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F0 <br /> B.C.C. 07.16.13 <br /> Office of <br /> INDIAN RIVER COUNTY <br /> ATTORNEY <br /> Alan S.Polackwich,Sr.,County Attorney <br /> William K.DeBraal,Deputy County Attorney <br /> MEMORANDUM <br /> TO: Board of County Commissioners <br /> FROM: Alan S. Polackwich, Sr., County Attorne�j'�- <br /> DATE: July 9,2013 <br /> SU13JECT: Proposed Third Amendment to Facility Lease Agreement for Vero Sports Village <br /> BACKGROUND. <br /> On June 4, 2013, the Board of County Commissioners approved a Third Amendment to Facility Lease <br /> Agreement for the Vero Sports Village ("Third Amendment"). The form of the Third Amendment had <br /> been circulated to and approved by the tenant, Verotown, LLC ("Verotown"), before presentation to the <br /> Board. After Board approval, the Third Amendment was signed by the Chairman, and sent to Verotown <br /> for signature. <br /> During the Verotown signature process, however, Verotown discovered that it had failed to request <br /> inclusion of an important income tax related provision. Specifically, section 11 of the Third Amendment <br /> states that all net income from Verotown's operations under the lease will either be invested in <br /> enhancements to the Sports Village, or paid over to the county at the end of the lease. As currently <br /> written, "net income" is calculated before taxes. However, under applicable tax laws, if Verotown has <br /> net income, it is required to allocate the net income to its partners/members, in accordance with their <br /> ownership shares. The partners/members are then required to pay personal income taxes on their allocated <br /> share of the Verotown income — even though, under the Third Amendment, they never actually receive <br /> any portion of the income. <br /> APPROVED FOR JULY 16, 2013 Indian River Co. • ved Date <br /> Admin. <br /> Co.Atty. e•1; <br /> Budget <br /> De artment -- <br /> Risk Management --- -- <br /> OUNTYA EY <br /> F.•Wno 4n yVnd2*LVEULIBCCUgendo.Lfem Oodgenow "M <br /> 133 <br />