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Agreements for the Development of Mountain Biking Facilities

IMBA World Summit, October 12, 2012
by

Aaron Smith

on 29 April 2013

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Transcript of Agreements for the Development of Mountain Biking Facilities

DISCLAIMERS
1. This is a breakout session at the IMBA World Summit, this is not a consultation at my office, your office, a trailhead, a bar, or anyplace else. We have no attorney-client relationship.

2. The legal concepts discussed today are generally applicable to most states; however, there are differences among the laws of the various states. Accordingly, you should consult a licensed attorney in your state before you sign a TDA. DRAFTING A TDA OVERVIEW NEGOTIATING A TDA WHAT IS A TDA? Signature Blocks

The TDA must be signed by authorized individuals on behalf of the parties

Use the full name of the parties: West Michigan Mountain Biking Alliance, a Michigan nonprofit corporation

Identify the name of the signatory: By: Aaron M. Smith

Identify the title of the signatory: Its Authorized Agent

*Some jurisdictions require signatures to notarized, witnessed, or the use of a corporate seal Parties
The parties must be properly define to ensure that corporate formalities can be followed and individuals protected from unintended liabilities.

Identify the parties by:
Legal name:
Form of entity WHAT IS A TRAIL DEVELOPMENT AGREEMENT?

A Trail Development Agreement (TDA) is a contract between a developer and a landowner for access to land for the development of mountain biking facilities. Define the scope of the project

Development and maintenance of Improvements
Are you negotiation for exclusive use of the Improvements?*
Definition of Improvements (broad vs. narrow definition)
Design Standards (IMBA standards for sustainability or some other standards)
Development costs Approvals and Processes for Approvals

What items require approval and whose approval is required?
Consents from other users
Layout/location
Design/features
Development related permits
Naming Rights

Who is responsible for obtaining approvals?

Timing for approvals. Five Key Provisions

Parties
Term
Allocation of Risks, Indemnities & Insurance
Notice
Assignment 1. Develop Relationships

2. Understand the other side's objectives and concerns -- learn to ask questions and listen to answers

3. Look for common ground and create a list of open items for further discussion BONUS TIP: Answering Questions about Liability

DO NOT SAY: "Our state's recreational land use statute covers mountain biking so there is nothing to worry about."

DO SAY: "I understand that governmental immunity or our state's recreational land use statute may provide protection, but we should defer to the lawyers on this." Term
The "Term" refers to the duration of the TDA.

A TDA can have a defined Term or an open or a term, with or without renewals. A TDA can also provide for termination upon written notice. Assignment

Assignment relates to the ability to transfer rights and obligations under the TDA. Landowners desire certainty since they do not want the developer to turnover its obligations to unknown entity; whereas Developers may need flexibility.


TIP: Try to negotiate carve-outs to prohibitions on assignment. Five "Business Terms" to Negotiate 1. Scope of the Project
Geographic boundaries
Permitted Improvements
2. Construction Terms
Design Standards
Approved Plans
3. Approvals
What approvals are required?
Who has authority to grant or deny?
Timing?
4. Economic Terms
Direct Costs
Indirect Costs
5. Donor Recognition Rights
Naming
Signage THREE NEGOTIATING TIPS


Example: The rights and obligations of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation or other entity without the prior written consent of the other party. In the event of a proper assignment, this Agreement shall be binding upon and inure to the benefit of the parties’ successors and assigns.

Example: The rights and obligations of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation or other entity without the prior written consent of the other party. Landowner shall not withhold, condition, or delay its consent to a proposed assignment to any entity which as the result of a reorganization or restructuring of the Michigan Mountain Biking Association replaces the Developer as the West Michigan affiliate of the International Mountain Bicycling Association or the Michigan Mountain Biking Association. In the event of a proper assignment, this Agreement shall be binding upon and inure to the benefit of the parties’ successors and assigns. Allocation of Risks, Indemnities & Insurance

1. Indemnity is a duty to cover another for liabilities, etc. they incur.

2. Indemnity obligations must be limited to matters under your control.

3. You need insurance to cover any indemnity obligations, secure and maintain coverage even if it is not required under the TDA.

4. Your insurance should correspond to your indemnity obligations, if you have questions, ask your insurance agent to confirm coverage.

5. If insurance is required under the TDA, try to condition your obligation to provide certificates upon receipt of a written request. Notice

Notice provisions are important
You will need to give and receive notice for various events
When dealing with default you need notice and an opportunity to cure
A notice provision identifies how notice and to whom notice is delivered and when it is "given"
Tips:
Use a permanent address
Provide for a mandatory copy of notice to a second party
Require a track-able mailing WHAT DOES A TDA LOOK LIKE?

A TDA can take many forms including:
Leases
Easements
Licenses
Memoranda of Understanding* Define the scope of the project

Development and maintenance of Improvements
Are you negotiation for exclusive use of the Improvements?*
Definition of Improvements (broad vs. narrow definition)
Design Standards (IMBA standards for sustainability or some other standards)
Development costs Approvals and Processes for Approvals

What items require approval and whose approval is required?
Consents from other users
Layout/location
Design/features
Development related permits
Naming Rights

Who is responsible for obtaining approvals?

Timing for approvals. Define the scope of the project

Development and maintenance of Improvements
Are you negotiation for exclusive use of the Improvements?*
Definition of Improvements (broad vs. narrow definition)
Design Standards (IMBA standards for sustainability or some other standards)
Development costs Approvals and Processes for Approvals

What items require approval and whose approval is required?
Consents from other users
Layout/location
Design/features
Development related permits
Naming Rights

Who is responsible for obtaining approvals?

Timing for approvals. WHAT IS A TRAIL DEVELOPMENT AGREEMENT?

A Trail Development Agreement (TDA) is a contract between a developer and a landowner for access to land for the development of mountain biking facilities. DISCLAIMERS

1. I am an attorney.

2. This is a breakout session at the IMBA World Summit, this is not a consultation at my office, your office, a trailhead, bar, or anyplace else. You are not my client, and I am not your attorney -- I would be happy to talk about changing the status of our relationship.

3. The legal concepts discussed today are generally applicable to most states; however, there are differences among the laws of the various states. Accordingly, you should consult a licensed attorney in your state before you sign a TDA. WHAT DOES A TDA LOOK LIKE?

A TDA can take many forms including:
Leases
Easements
Licenses
Memoranda of Understanding*



The form of the TDA and the manner in which the key concepts are addressed will be influenced by the goals and negotiating positions of the parties. AGREEMENTS FOR THE DEVELOPMENT OF MOUNTAIN BIKING FACILITIES:
A WORKSHOP FOR NON-LAWYERS IMBA WORLD SUMMIT, OCTOBER 12, 2012 Leases
Grant exclusive possession
Transfer interest in land
Irrevocable, unless stated
Potential Use as TDA: Situations were you control access to the MTB Facilities Easements
Grant rights to use land for specific purposes
Transfer interest in land
Perpetual and non-exclusive, unless stated
Potential Use as a TDA: Situations were MTB Facilities will be open to the public and grant funding requires land to be tied up for extended time Licenses
Contractual right, not an interest in land
Exclusive or non-exclusive use
Typically revocable
Potential Use as a TDA: Situations where you want permission to build MTB Facilities that will be used by the general public Memoranda of Understanding*
Expression of mutual goals
Not intended to be a binding contract
Potential Use as TDA: Situations where the right to use is generally accepted or where signing a contract is burdensome (i.e., too much red tape) HOW TO NEGOTIATE? A written TDA can:
Provide a road map to complete your project
Give legitimacy in the eyes of the public
Be required or desirable funding WHY DO I CARE? Putting It All Together WHAT IS A TRAIL DEVELOPMENT AGREEMENT?

A Trail Development Agreement (TDA) is a contract between a developer and a landowner for access to land for the development of mountain biking facilities. DISCLAIMERS

1. I am an attorney.

2. This is a breakout session at the IMBA World Summit, this is not a consultation at my office, your office, a trailhead, bar, or anyplace else. You are not my client, and I am not your attorney -- I would be happy to talk about changing the status of our relationship.

3. The legal concepts discussed today are generally applicable to most states; however, there are differences among the laws of the various states. Accordingly, you should consult a licensed attorney in your state before you sign a TDA. WHAT DOES A TDA LOOK LIKE?

A TDA can take many forms including:
Leases
Easements
Licenses
Memoranda of Understanding*



The form of the TDA and the manner in which the key concepts are addressed will be influenced by the goals and negotiating positions of the parties.


Example: The rights and obligations of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation or other entity without the prior written consent of the other party. In the event of a proper assignment, this Agreement shall be binding upon and inure to the benefit of the parties’ successors and assigns.

Example: The rights and obligations of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation or other entity without the prior written consent of the other party. Landowner shall not withhold, condition, or delay its consent to a proposed assignment to any entity which as the result of a reorganization or restructuring of the Michigan Mountain Biking Association replaces the Developer as the West Michigan affiliate of the International Mountain Bicycling Association or the Michigan Mountain Biking Association. In the event of a proper assignment, this Agreement shall be binding upon and inure to the benefit of the parties’ successors and assigns. FORMS OF TDAs WHAT TO NEGOTIATE? Aaron M. Smith
McShane & Bowie, P.L.C.
1100 Campau Sq. Plaza
99 Monroe, N.W.
Grand Rapids, MI 49503
616-732-5035 (direct)
Email: ams@msblaw.com
Twitter: @amsmith107 WHAT IS A TRAIL DEVELOPMENT AGREEMENT?

A Trail Development Agreement (TDA) is a contract between a developer and a landowner for access to land for the development of mountain biking facilities. DISCLAIMERS

1. I am an attorney.

2. This is a breakout session at the IMBA World Summit, this is not a consultation at my office, your office, a trailhead, bar, or anyplace else. You are not my client, and I am not your attorney -- I would be happy to talk about changing the status of our relationship.

3. The legal concepts discussed today are generally applicable to most states; however, there are differences among the laws of the various states. Accordingly, you should consult a licensed attorney in your state before you sign a TDA. WHAT DOES A TDA LOOK LIKE?

A TDA can take many forms including:
Leases
Easements
Licenses
Memoranda of Understanding*



The form of the TDA and the manner in which the key concepts are addressed will be influenced by the goals and negotiating positions of the parties. Aaron M. Smith
McShane & Bowie, P.L.C.
1100 Campau Sq. Plaza
99 Monroe, N.W.
Grand Rapids, MI 49503
616-732-5035 (direct)
Email: ams@msblaw.com
Twitter: @amsmith107 REVIEW 1. Read the TDA and ask questions
2. Make sure the parties are correctly identified
3. Make sure the notice provisions work - fill in any blanks
4. Make sure the TDA is properly executed by a person with authority
5. Make sure you have insurance to cover your indemnity obligations
Full transcript