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HomeMy WebLinkAboutCSD-016-08 CI~mgron REPORT Meeting: COMMUNITY SERVICES DEPARTMENT GENERAL PURPOSE AND ADMINISTRATION COMMITTEE July 7. 2008 Resolution #: ~ f A-~ 31 ~ D~ Date: Report #: CSD-016-0B File#: By-law #: Subject: DISSOLUTION OF TOTAL HOCKEY Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report CSD-016-08 be received and approved; 2. THAT a Request for Proposal be issued for the sale of the Total Hockey Transferred Assets and Total Hockey trademark; 3. THAT the Total Hockey Loaned Assets be offered to Brian McFarlane in return for a release and indemnity agreement satisfactory to the Municipality's Solicitor. A search for the lawful owner of Total Hockey Loaned Assets be undertaken if Brian McFarlane is unwilling to accept the retum of the Loaned Assets on these terms; 4. THAT assets acquired (purchased or donated) by the Municipality of Clarington for the "Local Heroes of Hockey" display be retained by the Municipality for display in Clarington; and 5. THAT any revenue received from the sale of Total Hockey assets be deposited into the Community Services Refurbish Reserve Fund Account #560-00- - 000-6760. Reviewed bQ~ Franklin Wu Chief Administrative Officer Submitted b JPC/sm/wg CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE. ONTARIO L 1C 3A6 T (905)623-3379 F (905)623-5506 REPORT NO.: CSD-016-08 PAGE 2 1.0 BACKGROUND 1.1 In an agreement dated October 29, 2003 between Brian McFarlane, Joan McFarlane, Brian McFarlane Hockey Museum Inc., and Sports Family Limited (collectively called "McFarlane") and the Municipality of Clarington, the Municipality of Clarington purchased approximately 1,300 hockey artifacts, the right to display further items loaned by McFarlane, the use of the name 'Brian McFarlane' in conjunction with the marketing of the museum, the assistance of Brian McFarlane for 3 years in publicizing the museum and the assistance of Brian McFarlane for 3 years in securing appearances by hockey players at the museum. In addition, the Municipality assumed an exhibition licence allowing use of the name, image and videos of the Peter Puck character in association with Total Hockey. 1.2 A 5,000-sq. ft. addition was built on the south side of the Garnet B. Rickard Recreation Complex to house a museum called Total Hockey, along with an adjoining gift shop. Barry-Bryan & Associates was hired as the architect, while GSM Design was secured to design and construct the museum displays. Total Hockey was opened to the public on October 29, 2006. After not achieving financial targets set out in the business plan, staff was directed by Council to close Total Hockey at the conclusion of business February 29, 2008. 2.0 DESCRIPTION OF ARTIFACTS AND EXHIBITION LICENCE 2.1 The collection of artifacts, numbering approximately 1,300, is comprised of items relating to hockey's history including, but not exclusive to, sticks, skates, jerseys, magazines, cards and approximately 700 photos. 2.2 The agreement of purchase and sale divides the Total Hockey assets into three separate categories. In order to ensure that the Municipality deals with the items in each category appropriately, a legal opinion was obtained through the Municipality's Solicitor. Below is an outline of the assets by category: 2.2.1 Transferred Assets - Are the vast majority of the collection purchased from McFarlane with full ownership of the asset transferring to the Municipality. With these assets, the Municipality may, without any permission from McFarlane, dispose of the assets and appropriate the sale price. 2.2.2 Loaned Assets - As a part of the McFarlane collection there are 10 artifacts that are on loan to the Municipality. With these assets the Municipality may, without permission from McFarlane, assign its right in the Loaned Assets and determine the assignment price. REPORT NO.: CSD-016-08 PAGE 3 However, the Municipality should ensure that the assignment is to a party that will preserve the memorabilia and retum them to the owners upon lawful request. If the lawful owner of the memorabilia requests its return, then each of McFarlane, the Municipality and the subsequent assignee likely will be responsible to ensure the return of the memorabilia to the lawful owner. 2.2.3 Exhibition Licence - Included in the agreement of purchase and sale was an Exhibition Licence for the use of the Peter Puck name, image and videos in conjunction with Total Hockey. The agreement limits the exercise of this Exhibition Licence to a hockey museum in Clarington. 3.0 ISSUES 3.1 TOTAL HOCKEY TRANSFERRED ASSETS 3.1.1 All but 10 of the artifacts fall into the Transferred Assets category. For these items the Municipality is free to sell or donate these artifacts to an individual or organization collectively as a package, in lots (sticks, photos, and magazines) or individually. 3.1.2 Since the closure of Total Hockey staff has received several inquiries about the collection and the Municipality's intent with respect to these artifacts. The Municipality has received two offers of a "home" for the entire collection that would see the collection remaining on display in another existing facility, namely, Dartmouth Sports Hall of Fame and Hockey Heritage North. In both cases, interested parties were looking for the collection to be donated or loaned with recognition in the facility to the Municipality of Clarington. 3.1.3 The Municipality has also received several inquiries about the collection from potential purchasers and collectors in the business of selling sports memorabilia. 3.1.4 To date staff has not formally solicited proposals for the collection and is recommending issuing a Request for Proposal for the Transferred Assets of the Total Hockey collection. This would ensure an opportunity for all interested parties to put forth a proposal with the details required for Council to make a well-informed decision on the future of the artifacts. 3.2 TOTAL HOCKEY LOANED ASSETS 3.2.1 At the time of purchase, the collection included 10 items loaned by Brian McFarlane to Total Hockey for display. These items were noted REPORT NO.: CSD-016-08 PAGE 4 on the "List of Inventory, July.2003" supplied by Brian McFarlane with an asterisk (*): 1) Gordie Howe hockey stick 2) Dennis Hull hockey stick autographed by members of Team Canada 1972 3) Ted Kennedy hockey stick, autographed by Maple Leafs team 4) Billy Nicholson goalie stick from Montreal AAA Stanley Cup win in 1902 5 & 6) Hand-painted goalie sticks 7) Doug Favell goalie skates 8) Replica Gerry Cheevers goalie mask 9) Replica Montreal goalie mask 10) Replica Toronto goalie mask 3.2.2 While the Municipality does not have the rights to sell the Loaned Assets, the Municipality may assign its rights to another party but will continue to carry liability with respect to ensuring at such time when the lawful owner requests the return of an item that this occurs and that the condition of the artifact has been preserved. Any such assignee should be required to financially support his indemnification of the Municipality by way of providing security or otherwise. This may limit both the pool of suitable assignees and the value of the Loaned Assets. 3.2.3 The Municipality could also seek to return the Loaned Assets to McFarlane in retum for a release and indemnity agreement satisfactory to the Municipality's Solicitor. The agreement would address responsibility for the Loaned Assets. McFarlane would have to agree with the Municipality to accept the return of the Loaned Assets on these terms. 3.2.4 Finally, the Municipality may sell the Loaned Assets if the Municipality provides notice to the owners that storage charges for the assets must be paid and the assets must be picked up within a specified time which must be reasonable. If the owner does not do so, the Municipality may proceed to realize upon the asset by selling it in compliance with applicable legislation. The difficulty with this option is determining the owner of the asset who is the proper party to give the notice to. 3.2.5 After review and consideration of the options staff recommends returning the Loaned Assets to Brian McFarlane in return for a release and indemnity agreement satisfactory to the Municipality's Solicitor. This would address the possibility of future exposure to liability of the Municipality. Should Brian McFarlane be unwilling to accept these items on these terms, staff is recommending the search for the original owners be undertaken and a process to return the items to the lawful owner be pursued. REPORT NO.: CSD-016-08 PAGE 5 3.2.6 On April 29, 2008 staff received correspondence from Brian McFarlane requesting that the Municipality allow him a 4 to 6 month option to purchase the collection for the purposes of re-selling. This period of time would allow Mr. McFarlane the opportunity to pursue other parties that may have interest in purchasing the collection in its entirety. The benefits of this option as described by Mr. McFarlane would be: - his multitude of contacts in hockey - his current ownership of Peter Puck and licence - the current Loaned Assets would in most cases stay with the museum, potentially increasing its value Should Council choose to pursue this option Mr. McFarlane has requested that the Municipality determine its asking price for the collection. 3.2.7 It is the opinion of staff that a RFP will generate the "best offer" in the market. Should Brian McFarlane wish to submit a proposal or any assistance he could provide ensuring potential purchasers are aware that the Municipality is seeking proposals would be encouraged. 3.3 EXHIBITION LICENCE (Peter Puck) 3.3.1 The agreement of purchase and sale between McFarlane and the Municipality did include a limited exhibition licence for Peter Puck. At that time the agreement between McFarlane and the Municipality was that use of the Peter Puck video and image was only in connection with the museum located in the Municipality of Clarington. 4.0 TOTAL HOCKEY OFFICIAL MARK/OFFICIAL DESIGN REGISTRATION 4.1 At the June 16th GPA meeting Council received report COD-36-08. At that time Council referred the report back to staff for consideration concurrently with the disposal of the artifacts. 4.2 It is proposed that the Total Hockey trademark be made available to interested proponents through the RFP process. The design of the RFP will allow for the award of the Total Hockey trademark independent of the artifacts or as a package with the artifacts. 5.0 FIXTURES/FURNITURE 5.1 In addition to artifacts, there are many items that for the purpose of this report will be described as fixtures or furnishings. Fixtures or furnishing are generally items that were used within Total Hockey but are not considered artifacts (desks, cabinets, lighting, audio visual). REPORT NO.: CSD-016-08 PAGE 6 5.2 The disposal of fixtures and furnishings would follow the requirements of the Purchasing By-law 2006-127 as described in Section 14. Section 14 states that the Purchasing Manager is authorized to determine the appropriate method of disposal of surplus or redundant goods and materials. 6.0 GIFT SHOP 6.1 Currently the Total Hockey gift shop remains open with merchandise discounted 40% off retail prices. Effective July 15, the discount will be increased from 40% off retail to 60% off, and remain that way through the start of the next school semester and hockey season, concluding after the Thanksgiving Weekend, October 12, 2008. At such time when renovations begin for a new tenant for the Total Hockey space, remaining merchandise would be distributed to various Community Centre reception desks, Pro Shops and Concessions for sale. 6.2 The disposal of remaining gift shop items would follow the requirements of the Purchasing By-law 2006-127 Section 14. 7.0 MISCELLANEOUS ITEMS 7.1 Total Hockey had two multi-year sponsorship agreements with an annual payment schedule. The Total Hockey sponsors are ReMAX Spirit Realty and the Don Breen Family. The sponsors have agreed that both sponsorship agreements and sponsor benefits for the 2008 year will be made available to the Clarington Sports Hall of Fame by the Municipality. 7.2 Since the opening of Total Hockey there were several memorabilia items acquired on a temporary basis from various community members. These items generally had a local hockey flavour or significance. Since the decision to close Total Hockey, all items that were documented as "on loan" to Total Hockey from the community have been returned to the lender. 7.3 Total Hockey had two Tourist Oriented Directional (TOO) signs, one in each direction of the 401. The TOO signage was under contract for a two year period, and does not allow for re-assignment of the space to another attraction. The Total Hockey TOO signs were removed on or about March 1st The Municipality's initial request for a refund of the second year fees has been denied, however, the Communications & Tourism Division are pursuing this matter through the Ministry of Tourism and the local MPP. REPORT NO.: CSD-016-08 PAGE 7 7.4 The Total Hockey website (www.total-hockev.ca) will remain operational until the Total Hockey assets are sold or January 16, 2009 when the domain name expires. Currently, the site is being used to promote gift shop sales and will be used to provide information on the sale of artifacts and pending RFP process. Attachment #1 : Confidential Attachment Interested Parties To Be Advised of Council Decision: Clarington Museums & Archives Classic Collectibles Dartmouth Sports Hall of Fame Peter Delisle Cheryl Finn, Tourism London Frozen Pond Collectibles Glory Days Hockey Hall of Fame Hockey Heritage North Brian McFarlane Angelo Santelli Segal Licensing CONFIDENTIAL REPORTS ✓ G PA REPORT NO. CSD-016-08 Attachment Only Resolution#: By-law#: DATE OF REPORT: 2008 Attachment Only — Total Hockey Staff