Dubuque Ice & Recreation Center DICE Development AgreementTHE CITY OF Dubuque
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Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Development Agreement Between and Among the City of Dubuque, Iowa,
Dubuque Ice & Recreation Center, Inc., Dubuque Racing Association,
Ltd., and Battlefield Dubuque, LLD
and
Lease Agreement Between the City of Dubuque, Iowa and Dubuque Ice &
Recreation Center, Inc.
DATE: September 17, 2009
City Attorney Barry Lindahl and Leisure Services Manager Gil Spence have been
working with the Dubuque Ice & Recreation Center (DICE), Battlefield Dubuque, LLC,
the Dubuque Racing Association and Vision Iowa to create a much larger ice arena on
the City site on Schmitt Island.
The parties have successfully come to an agreement to expand the planned ice arena
from 500 seats to 3,200 seats, and make it home to a new United States Hockey
League (USHL) team, replacing the Dubuque Thunderbirds.
The additional cost of the expanded facility of just over $3.2 million will be provided by
the owners of the USHL Hockey Franchise, Battlefield, LLC. Also, in addition to the $1
million the Dubuque Racing Association had in the project, they will contribute an
additional $300,000 to build additional parking and put lighting in the City's existing
parking lot.
The City will have no additional financial obligations over the $50,000 the City already
agreed to contribute, the funds to pave the City's existing parking lot and the $1 per
year 25-year land lease. However, the City is agreeing to do the following:
1. Expand the area of the land lease for the larger building and the additional
parking. This will eliminate the rugby fields.
2. Move up the planned paving of the City parking lot to Fiscal Year 2011, from
Fiscal Year 2013.
3. Eliminate ice at Five Flags so that DICE can use some of that equipment to avoid
some costs in their new facility
To ensure that the Five Flags annual deficit does not increase with the loss of ice, I am
recommending that the clause in the SMG Five Flags Management contract that
prohibits Five Flags from competing for certain special events be eliminated from the
SMG contract. With decreased operating costs, decreased capital expenses and
increased special event revenue, this causes an almost break-even in year one and a
better profit than ice by year three.
The Grand River Center opened in October 2003. The management firm for the Grand
River Center had asked for three to five years of no compete from Five Flags as it took
them time to fill their schedule with conventions and special events and made event
planners aware of their existence. That time has long since passed.
The Development Agreement includes:
1. The City will lease the property to DICE pursuant to the Lease Agreement for a
term of twenty-five (25) years.
2. DICE will construct on the property the ice arena for a total cost of approximately
$6.276 Million.
3. Construction shall commence within thirty (30) days of the October 15, 2009
closing date and shall be substantially completed within nine (9) months after the
commencement of construction.
4. Although the City will own the arena, the City will not incur any costs related in
any way to the design, construction, or operation of the arena.
5. During the term of the lease, the City will not enter into any agreement to operate
another indoor ice facility on property owned by or under the control of the City
and will no longer operate the ice facility at Five Flags Civic Center.
6. DRA agrees to contribute to DICE the sum of $1 Million for the construction of
the arena and to provide funds not to exceed $300,000.00 for parking
improvements.
7. Battlefield agrees to contribute $3.2 Million to DICE for the construction of the
arena. DICE and Battlefield have entered into an Arena Usage Agreement for
the arena. DICE has entered into a Management Agreement with Southwood
Management, LLC for the management of the arena.
8. An Arena Advisory Board comprising the Chairperson of the DICE Board of
Directors, the President and CEO of the DRA, the Chairperson of the Battlefield
Board of Governors, the City Manager, and the President of Dubuque Youth
Hockey, will advise and make non-binding recommendations to the DICE Board
of Directors and the arena manager for such things as capital improvements and
expenditures, a master schedule for the arena, establishing facility rules and
regulations, and providing a voice for all stakeholders using the arena.
At one time Dubuque had USHL Hockey, one level of hockey higher than the Dubuque
Thunderbirds, in the Dubuque Fighting Saints. USHL Hockey has grown and matured
since that time.
The USHL has teams in Chicago; Des Moines; Cedar Rapids; Sioux City; Waterloo;
Fargo, North Dakota; Green Bay, Wisconsin; Indianapolis, Indiana; and Youngstown,
Ohio.
The USHL celebrates its 31St season of junior hockey in 2009-2010, with over 180
players already committed to NCAA Division I schools during the 2008-2009 campaign,
and 17 NHL draft picks that played in the league this past season. The USHL is the
nation's foremost producer of junior hockey talent. The USHL Fall Classic is one of the
most highly scouted events in all of hockey, as each team will play in front of scouts
from every NHL Club and Division I college hockey program.
I respectfully recommend that the Mayor and City Council set a public hearing for
October 5, 2009 to consider the Dubuque Ice & Recreation Center Development
Agreement and Lease Agreement.
,~ ~
Michael C. Van Milligen ~_. ~ (-T-
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Gil Spence, Leisure Services Manager
THE CITY OF
DUB E
Masterpiece on the Mississippi
BARRY LINDAHL
CITY ATTORNEY
MEMORANDUM
To: Michael C. Van Milligen
City Manager
DATE: September 16, 2009
RE: Development Agreement Between and Among the City of Dubuque, Iowa,
Dubuque Ice & Recreation Center, Inc., Dubuque Racing Association,
Ltd., and Battlefield Dubuque, LLC
and
Lease Agreement Between the City of Dubuque, Iowa and Dubuque Ice &
Recreation Center, Inc.
Attached is a Resolution of Intent to Dispose of Real Property pursuant to a
development agreement and lease of property located on Schmitt Island for the
construction of an ice area. Also attached is the proposed Development Agreement
and proposed Lease Agreement.
Dubuque Ice & Recreation Center, Inc., an Iowa Corporation (DICE), has requested that
the City lease to DICE certain real property so that DICE may construct on the property
an ice arena. Dubuque Racing Association, Ltd. (DRA) has agreed to contribute funds
to the project. Battlefield Dubuque, LLC, (Battlefield), a Minnesota Limited Liability
Company, has also agreed to contribute funds for the construction of the arena and to
enter into an agreement with DICE for the use of the arena. Significant terms of the
Development Agreement are the following:
1. The City will lease the property to DICE pursuant to the Lease Agreement for a
term of twenty-five (25) years.
2. DICE will construct on the property the ice arena for a total cost of approximately
$6.276 Million.
3. Construction shall commence within thirty (30) days of the October 15, 2009
closing date and shall be substantially completed within nine (9) months after the
commencement of construction.
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563) 583-4113 / FAx (563) 583-1040 / EMAIL balesq@cityofdubuque.org
4. Although the City will own the arena, the City will not incur any costs related in
any way to the design, construction, or operation of the arena.
5. During the term of the lease, the City will not enter into any agreement to operate
another indoor ice facility on property owned by or under the control of the City
and will no longer operate the ice facility at Five Flags Civic Center.
6. DRA agrees to contribute to DICE the sum of $1 Million for the construction of
the arena and to provide funds not to exceed $300,000.00 for parking
improvements.
7. Battlefield agrees to contribute $3.2 Million to DICE for the construction of the
arena. DICE and Battlefield have entered into an Arena Usage Agreement for
the arena. DICE has entered into a Management Agreement with Southwood
Management, LLC for the management of the arena.
8. An Arena Advisory Board comprising the Chairperson of the DICE Board of
Directors, the President and CEO of the DRA, the Chairperson of the Battlefield
Board of Governors, the City Manager, and the President of the Dubuque Youth
Hockey, will advise and make non-binding recommendations to the DICE Board
of Directors and the arena manager for such things as capital improvements and
expenditures, a master schedule for the arena, establishing facility rules and
regulations, and providing a voice for all stakeholders using the arena.
Elevations showing the proposed arena are attached to this Memorandum.
I would recommend that the Resolution, Development Agreement and Lease
Agreement be submitted to the City Council for consideration at the September 21,
2009 City Council meeting, and that a public hearing be set for the disposition of the
property for the October 5, 2009 City Council meeting.
BAL:tIs
Attachment
cc: Cindy Steinhauser, Assistant City Manager
Gil Spence, Leisure Services Manager
F:\USERS\tsteckle\Lindahl\Dubuque Community IceWIVM_DevAgreement&LeaseAgreement_091609.doc
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563) 583-4113 / FAx (563) 583-1040 / EMAIL balesq@cityofdubuque.org
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Preparers Barry A. Lindahl, Esq. Address: Suite 330, 300 Main Street, Dubuque, IA 52001 Telephone: (563) 583-4113
RESOLUTION NO.
RESOLUTION OF INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTI( BY
DEVELOPMENT AGREEMENT BETWEEN AND AMONG DUBUQUE ICE ~
RECREATION CENTER, INC., DUBUQUE RACING ASSOCIATION, AND
BATTLEFIELD DUBUQUE, LLC AND LEASE AGREEMENT WITH DUBUQUE
COMMUNITY ICE & RECREATIONAL CENTER, INC.
WHEREAS, the City of Dubuque, Iowa (City) is the owner of the following
described real estate (the Property):
A part of Mineral Lots 298 and 299 in Fractional Section 19, T89N, R3E,
5th P.M., in the City of Dubuque, Iowa, containing 6.63 acres, more or
less, subject to easements of record and not of record;
and
WHEREAS, Dubuque Community Ice & Recreational Center, Inc. (DICE), an
Iowa Corporation, desires to lease a part of the Property shown on Exhibit A-1 attached
hereto for the construction and operation of an ice arena (the Arena) as described in a
Development Agreement and Lease Agreement now on file at the office of the City
Clerk, 50 West 13t" Street, Dubuque, Iowa; and
WHEREAS, Dubuque Racing Association, LTD (DRA) has agreed to enter into
the Development Agreement and contribute to the funds required by DICE for the
construction of the Arena; and
WHEREAS, Battlefield Dubuque, LLC (Battlefield), a Minnesota limited liability
company, has agreed to entered into the Development Agreement and contribute to the
funds required by DICE for the construction of the Arena and to enter in an agreement
with DICE for the use of the arena.
WHEREAS, the City Council of the City of Dubuque has found that the
development of the Property pursuant to the Development Agreement and Lease
Agreement, and the fulfillment generally of the Development Agreement and Lease
Agreement, are in the vital and best interests of City and in accord with the public
purposes and provisions of the applicable federal, state and local.
WHEREAS, the City Council has tentatively determined that it would be in the best
interests of the City to approve the Development Agreement and enter into the Lease
Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. The City of Dubuque intends to dispose of its interest in the Property
pursuant to the Development Agreement and Lease Agreement.
Section 2. The City Clerk is hereby authorized and directed to cause this
Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a
public hearing on the City's intent to dispose of the foregoing-described real property, to
be held on the 5th day of October, 2009, at 6:30 o'clock p.m. at the Historic Federal
Building, 350 West 6th Street, Dubuque, Iowa.
Passed, approved and adopted this 21St day of September, 2009.
Roy D. Buol, Mayor
Attest: Jeanne F. Schneider, City Clerk
F:\USERS\tsteckle\LindahllDubuque Community IcelResolutionOflntent 091609.doc
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Masterpiece on the Mississippi
2007
TO: Michael C. Van Milligen, City Manager
FROM: Gil D. Spence, Leisure Services Manager
SUBJECT: Amendment to the SMG Management Agreement
for the Five Flags Center
DATE: September 17, 2009
INTRODUCTION
The purpose of this memorandum is to request City Council approval of an amendment
to the SMG Management Agreement for the Five Flags Center.
DISCUSSION
With the opening of the new ice arena and elimination of ice at the Five Flags Center, I
am recommending an amendment to the SMG Management Agreement allowing them
to compete for the same type of events that can be held at the Grand River Center.
When the Grand River Center opened in October 2003 the City agreed that the Five
Flags Center would not compete for events that could be held there for afive-year
period.
The SMG Agreement, Section 2.6(b) (the last two sentences) states, "Notwithstanding
anything to the contrary contained herein, the parties acknowledge that the Facility (Five
Flags) shall not compete for the same type of events that can be held at the Grand
River Center in Dubuque, Iowa, unless the event comes through the Grand River
Center. Those events include, but are not limited to: conferences/conventions,
dinners/banquets, meetings, receptions, and flat floor events."
The amendment would be the elimination of these two sentences.
This change will allow SMG to secure additional events to offset the revenue loss of
having no ice in the building. It will take a few years to build an event load of these
types of events because many of them are scheduled several years in advance.
continued
SMG Agreement amendment
page two
When looking at just the operating budget, SMG projects a net revenue loss of $68,000
with all ice activities eliminated. They figure the first year they can offset this, to some
degree, with an increase of other events because of the number of dates freed up from
no ice events. This could reduce the net revenue loss to $14,000 the first year and by
the third year it could be revenue neutral, or making money. SMT will need to be
creative with the events they try to generate and they are already developing a plan for
how they will approach this.
If the capital improvement budget is included in this discussion, things look even better.
If all the capital costs associated with ice are budgeted on an annual basis, I estimate
that amount would be $40,000 per year. This capital money would then be freed up for
other projects.
Revenue generated from the same type of events held at the Grand River Center will
not be real great because these types of events do not generate a lot of revenue, unless
you prepare the food. They will create good traffic for the building and provide some
additional revenue.
I remind you that any impact will not occur until the Fiscal Year 2011 budget year.
Also, we will need assistance from the Convention and Visitors Bureau to market Five
Flags to regional and state groups to help create this new business.
ACTION STEP
The action requested is that the City Council adopt the attached resolution amending
the SMG Management Agreement for the Five Flags Center.
GDS:et
attachment
Preparers Gil D. Spence Address: 2200 Bunker Hill Rd Phone: X563) 589-4263
RESOLUTION NO.
A RESOLUTION APPROVING THE SECOND AMENDMENT TO THE MANAGEMENT
AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND SMG.
Whereas, the City of Dubuque has identified the need for private management of
the Five Flags Center; and
Whereas, the City of Dubuque (City) and SMG entered into a Management
Agreement on June 21, 2004; and
Whereas, City and SMG now desire to amend the Management Agreement to
eliminate the following language in Section 2.6(b): The SMG Agreement, Section 2.6(b)
states ..." Notwithstanding anything to the contrary contained herein, the parties
acknowledge that the Facility (Five Flags) shall not compete for the same type of events
that can be held at the Grand River Center in Dubuque, Iowa, unless the event comes
through the Grand River Center. Those events include, but are not limited to:
conferences/conventions, dinners/banquets, meetings, receptions, and flat floor events."
NOW, THEREFORE, BE IT RESOLVED, BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the Second Amendment to the Management Agreement between
the City of Dubuque, Iowa and SMG be approved.
Passed, approved and adopted this day of 2009.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider, City Clerk
THE CITY OF Dubuque
!
DUB E
1 1
Masterpiece on the Mississippi
2007
TO: Michael C. Van Milligen, City Manager
FROM: Gil D. Spence, Leisure Services Manager
SUBJECT: Amendment to the SMG Management Agreement
for the Five Flags Center
DATE: September 17, 2009
INTRODUCTION
The purpose of this memorandum is to request City Council approval of an amendment
to the SMG Management Agreement for the Five Flags Center.
DISCUSSION
With the opening of the new ice arena and elimination of ice at the Five Flags Center,
am recommending an amendment to the SMG Management Agreement allowing them
to compete for the same type of events that can be held at the Grand River Center.
When the Grand River Center opened in October 2003 the City agreed that the Five
Flags Center would not compete for events that could be held there for afive-year
period.
The SMG Agreement, Section 2.6(b) (the last two sentences) states, "Notwithstanding
anything to the contrary contained herein, the parties acknowledge that the Facility (Five
Flags) shall not compete for the same type of events that can be held at the Grand
River Center in Dubuque, Iowa, unless the event comes through the Grand River
Center. Those events include, but are not limited to: conferences/conventions,
dinners/banquets, meetings, receptions, and flat floor events."
The amendment would be the elimination of these two sentences.
This change will allow SMG to secure additional events to offset the revenue loss of
having no ice in the building. It will take a few years to build an event load of these
types of events because many of them are scheduled several years in advance.
continued
SMG Agreement amendment
page two
When looking at just the operating budget, SMG projects a net revenue loss of $68,000
with all ice activities eliminated. They figure the first year they can offset this, to some
degree, with an increase of other events because of the number of dates freed up from
no ice events. This could reduce the net revenue loss to $14,000 the first year and by
the third year it could be revenue neutral, or making money. SMT will need to be
creative with the events they try to generate and they are already developing a plan for
how they will approach this.
If the capital improvement budget is included in this discussion, things look even better.
If all the capital costs associated with ice are budgeted on an annual basis, I estimate
that amount would be $40,000 per year. This capital money would then be freed up for
other projects.
Revenue generated from the same type of events held at the Grand River Center will
not be real great because these types of events do not generate a lot of revenue, unless
you prepare the food. They will create good traffic for the building and provide some
additional revenue.
remind you that any impact will not occur until the Fiscal Year 2011 budget year.
Also, we will need assistance from the Convention and Visitors Bureau to market Five
Flags to regional and state groups to help create this new business.
ACTION STEP
The action requested is that the City Council adopt the attached resolution amending
the SMG Management Agreement for the Five Flags Center.
GDS:et
attachment
r
Preparers Gil D. Spence Address: 2200 Bunker Hill Rd Phone: 5563) 589-4263
RESOLUTION NO.
A RESOLUTION APPROVING THE SECOND AMENDMENT TO THE MANAGEMENT
AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND SMG.
Whereas, the City of Dubuque has identified the need for private management of
the Five Flags Center; and
Whereas, the City of Dubuque (City) and SMG entered into a Management
Agreement on June 21, 2004; and
Whereas, City and SMG now desire to amend the Management Agreement to
eliminate the following language in Section 2.6(b): The SMG Agreement, Section 2.6(b)
states ..." Notwithstanding anything to the contrary contained herein, the parties
acknowledge that the Facility (Five Flags) shall not compete for the same type of events
that can be held at the Grand River Center in Dubuque, Iowa, unless the event comes
through the Grand River Center. Those events include, but are not limited to:
conferences/conventions, dinners/banquets, meetings, receptions, and flat floor events."
NOW, THEREFORE, BE IT RESOLVED, BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the Second Amendment to the Management Agreement between
the City of Dubuque, Iowa and SMG be approved.
Passed, approved and adopted this day of 2009.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider, City Clerk