Loading...
HomeMy WebLinkAboutSP June 4, 2003 I' "- " / 1685 CROSSTOWN BOULEVARD N,W, . ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 . WWW.CI.ANDOVER,MN,US SPECIAL CITY COUNCIL MEETING CO~TYCENTERPROffiCT Council Chambers June 4, 2002 - 8:30 p.m. AGENDA 1. Call to Order 2. Approve Agenda 3. Determine Appropriate Project Financing Methodology 4. Order the Community Center Project , '\ '-~ 5. Authorize Schematic Design Phase 6. Approve YMCA Memorandum of Understanding 7. Approve Community Center Project Budget 8. Other Business 9. Adjourn , '--J 1685 CROSSTOWN BOULEVARD N,W, . ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 . WWW,CI.ANDOVER,MN.US SPECIAL CITY COUNCIL MEETING COMMUNITY CENTER PROJECT Council Chambers June 4, 2002 - 8:30 p.m. AGENDA 1. Call to Order 2, Approve Agenda 3. Determine Appropriate Project Financing Methodology 4. Order the Community Center Project 5. Authorize Schematic Design Phase 6. Approve YMCA Memorandum of Understanding 7. Approve Community Center Project Budget 8. Other Business 9. Adjourn C I T Y o F NDOVE 1685 CROSSTOWN BOULEVARD N,W, . ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 . WWW,CI.ANDOVER.MN.US TO: Mayor and Council Members FROM: John Erar, City Administrator SUBJECT: Community Center Project DATE: June 4, 2003 INTRODUCTION Council has directed that a meeting be scheduled following the Community Center Public Information meeting to consider the following items: 1) Determine Appropriate Project Financing Methodology; 2) Order the Community Center Project; 3) Authorize Schematic Design Phase; 4) Approve City-YMCA Memorandum of Understanding and 5) Approve Community Center Budget. DISCUSSION Over the course of the last several months, Council has been provided with extensive information regarding these action items. The following is a brief summary of the action items to be determined by the City Council this evening. Determine ADDroDriate Proiect FinanciD!!: Methodolol!:V Consider the appropriate project financing methodology for the proposed Community Center project. The two choices before Council with respect to project financing methodologies include a Lease Revenue Bond or a General Obligation (G.O.) Capital Improvement Bond subject to a voter referendum. Council has already received extensive background information on the use of a lease revenue bond as it relates to the Community Center project. Mark Ruff, Ehlers and Associates, will be in attendance at the meeting to provide comments regarding the financial Performa prepared by the City Finance Director, If Council selects a bond referendum, staff, in consultation with the project architect, construction manager and fiscal advisor, would recommend that the ballot referendum not be held until September 2003, Council is already aware of the project implications that a voter referendum would have on the community center construction schedule as it pertains to the opening date of the Ice Arena, Council has already received information on the household tax impacts that either type of bond issue would have on a range of a residential home values, Staff continues to anticipate that the annual tax impact on a home valued at $200,000 would range from $39-$45 per year. Order Community Center Proiect Council is requested to consider, subject to the type of financing instrument selected, whether the community center project should be ordered. Should Council authorize the issuance of a Lease Revenue Bond, the Community Center project could be ordered this evening, which would allow staff and City project consultants to meet previously discussed project deadlines. However, should Council opt to move forward with a G.O. Capital Improvement Bond through a voter referendum, the question of whether to order the Community Center project should be deferred until the outcome of the voter bond referendum is known. Staff would not recommend that Council order the project under a voter referendum scenario given the uncertainty of where funding would be appropriated from to underwrite project expenses should the referendum fail. Authorize Schematic Desil!n Phase The decision of whether to authorize the schematic design of the facility is dependent on the type of public financing selected by the Council and if the project is ordered. Once again, should Council select a lease revenue bond to finance the facility then the Council should authorize the architect and construction manager to begin the schematic design phase of the project. However, should Council opt to move forward with a G.O. Capital Improvement Bond through a voter referendum, staff would recommend against proceeding with this phase of the design work given the uncertainty of where funding would be appropriated from to underwrite consultant fees should the referendum fail. Approve CITY-YMCA Memorandum ofUnderstandinl! Attached is the final draft version ofthe MOD, which has been reviewed by City administration, the City Attorney's office arid senior YMCA staff, Subject to decision outcomes on previously described action items, the MOD is ready for adoption. Approve Community Center Budl!et According to the City's project construction manager and architect, a project budget of $16.5 million is a feasible estimate for all project related expenses to construct a facility outlined in the project presentation. If an indoor water park is added to the project budget in support of YMCA programming, then the project budget would increase to $18 million. It is important to note that the added capital expenses and subsequent debt service associated with an indoor water park would become the financial responsibility of the YMCA through a facility lease agreement, and would not affect the anticipated tax impact projections presumed under the original $16.5 million project budget. ACTION REQUIRED For Council consideration and action. @ MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (this "Memorandum") is made as of the day of ,2003, by and between Young Men's Christian Association of Metropolitan Minneapolis, a Minnesota not-for-profit corporation ("YMCA"), and the City of Andover ("City"). RECITALS A. City owns certain real property (the "Site") located to the north of the existing city hall (Exhibit A) that it is contributing to the project. B. City intends to design, construct, finance, and own a facility that incorporates reasonable architectural appeal, quality building materials and durable finishes in partnership with the YMCA, C. Such facility must meet the programming needs of the YMCA and must be adequate to house a field house, an aquatic center/water park, a fitness center, and an ice arena, including all infrastructure necessary to support such a facility (Exhibit B), D. YMCA intends to operate a full-service YMCA including typical member programs and youth services associated with an aquatic center, a fitness center, limited use of a field house, and other program spaces shared with the City (Exhibit C). I E. City and YMCA desire to jointly enter into a lease agreement for program space appropriate in design and adequate in size to operate programs and services customary to a suburban YMCA. F. YMCA intends to use memberships that entitle members to services as a part of the membership fee and access to additional programs on a fee basis. The YMCA intends to offer a package of services and programs similar to other suburban YMCAs and provide a discounted membership structure for Andover residents. G. City and YMCA desire to enter into a lease agreement whereby the YMCA provides certain management services for YMCA portion of the facilities that includes operation, maintenance, and all related staffing. H. City and YMCA have agreed that City and/or its assigns shall be solely responsible for the management, operation, capital improvements, and maintenance of the City components. 1. City and YMCA agree to share certain portions of the facility, including but not limited to the entrance, lobbies, conference space, multi-purpose space, field house, locker rooms, administrative and building service support areas. J Capital improvements will be agreed upon jointly by the City and YMCA and will be financed by the City, with those portions of the capital improvements attributable June 4, 2003 1 Final Version exclusively to YMCA operations and programs and the portion of spaces shared with the City attributable to the YMCA will be underwritten by the YMCA through the "- Lease Agreement. K. This Memorandum is dependent on both the City and the YMCA's ability to finance and service the debt required to construct a facility adequate to meet the programming needs of both entities and provide cash flow adequate to operate, staff, maintain and make capital improvements to the facility and provide the services and programs intended. NOW, THEREFORE, the parties hereto do hereby agree to the following terms and conditions: 1. The City and the YMCA will enter into a lease agreement for program spaces to be used exclusively by the YMCA and that in the YMCA's experience meets its needs and are adequate in size and design to operate a full service suburban YMCA in accordance with the following terms and conditions: A. Lease Term. The initial term of the lease shall be equivalent to the initial term of the financing and all subsequent refinancing and/or extensions of outstanding debt in support of the facility. B. Lease Agreement Principles. The City and the YMCA agree that the YMCA shall be a tenant for the life of the facility subject to the following conditions: I i) The initial lease agreement and any extensions will be based on the cost of capital improvements, maintenance expenses, and other expenses attributable to YMCA operations. ii) The facility must meet the program needs of the YMCA members. iii) The YMCA must continue to meet its financial obligations to the facility. iv) The term of the initial lease and all extensions will be based on and equivalent to the time required to amortize the cost of the improvements, v) The City agrees that it will not construct competing facilities, will not provide competing recreational programs or services or in any way preclude the YMCA from operating customary programs and services vi) The YMCA must be in compliance with all terms and conditions of the lease agreement. vii) The YMCA must contribute proportionately to its share of maintaining the facility and related supporting infrastructure to be determined on an annual basis. viii) The YMCA must be in compliance with all applicable City building and fire codes, ix) The YMCA agrees to work collaboratively with the City to address customer programming needs and service concerns. June 4, 2003 2 Final Version 2. Common Area Maintenance Principles. A. Exterior maintenance of grounds and parking facilities will be provided by the City. These services will include maintaining all landscaped areas, and maintenance of all parking areas and will be proportionately expensed between the City and YMCA on an annual basis. B. Certain areas of the building will be shared by all users. These areas include entrances, lobby spaces, elevator, stairs and corridors. These areas, to be designated and agreed upon by the City and the YMCA, will be defined as common areas and the expense of maintaining and improving these areas will be shared through a common area maintenance agreement. 3. Risk Management Principles. A. City will provide casualty and liability insurance customary for such a facility, The insurance policy will include the YMCA as a named insured, B. YMCA will provide casualty and liability insurance customary for such a facility. The insurance policy will include the City as a named insured, 4. Capital Campaign Proceeds and Allocations. , The City and the YMCA have jointly undertaken a capital campaign to raise I funds for the community center. All revenues and expenses generated from the capital campaign will accrue to the benefit of the facility and will be allocated against construction costs in proportion to the exclusive and shared uses of the facility by both parties. Subsequent to the completion of the initial capital campaign, the YMCA will continue to raise money for financial assistance to members, non-revenue programs, capital improvements and other needs identified by the YMCA. S, YMCA Facility Financing Principles. It is understood that the YMCA agrees to underwrite its proportionate share of capital construction costs attributable to YMCA programs and services through a formal lease agreement to be negotiated prior to the issuance of City bonds and approved by the Andover City Council and YMCA of Metropolitan Minneapolis. This document represents a framework of principles expressing the current understanding between both parties and does not constitute a legally binding agreement. The parties agree to utilize the principles expressed in this document as a framework for all subsequent legally binding documents between the City and YMCA. June 4, 2003 3 Final Version CITY OF ANDOVER By: John F. Erar Its: Chief Administrative Officer YMCA OF METROPOLITAN MINNEAPOLIS By: Harold Mezile, Jr. Its: President & CEO f:\495IMemo of Understanding YMCA 6/3/2003 , I / June 4, 2003 4 Final Version