Ordinance 125

METROPOLITAN AIRPORTS COMMISSION

ORDINANCE No. 125
HOTEL FACILITY CHARGE ORDINANCE

 

MAC Ordimnce 125 Hotel Facility Charge Effective date: July 1, 2017

 

METROPOLITAN AIRPORTS COMMISSION ORDINANCE NO. 125

HOTEL FACILITY CHARGE (HFC) ORDNANCE

AnOrdinancetopromoteandconservethepublicsafety,health,peace,convenience, andwelfare; toestablishuniformfeesforhotelCustomerstofimdHotelFacilitiesattheMinneapolis-St. Paul International Airport consistent withMinnesota Statutes § 473. 651; establishingpayment procedures;andprescribingthepenaltyforviolationthereof.

The MetropoUtaa Airports Coinmission does ordain: SECTION 1 -DEFINITIONS

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Airport. Minneapolis-St. Paul International Airport, Wold-Chamberlaiii Field, a public airportoperatedbytheMetropolitanAirportsCommissionandlocatedm Hennepin County, Minnesota.

CapitalCosts. ThatportionofMACprojectcosts,including,butnotlimitedto,demolition, constmction, debt service, capitalizedinterest, bondinsurance, imderwriting, bond issuance,accmedinterest, andcontingencies, associatedwiththeconstmction ofHotel Facilitiesthatareassociatedwithusebya HotelCompanyoritsCustomers.

CapitalMaintenanceCosts. Thatportionofallcostsassociatedwithengineering, materials, labor, testing, repairs, andinspections neededto operate, maintain, refiu-bish, and

improve the Hotel Facilities that areassociated with useby a Hotel Company or its Customers.

Commission orMAC. TheMetropolitan Airports Commission, a public corporation organizedandoperatingpursuanttoChapter500,LawsofMinnesota 1943md amendments thereto.

Customer. Anypersonthatrentsoneormoreroomsorotherwisepurchasesgoodsor servicesfromaHotelCompanyorotherwisemakesuseofahotel.

Executive Director/CEO. The Commission's chiefexecutive ofBcer or a designated representative.

ExtraordinaryCosts.CostsincurredbyMACoraHotelCompanyforimprovements tothe overall operationofHotel Facilitiesincludmg, butnot limitedto: facility improvements that, in MAC'S opinion, improve the overall operation ofHotel Facilities, professional consultingcostsassociatedwithhotelselectionprocesses,andcommonareamaintenance costs.Onlyprojectsorimprovements costing$50,000ormoremayqualifyas Extraordinary Costs.

HotelAccessRoad.Anyroad(s)usedbya HotelCompanyorCustomerstoaccessa hotel. HotelAdvertisineCosts. CostsincurredbyMACforpromotionofanon-Airporthotel.

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MAC Ordinmce 125 Hotel Facility Charge

Effectivedate:July1, 2017

Hotel Company or Company. Any company that has a lease or concession agreement with theCommission forthepurposeofsellinglodgingtoCustomers onAirport whooriginate onAirportproperty. Thisdefinitionappliestoanycompanythathasaleaseorconcession agreement onthedatethisOrdinancetakeseffectandanynewentrants fromthedatethey beginon-Airport operations.

HotelFacilities.FacilitieslocatedonAirportproperty dedicatedforusebytheHotel Company or its Customers including, but not necessarily limited to, ParkingRamps, Skyways, and Hotel Access Roads.

Hotel Facility Charge. A percentage chargeonthatportion ofgrossreceipts chargedfor room rentals applicable to all Customers.

OoeratineandMamteiiance_Costs. ThatportionofcostsincurredbytheCommissionto

operateandmaintainHotelFacilitiesthatareassociatedwithusebya HotelCompanyor its Customers.

Parkine Ramp. The Post OfGce Parking Ramp, together with any other existing or future HotelFaciUtiesusedforparking,valetservice,and/orrelatedpurposes.

PostOfFiceParkineRamp. Theparkingrampattachedtothepostofficelocatedat5001 NorthwestDrive,St.Paul,MN55111.

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SECTION2 - PLIRPOSE

Skvway. Existingandfuture skywayfs) providing access fromTl-Lmdberghtoandfroma hotel,includingassociatedsecuritycheckpointfacilities.

ThepurposeofthisOrdinanceistoimposearate-basedCustomer feeonthegrossreceiptsfrom roomrentalstopayforCapitalCosts, CapitalMaintenanceCosts,OperatingandMaintenance Costs, andExtraordinaryCosts as setforth in this Ordinance. TheHotel Facility Chargeenablesthe Commission anda Hotel Company to provide convenieut, on-Airport facilities to lodgethe travelingpublicm AirportlocationsasdeterminedbytheCommission.

SECTION3- FmANCWGOFHOTELFACILITIES

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ParkineRamp Capital Costs

ParkingRampCapital Costswill befinancedwiththeHotelFacilityChargeoveran estimated37yearsprojectedtobeginm 2018.

ParkineRampCapitalMaintenance CostsandOperatins andMaintenance Costs

TheHotel FacilityChargewill beusedto fimdannualParkingRampCapitalMaintenance Costs andParkingRamp Operating andMaintenance Costs.

Skvwav Capital Costs

TheSkywayCapitalCostswill befinancedwiththeHotelFacilityChargeoveran estimated37yearsprojectedtobeginin2018.

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MAC Ordinance 125 Hotel Facility Charge

Effective date: July 1, 2017 SkvwavCapitalMaintenanceCostsandSkvwavOperatineandMaintenanceCosts

TheHotelFacilityChargewillbeusedto fundannualSkywayMaintenanceCostsand SkywayOperating andMamtenance Costs.

Hotel Access Road Capital Costs

TheHotelAccessRoadCapital Costswill befinancedwiththeHotelFacilityChargeover an estimated 37 years projected to begin in 2018.

HotelAccessRoadCapitalMaintenanceCostsandOperatineandMaintenanceCosts TheHotelFacilityChargewillbeusedtofundannualRoadMamtenanceCosts. Hotel Advertisine Costs

TheHotelFacilityChargewillbeusedto fundannualHotelAdvertisingCosts. PaymentorReimbursement ofExtraordmarvCosts

TheCommissionmaypaythirdpartiesdirectlyorreimbursea HotelCompanyfor ExtraordinaryCoststhroughmoneycollectedviatheHotel FacilityCharge.Payment md/orreimbursement ofExtraordinary CostsunderthisOrdmanceshallbeatMAC'Ssole discretionandshallrequireCommissionapproval. Tobeeligibleforreimbursementunder thisprovision,a HotelCompany'sExtraordinaryCostsmustbeincurredforgoodsand servicesprovidedbyathirdpartyvendororcontractoranddocumentedtoMAC'S satisfaction.

ExtraordinaryCostsshallbedistributedtoeachHotelCompanyinonepayment,within a reasonabletimeaftersubmissionoftheHotel Company'sconformingcoststatement.MAC reservestherightto auditall costsasto qualificationandamount.Everypaymentor reimbursementofExtraordinaryCostsis subjectto Commissionapproval.

Other Capital Maintenance Projects

TheHotelFacilityChargemayalsoincludepayment forapprovedCapitalMaintenance CostsincurredbyMAC throughits capitalimprovement programorothersimilarcapital programs.

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SECTION4- HOTELFACILITYCHARGE 4. 1 Collection ofHotel FaciUtyChaiee

TheHotel Company shall chargeandcollect the sameHotel Facility Charge from all

Customersinthefonnofa percentageofthatportionofgrossreceiptschargedforroom reutals.

4.2 DesienationonBillandReceipt

MAC Ordinance 125 Hotel Facility Charge Effective date: July 1, 2017

A Hotel Company shall separately designate the Hotel Facility Charge on the Customer's billandreceipt.Itshallbelabeleda"HotelFacilityCharge." Nootherdesignationwith

respecttotheHotelFacilityChargeshallbepermitted onabillorreceiptwithouttheprior writtenapprovaloftheExecutiveDirector/CEO.

4.3 AmountofHotelFacilityCharseandRateAdjustment

1. Initial Amount

   TheHotelFacilityChargeshallbe6.5%ofthatportionofthegrossreceiptsfrom room rentals, beginning on the effective date of this Ordinance.

2. Future Adjustments and^iljmmum Amount

   Starting July 1, 2022, or anytime thereafter, the Executive Director/CEO may, at hisdiscretion,requestthattheamountoftheHFCberecalculatedbasedon unfundedcostsandprojectedgrossroomrentalstobeeffectiveJanuary1the following year.

   The Executive Director/CEO may only adjust the HFC once every five years. The CommissionshallapprovetheadjustedHFCandhavethesoleandfinal determination ofthe amount.

   TheHotel FacilityChargeshallremainin effectuntil CapitalCostsarefully paid, andatsuchtime,theHotelFacilityChargeshallbereducedto anamountnecessary topayforanyCapitalMaintenanceCosts,OperatingandMaintenanceCosts, Advertising Costs, andprojected Extraordinary Costs. The Commission shall approve andhavethesoleandfinaldetermination oftheamount.

3. Notice to Hotel ComBany

   The Commission shall provide notice to each Hotel Company by December 1 of eachyearoftheHotelFacilityChargeamountwhenrecalculated accordingto Section 4. 3 for the upcoming year. The Commission may waive the December 1 noticedateiftheHotelCompanydoesnotprovidetheinformationrequiredin Section 5. 3 by the date specified.

SECTION 5 - PAYMENTS AND REPORTS 5. 1 Hotel Facility Charees Held m Tmst

A Hotel Company shall hold the Hotel Facility Charges coUected in trast for the benefit of the Commission. The Hotel Facility Charges are the Commission's property and Hotel Companiesacknowledgethattheyshallhaveonlya possessoryinterest(notanequitable interest) in suchHotel FacilityCharges.

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Payments

MAC Ordinance 125 Hotel FaciUty Charge

Effective date: July 1, 2017

The Hotel Company shall remit electronically each month's Hotel Facility Charges to the Commission by the 15th ofthe following month, or such other date asthe Commission shallnotifytheHotelCompanym writing.

Reportine Reauiiements

Simultaneously with eachmonthly payment, the Hotel Company shall submit electronically totheCommissionareportideatifymgthegrossreceiptsattributabletoroomrentalsand theHotelFacilityChargesseparatefiumanyotherpaymentsowedtotheCommission.The report shall be in a form acceptable to the Commission.

Rent and Concession Fees

The Hotel Facility Charges collected and remitted to the Commission shall be in addition to anyreutandconcessionfeesduetotheCommissionunderagreementsbetweenaHotel CompanyandtheCommission.TheHotelFacilityChargesshallnotbeincludedaspartof a Company's gross receipts.

Audits

Inadditiontoanyauditprovisionsinitsleaseorconcessionagreementwiththe Commission,theCommissionhastheauthoritytoaudittheHotelCompany'sbooksand recordswithrespecttoHotelFacilityChargesatanytimeuponwrittennotice.

Late Payment Penalty

ForanyamountsdueunderthisOrdinance, theHotelCompanyshallpayapenaltyforlate or delinquent payments ofeighteen percent (18%) per annum on anypast duebalance calculated from the date the amount is due to the Commission until the close ofthe

businessdayuponwhichthedelinquentpaymentisreceivedbytheCommission. Security Deposit

Ifa HotelCompanydefaultsonanypaymentsorreportsdueunderthisOrdinanceand doesnotcurethedefaultwithin10daysofreceivingwrittainoticeofthedefaultfromthe Commission, theCommission hastheright,bywrittennoticetotheCompanygivenatany timewithinninetydaysofsucheventofdefault,toimposeorreimposetherequiremaits of this section; however, the Commission may immediately impose the security deposit requirementwithoutsuch10-daynoticeiftheCompanyisindefaultforthesecondtime withinonecalendaryear.Insuchevent,theCompanyshallwithin15daysfromthedateof thenoticeprovidetheCommissionwitha securitydepositequaltotheCompany'spast threemonthsofHotelFacilityChargesm aformaccqitabletotheCommission. The Company shall mamtain fhe security deposit in effect for 12 consecutive months during whichtheCompany commits noeventofdefaultunderthisOrdinanceorinanyother paymentsduetotheCommission.TheCommissionhastherighttoreimposethis requirementeachtimetheCompanycommitssuchaneventofdefault.TheCommission's rightsunderthissectionshallbeinadditiontoanyotherrightsprovidedbyagreemeutor bylaw

MACOrdinance125 Hotel Facility Charge

Effective date: July 1, 2017

SECTION 6 - TERMINATION OF HOTEL FACILITY CHARGE

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Termination ofHotel Facility Charge

TheHotelFacilityChargeshallabateduringperiodsin whichtheCommissionno longer permitsuseofHotelFacilitiesforon-Airportlodgingpurposes.

IftheHotelCompany's agreementwiththeCommission isexpiredorterminated orthe Hotel CompanyabandonsthepropertyortheHotelFacilityChargeceasesaccordingto the termsofthissection,sucheventdoesnotreleasetheCompanyfromtheresponsibility for payments andreports duetotheCommission forcustomer transactions priortothedateof that event.

SECTION 7 - GENERAL PROVISIONS

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Penalt

Anypersonviolatinganyoftheprovisions ofthisOrdinanceshalluponconvictionbe punishedbysentencewithintheparameters ofthemaximumpenaltyformisdemeanors set forth in Minn. Stat. § 609. 03, or asmaybe amended.

The penalties prescribed under this Ordinance in no way preclude the Commission from takinganyothercivilactionauthorizedundertheHotelCompany'sagreement(s)withthe Commission orbylaw.

Provisions Severable

IfanypartorpartsofthisOrdinanceisdeclaredunconstitutionalorinvalid,theremainder shallcontinueineffect.TheCommissiondeclaresit wouldhavepassedtheremaining parts ofthis Ordmancewithouttheunenforceableprovisions.

If foranyreasontheHotelFacilityChargesdescribedinthisOrdinancearedeclaredillegal or invalid by a court ofcompetent jurisdiction, theHotel Company remains responsible to pay the Commission any outstanding Capital Costs. Hotel Companies shall pay the Commission anamountequivalenttooneyear'sportionoftheremainmgCapitalCostson January 1 ofeachyearaccordingto eachHotel Company's percentage ofmarket share amongHotel Companies on-Auport.

7.3 Notice

AnynoticerequiredbythisOrdinanceissufficientifdeliveredinperson,sentbyU.S.mail tothelastaddressonfilewiththeCommission, ortransmittedbyE-mailtothelastE-mail address on file with the Commission.

7.4 Effective Date ThisOrdinanceiseffectiveJuly1, 2017