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Councilmember McGovern questioned what the cost of the equipment would be in 5 years, as most people will want this to continue if successful. The agreement states that after 5 years, the City would have to purchase the equipment. Ms. Ott said after the extension of the agreement, San Jose Arena Management would sell all equipment to the City at a depreciated value, and could later provide specific dollars for this. Councilmember Sullivan referred to costs, stating it would cost the City $15,000 to install water, power and voice and data lines to the site, existing lighting is in place for night-time use, however, additional lighting would be installed for safety of street crossing at the San Francisco site. The City would pay a minimum of $30,000 for sponsorships and $40,000 if 3 sponsorships cannot be achieved. The City will be reimbursed for utilities and security personnel from all revenues generated after expenses are deducted. Councilmember Sullivan noted this was a public/private partnership and he believed the City was at some risk for the sponsorship as well as utility costs. He asked if a pro forma has been provided showing the Sharks revenue. Ms. Ott said a pro forma is being developed but it was not included as part of the project when identifying ticket sales, but she said the equipment will initially cost about $170,000, but after the agreement is approved, the budget can be developed. City Manager Fialho said the plan was to determine whether the Council was amenable to the use and staff would meet with the Sharks organization, review the pro forma, estimate activities, set ticket prices, estimate sponsorships and lay out a plan which will be successful. He confirmed with Councilmember Sullivan that staff is requesting that the City Council approve the licensing agreement to give the City Manager the authority to work out a business plan that is successful. Councilmember Sullivan said one of the differences between Walnut Creek and other rinks is that there is significant advertising or promotional element for the Sharks, not only for their regular hockey ticket sales but also a controversial project coming to build a large ice rink at Staples Ranch, and he felt this provides a significant promotional opportunity for the Sharks. Both of these things have some value and he questioned whether this has been factored into the pro forma. Mr. Fialho said staff has not placed a value on the name of the facility and can entertain this when staff discusses this with the business plan. He said there is a benefit to have the facility in town during the holidays, he agreed it does provide a name recognition for the organization which could create excitement for the other opportunity which will be considered across town. Staff has been careful to separate the two projects. Councilmember Thorne said he thought in the staff report there would not be any on-site vending, except for non-profits. Mr. Fialho said they were but had a discussion with the PDA yesterday and this led staff to change its position. Staff certainly wants to promote non-profit activity where it can, but they rather want to bring the 20,000 to 30,000 people into the downtown and have them spend their money in the restaurants and coffee shops on Main Street. Councilmember McGovern said she would really have part of the profit go toward buying the equipment in 5 years and that it be included in the business plan and suggested going with a 50%/50% split. Mr. Fialho said the Council should reflect this preference when making a motion that rdth there is an interest to purchase the equipment at the end of the 3 or 5 year and to allow staff to come up with a plan to purchase the equipment and leave the current calculation at 10%/90%. Councilmember McGovern feels this is something the community is really looking forward to, confirmed that Walnut Creek had 43,000 participants attend their downtown facility. Mayor Hosterman opened the public hearing. City Council Minutes Page 18 of 20 April 21, 2009