The City Council directed at its March 25, 2013, meeting that staff send a registered letter to the Billings Community Youth Foundation, Inc. (BCYFI), warning that the Council intended to terminate a lease for an amateur ice arena on 8 acres in the southeast part of Centennial Park unless the BCYFI provide documented proof of its compliance with all provisions of the lease.  The City Council originally approved a lease with the Billings Amateur Hockey League for an arena on May 8, 2000.  The Council then approved transferring the lease to BCYFI on June 23, 2003, because the hockey league was not in a position financially or organizationally to build such a facility, according to a letter from BCYFI.  The lease automatically renewed in 2010 under terms that allowed the hockey league to do so unless it was in breach of the lease agreement.

The registered letter requested by the Council was signed by the Mayor and sent by staff on March 26, 2013.  It required that BCYFI show its compliance with the following four requirements stated in the lease:

• Pay a nominal annual rent of $10;
• Keep the Council informed of its fundraising status through periodic reports;
• Make reasonable efforts to develop the facility contemplated in the lease; and
• Provide proof of annual liability insurance for the leased area, naming the City as an additional insured.

No reply was received by the 60-day deadline.  Staff subsequently inquired of Leslie Albright, Secretary/Treasurer of the BCYFI about a response, and was told the organization would stand on an extensive packet provided to the City Council for its March 25, 2103, meeting.  That packet included a letter purporting to cure any potential default in the lease, and indicating that the BCYFI had elected new leadership in 2013, and received a $25,000 donation in 2013 as seed money.  Attachments included:

• An economic feasibility study and market analysis dated March 22, 2013. 
• Lease payments for $80 made in 2013 and of $20 made in 2012, along with a letter from the former BCYFI president, stating he had made such payments every year from 2003 to 2010.   Parks staff has confirmed the payments were made in 2006-08.
• A fundraising status and periodic report showing organizational activities and donations in 2003-05, and in 2012-13.  However, the report showed no meetings were held and no additional information was provided to the City from 2006-11.
• An insurance certificate dated March 22, 2013, that names the City as an additional certificate holder on a liability insurance policy.  There was no proof of insurance for previous years.

The Parks, Recreation and Cemetery Board has recommended the lease be terminated.  Several other groups have expressed an interest in the park land such as Little League, a lacrosse group and the dog park committee, but the Council needs to decide whether BCYFI is in breach of its lease before discussions can occur.  The Centennial Park Master Plan includes the ice arena, so the plan ultimately would have to be amended before future changes could occur.  

The City Council may:

• Accept the BCYFI report from March 25, 2013, as adequate and allow the organization to continue working toward construction of an amateur ice arena;
• Declare BCYFI to be in breach, and begin a process to consider other options for development of the park; or
• Declare BCYFI to be in breach and let the land continued to be occupied only for Park purposes.

If the Council decides to allow BCFYI to continue the lease, the City Attorney's Office strongly recommends that it be rewritten.  The current lease does not conform to other City leases and was not recommended by the City Attorney's
Office originally.

BCYFI paid $20 in 2012 and $80 in 2013 toward its nominal lease payments.  Staff did find records of other payments in 2006-08.

Amendment of the Centennial Park Master Plan to include another purpose will require $5-10,000, and should be paid for by whatever group, if any, that the Council determines that it wishes to consider proposals for occupying the site.

Because of BCYFI's failure for at least 2006 through 2011 to make periodic reports and for its apparent failure to provide liability insurance including the City of Billings as a named insured for the Centennial Park site prior to 2013, it is recommended that the Council declare the group to be in breach of the lease agreement.  Further, it is recommended that the Council ask the Parks, Recreation and Cemetary Board to consider proposals for other uses at Centennial Park and to make a recommendation to the Council on which group, if any, should be allowed a new lease agreement.