REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on Second Amendment to Agreement with STR Marketplace, LLC for Stadium Builder License Website Marketing
Report
BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
On October 8, 2019, the Stadium Authority Board (Board) approved Ordinance No. 2005 amending Chapter 17.30 of the City Code (Stadium Authority Procurement Policy), which rescinded the delegation to the Executive Director to enter into agreements without prior Board approval. As of the effective date of the Ordinance, November 8, 2019, all Stadium Authority agreements for services, supplies, materials, and equipment require the approval of the Stadium Authority Board.
The Executive Director is requesting approval for the following:
• Authorization to execute the Second Amendment to the Agreement with STR Marketplace, LLC (STR) to extend the term of the agreement by one year from June 1, 2022 to May 31, 2023.
STR has provided a secondary market website to facilitate the transfer of Stadium Builder Licenses (SBLs) since 2014. Under the scope of the existing agreement, STR manages and operates a website where buyers and sellers of SBLs conduct transactions. In exchange for use of the Levi’s Stadium trademarks and links on the Stadium Authority website, STR pays the Stadium Authority a base annual Sponsorship Fee of $325,000 and 50% of the balance of Transfer Fees if STR exceeds $650,000 in commissions for the contract year.
DISCUSSION
Pursuant to Purchasing Code section 2.105.160(b)(5)(e), the recommended action does not require competitive bidding because this is a “continued service” where changing vendors would result in service disruptions due to STR’s past experience performing these services.
The services provided under the agreement with STR provides SBL Holders with a resale market for SBLs. Users pay commissions to STR with buyers and sellers paying a 10% commission on sales facilitated on the website. In addition to the based annual Sponsorship Fee, STR compensates the Stadium Authority with each resale. The funds from the resales have been used for operating costs and debt service.
SBL Holders are not obligated to use STR’s secondary market website to transfer SBLs; transfers conducted outside of the website are processed by the Forty Niners Stadium Management Company, LLC (Stadium Manager) in accordance with the terms outlined in the SBL agreement.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
Through the STR agreement, the Stadium Authority has recognized $3,443,764 in revenue through March 31, 2022. This one-year extension to the term of this agreement will generate $325,000 (base annual Sponsorship Fee) in revenue for the Stadium Authority, with the potential for additional compensation if STR’s commissions exceed $650,000 for the contract year (June 1 through May 31).
COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Treasurer’s Offices.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
Authorize the Executive Director to execute a second amendment to the agreement with STR to extend the term by one year from June 1, 2022 to May 31, 2023.
Staff
Prepared by: Christine Jung, Assistant to the Executive Director
Approved by: Rajeev Batra, Executive Director
ATTACHMENTS
1. Original Agreement with STR
2. First Amendment to Agreement with STR
3. Proposed Second Amendment to Agreement with STR