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September 25, 1996 <br /> <br />PUBLIC RESOURCE <br /> <br /> G oup, <br />Business Development & Finance Specialists <br /> <br />Mr. Patrick Klaers <br />City Administrator <br />13065 Orono Parkway <br />Elk River, MN 55330 <br /> <br />Dear Mr. Klaers: <br /> <br />Perry Coonce and I appreciated the opportunity to meet with you last week and further discuss <br />the proposed Minnesota Sports Federation project. We appreciated the opportunity to review <br />the report prepared by Springsted and wanted to respond, in writing, to their concerns. <br /> <br />Most importantly, Springsted's review of the projections, represents MSF's first serious <br />proforma analysis of their proposed operations. As we move forward, we would expect to <br />refine these projections based upon the appropriate'" mix" of programs and services and the final <br />financing plan. We are encouraged by Springsted's overall observation that the proforma <br />represents a reasonable mix of MSF's current operation. <br /> <br />There are several items which should be clarified as we move to the next step. These items are <br />as follows: <br /> <br />We agree with Springsted that the City should not move forward with issuance of its <br />bonds/financing until the equity commitments from Minnesota Sports Federation are <br />complete. Although MSF has a significant level of existing capital reserves, they have <br />always intended to proceed with a capital fund raising campaign, once the site and <br />general financing plan has been agreed upon. Failure of MSF to generate the required <br />equity would negate any City financing commitment. <br /> <br />MSF wishes to clarify that the financial information, as presented, represents only the <br />proposed operations of the sports thcility. As such the continuing operations of the <br />Sports Federation would be available to support the sports facility, as appropriate. We <br />also expect that there will be direct additional cost savings associated with sharing <br />personnel, etc. which is not currently represented in the proforma. <br /> <br />o <br /> <br />MSF recognizes the concern regarding the proposed "fitness center", at least to the extent <br />that 500 members would join in the first year. A more conservative estimate would be <br />200 - 300. A better definition lbr this proposed activity would be a "training/fitness <br />center". The training center would be a focused training program, specifically for a <br /> <br />4205 Lancaster Lane North · Suite 1100 · Minneapolis, Minnesota 55441 · (612) 550-7979 · (612) 550-9221 Fax <br /> <br /> <br />