10-28-1996 CC MIN - SPECIAL - Laserfiche WebLink

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Special City Council Meeting October 28, 1996 Page 2 complex. He indicated that according to the pro-forma the principle revenues of financing the MSF sports complex include the following: 27 percent from volleyball; 27 percent from vending machines and other associated sales; 30 percent from the operation of the fitness center; and 13 percent from rentals and advertising. Dave MacGillivray indicated his concern regarding 30 percent of the revenues coming from the operation of the fitness center. He stated that the Council should also be concerned about other competing fitness facilities whether they be private or public. He stated that should another large fitness center be built in the City of Elk River, the City must question whether this would jeopardize the revenues of the MSF sports complex. He indicated that the City must also bear in mind that should a fitness center be included in a community center, it could be perceived as being in conflict with the MSF facility. Dave MacGillivray next discussed the marketability of the project. He indicated that he felt it would be possible to find a bond purchaser for the gross revenue bonds through direct negotiations. City Attorney Dave Sellergren indicated that from a legal perspective the Letter of Intent is not binding to the City and the City would not be taking a risk to stad the process, other than costs associated with the review and evaluation process. Dave Anderson, Park and Recreation Commission representative, discussed the effect the MSF would have on organizations that are currently managing the vending operations during softball games. Perry Coonce indicated that during the first phase of the MSF project, it would continue to have the existing youth organizations operating the concessions. Dana Anderson, Park and Recreation Commission representative, indicated his concern as to what type of guarantee the City would receive regarding indoor use of the sports complex for the local youth. Al Mundt indicated that City residents would be charged less for use of the facility than non-residents. Discussion was held regarding cost to rent the volleyball courts. Discussion was also held regarding a possible conflict of interest if the City builds a community center and includes a fitness center within the community center. Al Mundt indicated that MSF has changed its per-forma to indicate that 12 percent of the funding would come from the fitness center rather than 30 percent. Street/Park Superintendent Phil Hals indicated that he has some concerns regarding the acreage and space allowed for the sports facility, parking, and fields. He stated that Orono Park is the City's premier park. He indicated that usage of the park has increased and suggested that the Council closely consider whether or not it should give up the 2 acres that are adjacent to Gary Street for the MSF complex. Phil Hals indicated that these two acres could someday be incorporated into Orono Park. COUNCILMEMBER DIETZ MOVED TO AUTHORIZE STAFF, CITY AI'rORNEY, AND BOND CONSULTANT TO MOVE FORWARD IN DRAFTING A LETTER OF INTENT WHICH WILL BE BROUGHT BACK TO THE CITY COUNCIL FOR DISCUSSION. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 4. Adjournment