockey Association, is the incubator for ASIN. Okay. And as a nonprofit, and the vision is to make it a space that the community enjoys. And the previous contract was written in a way, as Mr. Fauzi pointed out, that there is an incentive to make it as profitable as possible, in that there's a 50/50 split with the city if, you know, you came out ahead.

But that created a management model of being a poor landlord and leaving things that were not repaired. And so this contract is different from the previous contract in that in the budget, 5% is put aside on a regular basis to go into doing maintenance, simple maintenance within the building and having things like the toilet that's broken repaired or the water fountain that's broken, repaired. Those types of things haven't been happening, and we as users have a mission to make it a more comfortable place for these youth and the rest of our community to be together. And so that's how this contract is very different from the previous contract.

Ms. Scout, go ahead. Yeah, thank you. I have one request and one question. I think the request for me trying to get up to speed on this, I know there are a few of us who are newer here.

Would it be possible by or before the Tuesday meeting to kind of get a side-by-side of the contracts, the previous one and the current one that's being proposed so that we can really understand the differences? I think there's a lot of baggage, especially with the Sullivan arena particularly, that my constituents will want to make sure we do it right this time. Yeah. Yes, I can give it the college try. Thank you.

Um, and then my second question is pretty simple, which is you referenced the maintenance and repairs needed. Who is paying for that?

That's a $100 question, right? Or $1,000 question? Million dollar question. And that has been central to some of our negotiation. And as I said earlier, ASIM, you know, it might be different for the Sullivan, we're moving the maintenance deeper into the wall than the previous contract.

And we're using user fees that come in during the season to repair the parts of the facilities that are interacting with the public. And so in that sense, it's a better deal for the city. I think one of the challenges in the past has been, oh, who's responsible, right? In the last contract, the city was responsible for everything. The maintenance department was responsible for everything, including, you know, fixing a toilet.

But this facility is behind the fire department, which is more important, right? But the maintenance department, you know, this is slow to respond to issues like this. And so I hope that answers your question. We're describing it as Everything outside the wall is us, and the major systems are still the municipalities. Major systems would be the HVAC system, the heating, ventilation, air conditioning.

Those major systems will still be the municipality's burden, but we're moving that maintenance line further out. And so that will be a benefit to the city.

I have myself in the queue, then. Ms. Baldwin-Day, thank you for being here, and thanks for really explaining in detail kind of how you set this up. I think that's helpful. I was curious— these questions are really, I think, for Mr. Fawzy, but It strikes me that we've had a conversation about a number of facilities, whether they've been operated by nonprofits or just— it's a general issue. And I would also say our friends down in city— city and borough of Juneau have really been struggling with what to do with a bunch of muni facilities and who can operate them.

So we're certainly not alone. So I appreciate really looking at creative solutions and figuring this out, especially keeping it in the community. That's all preface. Preface to say, can you describe kind of what other facilities, muni facilities right now are being run by nonprofits? You know, I know this is not a unique model.

I don't know if there's others that were formed specifically for the purpose of running them, but can you just kind of characterize it, how this fits into the portfolio? Yes, I think there may be 9. So let's see if I can do that. One is the Harry McDonald Center, which has been run by Flamme, which is also in an RFP process now. That's in Parks and Rec, and I believe all the others are in venues.

And so that's the museum, which used to be a municipal department but which was spun off in the begichera to become managed by a nonprofit, the Performing Arts Center, which is run by the performing arts center nonprofit that was created at the time to run it. Do you say contracted facilities or nonprofit facilities? Just generally those being run by nonprofits, so contracted. Oh, well, so then it's not 9 because the convention centers are not well, are not run by a nonprofit. They're operated by a for-profit entity, but managed with Visit Anchorage in the middle of those.

That was 2 of the 9. The golf course is leased by a for-profit entity, not a nonprofit. And then the remainder are these, the Boakey Dempsey and this Sullivan. Yeah, so it's a mix, essentially. And then my other question, this is more, I think, in the space of larger kind of capital needs.

I know for multiple years, at least for the Dempsey Arena, myself and Member Presverdia for the Westside have put those as state priorities in the CIP, knowing, of course, we all know where the state is with funding and capital projects, but just knowing that those are needed. So I'm wondering also, in those facilities, do you anticipate needs that would most likely need to be met by local bonding realistically? I know we've had facilities bonds. I don't know if there were any this year. But just in general, kind of the state of those two facilities, the Boki and Dempsey, and in the major maintenance or kind of major repairs category.

Great question. I will not answer it directly because I'll also say I remember that Hilltop is operated by a contractor, and I don't know if they're for-profit or nonprofit because they are in parks, which I have not previously had the pleasure of working with directly, but will hopefully soon. To answer your question, should either of these facilities be on bonds? I think the answer is probably yes, and in part because I think that we are very interested in making long-term energy efficiency saving investments in these facilities. I certainly—.

I'm not surprised to learn our energy-heavy uses, and these facilities are really old. I think it is entirely possible that some capital investments could meaningfully reduce the operating cost of these facilities going forward, and whether that's a bond or something else remains to be seen, but I think One of the reasons why I was actually very interested in working with venues in this administration is that I do think facilities have been a little out of sight, out of mind in the contracted model. [FOREIGN LANGUAGE] Maintenance just didn't rise to the same level of attention in the bond creation process. Hopefully we can address that. Thank you.

Yeah, I think that's something that obviously much bigger than the scope of operations of these facilities. But it's something I've heard concern from multiple folks about, and I think it's the— to me, it's the question of really what do you ask your tenant to do versus what the landlord is responsible for. I know that's been a sticking point. So, so thank you. Other questions?

Thanks. One question I just feel a due diligence to ask is, so we— All in 49 is a new business.

Are you set up to— I mean, I know— I'm sure you applied for this, so you believe you're set up to do this. What kind of, like, personnel systems track record do your folks have of running this kind of operation?

Currently, a lot of the staff that will be starting there is going to be group— the group from the Wolverines, like myself. Okay. And some of the other staff, again, will transfer over from the Wolverines. I have experience with large-scale events and facilities for the past 15 years at ASAA, March Madness Alaska, the large basketball state tournament, which sees 40,000 to 42,000 come through the facility. That's been my responsibility for the last few years.

Great. The ownership, I would say, is really the big piece of this, is they— we are set up, and it's because of their generosity of getting this All In '49 off the ground, getting bonded for insurance when we obviously haven't been operating yet. They've been a huge part of this. So we are set up, and now once we get the go-ahead and things are official, we can start putting people to work. Okay, awesome.

And then—. Remember, Scott, I might also jump in to say that I think you're right to point out that these are both new entities, but I think they're both new entities formed by heavy users of the facilities who already know a lot of the ins and outs. And practically, our experience has been that a lot of times when we are changing contractors, new contractors will at least on an interim basis find their way to the people who have been working in the building previously. So every time we relet a security contract, We still get the same faces up there, they're just in different uniforms. I wouldn't be surprised at all if some version of that doesn't happen in both of these settings, at least on an interim basis.

Okay, great. And then, yeah, my second question is just what does the handoff plan look like if this is approved with the previous contractor and the new ones? Another great question. We have been in regular weekly communication with O'Malley, the current contractor, and I'm very happy to report that at least Nat Settings very generously said that he's willing to be as helpful as he can be in this handoff period. However, we've also been operating under the veil of the Title VII procurement secrecy, so we've had very elliptical conversations about where we were in the process and when we're going to be able to talk about this more publicly.

I suspect more direct conversations probably happened on the other side of the curtain that we weren't directly involved in.. But I think that process begins in earnest now that it's more public as of Monday and really, really in earnest if and when the Assembly is able to act. And on that note, there are at least two more things I want to mention before we run out of time. One was to get to cost. The other was to get to scheduling because I do think that Asim can speak more directly to the time crunch if we go too much further into July.

If I could speak— Chair, again, Jeanne Carey, AHA President. I pointed out to Bill that you can't just sell ice next Monday, right? These different organizations, especially we're working with probably more user groups than— because smaller groups are setting their season plans. So any type of delay means loss of revenue because we're not able to to book these facilities. And I guess that also aligns with the Sullivan as well.

Any type of delay, you can't come and have a user the next Monday. You have to provide certainty. And July is typically when, as Mr. Falzy pointed out, we have— you have an ICE allocation policy. And what that ends up doing is the operator generates is a list of ICE that's sent out to each user group, and that's typically developed in July and then given to user groups within the month of July. So if we push out beyond July, then we're really starting to disrupt the programming for the organizations in our community.

Just to put a slightly finer point on that, the way the operation has— the way the ICE allocation policy has operated as I understand it, is that there's a first bid. You have been offered Tuesday at 5:00 AM, which people really do get, and you have a 45-day window to say whether you're gonna take it or not. So we really start to bunch into the time when people are gonna be really on the ice if that 45-day window doesn't start earlier. And then my second point that I wanted to mention is to underscore what Member Baldwin-Day said, and I want us to be eyes open about this, that this is a paradigm where we are going to spend money on these facilities in a way we haven't previously. If you approve both of these items, there will need to be another $400,000 that we'll put somewhere into the venue's budget before the year ends.

And then we will have operationalized this carrying cost for the Sullivan that is already in the venue's budget now, but which is new. We were not paying the utilities in this way previously. So I do want to say that I think that we don't want to be shy or hide that ball, that this will come with a cost. Our view as an administration is this is a cost worth bearing, that I think jump-starting the ASAM model in the Bucky Dempsey can pay some real long-term dividends for the community. And I think keeping the Sullivan and the Wolverines in operation, um, for this foreseeable future is something that Ms.

Baldwin-Day. Thank you. I do want to say to the three of you, you know, there was at one point a question as to whether there would be anyone interested in operating these venues, and so I just want you all to know that we really appreciate you being willing to jump in with both feet and do some really challenging work to make sure that these facilities serve the community in a really robust way. Way. So thanks for being willing to take on the challenge.

We really appreciate that, and I want to be very clear about that from the outset. A couple of questions, Mr. Falsi, in, in your direction, and this sort of follows on Ms. Brawley's questions, or Chair Brawley's questions earlier, with respect to potential options for funds to reinvest in these facilities. Do we expect to capture any of the funds that are owed to us at this point from O'Malley Ice Management? And if so, would those funds potentially be a source of reinvestment, you know, reinvestment dollars, capital funds for these facilities? I think what I could say in this context at this time is that I don't foresee a voluntary remission of a lot of money from the current operator this— on a short timeline.

Okay, fair. And then my second question is, Will these contracts be managed inside of the Parks and Rec Department? Is that the intention? No, these contracts have lived with the Office of Venues, and that is one that I think I am interested institutionally in thinking about that. They have moved around over time.

I think in its origin, the Sullivan was in Parks for a while. It's been in various iterations of Economic and Community Development. Right now, when I went through the constellation of the 9 contracted facilities, 8 of them are with venues. I'd say maybe it's 10 I got up to by the time I was done. 2 Are in parks, the Harry McDonald Center and the Hilltop.

And maybe there is some rationalization or some synergy to work through there, but as of now, the model is that they stay with venues. Okay, so they will be in venues. Great, okay. Yeah, I think maybe further conversation, not in this format, about contract administration would be great. So wonderful.

Thank you. Other questions from members? Okay. I do have just one question. So of course these are on our agenda for Tuesday.

And I think, you know, there's multiple possibilities. Obviously one is we pass them on Tuesday. The second is they get postponed to our next regular meeting is July 7th. A third option is we have a special meeting if folks do want to have time. So I'm not signaling what I intend to do.

I'm asking kind of, can you give guidance? You know, we talked about kind of the scheduling and the intent to get this done by July 1st. Kind of what are the options before the body? I think those are the options that are similarly appearing on the horizon for us too. So action on Tuesday, action sometime before July 1st with the July 1st handoff, or sometime into July.

I think all things being equal, if the Assembly is ready to vote on Tuesday, that probably provides the greatest certainty for these folks who are looking to go hire employees. But I understand the tension, so we will work with the body on whatever reasonable approach the body wants to land on. And a follow-up to that. So I know in the past there— and it was at the request of members to have a copy of the full contract. That's not typically what we do.

But if a member— well, it's okay. I mean, it's— I mean, it is something that we have the ability to ask for. It's not something that you see on our agendas as the full— we approve contracts all the time. We don't have the contract language. If a member would like to review that contract language, can you describe the steps for that?

I think it would be nothing more than sending me an email. That's right. The Title VII says we provide the essential terms of the contract, but they're all public documents. And I think it's probably more to prevent killing as many trees as we already kill with this and the agenda as much as anything else. Yeah, and I'll note the unusual nature of the prior contract was why other members had asked for it to be brought, but we did not ask that in this particular instance.

So I would encourage members, if you are interested, then I would definitely reach out. Of course, it's gonna be holiday weekend, but you are certainly welcome to avail yourself of that ability review it, so both contracts. Okay. Any other questions? Any closing comments?

Okay. Well, we are just about at time, so thank you again for being here, and thanks for members for coming at the end of the holiday weekend. So we will say happy Juneteenth, everybody, and have a good weekend. And this will be on our agenda for Tuesday. Thank you.

We're adjourned. Thank you.