The Board of Mayor and Aldermen voted Nov. 3 to enter into a new agreement with Coffee County regarding the Manchester-Coffee County Conference Center. Under the new contract, the city would absorb all operating cost associated with the center.

The city and county are currently the parties to an agreement from Nov. 21, 2000 concerning the operation of the Manchester-Coffee County Conference Center, which states

“It is contemplated by the parties that this venture shall continue for an initial term of years necessary to liquidate and pay the bond indebtedness incurred by the Public Building Authority for the acquisition of the conference center and personal property used in conjunction therewith; and that it may be continued thereafter under such terms as the parties may agree on.”

According to city officials, the bonds are expected to be paid off in 2021, the county does not wish to continue the existing agreement past its term; and Manchester City, Coffee County and the Public Building Authority have reached a new agreement.

“The PBA will convey the conference center real estate and improvements one-half to the City and one-half to the County or as directed by the City and County regarding their respective interests,” the proposed agreement states.

The City will form a new Public Building Authority (City PBA), to which the PBA will convey ownership of all of the non-real estate assets of the conference center, the proposed agreement states.

“City and County will lease the Conference Center real estate and improvements, including any associated use rights to the PBA to be created by the City under the following terms and conditions. This Agreement shall remain in effect for so long as the City PBA or any contractor with the City PBA operates the Conference Center,” the proposed agreement states.

“Any funds advanced to the City PBA by the City shall be reimbursed to the City of the City PBA generates revenue beyond its operating requirements,” the proposed agreement states.

The city will insure the building with an actual cash value policy, and the limit will be no less than the value of the building.

The proposed agreement does not pledge any monetary contribution or tax revenues from either the county or the city to the City PBA, except for capital improvements.

The City PBA will maintain the conference center real estate and facilities. Capital improvements cost $15,000 or more and have a useful life for more than one year, such as parking lot surfacing, HVAC replacement, significant roof repair or replacement of carpet or flooring replacement, according to the proposed agreement.

At the termination of the lease with the City PBA, unless the parties agree otherwise, the property will be offered for sale in accordance with the surplus property regulations of the city, the county, applicable state law, and the proceeds will be divided equally between the city and the county, the proposed agreement states.

In the event of total destruction and if the property is insured with a replacement cost policy, the Conference Center will be rebuilt. If the property is insured with an actual cash value policy, the policy proceeds shall be used to repair the premises. If the policy proceeds are insufficient to rebuild the property, the property will be deemed destroyed unless either party or both parties contribute any additional cost of rebuilding, according to the proposed agreement.

“No party to this Agreement shall be obligated to contribute any funds other than insurance proceeds realized due to the destruction of the property,” the agreement states.

If the property can’t be repaired with the insurance proceeds and any contribution, the property will be deemed sold and proceeds divided equally. The parties will then own the real estate in equal shares.  

“Nothing in this Agreement or the Lease Agreement with the City PBA shall constitute a joint venture or obligate funds of the City or its tax revenues. Nothing in this Agreement or the Lease Agreement with the City PBA shall constitute a joint venture or obligate funds of the County or its tax revenues. The Agreement dated November 21, 2000 shall terminate effective midnight January 1, 2021,” the agreement states.

County ready to cut conference center ‘ongoing financial drain’

The Coffee County Public Building Authority has owned and operated the center since its inception 20 years ago, and Coffee County and Manchester City equally covered the operating losses of the center. County officials say that the city sees most of the benefits associated with the center, such as sales tax and hotel tax revenues. However, the county couldn’t change the original agreement until the bonds on the construction of the center were paid off. With the bonds scheduled to be paid off 2021, the city has agreed to absorb the full operating losses of the center and form Manchester Public Building Authority, which would relieve financial burden for the county. The new agreement must be approved by Coffee County Commission, and it’s on the agenda for the commission’s Nov. 10 meeting.