3.0. SR 10-17-1996~ity of
iver
FROM:
DATE:
SUBJECT:
MEMORANDUM
Mayor & City Council
Pat Klaers, City .a)dlministrator
October 15, 1996 g'~09~
MSF Worksession
The city and Minnesota Sports Federation (MSF) have been discussing a
possible MSF project in Elk River since February, 1996. MSF is now to the
point in their project where they are requesting that the city and MSF enter
into a Letter of Intent for the project. As this Letter of Intent commits both
MSF and the city to certain obligations, it is appropriate for the City Council
and MSF to meet in a worksession to review and evaluate the project
proposal.
MSF needs the city to enter into a Letter of Intent so that it can do some
fundraising. Additional funds are needed by MSF because no project can
move forward until MSF has a certain level of funding available for the
project. In this regard, MSF cannot do any serious fundraising until the city
commits to provide sites for the project. Once the sites are established and
known, MSF will have something to market so it can raise the necessary
funds for the project.
The Letter of Intent between the city and MSF will provide the framework
for a development agreement. If MSF has a certain level of funding available
for the project and, if the city accepts the MSF projections for revenues and
expenditures, then the city will be committed to certain actions. In this
regard, the city will commit to financing the project; to provide MSF with a
six to eight acre site for its building; and, to provide land to MSF in the
future for the development of a field (and restaurant) complex along with
working out an appropriate schedule which allows MSF use of the new fields
that the city is constructing on the Cass property.
The most significant issue in this project is the city commitment to doing
public bonds for the construction of the facility. If the city does not commit to
financing the facility, there will be no MSF project. On the other hand, if the
city does commit to doing the bonding for this project and MSF cannot meet
its financial obligations, the city will be required to pay for the project.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
The city bond consultant, Springsted, has analyzed financial data that was
provided to them by MSF. Please carefully review the attached September 4,
1996, report from David MacGillivray. This report outlines some important
concerns and risks to the city if we move forward and publicly finance this
project. The biggest issue that David raises in his report relates to the
proposed fitness center program and revenues.
In response to this analysis, Pat Pelstring from Public Resource Group, Inc.,
who represents MSF, provided the attached September 25, 1996, letter.
Point #2 of this letter offers some additional financial information regarding
the project. The revenues identified in point number 2 cannot be put into
the revenue side of a bond project, but are important to understand. The
fitness center comments made under number 3 actually will reduce the
revenues in the financial projections that were analyzed by Springsted.
Also attached is the September 30, 1996, draft Letter of Intent between MSF
and the city. This Letter of Intent provides the framework for a future
commitment by the city for funding and for providing sites if MSF raises
sufficient funds and if the city agrees with the revenue and expenditure
estimates. As you can tell by this Letter of Intent, the details of how MSF
can use the Cass fields that are under development have yet to be worked
out. MSF is in agreement that it does not need land for its own permanent
complex and restaurant for fifteen years or until the city is through using it
for WWTP sludge purposes. Regarding the water tower site, the big issue
relates to the immediate building needs (6 acres) versus a master plan and
long term use of additional property.
s:\council\msf1017.doc
r'ity of
iver
FROM:
DATE:
SUBJECT:
MEMORANDUM
Mayor & City Council
Lori Johnson, Asst. City Administrator/
Finance Director
October 15, 1996
MSF Worksession
The Minnesota Sports Federation (MSF) has requested that the city
participate in the financing of a proposed sports facility to be constructed in
Elk River. Bond Consultant Dave MacGillivray of Springsted and I have
reviewed the proposal and offer some comments on the project. Our
comments relate to the financial status of MSF as presented by MSF,
financial feasibility of the project based on the pro forma provided by MSF,
and the implications to the city if it chooses to issue bonds for the
construction of the facility. Attached is a letter from Dave MacGillivray on
his review of the project. This memo will briefly highlight some of
Springsted's issues and other financial items related to this project.
As I stated, MSF has requested that the city issue bonds to finance
construction of the facility. As Dave's letter indicates, the bonds would most
likely be gross revenue recreational facility bonds. All revenues generated by
the facility would first go to pay debt and the remaining revenues would be
used for operation. The city would be required to fund any operating
shortfall if there were not sufficient revenues available for both debt service
and operation of the facility.
In the bond schedules prepared by Springsted, a 10 percent MSF
contribution is included. It is important that the city not proceed with the
issuance of bonds until MSF has met this obligation. If it is determined that
annual MSF revenues will not be sufficient to meet the debt requirements,
MSF could contribute additional funds to make the project feasible.
Other issues raised when reviewing the financial information include the
following:
Memberships. The first pro forma indicated that club
memberships were 30 percent of the revenue stream. Is the
Council comfortable that 200-300 memberships can be sold each
year? (This was decreased by MSF from MSF's original
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
estimate of 500 memberships) Will other competition prior to
the end of the 20 year bond term jeopardize this revenue source?
o
Other MSF revenues. Will MSF use revenue from other sources
not associated with this building if sufficient revenues are not
available for both debt and operation of the new facility?
o
City pledge. Is the Council willing to pledge that it will continue
to keep the facility operational if MSF revenues are not
adequate?
Additionally, if the Council wishes to proceed with this project and
Springsted determines that it is financially feasible, there are several items
which should be required prior to proceeding:
· The MSF contribution plus sufficient cash for equipment and cash
flow be verified.
· An accurate construction estimate be obtained. (Because the city
will issue bonds for this project, it will be a city bid project.)
· A draft lease agreement be approved by MSF and the city.
Finally, additional financial information was requested from MSF to address
some of the concerns outlined in Springsted's letter; this information has not
yet been received. If the information is received prior to the meeting,
Springsted will revise its comments accordingly. Both Dave and I will be
available on Thursday to answer other questions you may have.
admin\msflori2.doc
85 E. SEVENTH PLACE SUITE 100
SAINT PAUL, MN 55101-2143
612-223-3000 FAX: 612-223-3002
September 4, 1996
SPRINGSTED
Public Finance Advisors
Mayor Hank Duitsman
Members, City Council
Mr. Patrick Klaers, Administrator
Ms. Lori Johnson, Finance Director
13065 Orono Parkway
Elk River, MN 55330
Re: Minnesota Sports Federation Volley Ball Complex
We have completed our preliminary review of the Minnesota Sports Federation (MSF) request
for assistance by the City. In conducting our review we obtained more detailed information from
the MSF though its representative, Mr. Pat Pelstring of Public Resource Group, Inc., and
conversations with other persons involved with competitive volley ball programs. The purpose
of this letter is to comment on the MSF pro forma estimates and outline risks to the City. We
also discuss potential financing options for the facility.
MSF has an advantage to other programs being developed in that they already have a program
in place and are conducting approximately 40 tournaments each year. They are currently
renting space where available and would move all of these tournaments to the new facility.
The Plan
The MSF proposes that the City bond for the construction costs for the new eight court facility
and lease it to the MSF for the cost of the debt service. MSF would make a down payment of
ten percent of the project costs and fund all equipment purchases. After the bonds are entirely
repaid the City would sell the facility to the MSF at an agreed upon price. The MSF would pay
for all annual operating and maintenance costs of the facility.
Capital Financing
The City has two potential financing options, exclusive of a referendum-approved process. The
City/EDA can issue lease revenue bonds secured in large part by lease payments from MSF.
While this is a potential approach, its actual use for this project may prove very challenging in
achieving a marketable issue. Given recent defaults in lease revenue transactions for
recreational facilities, investors carefully scrutinize the essentiality of the facility, the revenue
and expenditure performance estimates and the potential for competing facilities. This option
requires more analysis, once additional issues outlined in this letter are addressed.
SAINT PAUL, MN MINNEAPOLIS, MN BROOKFIELD, WI OVERLAND PARK, KS WASHINGTON, DC IOWA CITY, IA
Page 2
The second option is the issuance of gross revenue recreational facility bonds, Minnesota
Statutes, Section 471.191. These bonds are repaid by the "gross" revenues of the facility. The
City pledges that it will continue to operate the facility while bonds are outstanding (here 20
years). This pledge requires the City to pay operating costs should gross revenues be
insufficient to pay both debt service and operations.
For each option we have structured a debt repayment period of 20 years. Because this is not a
general obligation offering and bondholders rely solely on revenues of the facility, in order for
the bonds to be marketable certain financial conditions will have to exist; such as a funded one-
year, debt service reserve, and revenues exceeding debt service by an appreciable margin,
coverage, at a minimum of 125%.
The preliminary estimates of project costs, financing costs and MSF contributions are as
follows:
Project Costs
Capitalized Interest
Reserve Fund
Costs of Issuance
Discount
Subtotal
MSF Contribution - 10%
Total Bond Issue
$2,100,000
190,826
205,188
54,066
44,365
2,594,445
<259,444>
$2,335,000
Schedule A is enclosed as a preliminary estimate of the issue's structure and repayment.
Risks to The City
There are always risks when bonds are sold depending on revenues for debt service payments.
A facility dependent on recreational revenues is more vulnerable than one with revenues from a
more essential purpose such as water or electricity.
Schedule B is a summary of the MSF pro forma. Using the conservative totals, we have the
following comments:
1. Volleyball and associated gym recreational activities are estimated at 27% of total revenues.
2. Ancillary revenues from the pro shop, snack bar/lounge, video games, vending machines
and batting cages represent approximately 28% of total revenues. A significant share of these
revenues could be assumed to be linked with the volleyball operation.
3. Fitness center revenues, with a projected 500 members, are estimated at approximately
30% of all revenues.
4. Other revenues from clinics, office rental and advertising are estimated at approximately
15% of all revenues.
5. Based on MSF experience in volleyball tournaments and programming, and our experience
with other recreation facilities, albeit not volleyball operations, our review shows that all major
cost categories are included. We believe additional questioning may be in order relative to the
staffing levels and resulting payroll estimates. While these estimates may be accurate, a
question exists as to how costs will be allocated between existing MSF staff and the staff of this
Page 3
facility. MSF offices were closed the week of September 2, so clarification of this issue was not
possible prior to materials being distributed to City Council members.
6. A major concern is the probability of developing and maintaining the fitness center revenues
over the 20-year bond repayment term. The fitness facility is subject to any current and future
competing facilities, both private and public. We understand the fitness center to be a very
basic facility. Current and future competing facilities may prove more attractive to the changing
population of the Elk River area.
7. The projections also assume that the MSF will be able to fund 10% of the project cost
($260,000) at the time the City issues bonds, plus all of the equipment to make the facility
operate. The Financial Statement for year ending November 30, 1995 shows only $250,000 of
cash and cash equivalents available. They expect to have a fund drive to generate the
revenues necessary to fulfill their commitments to the project.
8. When issuing the bonds, the City will pledge to the bondholders that it will continue to own
and operate the facility for the life of the bond issue. In doing so, the City wi!i be obligated to
subsidize any operating shortfalls since the first dollars must go to the bonds.
Conclusion
The City has the authority to issue bonds for the construction of this facility. Given current
estimates, the use of gross revenue recreational facility bonds meet the current market
thresholds for issuance.
MSF has pledged to provide funding for 10% of the facility plus all equipment purchases. We
recommend the City verify the existence of such resources before the City proceeds with any
final financing program of its own.
As to the operating estimates, we are impressed with MSF's track record of volleyball activities.
The centralization of these activities in one site should enhance their delivery, and hopefully
expand revenues. However, given all volleyball and gym activities and assuming all related
ancillary snack bar type revenues occur, these sources constitute only 55% of total revenues,
or 70% assuming other advertising revenues.
The fitness center revenues of 30% presents the greatest unknown, and requires the most
comfort on the part of the City that such revenues will be in place for the next 20 years.
The City can bring its own perspective into the likelihood of other competing fitness facilities,
both public and private, being developed, and their impact on this facility. We suggest the City
review this potential, its impact on revenues, and probable sources of payment should the
facility not generate sufficient revenues to cover both debt service and operations, where by the
City would be required to fund any shortfall. Given the outcome of this discussion, it may or
may not be appropriate to discuss with MSF a reduced project scope, and cost.
After these discussions and then based on the City's comfort level with the ability of the facility
to finance both debt service and operations, the City may wish to negotiate a contract for MSF
from its other operations to reimburse the City for any shortfalls, which the City would be
required to fund.
Page 4
We are prepared to assist the City in any further examination of this proposal.
Respectfully,
David N. MacGillivray
Principal
Director of Project Management
tmp
Enclosures
City of Elk River, Minnesota
Minnesota Sports Federation Volley Ball Complex
Gross Revenue Bond Issue
Bonds Dated October 1, 1996
Bonds Mature April 1
Schedule A
Reserve Projected
Earnings @ Annual
Principal Rate Interest Total 6.00% Net Cost Covera~le*
69,069 69,069 (6,156) 62,913 0
65,000 4.70% 138,138 203,138 (12,311) 190,826 1.26
65,000 4.90% 135,083 200,083 (12,311) 187,771 1.28
70,000 5.10% 131,898 201,898 (12,311) 189,586 1.27
75,000 5.20% 128,328 203,328 (12,311) 191,016 1.26
80,000 5.30% 124,428 204,428 (12,311) 192,116 1.25
85,000 5.40% 120,188 205,188 (12,311) 192,876 1.25
85,000 5.50% 115,598 200,598 (12,311) 188,286 1.28
90,000 5.60% 110,923 200,923 (12,311) 188,611 1.28
95,000 5.70% 105,883 200,883 (12,311) 188,571 1.28
100,000 5.80% 100,468 200,468 (12,311) 188,156 1.28
110,000 5.90% 94,668 204,668 (12,311) 192,356 1.25
115,000 6.00% 88,178 203,178 (12,311) 190,866 1.26
120,000 6.05% 81,278 201,278 (12,311) 188,966 1.27
130,000 6.10% 74,018 204,018 (12,311) 191,706 1.26
135,000 6.15% 66,088 201,088 (12,311) 188,776 1.28
145,000 6.20% 57,785 202,785 (12,311) 190,474 1.26
155,000 6.25% 48,795 203,795 (12,311) 191,484 1.26
165,000 6.30% 39,108 204,108 (12,311) 191,796 1.26
175,000 6.35% 28,713 203,713 (12,311) 191,401 1.26
275,000 6.40% 17,600 292,600 (217,499) 75,101 3.21
2,335,000 1,876,226 4,211,226 (457,568) 3,753,658
Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Bond Years:
Average Maturity:
Avg Coupon Rate:
Net Interest Rate:
30,697.50
13.15
6.112%
6.257%
Coverage of Net Income of:
Average 1998-2016 (Times)
240,776
1.265
Composition of Issue
Project Costs
Capitalized Interest
Reserve Fund
Costs of Issuance
Discount
Sub Total Costs
MSF Contribution - 10%
Total Bond Issue
2,100,000
190,826
205,188
54,066
44,365
2,594,445
(259,444)
2,335,000
Prepared by: Springsted Incorporated (9/4/96) elkrvvb.xls E0894W2
City of Elk River, Minnesota
Minnesota Sports Federation Volley Ball Complex
Projected Revenues and Expenses
Schedule B
Projected Revenues (Net)
Pro Shop
Snack Bar/Lounge
Vending Machines
Video Game Room
Batting Cages
Fitness Area
Youth Income
Adult Leagues
Tournaments
Clinics & Camps
Office Rental
Advertising
Total Revenues
MSF Conservative
30000
97 250
4 800
7 200
24,750
182 240
24 945
26 250
103 580
18,750
36,000
25,000
58O,765
MSF Maximum
33,000
97,250
5,700
12,650
24,750
182,240
24,945
26,250
194,088
62,500
36,000
25,000
724,373
Projected Expenses
Payroll
Benefits @ 20%
Utilities - Electric
- Gas
- Water/Sewer
- Trash
Cleaning Supplies
Repair & Maintenance
Telephone
Insurance
Postage
Credit Card Discounts
Operating Supplies
Equipment Rentals
Advertising
Bad Debts
Miscellaneous
Total Expenses
133,574
26,715
60,000
32,500
7,500
3,000
7,500
7,500
6,000
24,000
3,000
3,000
4,800
10,000
6,000
2,400
2,500
339,989
133,574
26,715
60,000
32,500
7,500
3,000
7,500
7,500
6,000
24,000
3,000
3,000
4,800
10,000
6,000
2,400
2,500
339,989
Available to Pay Debt Service
240,776
384,384
Prepared by: Springsted Incorporated (9/4/96) elkrvvb.xls E0894.W2
September 25, 1996
PUBLIC RESOURCE
G oup,
Business Development & Finance Specialists
Mr. Patrick Klaers
City Administrator
13065 Orono Parkway
Elk River, MN 55330
Dear Mr. Klaers:
Perry Coonce and I appreciated the opportunity to meet with you last week and further discuss
the proposed Minnesota Sports Federation project. We appreciated the opportunity to review
the report prepared by Springsted and wanted to respond, in writing, to their concerns.
Most importantly, Springsted's review of the projections, represents MSF's first serious
proforma analysis of their proposed operations. As we move forward, we would expect to
refine these projections based upon the appropriate'" mix" of programs and services and the final
financing plan. We are encouraged by Springsted's overall observation that the proforma
represents a reasonable mix of MSF's current operation.
There are several items which should be clarified as we move to the next step. These items are
as follows:
We agree with Springsted that the City should not move forward with issuance of its
bonds/financing until the equity commitments from Minnesota Sports Federation are
complete. Although MSF has a significant level of existing capital reserves, they have
always intended to proceed with a capital fund raising campaign, once the site and
general financing plan has been agreed upon. Failure of MSF to generate the required
equity would negate any City financing commitment.
MSF wishes to clarify that the financial information, as presented, represents only the
proposed operations of the sports thcility. As such the continuing operations of the
Sports Federation would be available to support the sports facility, as appropriate. We
also expect that there will be direct additional cost savings associated with sharing
personnel, etc. which is not currently represented in the proforma.
o
MSF recognizes the concern regarding the proposed "fitness center", at least to the extent
that 500 members would join in the first year. A more conservative estimate would be
200 - 300. A better definition lbr this proposed activity would be a "training/fitness
center". The training center would be a focused training program, specifically for a
4205 Lancaster Lane North · Suite 1100 · Minneapolis, Minnesota 55441 · (612) 550-7979 · (612) 550-9221 Fax
particular sport (i.e. basketball, baseball, etc.). These training centers have become very
popular over the past several years and there are several successful examples in the Twin
Cities area. MSF has already initiated discussions with existing private organizations
which may run this "training center" on behalf of MSF. On this basis, MSF may simply
be a landlord and lease its facilities. We will continue to advise the City on the
anticipated structure of this relationship as it develops over the next 60 - 90 days. We
do, however, plan to make a concerted effort at serving fitness enthusiasts, as we feel
this market is available and complilnents our diversification approach.
It is important to understand that the structure and nature of this project may change, somewhat
as we proceed over the next several months. As an example, MSF may find a corporate sponsor
during its capital campaign which would commit to an amount of funding each year, for several
years. Additionally, we have discussed the potential positive financial impact of having MSF
having a pull-tab commitment. MSF continues to explore this opportunity.
In any case, we would expect that a development/lease agreement will specify the requirements
for equity and on-going operations acceptable to the City. We would expect to work directly
with you to complete the project.
Please contact Perry, Al, or myself if you have additional questions.
Sincerely,
Patrick W. Pelstringk
Chief Executive Officer
PWP\dp
cc: Dave MacGillivary
September 30, 1996
Honorable Mayor Duitsman
and City Council for the
City of Elk River
Re.'
"Letter of Intent" for
Minnesota Sports Federation Project
INTRODUCTION
The Minnesota Sports Federation and the City of Elk River do hereby express their intent
to mutually proceed with the development of a 59,500 square foot recreational facility.
This letter represents the proposed terms and conditions to mutually proceed with the
project development and financing.
NOTWITHSTANDING ANYTHING TO THE CONTRARY, HOWEVER, THIS
LETTER DOES NOT REPRESENT A BINDING COMMITMENT, BY EITHER
PARTY, TO PROCEED WITH THE DEVELOPMENT, FINANCING, OR
OPERATION OF THE PROJECT.
PROJECT DESCRIPTION
The proposed development project consists of approximately a 59,500 square foot indoor
sports recreational facility to be operated by the Minnesota Sports Federation. The
facility is proposed to be constructed on a 6 to 8.5 acre site (final acreage to be mutually
determined after review and approval of the site plan) located at the water tower site,
south of Highway 10 and bordered by Hudson Street on the west.
The facility will be a multi-use indoor sports facility designed for volleyball, basketball,
touch football, indoor soccer, and wrestling. The facility will contain offices, locker
rooms, food service, meeting rooms, and will be the official home of the Minnesota
Amateur Hall of Fame.
The Minnesota Sports Federation will utilize the facility for conducting clinics,
recreational league activities and tournalnents. In addition, the City and Minnesota Sports
Federation will work together to develop local programming to benefit area residents.
It is proposed that the facility will be designed by Minnesota Sports Federation with input
from City representatives. The facility will be constructed and financed by the City, after
the City deems the project to be financially feasible, and Minnesota Sports Federation will
execute a lease/purchase agreement to fully amortize the City financing.
MINNESOTA SPORTS FEDERATION REPRESENTATIONS:
Minnesota Sports Federation represents its interest in the project and agrees to proceed
as follows:
Minnesota Sports Federation is a private, non-profit 501(c)3 organization with over
200,000 members and participants in its programs.
Minnesota Sports Federation intends that the proposed project will serve as its
operational headquarters and primary indoor sports facility.
o
Minnesota Sports Federation intends to locate the Minnesota Amateur Sports Hall
of Fmne as a part of the project.
Minnesota Sports Federation intends to lease the proposed facility from the City
at a minimum annual cost equal to the City's annual debt service for the project.
Minnesota Sports Federation intends to cooperate with the City to encourage
programming to enhance local community recreational opportunities.
o
Minnesota Sports Federation intends to equip the facility with equipment valued
at $300,000.
°
Minnesota Sports Federation intends to be responsible for all on-going operating
costs.
o
Minnesota Sports Federation has provided a financial pro-fonna, and will work
with the City to update as required, which fairly justifies the on-going lease and
operating expenses.
CITY REPRESENTATIONS
The City represents its interest in the project and agrees to proceed as follows:
1. The City will cooperate with Minnesota Sports Federation in the
construction, and financing and development of the proposed project.
design,
The City intends to provide, at no charge, a 6 to 8.5 acre site located at water
tower site for development of the facility and potential expansion. The City and
Minnesota Sports Federation will masterplan the site and agree to the appropriate
acreage to meet this plan (see attached site map).
o
The City recognizes the need for MSF to have access to additional softball fields
for summer tournaments. The City represents that it intends to develop four new
softball fields on property identified as the "Cass Property". In addition, the City
owns 23 acres immediately to the south of the Cass Property which will be
available for development between 10 and 15 years. The City's intentions to
support MSF and their requirement for outdoor softball fields is as follows:
mo
The City agrees to provide access to the new four fields complex or existing
Elk River softball complex on seven to nine weekends per summer (June,
July, August, and September - additional to current field usage by Elk
River Softball Association of MSF tournaments) by MSF, as necessary.
Access to the softball fields shall include concession stands and gate
revenue. Usage of the softball fields shall be based on the sports tourism
and corresponding economic impact generated to the community by
tournaments held by the Minnesota Sports Federation at the fields.
Bo
The City agrees, at the point it no longer requires the use of the 23 acre site
for waste disposal, south of the Cass Property, to enter into a $1.00 land
lease or equivalent land sale on this property. MSF shall be responsible for
development of the site.
o
The City intends to finance the facility, if determined to be financially feasible,
through Certificates of Participation and lease the facility to Minnesota Sport
Federation.
The City intends to sell the facility to Minnesota Sports Federation, after debt
retirement, for the sum of $1.00.
o
The City agrees to provide a "right of first refusal" on the softball fields adjacent
to the Minnesota Sports Federation developinent site, should the City decide to
relinquish its ownership/control of these fields.
MUTUAL REPRESENTATIONS
The Minnesota Sports Federation and City intend to mutually reach agreement on the
following:
1. The schedule and timing for the project.
The determination of a construction company and architect. The City and
Minnesota Sports Federation will agree to comply with public bidding
requirements as required by state statute. (Minnesota Sports Federation prefers
the design/build approach at this point due to cost savings and control)
3. Local programming options and cost reimbursement, if appropriate.
The potential and process for future facility expansion and the development and
management of additional outdoor recreational facilities adjacent to the facility.
5. The specific terms, conditions, and security for the lease/purchase agreement.
o
The City and Minnesota Sports Federation agree to cooperatively support existing
commitments to the Wright County Fair, to provide additional parking during the
annual four day county fair.
The Minnesota Sports Federation will submit a license(s) as required by City
ordinance to grant a 3.2 liquor license and charitable gaming for the facility. MSF
will work with the City to assure that alcoholic beverages will not be dispensed
during youth tournaments. Should MSF meet traditional guidelines for approval,
the City would expect to approve these licenses.
PRE-DEVELOPMENT COMMITMENTS
In consideration of these representations and intentions the parties do hereby agree as
follows:
1. To select a project construction company and architect.
2. To initiate fi~rther design and develop detail specifications of the facility.
o
To conduct a financial feasibility analysis of the project to forecast anticipated
revenues and expenses and an overall financing plan.
The City and Minnesota Sports Federation anticipate that all development costs
will be included as a part of the project. In the event, however, that the project
does not proceed, the parties agree to pay costs as follows: (1) The City agrees
to pay tip to $3,000.00 for a preliminary financial analysis of the project;
(2) Minnesota Sports Federation agrees to pay for preliminary architectural
development costs for the project. (3) Minnesota Sports Federation and the City
agree to pay for their individual direct expenses.
Agreed to this
day of September, 1996 by:
The City of
Minnesota Sports Federation
Mayor
Executive Director
City Clerk Secretary
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SITE WEST OF
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PARK
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CASS PROPERTY
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