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HomeMy WebLinkAbout2024-11-18 - Agendas - FinalFayetteville Advertising and Promotion Commission November 18th, 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 September minutes (no meeting in October). 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.Marketing Report. Sarah King, Vice President of Marketing and Communications and Anne Davis, Outright D.Town Center Exterior Refresh Project. Tyler Wilson, Vice President of Strategic Initiatives & Executive Director, Fayetteville Town Center E.Vote. Contract renewal with the City of Fayetteville for Collection of HMR Taxes. Memo and contract attached. F.Vote. Lease renewal with Folk School of Fayetteville. Memo and lease attached. G.Additions to the agenda may be added upon request from a majority of the commissioners. IV.Adjourn Fayetteville Advertising and Promotion Commission Minutes September 23, 2024 Fayetteville Town Center Commissioners Present: Commissioners Absent: Staff: Chrissy Sanderson, Chair, Tourism & Hospitality Representative Elvis Moya, Tourism & Hospitality Representative Sarah Bunch, City Council Representative (virtual) Andrew Prysby, Commissioner at-large Katherine Kinney, Tourism & Hospitality Representative Todd Martin, Tourism & Hospitality Representative Mike Wiederkehr, City Council 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 August minutes for approval. Commissioner Prysby noted he was present at the August meeting, not absent. This will be corrected before the minutes are submitted to the City Clerk’s office. With no other changes being made, the minutes stood approved with that correction. III. New Business A. CEO Report We worked with Ellingson Construction to put up a wall in the Visitors Center which is allowing us to remain open except for certain times when construction will be too cumbersome to be open. You can except us to be open Wednesday- Saturday. Destination Master Plan is underway and Commissioner Moya is the commission’s representative for this project. We hope to host the HMR task force’s first meeting next week. Also, we are in conversation with the city about the city collection contract and plan to work with them. Rawn then praised Dell Hall on our EF Sales team, stating he met with many meeting planners at a recent conference to garner 3 different RFPs which is resulting in one site visit already this year. She also spoke about a new print piece we will be sharing, a single panel for Fayetteville Art Gallery coalition. We will be helping them promote different gallery tours throughout the year. We are kicking off Hoptoberfest, which is an event featuring a limited edition t-shirt for the first 50 who complete the 8 Fayetteville breweries. We have hired an architecture to help us at FTC to help suggest some improvements to the building’s facade such as the teal paint color on the rails, an awning that is not functional etc. The town center has hosted 16 events since we last met. We are in the final stages of restoration of the Walker Stone House second floor porch and it should be complete this week, weather permitting. Downtown Fayetteville Coalition has launched a façade program – a matching grant of up to $2,500 to help downtown businesses with small exterior improvements to signage, awning and more. Rawn also included upcoming events such as upcoming razorback football games and she also spoke about upcoming A&P commission meeting dates. We will not meet in November but will meet on December 9th to review and approve the 2025 budget and possibly see an update from Coraggio Group concerning our Master Tourism Plan. Commissioner Moya asked about Light Night for Lights of the Ozarks, and which entity was coordinating that event. Rawn said it will be an Experience Fayetteville event with Sarah King handling communications. The parade on December 5th will be handled more by Downtown Fayetteville Coalition. B. Financial Report August financials statements are in your packets along with a balance sheet. The target for both revenue and expenditures is 67%. Revenue at 64% with expenditures at 61% and HMR tax collections are YTD at $3,317,425. Net operating income is $173,714 YTD and cash and investments are $4.8 million on the balance sheet. Walker pointed out that the town center has approximately $240,000 left in unearned revenue for events booked the remainder of 2024. C. Marketing Report Sarah King introduced Anne Davis with Outright to share an overview of performance through August. Through August our paid campaign has reached more than 18.6 million impressions, about 5 million more than we planned. This allows our budget to go farther than we projected. Davis continued with stating that high level trending data shows that the average length of stay has increased by 22% compared to 2023 from 1 night average to 1.2 nights average and also our overall share of overnight stays has increased from 47% to 51% of trips. Davis can also say that we can see where people are coming from via the Arrivalist data. You can see that Chicago has grown 150% with Dallas growing 138% and we see that Denver has grown 10%. Spotlights on some exciting things that are happening, on the advertising side we added “retargeting” which is where we are reaching users who visited the EF website or saw an ad. We are planning an email newsletter campaign with Axios Chicago and Axios Denver running in late September to October. This is a newer media platform for Experience Fayetteville to participate in and we are excited to see the results from these areas. In the beginning of August we updated our display ads to show upcoming Fall foliage – and also showing specifically the Denver and Chicago area that you can bike, eat on a patio etc throughout the rest of the year. In earned media, we hosted a media event in Golden Colorado in September for journalists to join Sarah, Ashley and Brannon Pack with Ozark Foundation and Stephanie Levinson with Outright. We are continuing the conversation with the journalists and hoping to host two journalists travel to Fayetteville later this fall. This proactive approach is something we hope to replicate next year, maybe with a different city. Davis asked Sarah King asked about the Bikepacking Guide to see if it was printed yet and Sarah said the guide was at the press as we speak. Anne spoke about some of the earned media coverage we have earned such as Velo and Outside. She also said we were featured in the New York Times and also Southern Living. Landing this coverage in these well respected magazines is something to be proud of. Commissioner Prysby commented about the direct flight from XNA to Detroit and wondered about how we want to showcase ourselves in places like Detroit. He commented on how we need to look at our strategies when XNA onboards direct flights like Detroit and Philadelphia. With the report concluded, both Davis and King were thanked and appreciated for the great media effort and results. D. Vote. TekTrendz Contract Renewal. We are concluding two years with TekTrendz and it is time to renew a contract. We propose to renew with TekTrendz for a three year contract which would take us through October 2027. At that time we would plan to extend a RFP as it will have been 5 years with one vendor. The proposal is for 36 months for a total of $135,944 with a yearly impact less than our current budget line item due to renewing for three years as opposed to two years. Chair Sanderson asked for questions and hearing none, asked for a motion. Commissioner Bunch made a motion which was seconded by Commissioner Kinney to authorize the CEO to approve the three year contract with TekTrendz to serve as our Managed IT service provider for a total price of $135,944. It was unanimously approved. With no more business or announcements, the meeting was adjourned at 2:45pm. 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 (Oct) HMR A&P Tax Collection Totals 2020 $2,467,320 2021 $3,233,272 2022 $3,819,217 2023 $4,123,262 2024 $4,247,888 $42,194 Prior Dues Collected $476,619 Total HMR Collected October Collection (September Activity) $68,974 Lodging $365,451 Restaurant + -19.63%31.04%18.12%7.96%3.02% % 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% 2.09% 1.89% 11.86% 3.24% $410,352 $444,020 $419,784 $394,928 $453,844 $476,619 Memo To: Molly Rawn, CEO, Experience Fayetteville Fayetteville Advertising & Promotion Commissioners From: Jennifer Walker, VP Finance, Experience Fayetteville Date: November 11, 2024 Re: Financial Statements – October 2024 This packet contains Experience Fayetteville Financial Statements for the month ended October 31, 2024. The following reports are included in the packet:  Summary P&L Financials for month ended October 31, 2024  Balance Sheet for month ended October 31, 2024 Target Budget October – 83% Revenue target 83% of budget or higher by the end of October 2024. Expenditures target 83% or lower at October 2024. Total Revenue YTD: $5,165,416 or 85%; We are 2% above target. Tax Receipts - $4,247,888 (1% above budget ytd) Town Center - $596,416 (8% above budget ytd) Other - $321,112 Total Operating Expenditure YTD: $4,685,538 or 77%; this is 6% under budget. EF Main - $3,812,906 Town Center - $872,632 HMR tax – YTD October Collections (September activity) are 2.5% above the seasonally adjusted budget. Operating Net Income is $479,879 year to date. Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ October 31, 2024 Actual Budget Over/(Under) Budget % of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 4,247,888 5,031,000 (783,112) 84.4% Rental Revenue 550,322 605,255 (54,933) 90.9% Event Revenue 30,515 60,000 (29,485) 50.9% Visitor Center Store Revenue 30,278 46,500 (16,222) 65.1% Parking Revenue 40,916 35,000 5,916 116.9% Advertising Revenue 3,375 4,000 (625) 84.4% Grant/Other Revenue 205,966 210,000 (4,034) 98.1% Interest and Investment Revenue 56,155 55,100 1,055 101.9% Total Revenue 5,165,416 6,046,855 (881,439) 85.4% Expenses Operating Expenses Rental Expenses 76,774 214,500 (137,726) 35.8% Event Expenses 55,479 130,100 (74,621) 42.6% Visitor Center & Museum Store 21,100 53,619 (32,519) 39.4% Personnel 1,602,412 2,060,934 (458,522) 77.8% Sales & Marketing 1,194,179 1,440,267 (246,088) 82.9% Office and Administrative 655,480 845,812 (190,332) 77.5% Bond Payments 581,500 700,000 (118,500) 83.1% Contribution to Capital Reserves 100,000 100,000 - 0.0% Other Tourism Support - Community, Art Court, DFC 198,613 311,500 (112,887) 63.8% TheatreSquared Contribution 200,000 200,000 - 100.0% Total Operating Expenses 4,685,538 6,056,732 (1,371,194) 77.4% Net Operating Income/(Loss) 479,879 (9,877) 489,756 -4858.5% Other Income Unrealized Gain/(Loss) on Investments 58,160 0.0% Other Expenses FFE & Improvements 507,315 971,000 (463,685) 52.2% Depreciation Expense 185,278 0.0% Cost of Goods Sold 1,101 0.0% Net Income/(Loss) (without CX Grants)(155,655) (980,877) 767,062 15.9% CONSOLIDATED Year-to-Date Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ October 31, 2024 Actual Budget Over/(Under) Budget % of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 4,247,888 5,031,000 (783,112) 84.4% Rental and Event Revenue 25,434 46,350 (20,917) 54.9% Visitor Center Store Revenue 30,278 46,500 (16,222) 65.1% Advertising Revenue 3,375 4,000 (625) 84.4% Grant & Other Revenue 205,966 210,000 (4,034) 98.1% Interest and Investment Revenue 56,059 55,000 1,059 101.9% Total Revenue 4,569,000 5,392,850 (823,850) 84.7% Expenses Operating Expenses Event Expenses 44,960 97,100 (52,140) 46.3% Visitor Center & Museum Store 21,100 53,619 (32,519) 39.4% Personnel 1,074,630 1,397,503 (322,873) 76.9% Sales & Marketing 1,188,263 1,410,917 (222,654) 84.2% Office and Administrative 403,840 470,507 (66,667) 85.8% Bond Payments 581,500 700,000 (118,500) 83.1% Contribution to Capital Reserve 100,000 100,000 - 0.0% Other Tourism Support - Community, Art Court, DFC 198,613 311,500 (112,887) 63.8% TheatreSquared Contribution 200,000 200,000 - 0.0% Total Operating Expenses 3,812,906 4,741,146 (928,240) 80.4% Net Income/(Loss) Before Other Revenue and Expenses 756,094 651,704 104,390 116.0% Other Income Unrealized Gain/(Loss) on Investments 58,160 - 58,160 0.0% Other Expenses FFE & Improvements 198,075 511,000 (312,925) 38.8% Depreciation Expense 85,944 Cost of Goods Sold 1,101 Net Income/(Loss) 529,134 140,704 330,270 376.1% Experience Fayetteville Year-to-Date Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ October 31, 2024 Actual Budget Over/(Under) Budget % of Budget Revenue Rental Revenue 550,322 605,255 (54,933) 90.9% Event Revenue 5,082 13,650 (8,568) 37.2% Parking Revenue 40,916 35,000 5,916 116.9% Interest and Investment Revenue 96 100 (4) 96.4% Total Revenue 596,416 654,005 (57,589) 91.2% Expenses Operating Expenses Rental Expenses 76,774 214,500 (137,726) 35.8% Event Expenses 10,519 33,000 (22,481) 31.9% Personnel 527,782 663,431 (135,649) 79.6% Sales & Marketing 5,916 29,350 (23,434) 20.2% Office and Administrative 251,640 375,305 (123,665) 67.0% Total Operating Expenses 872,632 1,315,586 (442,955) 66.3% Net Income/(Loss) Before Other Revenue and Expenses (276,215) (661,581) 385,366 41.8% Other Expenses FFE & Improvements 309,239 460,000 (150,761) 32.8% Depreciation Expense 99,335 0.0% Net Income/(Loss) (684,789) (1,121,581) 436,792 61.1% Town Center Year-to-Date ASSETS Current Assets Cash 3,663,422 Investments 1,306,271 Accounts Receivable 697,955 Prepaid Expenses 38,855 Deposits 40,838 Inventory Asset 23,306 Total Current Assets 5,770,647 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 426,390 Accumulated Depreciation (1,876,212) Total Other Assets 3,362,712 TOTAL ASSETS 9,133,359 LIABILITIES AND EQUITY Current Liabilities Accounts Payable 164,789 Unearned Revenue 205,172 Total Liabilities 369,961 Long Term Liabilities Notes Payable - City of Fayetteville Solar 386,825.75 Total Liabilities 386,825.75 Equity Unreserved Fund Balance 6,958,825 Operating Reserve 1,000,000 Capital Reserve 412,000 Temporarily Restricted Funds 45,558 Net Revenue Gain/(Loss) on Investments 58,160 Net Revenue (97,970) (39,810) Total Equity 8,376,572 TOTAL LIABILITIES AND EQUITY 9,133,359 Fayetteville A&P Commission Balance Sheet As of October 31, 2024 TOURISM MARKETING CAMPAIGN UPDATES A&P Commission Meeting: November 18, 2024 Increase awareness of Fayeeville as an aractive long weekend travel destination PRIMARY GOAL 2 A REMINDER OF OUR STRATEGY ●An awareness campaign comprised of high-impact digital media channels: Display and Online Video ●Built on the themes of outdoor recreation, food & drink, and arts & culture that have emerged from Outright’s discovery and research ●Targeting focused geographic areas with nonstop flights to Fayeeville, and roadtrippers ●Flight: April-December - heavy investment through September to capitalize on Summer and Fall travelers, then continuing through December at a low simmer ●Earned media strategy focused on target regions + national media publications ●Selective investment in regional publication advertising CAMPAIGN STRATEGY RECAP 4 5 Focused advertising on four key markets to maximize impact Geography Justification Colorado ●3 non-stop flights per day from Denver ●Spend an average of 2+ nights in Fayeeville (source: Arrivalist) ●Expanded to entire state (vs. only Denver), as most of the state uses Denver Airport; other airports are pricey and don’t have great flight options Chicago ●3 non-stop flights per day ●Spend an average of 2+ nights in Fayeeville (source: Arrivalist) ●Capitalize on momentum from AR Tourism activations and investment in this area Dallas/Fort Worth ●9 non-stop flights per day ●Spend an average of 2+ nights in Fayeeville (source: Arrivalist) ●Core market for Fayeeville 3-Hr Fayeeville Drive Radius ●34% of Americans plan to take a road trip in 2024, with 18% claiming they’d take a road trip over flying - Forbes Total campaign impressions of 21.5 million, 8 million higher than projected total Trending Data YTD: ●Average length of stay has increased by 6.8% compared to 2023, up to 1.1 nights. ○Colorado: 28.3% increase in avg. nights in destinations (2.6 nights) ○Illinois: 15.8% increase in avg. nights in destination (1.8 nights) ○Texas: 6.5% increase in avg. nights in destination (1.9 night) ●Organic traic to ExperienceFayeeville.com YoY has increased by 58% during the campaign period, indicating a general lift in interest in the destination ● PERFORMANCE CALL-OUTS 6 Rationale: ExperienceFayeeville.com already dominates organic Google Search Results. Instead, we invested in high-impact digital ad formats that reached new audiences and lift organic search volume. Paid Search Investment of $77,180 in 2023 was reallocated in 2024 to focus on top-of-funnel, without negatively impacting website traic. In fact, overall website traic increased by 34%, and organic search traic increased by 57% (equating to nearly 153,000 additional sessions on the website) STRATEGIC SHIFT AWAY FROM PAID SEARCH 7 We tested an email newsleer campaign with Axios Chicago and Axios Denver, including 3 e-newsleer sponsorships in both cities. ➔339,000 newsleer opens ➔568 clicks to the website, with a strong engagement time of 40 seconds per user (higher than most other display ads we’ve tested) ➔Average click-through rate was 0.17%, which is higher than the benchmark for travel partners of 0.12% ➔Overall, we’re pleased with this approach and plan to invest more regular dedicated newsleer campaigns in target metro regions in 2025 8 TESTING LOCAL NEWSLETTER ADVERTISING WITH AXIOS 9 SECURED REGIONAL AND NATIONAL MEDIA COVERAGE 10 BIKEPACKING COVERAGE A flash challenge within our 11-year-old Fayeeville Ale Trail program. Month-long challenge to visit all 8 Fayeeville breweries. 68 people completed the challenge. Benefits: ➔Boost economic impact by driving visitors to multiple local breweries ➔Captured new email addresses (all but 2 finishers were not on our email list prior) 11 HOPTOBER CHALLENGE Thank you! Memo To: Molly Rawn, CEO, Fayetteville Advertising and Promotion Commission; Fayetteville Advertising and Promotion Commissioners From: Tyler Wilson, Executive Director, Fayetteville Town Center Date: November 9, 2024 Re: Fayetteville Town Center Exterior Refresh, Informational Background: The Fayetteville Town Center is excited to pursue enhancements to the building’s exterior to align with recent interior upgrades. While this is not a structural renovation, the proposed updates will provide a refreshed look and improved aesthetics. The scope of the exterior styling update includes: • Painting existing awnings, terrace rail, and stairwells • Replacing weathered rain coverings • Covering the current teal tile to create a cohesive, modern appearance These recommendations are being made after consultation with Jessica Lewallen of Gemstone Design Studio and are designed to elevate the building’s visual appeal and complement the enhancements being made inside the Town Center. Town Center staff will begin to immediately gather quotes and schedule these improvements. Elements of the work exceeding $20,000 will be brought to the commission for a vote. Fayetteville A&P Commission Memo To: Fr om: Date: Re: Fayetteville Advertising and Promotion Commissioners Molly Rawn, CEO, Fayetteville A&P November 13, 2024 Collections Contract with City of Fayetteville Background: The proposed contract with the City of Fayetteville continues the longstanding procedure followed by the City of Fayetteville and the A&P Commission for the collection of Hotel, Motel and Restaurant taxes. This agreement would remain in effect for an initial term of five years with a renewal procedure. This agreement outlines the duties and obligations to be performed by the City of Fayetteville and outlines that A&P agrees to pay the city 2% of the A&P portion of the HMR taxes collected for performing the duties and obligations. Budgetary Impact: The 2024 budgetary impact is projected to be $100,000. The fee for collecting is 2% of A&P collections and budgetary impact varies depending on the amount of HMR revenue collected. Recommendation: The staff recommends the commission approve the contract with the City of Fayetteville, as presented, and authorize Chair Sanderson and CEO Molly Rawn to sign it. AGREEMENT This Agreement, made and entered into this _____ day of ________________, 2024, by and between the City of Fayetteville, Arkansas, a municipal corporation, and the Fayetteville Advertising and Promotion (A&P) Commission. WITNESSETH, IN CONSIDERATION of mutual promises of the parties contained herein and other good and valuable consideration, the parties agree as follows: 1. This agreement continues the longstanding procedure followed by the City and the A&P Commission for the collection of Hotel, Motel & Restaurant taxes. This agreement shall remain in full force and effect for an initial term of five years from the above date. Upon completion of the initial term, this agreement will automatically be renewed for an additional five year term unless either party notifies the other party in writing at least sixty (60) days prior to the expiration of the initial term that no renewal is desired. 2. The A&P Commission agrees to pay 2% of the A&P portion of the Hotel, Motel, Restaurant (HMR) taxes collected by the City in consideration of the following duties and obligations to be performed by the City: a. Provide reporting forms and handle all communications with the tax remitters concerning the HMR tax; b. Receive tax reports and remittance forms from the tax remitters; c. Check tax reports for accuracy and timely reporting; d. Invoice tax remitters for underpaid taxes and/or penalties and interest if applicable; e. Perform collection efforts in accordance with established procedures as described in Exhibit “A”; f. Disburse funds to Bond Trustees for debt service on outstanding bonds supported by the A&P Commission’s portion of the HMR taxes; g. Provide a monthly accounting of all revenues collected for the previous month and remit the collections less the bond payments and collection fees to the A&P Commission by the 15th of the month; h. Invest funds not needed for immediate expenditures as part of the City’s pooled investments and allocate interest on the basis of percentage of ownership in the pool. 3. The City of Fayetteville and the Fayetteville Advertising and Promotion Commission agree to work collaboratively to develop necessary rules and regulations to implement Sections 35.26 and 35.27 of the Code of Fayetteville. 4. Neither party may assign any of its rights or obligations under this agreement, without the express written consent of the other. 5. The parties agree and understand that this Agreement is exclusive of any and all other agreements, and that it in no way alters, amends or abridges any rights, obligations or duties of the parties contained in such agreements. 6. A waiver by either party of any of the terms or conditions herein shall be limited to that particular instance, and shall not be construed as a general waiver of any other breaches by either party. 7. This Agreement constitutes the entire understanding of the parties, and no modification or variation of the terms of this agreement shall be valid unless made in writing and signed by the duly authorized agents of the City and the A&P Commission. IN WITNESS WHEREOF, the City of Fayetteville and the Advertising and Promotion Commission have executed this Agreement on or as of the date first written above. FAYETTEVILLE CITY OF FAYETTEVILLE, ADVERTISING & PROMOTION ARKANSAS COMMISSION By: _________________________________ By: _____________________________ Chrissy Sanderson, Chairperson Lioneld Jordan, Mayor Witness: Attest: By: _____________________________ By: _____________________________ Molly Rawn, Chief Executive Officer Kara Paxton, City Clerk/Treasurer Exhibit “A” HMR COLLECTION PROCEDURES ACCOUNTING DIVISION At the end of each month, after balancing collections with General Ledger accounts: 1. Analyze listing of payments received for the year to determine which establishments are delinquent. 2. Prepare a list of all establishments that are delinquent. If an establishment has had to be prosecuted within the last two years, immediately refer to the City Prosecutor. Indicate on the list if the delinquent establishment also has an alcoholic beverage permit. If an establishment has a private club or an on-premises consumption permit, also indicate if they are delinquent in their supplement beverage tax payments. 3. Send notices to all establishments that are delinquent in their HMR remittances. This notice shall advise each establishment of the date (21 days after notice mailed) delinquent taxes must be paid to avoid referring the case to the City Prosecutor. 4. If delinquent taxes are not paid by the stated date, refer the case to the City Prosecutor’s Office. CITY PROSECUTOR’S OFFICE 5. Upon receipt of the delinquent HMR file, the City Prosecutor may send a letter/notice that charges will be filed unless delinquent taxes are paid within thirty (or fewer) days. The City Prosecutor shall be authorized to commence prosecution anytime after thirty days from the initial delinquency. Memo To: Fayetteville Advertising and Promotion Commissioners Molly Rawn, CEO, Fayetteville A&P November 13, 2024 Walker Stone House Lease Renewal From: Date: Re: Background: The Fayetteville A&P Commission currently leases the Walker Stone House to the Folk School of Fayetteville, in accordance with a lease dated March 2, 2023. The existing lease terminates on February 28, 2025. In accordance with Section 26 in the original lease, Folk School of Fayetteville is requesting to exercise its renewal option and extend the lease for an additional twelve- month period, to conclude February 28th, 2026. Recommendation: The CEO recommends the commission approve the lease renewal with the Folk School of Fayetteville, as presented, and authorize Chair Sanderson and CEO Molly Rawn to sign it. LEASE AGREEMENT This Lease Agreement (the “Agreement”) is entered into effective the ____ day of November, 2024 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 FOLK SCHOOL OF FAYETTEVILLE, INC., an Arkansas nonprofit corporation (“Folk School”) (collectively, “the Parties”). WHEREAS, the Parties hereby acknowledge and agree that A&P Commission is the fee simple absolute owner of the real property and any and all improvements situated upon the Premises, as hereinafter defined; and WHEREAS, Folk School acknowledges and agrees that it lacks any ownership or equity interest of any nature in the Premises, as hereinafter defined, but desires to enter into this Agreement for the limited purpose of leasing the Premises subject to the terms and conditions herein set forth; and WHEREAS, A&P Commission desires to lease the Premises, as hereinafter defined, for the limited purposes herein set forth; NOW, THEREFORE, in consideration of the mutual promises and covenants of the Parties contained herein, and other good and valuable consideration, A&P Commission hereby leases and demises to Folk School the real property and improvements (“the Premises”) located at 207 West Center Street in the City of Fayetteville, Washington County, Arkansas, also known as the Walker- Stone House, and being more particularly described on Exhibit A attached hereto. TO HAVE AND TO HOLD the same unto Folk School and unto its permitted successors and assigns, together with all privileges and appurtenances thereunto belonging, for the duration and under the conditions hereinafter set forth: 1. DURATION. The duration of this Agreement shall be for 12 months beginning the 1st day of March, 2025, and ending the 28th day of February, 2026 (“the Duration”). 2. RENT. As rental for the Premises, Folk School shall pay to A&P Commission rental in the amount one dollar annually. 3. UTILITIES AND REFUSE REMOVAL. Folk School shall be responsible for both the procurement and payment of all utilities including, but not limited to, water, sewer, electricity, gas, internet, telecommunications, and other data services, and for all charges connected with removal of refuse from the Premises. A&P Commission does not warrant that any service will be free from interruptions caused by circumstances beyond the reasonable control of A&P Commission. No such interruption of service shall be deemed an eviction or disturbance of Folk School’s use and possession of the Premises or any part thereof or render A&P Commission liable to Folk School for damages, by abatement of rent or otherwise, or relieve Folk School from performance of Folk School’s obligations under this Agreement. Folk School hereby waives and releases all claims against A&P Commission for damages for interruption or stoppage of service. 4. LAWN/GROUNDS CARE AND MAINTENANCE. A&P Commission shall be responsible for providing for regular lawn/grounds care and maintenance, including landscaping and mowing. 5. TERMITE POLICY AND SECURITY. A&P Commission shall be responsible for procurement and payment of an annual termite inspection and for any security systems installed on the premises. 6. ALTERATIONS/IMPROVEMENTS. Folk School may not make any changes, alterations, additions, or major repairs to the Premises, including any existing or future structures, including existing artistic pieces, unless all plans and specifications for such changes, alterations, additions or major repairs have been approved by A&P Commission or its agent and by any agency of the State of Arkansas required by law to review or approve such projects. Furthermore, such projects shall be performed by persons, companies or agencies which are properly trained and licensed to perform such repairs and maintenance, and which are approved in advance by A&P Commission’s facilities management department, provided that such approval will not be unreasonably withheld. A&P Commission, its officers, officials, employees, and agents, may inspect any such project to ensure that plans and specifications are followed, and that the construction, repairs or renovation meets the requirements of state law and applicable codes, and may require changes to be made in order to comply with the plans, specifications, state law or applicable codes. A&P Commission may make or contract for improvements at the request of Folk School. Should such improvements be made during the Duration, the cost of such improvements to A&P Commission will be at Folk School’s cost, to be paid within thirty (30) days of receipt of the charge, unless otherwise agreed to in writing by A&P Commission. 7. ORDINARY REPAIRS AND MAINTENANCE. Folk School agrees to maintain the Premises and any improvements thereto in good repair, ordinary wear and tear excepted. Folk School shall, at its costs and expense, repair and replace any damage or injury done to the Premises, or any part thereof, caused by Folk School or its agents, employees, invitees, or visitors, provided that such repairs and maintenance shall be performed by persons, companies or agencies which are properly trained and licensed to perform such repairs and maintenance, and which are approved in advance by A&P Commission’s facilities management department, provided that such approval will not be unreasonably withheld. All such repairs and maintenance shall meet all applicable code and any other requirements. Should Folk School fail to make such repairs or replacements within thirty (30) days of occurrence of such damage or injury, A&P Commission may, at its option, make such repairs and replacements and Folk School shall pay the cost thereof to A&P Commission upon demand. A&P Commission may inspect the Premises at any time upon adequate notice and without any interruption of Folk School's use of Premises, including the house and all leasehold improvements, and may, if necessary, designate necessary maintenance and repairs to be made by Folk School. If Folk School fails or refuses to make the designated maintenance or repairs, or if Folk School requests that A&P Commission perform the designated maintenance or repairs, A&P Commission may do so. Any maintenance or repairs performed by A&P Commission under this Section may, at A&P Commission's sole discretion, be charged to Folk School, to be paid within thirty (30) days of receipt of the charge. A&P Commission shall complete the repairs and improvements listed on Exhibit B attached hereto (the "A&P Commission Work"), at A&P Commission's sole expense. 8. MAJOR REPAIRS. A&P Commission shall be responsible for any costs associated with major structural improvements, system failure, or improvements necessary to resolve life safety issues. Such responsibility shall include the heating and air conditioning system, roof, exterior walls, exterior plumbing, foundation, structural components of the Premises, and pavement that becomes defective or damaged at any time during the Duration due to ordinary wear and tear and not due to the negligence of Folk School or Folk School's agents or invitees. Upon notice from Folk School, A&P Commission will promptly cause repairs to be made and restore the defective portions to good condition. 9. PROPERTY INSURANCE. The Premises shall be included on A&P Commission’s fire and casualty insurance policy, and the premium charges shall be paid by A&P Commission. Folk School shall be responsible for renter's insurance coverage on Folk School’s personal property and equipment and Folk School acknowledges and agrees that A&P Commission shall not be responsible and shall hold A&P Commission harmless for any loss or damage to Folk School’s personal property for any reason. 10. DESTRUCTION BY FIRE OR OTHER CASUALTY. If at any time the Premises, or the building which forms the principal component of the Premises, should be totally or partially destroyed by fire or other major casualty events covered by insurance and for which insurance proceeds are paid, then the Agreement shall terminate immediately subject to the Folk School’ right to assess the amount of damage and the amount of any remaining usable space and then to continue with the Agreement with rental payments, if any, abated in accordance with reduced square footage and inconvenience of the loss of any portion of the Premises. 11. LIABILITY INSURANCE. Folk School shall indemnify and hold A&P Commission, its officers, officials, and employees harmless from any and all liability for loss, injury or damage to persons (including, but not limited to death) or property arising out of or in connection with the Premises, any improvements thereto, or any activities of Folk School, its officials, employees, invitees, members or guests. Folk School shall maintain a comprehensive general liability insurance policy insuring against such a loss, injury, or damage in the minimum amount of One Million Dollars ($1,000,000) per person or occurrence, Two Million Dollars ($2,000,000) aggregate. Proof of such liability insurance coverage shall be given to A&P Commission at the beginning of the Duration and again upon request at any time during the Duration, and the policy shall name A&P Commission as an additional insured as its interest may appear. Any such policy shall provide that it shall not be subject to cancellation without first furnishing A&P Commission fifteen (15) days prior written notice. If Folk School fails to comply with this obligation or if such coverage is terminated or cancelled for any reason, A&P Commission shall have the right to secure such coverage and Folk School shall fully reimburse A&P Commission for any premiums or cost incurred by A&P Commission for such coverage. 12. TAXES. LICENSES, FEES, AND ASSESSMENTS. A&P Commission shall pay applicable ad valorem taxes, if any, and assessments on the real property and improvements comprising the Premises. However, Folk School shall pay any sales or use taxes arising from its use of the Premises and shall indemnify and hold A&P Commission harmless against any claims for such taxes. Likewise, Folk School will secure and pay for all licenses, permits, and fees pertaining to its use of the Premises. 13. LAWFUL USES. The Premises and all improvements thereto will be used by Folk School only for the following purposes: the first floor of the Premises’ Walker- Stone House will be used by Folk School only for purposes of offices, lessons, exhibit space, performance and practice space, and events and programs related to the mission of Folk School; the second floor of the Walker-Stone House will be used solely for office and storage purposes by the Folk School, with no public access permitted. Folk School will comply with all federal, state, and local laws, statutes, ordinances, regulations, and legal requirements governing the use of the Premises and the activities conducted thereon, including but not limited to the policies of A&P Commission, noise ordinances, and rules applicable to buildings listed on the National Register of Historic Places. Folk School will not permit or suffer the Premises to be used for any illegal purposes, to create a nuisance, or to create dangerous conditions affecting other persons or property. 14. RIGHT OF ENTRY. A&P Commission, its officers, officials, employees or agents shall have the right to enter the Premises at any time upon notification to Folk School and without interrupting Folk School’ use of the Premises, for the purpose of inspecting the Premises and determining compliance with laws, statutes, ordinances, regulations and legal requirements, including policies of A&P Commission or to ensure the preservation of the Premises in good condition in the event of Folk School’ failure to perform any obligation of this Agreement. 15. PROHIBITION AGAINST CREATION OF LIEN. Folk School shall have no authority, express or implied, to create any lien, charge, or encumbrance upon the Premises or upon the improvements thereon, for any reason whatsoever. 16. ASSIGNMENT OR SUBLEASING RESTRICTED. This Agreement and any rights granted herein shall not be assigned without the prior written consent of A&P Commission. Folk School shall not be entitled to sublease the Premises or any portion thereof without the prior written consent of A&P Commission. 17. DELIVERY AT END OF LEASE. Upon the expiration of the Duration of this Agreement or any extension thereof, possession of the Premises, including any improvements thereto, shall be delivered to A&P Commission free of all persons, goods and things not properly belonging to A&P Commission and in the same condition as the Premises existed at the commencement of this Agreement or upon subsequent completion of any new construction, reconstruction, renovation or repair to any improvements to the Premises, excepting destruction or damage by fire, storm or other casualty and/or ordinary deterioration and reasonable wear and tear, and no demand for such delivery shall be necessary. All fixtures not integral to the building, furniture and equipment installed by Folk School or acquired by Folk School independent of this Agreement shall remain Folk School’ property and may be removed by Folk School at the expiration of this Agreement; provided, however, Folk School shall restore the Premises and repair any damage thereto caused by such removal. 18. A&P COMMISSION’S LIEN. As security for payment of its obligations under this Agreement and any other debt owed to A&P Commission, Folk School hereby grants A&P Commission a security interest in all property of Folk School, including furniture, furnishings and fixtures of Folk School which may, at any time during the Duration of this Agreement, be in, about or upon the Premises. Folk School agrees to execute all documents necessary to perfect A&P Commission’s security interests. 19. DEFAULT. Folk School shall be in default under the provisions of this Agreement upon the happening of the following events or conditions and, in the case of the events and conditions set forth in subparagraphs (a) and (b) below, the failure to cure same within ten (10) days after written notification by A&P Commission to Folk School of such default: (a) Failure to pay the rental fees or charges as provided herein at the time, in the amount, and in the manner set forth, or within ten (10) days after the date the same becomes due; (b) Failure to keep or perform any of the covenants on the part of Folk School herein to be kept or performed; (c) Should Folk School become insolvent, or become bankrupt, either voluntarily or involuntarily, or make any assignment for the benefit of creditors, or if a receiver be appointed for the benefit of Folk School’ creditors, or if a receiver be appointed for Folk School to take charge of and manage Folk School’ affairs. 20. REMEDIES IN THE EVENT OF DEFAULT. In the event of a default by Folk School during the Duration hereof, the A&P Commission may, at A&P Commission’s option, declare this Agreement thereupon terminated, and A&P Commission shall have the right immediately to enter upon and take possession of the Premises, and to evict and expel Folk School and any or all of Folk School’ property, belongings, and effects there from, without thereby being guilty of any matter of trespass, in addition to any other remedies of A&P Commission either at law or in equity. Folk School waives any right to legal process in such an event. No delay in or failure to exercise any of the options herein granted to A&P Commission by reason of a default shall be a waiver thereof, and the waiver on any occasion of default shall not be deemed a waiver of A&P Commission’s right to exercise its remedies by reason of the same or similar default at any later occasion. 21. HOLDING OVER NOT PERMITTED. Upon the expiration or termination of this Agreement, Folk School shall have no right to hold over. Moreover, Folk School waives any right to receive legal process to eject Folk School. 22. WASTE. Folk School agrees not to commit or to permit any waste to the Premises and any improvements thereto. 23. SPACE HEATERS. Space heaters are prohibited from use on the Premises. Use of a space heater by Folk School or any of Folk School's agents or invitees shall be an event of default under this Agreement. 24. RIGHT OF FIRST REFUSAL TO PURCHASE. If at any time during the Duration, A&P Commission intends to accept an offer or enter into an agreement to sell its interest in the Premises, A&P Commission shall give notice in writing to Folk School in which it shall first offer to sell the Premises to Folk School on the same terms and conditions which A&P Commission intends to accept. A&P Commission's notice of such offer shall include the material terms under which A&P Commission intends to make such sale. Folk School shall have ten (10) calendar days in which to respond to A&P Commission's offer. It is expressly understood and agreed that time shall be of the essence with respect to the giving of such notice by Folk School and the failure of Folk School to give such notice within the time and in the manner hereinabove provided shall be a waiver of Folk School's rights pursuant to this Section 24. 25. EARLY TERMINATION. Folk School may terminate this Agreement prior to the end of the Duration, upon sixty (60) days' written notice to A&P Commission. 26. RENEWAL. Upon written request to A&P Commission received by A&P Commission no less than sixty (60) days prior to the expiration Duration (the "Renewal Option Notice"), Folk School shall have the right and option (a "Renewal Option") to request to extend the Duration for the Premises for one (1) additional and consecutive twelve (12) month period (a "Renewal Term"), on the terms and conditions hereof. Such Renewal Option shall be subject to approval by the A&P Commission. If Folk School shall fail to provide a Renewal Option Notice in the time set forth herein or if A&P Commission does not approve the Renewal Option, then A&P Commission and Folk School agree that this Agreement shall terminate. In A&P Commission's sole discretion, Folk School shall not be entitled to exercise a Renewal Option for any Renewal Term if Folk School is in default under the terms of this Agreement at the time it provides the Renewal Option Notice. 27. NOTICES. All notices required to be given under this Agreement shall be given in writing by a form of delivery requiring a receipt to the Parties at the following addresses or at such other addresses as the Parties might hereafter designate in writing: A&P COMMISSION: ADVERTISING AND PROMOTION COMMISSION OF THE CITY OF FAYETTEVILLE, ARKANSAS 21 South Block Avenue, Suite 100 Fayetteville, Arkansas 72701 Attn: CEO FOLK SCHOOL: FOLK SCHOOL OF FAYETTEVILLE, INC. ___________________________ ___________________________ Attn: _______________________ 28. NO WAIVER OF BREACH. The failure of A&P Commission to insist upon the strict and literal performance of any covenant or condition herein, or to exercise any option retained or granted by reason of a default or breach by Folk School, or to avail itself of any of the terms or conditions of this Agreement, shall not constitute a waiver of A&P Commission’s right thereafter to insist upon and enforce full performance of this Agreement. 29. INDEPENDENT PARTIES. This Agreement shall not be construed to create a partnership, agency relationship or any other relationship between the Parties other than that of independent parties. 30. PARTIES BOUND. All covenants, conditions, agreements and undertakings contained herein shall inure to the benefit and be binding upon the Parties. 31. APPLICABLE LAW. This Agreement shall be governed by and construed under the laws of the State of Arkansas, without regard to its choice of law principles. 32. ENTIRE AGREEMENT. This Agreement expresses the entire agreement of the Parties and may only be amended in writing signed by the Parties hereto or their duly authorized agents. This Agreement is a final agreement and supersedes any prior negotiations, representations, statements, promises, or other discussions, express or implied, between or behalf of the Parties concerning the subject matter of this Agreement. 33. INDEPENDENT JUDGMENT. The Parties represent and warrant to one another that this Agreement is entered into based on each party’s independent analysis, with the advice of counsel, of the acts and legal principles relevant to the terms and conditions of this Agreement. 34. MUTUAL DRAFTING. This Agreement has been drafted mutually by the Parties with the assistance of their respective counsel or representatives. Accordingly, the rule of construction that ambiguity is construed against the drafting party shall have no application in any dispute over the interpretation of this Agreement. 35. SECTION HEADINGS. In the case of any conflict between a section heading set forth in this Agreement and the terms of this Agreement, the latter shall prevail, the former being for ease of reference only. The recitals set forth at the beginning of this Agreement, however, shall be given full weight and construed as substantive provisions of this Agreement. 36. COUNTERPARTS: This Agreement 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. [Signature Page to Follow] IN WITNESS WHEREOF, the above named parties have executed this instrument on the Effective Date set forth above. FOLK SCHOOL FOLK SCHOOL OF FAYETTEVILLE, INC., an Arkansas nonprofit corporation By: Name:_________________________ Title:__________________________ A&P COMMISSION FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION By: Molly Rawn, Chief Executive Officer EXHIBIT A [Legal Description] as designated upon the Revised Plat of Said Addition or Subdivision filed and recorded in the Office of the Circuit Clerk and Ex-Officio Recorder of Washington County, Arkansas. EXHIBIT B [A&P Commission Work]