Opinion ID: 1537924
Heading Depth: 1
Heading Rank: 3

Heading: The Amphitheater Lease Agreement

Text: In 1997, the Authority leased the amphitheater to GSAC Partners (GSAC). Prior to 1997, the amphitheater was operated by the Authority in conjunction with several private companies. See October Hearing, supra, at 45A; 1988 Senate Hearing, supra, at 60. The GSAC lease took effect retroactively in 1996 and expires in 2017. The leased facilities consist of the amphitheater and related land areas, mostly parking lots. The lease also grants GSAC the right to use the two electronic billboards adjacent to the Parkway for advertisement of scheduled events and sponsors. The Authority retained the right to use the signs for non-commercial purposes. Under the lease, GSAC holds the exclusive rights to use, operate, and enjoy the amphitheater. However, GSAC's use of the facility is restricted to entertainment events, seminars, corporate meetings, political fund-raisers, and tangential events. Additionally, the Authority retains the right to use the amphitheater annually for up to ten ethnic-heritage festivals, twenty admission-free performances, and a winter holiday celebration. The Authority's right to use the facility is subordinate and subject to GSAC's rights. The lease also requires GSAC to use recognized modern business practices to provide efficient and high quality services to the public. However, in respect of programming, the ultimate decision as to what action, if any, should be taken rests solely with [GSAC]. Nevertheless, the lease requires GSAC to use its reasonable best efforts to present balanced programming at the amphitheater. Under the lease, GSAC has the limited right to sell alcohol on the premises. The lease restricts sales to two beverages per person per sale, requires cessation of sales one hour before the end of a performance, prohibits sales to anyone exhibiting signs of intoxication, and bars patrons from bringing alcohol onto the premises. GSAC is also authorized to sell merchandise, food, and beverages at performances. Rent for the first year, 1997, was a minimum of $1.5 million plus 100% of GSAC's profits in excess of $1 million. Rent for the second and subsequent years was set at $1.65 million. Additionally, GSAC is obligated to pay contingent rent from gross revenues, based on a graduated scale ranging from 5% to 15%. GSAC further agreed to pay all taxes imposed on the amphitheater. GSAC also has the right to sublease the amphitheater without the Authority's approval and mortgage its leasehold interest in the amphitheater. Finally, the lease requires GSAC to undertake various renovations, including expansion of the amphitheater's covered and lawn seating, parking lots, restroom facilities, and access walkways and plazas. Currently, the amphitheater can accommodate over 17,000 people and, under the GSAC lease, may host performances on any day of the week.