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HomeMy WebLinkAbout2024-07-22 - Agendas - FinalFayetteville Advertising and Promotion Commission July 22nd, 2024 Location: Fayetteville Town Center, 15 W. Mountain Street Commissioners: Staff: Chrissy Sanderson, Chair, Tourism & Hospitality Representative Katherine Kinney, Tourism & Hospitality Representative Todd Martin, Tourism & Hospitality Representative Elvis Moya, Tourism & Hospitality Representative Andrew Prysby, Commissioner at-large Sarah Bunch, City Council Representative Mike Wiederkehr, City Council Representative Molly Rawn, CEO I. Call to order at 2:00 p.m. II. Old Business Agenda A. Review and approval of June minutes. III. New Business A. CEO Report. Molly Rawn. An executive overview of the previous month. B. Financial Report. Jennifer Walker, Vice President of Finance. C. Vote. Renewal of Arrivalist subscription. Staff recommends commission authorize the CEO to renew the subscription for the Arrivalist Trip Dashbaord for a total cost of $22,500. Memo and quote attached. D. Vote. Memorandum of Understanding with TheatreSquared. Experience Fayetteville and Theatre Squared staff have developed a memo outlining the appointment of an Experience Fayetteville representative on the T2 board of directors. Memo attached. E. Additions to the agenda may be added upon request from a majority of the commissioners. IV. Adjourn Fayetteville Advertising and Promotion Commission Minutes June 24, 2024 Fayetteville Town Center Commissioners Present: Commissioners Absent: Staff: Todd Martin, Tourism & Hospitality Representative Elvis Moya, Tourism & Hospitality Representative Mike Wiederkehr, City Council Representative Andrew Prysby, Commissioner at-large Sarah Bunch, City Council Representative Katherine Kinney, Tourism & Hospitality Representative Todd Martin, Tourism & Hospitality Representative Molly Rawn, CEO Jennifer Walker, VP of Finance, I. Chair Sanderson called the meeting to order at 2:00 pm and declared a quorum. II. Old Business A. Chair Sanderson presented the May minutes for approval with Commissioner Wiederkehr making a motion and Commissioner Moya seconded to approve the minutes as presented. III. New Business A. CEO Report Rawn began by sharing that our HMR tax is rebounding, we are beginning to close the gap in between our projected and actual HMR revenue. She shared that the new online payment system the city made mandatory in April has caused a delay in some payments being made as users are becoming familiar with the system. She pointed out that last month we reported a significant decrease in April collections, this month she was able to show how April collections has improved greatly as users are making back payments. Our 2023 financial audit is complete, and commissioners have received the report. We will be hearing a report later in the meeting. Hotel occupancy is flat, which is an improvement over last month’s report. The Visitors Center saw a 46% increase in attendance in May compared to last year. Our May 2024 hotel occupancy compared to May 2023 shows an 8% increase while our YTD hotel occupancy shows an almost flat or .2% growth. In sales, Tina traveled to an international show, IPW with a cooperative opportunity with Arkansas Tourism. The team took on over 90 appointments. The Ragnar Relay has secured dates for 2025 race. It will be held Easter weekend. Tina continues to represent us with motorcycle events, recently taking Vanny to the Over and Out MOTO event in Mansfield, MO. Julie, Eden and Molly surprised 15 hospitality professionals with “Hospitality Hero” certificates in May during National Tourism week. Our very own Chair, Chrissy Sanderson, was also included in these awards. We had 467 events in May on our web calendar. Our website sessions were down 4% from April 2023, but up 83% compared to May 2023. The Fayetteville Strawberry Festival and NWA Pride events both made the top 10 most viewed pages. Our primary email list has climbed to 10,321 subscribers. Our YOY social media engagement rates are up by 3 times with overall followers growing by 746 accounts. Our new downtown tear off map is now available and includes an expanded footprint of downtown and expanded list of attractions and restaurants/bars. We also have more collateral that will receive an update this year, including a redesigned street map, bucket list and a new bikepacking guide. Since our last meeting, the town center has hosted 12 events. This schedule is lighter than usual due to the ongoing roof replacement. We’ve used this time for deep cleaning and other maintenance items. Our solar panel project planning has begun. An update on Downtown Fayetteville Coalition – we had a successful inaugural strawberry festival with an estimated 10,000 in attendance. Lights of the Ozarks will be two separate events this year – the lighting night will be held the Friday before Thanksgiving as is tradition. The parade will be held the first Thursday of December. We had a successful June First Thursday. May’s First Thursday was cancelled due to a high chance of thunderstorms – which ended up being mostly clear. Moving forward we will not make weather calls until the day of the event. Commissioner Moya asked if we would be communicating the Lights of the Ozarks change to the media and Sarah King said that yes, we were already updating sites and connecting with the tourism team at the state about this change. B. Financial Report VP Walker stated that the May financials were in the agenda packets. The target budget for both expenses and revenue for May is 42%. With total revenue YTD at $2,358,001 we are 3% below budget. We are also at 39% for expenses. Total expenses are $1,881,570 or 30%, we are 3% under budget. YTD HMR tax collections are $1,960,338 which is 5% below the seasonally adjusted target. We have seen increases in the number of businesses utilizing the online payment system and we think this will only continue to improve, i.e. at the time of reporting, approximately 18% of businesses had not yet reported monthly HMR revenue, which is an improvement of the previous month at 30%. The balance sheet for April shows $4.8 million dollars in cash and investments and the unearned revenue for the town center is $318,000 for 2024 events. Our net income is $14, 204 YTD, the first time this year that number has been a net gain and not a loss. C. 2023 Financial Audit Presentation Cynthia Burns and Abby Smith with Forvis Mazars opened the presentation by saying the audit report went very well and they were able to issue the audit report by the end of May. As usual, because we are doing a regulatory basis of accounting, we receive an adverse opinion on generally accepted accounting principles, but we received an unmodified opinion on regulatory basis of accounting, which is the best opinion we can receive on the financial statements. The opinion is also an unmodified opinion concerning the testing and the work we did, we noticed no significant deficiencies or material weaknesses in both the A&P financials and operations. You ended the year with approximately a 500,000 increase in our fund balance, a very good year for the commission. The other document in the report, aside from the financial statements is the required communications to the governing board, including standard language for audits. The only adjustment on the books, one made all the time, is the adjustment of the commission’s investments to agree with the city of Fayetteville’s records, which is an adjustment that comes every year. The only other item we noted was a one-time instance where the accounting software didn’t automatically back up. Cynthia Burns shared that they appreciated all the hard work the staff did in preparing for the audit, it went very smoothly. Cynthia also addressed a question from Commissioner Wiederkehr concerning regulatory accounting. With no other questions, she again thanked the staff and the commission and urged anyone to reach out to her with any other questions. D. Marketing Report Sarah King began by reminding commissioners that Outright came on board in January as our new agency of record. They were able to do a photo and video shoot in March. She introduced Anne Davis, Director of Marketing with Outright who gave an overview of the marketing campaign that they began in April along with some preliminary reporting. Davis talked about the campaign, built on the themes of outdoor recreation, food and drink and nightlife/arts and culture. Target geo areas Chicago/ DFW, Denver and also road trippers, i.e. within a 4-hour distance. This campaign will run through December with the heavy investment being now through September, knowing that it can be a 90-day lead time between when someone sees an ad and they actually travel to that area. Davis then reviewed some high-level statics from the first 6 weeks of the ads, showing that there were just over 12 million impressions of the ads and almost 60,000 clicks from the ads with a higher than average click through rate and a high video completion rate. Commissioner Prysby had questions and comments about optimizing the cost to reach our target audience and Davis said she could share some information about that. Davis also shared organic traffic increases compared to 2023. They are also working with the Pixel Perfect team to continue to make some modifications and improvements to our website. She ended with sharing a new video link that will debut this week. Also, we have begun doing some advertisements in the Arkansas Times. Davis passed it to Stephanie, the media relations manager with Outright. Starting in February, they began sending two story ideas a month to relevant publications and also set up introductory conversations with relevant travel journalists. We’ve had consistently been in 15 articles a month, some are just mentions and some are features. We had an outdoor freelance journalist in Fayetteville during the eclipse and those articles are starting to appear. We’ll be featured in Southern Living in October, and we also had a recent article in the Knot about where to host your wedding in Fayetteville. She ended with asking if anyone had questions or story ideas to feel free to send them to Outright. Commissioner Moya asked if the links where we are mentioned could be sent to the commission so they could also share them out and review them. Molly and Sarah said they would do discuss a good way to do that. The new video was shown with good reactions. E. Vote. Scissor Lifts purchase at Fayetteville Town Center. Rawn opened up with background that we currently owned one scissor lift that is beyond it’s usable life and one we rent. Our intent was to replace the lift we owned and in seeking quotes, we realized we could purchase two scissor lifts for the same cost as we planned to purchase one, thus relieving our need to rent one. The expense would be $33,022.50 and was included in our original budget and also the revised budget. We asked for a contingency of. Chair Sanderson asked if the scissor lifts were new and asked about maintenance. Commissioner Bunch also asked questions. With no other questions, Chair Sanderson asked for a motion to authorize the CEO to accept a quote for two new scissor lifts from Hugg & Hall and spend up to $36,300, which is the quoted price with a 10% contingency for unforeseen costs. The motion was made by Commissioner Moya and seconded by Commissioner Bunch and was approved unanimously by a roll call vote. F. As a closing note, Rawn added that the town center is once again hosting Youth Zone this coming Saturday as a part of NWA Equality Pride Weekend. The parade will be held Saturday afternoon at 5pm. With no further business, the meeting was adjourned at 2:55pm. Minutes submitted by Amy Stockton, Director of Operations, Experience Fayetteville $382,586 Monthly A&P Tax Collections 2024** 0.24% -1.99% -3.15% % change from 2023 Previous YTD (June) HMR A&P Tax Collection Totals 2020 $1,455,289 2021 $1,834,940 2022 $2,191,465 2023 $2,465,118 2024 $2,467,508 $9,560 Prior Dues Collected $444,020 Total HMR Collected June Collection (May Activity) $80,447 Lodging $354,012 Restaurant + -19.55%26.09%19.43%12.49%0.10% % change over previous year ** This represents one half of the total HMR collections. The other half supports the Parks and Recreation department. $349,739 $401,088 $416,573 -4.31% -6.09% 0.89% $410,352 $444,020 Memo To: Molly Rawn, CEO, Experience Fayetteville Fayetteville Advertising & Promotion Commissioners From: Jennifer Walker, VP Finance, Experience Fayetteville Date: July 15, 2024 Re: Financial Statements – June 2024 This packet contains Experience Fayetteville Financial Statements for the month ended June 30, 2024. The following reports are included in the packet:  Summary P&L Financials for month ended June 30, 2024  Balance Sheet for month ended June 30, 2024 Target Budget June – 50% Revenue target 50% of budget or higher by the end of June 2024. Expenditures target 50% or lower at June 2024. Total Revenue YTD: $2,930,428 or 49%; We are 1% below target. Tax Receipts - $2,467,507 (1% below budget ytd) Town Center - $331,287 (1% above budget ytd) Other - $131,633 Total Operating Expenditure YTD: $2,717,595 or 45%; this is 5% under budget. EF Main - $2,204,172 Town Center - $513,423 HMR tax – YTD June Collections (May activity) are 1% below the seasonally adjusted budget. Please note – the City of Fayetteville has moved to an online collection system for HMR tax revenue, which became mandatory in April 2024. We fully expect this revenue to rebound in the next few months while businesses adapt to the new process. Operating Net Income is $212,833 year to date. Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ June 30, 2024 Actual Budget Over/(Under) Budget % of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 2,467,507 5,031,000 (2,563,493) 49.0% Rental Revenue 314,139 605,255 (291,116) 51.9% Event Revenue 18,794 60,000 (41,206) 31.3% Visitor Center Store Revenue 20,673 46,500 (25,827) 44.5% Parking Revenue 12,952 35,000 (22,048) 37.0% Advertising Revenue 1,850 4,000 (2,150) 46.3% Grant/Other Revenue 62,500 210,000 (147,500) 29.8% Interest and Investment Revenue 32,011 55,100 (23,089) 58.1% Total Revenue 2,930,428 6,046,855 (3,116,427) 48.5% Expenses Operating Expenses Rental Expenses 33,320 214,500 (181,180) 15.5% Event Expenses 35,902 130,100 (94,199) 27.6% Visitor Center & Museum Store 13,326 53,619 (40,293) 24.9% Personnel 946,458 2,060,934 (1,114,476) 45.9% Sales & Marketing 808,601 1,440,267 (631,666) 56.1% Office and Administrative 387,511 845,812 (458,301) 45.8% Bond Payments 348,900 700,000 (351,100) 49.8% Contribution to Capital Reserves - 100,000 (100,000) 0.0% Other Tourism Support - Community, Art Court, DFC 143,576 311,500 (167,924) 46.1% TheatreSquared Contribution - 200,000 (200,000) 0.0% Total Operating Expenses 2,717,595 6,056,732 (3,339,137) 44.9% Net Operating Income/(Loss) 212,833 (9,877) 222,710 -2154.8% Other Income Unrealized Gain/(Loss) on Investments 88,668 0.0% Other Expenses FFE & Improvements 230,103 971,000 (740,897) 23.7% Depreciation Expense 111,167 0.0% Cost of Goods Sold 3,556 0.0% Net Income/(Loss) (without CX Grants)(43,325) (980,877) 848,884 4.4% CONSOLIDATED Year-to-Date Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ June 30, 2024 Actual Budget Over/(Under) Budget % of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 2,467,507 5,031,000 (2,563,493) 49.0% Rental and Event Revenue 14,660 46,350 (31,690) 31.6% Visitor Center Store Revenue 20,673 46,500 (25,827) 44.5% Advertising Revenue 1,850 4,000 (2,150) 46.3% Grant & Other Revenue 62,500 210,000 (147,500) 29.8% Interest and Investment Revenue 31,950 55,000 (23,050) 58.1% Total Revenue 2,599,141 5,392,850 (2,793,709) 48.2% Expenses Operating Expenses Event Expenses 26,715 97,100 (70,385) 27.5% Visitor Center & Museum Store 13,326 53,619 (40,293) 24.9% Personnel 628,520 1,397,503 (768,983) 45.0% Sales & Marketing 807,290 1,410,917 (603,627) 57.2% Office and Administrative 235,844 470,507 (234,663) 50.1% Bond Payments 348,900 700,000 (351,100) 49.8% Contribution to Capital Reserve - 100,000 (100,000) 0.0% Other Tourism Support - Community, Art Court, DFC 143,576 311,500 (167,924) 46.1% TheatreSquared Contribution - 200,000 (200,000) 0.0% Total Operating Expenses 2,204,172 4,741,146 (2,536,974) 46.5% Net Income/(Loss) Before Other Revenue and Expenses 394,969 651,704 (256,735) 60.6% Other Income Unrealized Gain/(Loss) on Investments 88,668 - 88,668 0.0% Other Expenses FFE & Improvements 27,616 511,000 (483,384) 5.4% Depreciation Expense 51,566 Cost of Goods Sold 3,556 Net Income/(Loss) 400,900 140,704 171,528 284.9% Experience Fayetteville Year-to-Date Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ June 30, 2024 Actual Budget Over/(Under) Budget % of Budget Revenue Rental Revenue 314,139 605,255 (291,116) 51.9% Event Revenue 4,134 13,650 (9,516) 30.3% Parking Revenue 12,952 35,000 (22,048) 37.0% Interest and Investment Revenue 61 100 (39) 61.0% Total Revenue 331,287 654,005 (322,718) 50.7% Expenses Operating Expenses Rental Expenses 33,320 214,500 (181,180) 15.5% Event Expenses 9,187 33,000 (23,813) 27.8% Personnel 317,938 663,431 (345,493) 47.9% Sales & Marketing 1,311 29,350 (28,039) 4.5% Office and Administrative 151,667 375,305 (223,638) 40.4% Total Operating Expenses 513,423 1,315,586 (802,163) 39.0% Net Income/(Loss) Before Other Revenue and Expenses (182,136) (661,581) 479,445 27.5% Other Expenses FFE & Improvements 202,487 460,000 (257,513) 56.0% Depreciation Expense 59,601 0.0% Net Income/(Loss) (444,224) (1,121,581) 677,357 39.6% Town Center Year-to-Date ASSETS Current Assets Cash 3,765,106 Investments 1,336,779 Accounts Receivable 758,115 Prepaid Expenses 20,743 Deposits 40,838 Inventory Asset 20,385 Total Current Assets 5,941,967 Other Assets Capital Assets Furniture & Fixtures 169,248 Equipment 756,009 EF/CVB Building 940,410 EF/CVB Land 198,621 Building Additions 1,451,322 Walker-Stone House 1,174,064 Vehicles 122,860 Construction in Progress 19,205 Accumulated Depreciation (1,802,101) Total Other Assets 3,029,639 TOTAL ASSETS 8,971,605 LIABILITIES AND EQUITY Current Liabilities Accounts Payable 218,578 Unearned Revenue 357,674 Total Liabilities 576,251 Equity Unreserved Fund Balance 7,060,137 Operating Reserve 1,000,000 Capital Reserve 312,000 Temporarily Restricted Funds 45,558 Net Revenue Gain/(Loss) on Investments 88,668 Net Revenue (111,009) (22,341) Total Equity 8,395,354 TOTAL LIABILITIES AND EQUITY 8,971,605 Fayetteville A&P Commission Balance Sheet As of June 30, 2024 Memo To: Fayetteville Advertising and Promotion Commissioners From: Molly Rawn, CEO, Fayetteville A&P Commission Date: July 22, 2024 Re: Subscription Renewal, Arrivalist Trip Dashboard Background: Arrivalist is a data and research tool specifically for Destination Marketing Organizations, tourism attractions and other travel-related organizations. We first subscribed to both their Trip and Lodging dashboards in 2023. The ability to know where our visitors are coming from and what activities they are participating in while they are here has allowed both Outright, our agency of record, and our marketing team to better position our sales and marketing efforts. Additionally, Arrivalist data has been utilized by our Master Tourism Planning consulting organization, Coraggio Group. Staff is prioritizing the insights of the Trip dashboard and will consider re-subscribing to Lodging at a later date. Arrivalist Trip Dashboard includes: o Visitor trip information including in-depth insight into our origin markets o In-market activities and places visited by tourists during the time in Fayetteville o In-depth information about visitors to specific events and activities o The ability to understand the connection between our website visitors and tourism visitation Budgetary Impact: The renewal quote is for $22,500; half ($11,250) will be expensed in 2024 and is included in the approved 2024 budget as a marketing expense. Recommendation: The CEO recommends the commission authorize her to accept the $22,500 quote from Arrivalist, LLC. Fayetteville A&P Commission Memo To: Fayetteville Advertising & Promotion Commissioners From: Molly Rawn, CEO, Experience Fayetteville Date: July 17, 2024 Re: Memorandum of Understanding between Fayetteville Advertising and Promotion Commission and Theatre Squared. Background: In 2018, the Fayetteville Advertising and Promotion Commission entered into an MOU with Theatre Squared, outlining the former’s intention to support the construction of the theatre’s new facility. That MOU is attached to this memo. Over the course of the past several months, acting in accordance with the goals of the Advertising Promotion Commission, I have had several discussions with the Theatre Squared leadership team about the following: - Better collaboration between our two entities and staff members -Our shared goal to strengthen the arts in Fayetteville, of which Theatre Squared plays a critical role -A continuation of A&P’s funding to Theatre Squared -A seat on Theatre Squared’s board of directors, to be held by either an A&P Commissioner or an employee of the commission (Experience Fayetteville). An MOU drafted by the commission’s legal council outlining the shared commitment to a board seat is attached to this memo. Staff Recommendation: A vote to authorize CEO Molly Rawn to execute the memo with Theatre Squared. Fayetteville A&P Commission and TheatreSquared Proposed 2024 Memorandum MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (“MOU”) is entered into effective _________ ___, 2024 (the “Effective Date”), by and between the FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION, a governmental agency established by Ordinance No. 2310 of the City of Fayetteville pursuant to Arkansas law (Ark. Code Ann. § 26-75-605) (“A&P Commission”), and THEATRE SQUARED, INC., an Arkansas nonprofit corporation (“T2”) (collectively, the “Parties”). WHEREAS, the Parties previously executed that certain Memorandum of Understanding dated February 19, 2018 regarding the expectations between the parties relating to the construction and funding of T2’s facility in downtown Fayetteville, Arkansas (the “Facility”), as described therein (the “Prior MOU”). WHEREAS, the purpose of this MOU is to clarify the expectations between the Parties as it relates to the operation of the Facility and T2’s board of directors (the “T2 Board”); this MOU establishes the understanding between the Parties relating to the T2 Board and is not intended to revoke or restate the Prior MOU. Except as expressly set forth herein, the terms and provisions of the Prior MOU shall remain in full force and effect. WHEREAS, the Parties shall act in accordance with the expectations and responsibilities set forth in this MOU. This MOU shall not affect, modify, or interfere with the responsibilities of either party under applicable law. The legal duties and responsibilities of either party shall prevail over any provision of this MOU in the event of any conflict between the provisions of this MOU and the legal duties and responsibilities of the Parties. WHEREAS, as expressed by an affirmative vote of the members of the A&P Commission in a meeting on July 22, 2024, it is the intent and desire of the A&P Commission to hold a position on the T2 Board, as provided in this MOU. NOW, THEREFORE, in the furtherance of the intention of the Parties to carry out the purposes of this MOU, the Parties do hereby agree: 1. A&P Seat: T2 shall create one (1) seat on the T2 Board to be held exclusively by an Eligible Person (defined below) (the “A&P Seat”). The A&P Seat shall be a non-voting position but shall have all of the other rights and responsibilities of any other seat on the T2 Board. 2. Eligibility: A person shall only be eligible to hold the A&P Seat if such person is either employed by, or is an elected commissioner on, the A&P Commission (an “Eligible Person”). If an Appointee’s (defined below) employment with, or status as a commissioner on, the A&P Commission is terminated for any reason, such Appointee shall be removed from the A&P Seat, effective immediately. 3. Nomination and Appointment: Upon any vacancy of the A&P Seat, the A&P Commission shall nominate an Eligible Person (a “Nominee”) within sixty (60) days of such vacancy. Such nomination shall then be submitted to T2 for approval, with such approval not to be unreasonably withheld, conditioned, or delayed. T2’s approval or disapproval of any Nominee shall be communicated to the A&P Commission within thirty (30) days of such nomination. Upon T2’s approval, such Nominee shall be appointed to the A&P Seat (an “Appointee”). An Appointee shall continue to hold the A&P Seat until the Appointee is removed or resigns. 4. Acknowledgment by T2: A&P Commission’s agreement to hold the A&P Seat is not a binding contractual obligation and does not constitute a pledge of the full faith and credit of the City of Fayetteville or any of its commissions, including the A&P Commission. 5. Duration: This MOU shall be in effect as of the Effective Date and shall continue until the sooner of (i) A&P Commissions funding obligation under the Prior MOU is complete; (ii) the date T2 ceases operation; or (iii) A&P Commission’s authorized vote to discontinue this MOU and its participation on the T2 Board. 6. Final and Complete Agreement: This MOU contains the entire agreement and understanding between the Parties and supersedes any prior negotiations, representations, statements, promises, or other discussions, express or implied, concerning the subject matter of the T2 Board. 7. Modification and Termination: This MOU may be amended or modified only by written agreement signed by each of the Parties. 8. Governing Law: This MOU shall be governed and conformed in accordance with the laws of the State of Arkansas. 9. Counterparts: This MOU may be executed and delivered at different times and in any number of originals or counterparts and by each party on a separate counterpart, each of which shall be deemed an original but all of which together shall constitute only one agreement, notwithstanding all the Parties shall not have signed the same counterpart. THEATRE SQUARED, INC., an Arkansas nonprofit corporation By: ________________________________ Shannon A. Jones, Executive Director Date:___________________ FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION By: ________________________________ Molly Rawn, CEO Date:___________________ Fayetteville A&P Commission and TheatreSquared 2018 Memorandum MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (“MOU”) is entered into effective February 19, 2018, by and between FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION, a governmental agency established by Ordinance No. 2310 of the City of Fayetteville pursuant to Arkansas law (Ark. Code Ann. § 26-75-605) (“A&P Commission”), and THEATRE SQUARED, INC., an Arkansas nonprofit corporation (“T2”) (collectively, the “Parties”). WHEREAS, the purpose of this MOU is to clarify the expectations between the Parties as it relates to A&P Commission’s support for the construction of T2’s facility in downtown Fayetteville, Arkansas (the “Facility”), and other support generally for capital expenses related to Facility construction, including the repayment of accounts used to fund the initial construction of the Facility following substantial completion; this MOU establishes the understanding between the Parties. WHEREAS, the Parties shall act in accordance with the expectations and responsibilities set forth for each in this MOU. The MOU shall not affect, modify, or interfere with the responsibilities of either party under applicable law. The legal duties and responsibilities of either party shall prevail over any provision of this MOU in the event of any conflict between the provisions of this MOU and the legal duties and responsibilities of the Parties. WHEREAS, as expressed by unanimous vote of the members of the A&P Commission in a meeting on April 24, 2017, it is the intent and desire of the A&P Commission to support funding of the construction of the Facility in the amount of $3,000,000.00 as provided in this MOU. NOW, THEREFORE, in the furtherance of the intention of the Parties to carry out the purposes of this MOU, the Parties do hereby agree: 1.Intended Support: Within the limitations of applicable law, including the provisions of Article 12, § 4 of the Arkansas Constitution, A&P Commission has by unanimous vote of April 24, 2017 agreed to support the construction of the Facility, including the repayment of accounts used to fund the initial construction of the Facility, by providing funding of $3,000,000.00, in installments of $200,000.00 annually for 15 years, beginning A&P Commission’s Fiscal Year 2018. This support in the form of funding is in accordance with the provisions of A.C.A. § 26-75-606(a) and (b). As per the limiting parameters of applicable law, A&P Commission will each fiscal year consider its continued support of the Facility construction and related Facility construction capital expenses (including repayment of accounts used to fund the initial construction of the Facility) and must approve annually each funding installment. 2.Acknowledgment by T2: A&P Commission’s agreement to support the construction of the Facility is not a binding contractual obligation and does not constitute a pledge of the full faith and credit of the City of Fayetteville or any of its commissions, including A&P Commission. 3.Duration: This MOU shall be in effect as of the date of execution by both of the Parties and shall expire upon payment of a cumulative funding amount of $3,000,000.00 by A&P Commission to T2 for construction and related construction capital expenses for the Facility (including repayment of accounts used to fund the initial construction of the Facility) or upon A&P Commission’s authorized vote to discontinue the MOU and its intended support as approved on April 24, 2017. 4.Final and Complete Agreement: This MOU contains the entire agreement and understanding between the Parties. This MOU is a final memorial of the Parties’ understanding and supersedes any prior negotiations, representations, statements, promises, or other discussions, express or implied, concerning the subject matter of this MOU. 5.Modification and Termination: This MOU may be amended or modified only by written agreement signed by each of the Parties. 6.Governing Law: This MOU shall be governed and conformed in accordance with the laws of the State of Arkansas. 7.Counterparts: This MOU may be executed and delivered at different times and in any number of originals or counterparts and by each party on a separate counterpart, each of which shall be deemed an original but all of which together shall constitute only one agreement, notwithstanding all the Parties shall not have signed the same counterpart. THEATRE SQUARED, INC., an Arkansas nonprofit corporation By: Date FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION By: Molly Rawn, Executive Director Date Martin Miller, Executive Director January 22, 2018