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Dubuque Ice & Recreation Center_Disposing of Property_Staff DocumentsTHE CITY OF Dubuque ..-- DLTB E A~~~ 1 1 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, LLC and Lease Agreement Between the City of Dubuque, Iowa and Dubuque Ice & Recreation Center, Inc. DATE: October 1, 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, except for national political 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: 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 forty-five (45) 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, establishing facility rules and regulations, and providing a voice for all stakeholders using the arena. The Board shall determine the master schedule for the facility. 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 MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Gil Spence, Leisure Services Manager THE CITY OF DUB E MEMORANDUM Masterpiece on the~ississippi BARRY LINC CITY ATTOR EY To: Mich~l C. Van Milligen City Manager DATE: October 1, 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 Disposing 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 forty-five (45) 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. Elevations showing the proposed arena are attached to this Memorandum. Section 8 of the Development Agreement has been revised since the September 21, 2009 City Council meeting. Revised Section 8 provides: SECTION 8. ARENA MANAGEMENT AGREEMENT 8.1. Management Agreement. Prior to the Closing, DICE shall enter into the Management Agreement with Southwood Management, LLC (Southwood Management) in the form attached hereto as Exhibit F. The Management Agreement may not be modified in any way without the prior written consent of City. 8.2 Arena Advisory Board. The Arena Advisory Board is a select group of stakeholders whose function shall be to advise and make non-binding recommendations to the DICE Board of Directors and the Arena Manager. The Arena Advisory Board shall among other things, suggest capital improvements and expenditures, determine the master schedule for the Arena, assist in establishing Facility Rules and Regulations, and provide a voice for all stakeholders using the Arena. The Arena Advisory board shall be comprised of the following five (5) members: A) Chairperson of the DICE Board of Directors, or designee; B) President and CEO of the DRA, or designee; C) Chairperson of the Battlefield Board of Governors, or designee; D) City of Dubuque City Manager, or designee; E) President of Dubuque Youth Hockey or designee 8.3 Public Use Priority. The priority use of the Arena is for public skating and all other uses are secondary in nature. Other than the specific dates and times agreed to in the Ice Usage Agreement between DICE and Battlefield, the arena shall be scheduled for, and open to, public uses including, but not limited to, public skate, learn to skate, youth hockey, figure skating, broomball, adult hockey, birthday parties and similar ice- related activities. Southwood Management will conduct a master scheduling meeting each year on or about August 1St. Southwood Management's role is the role of coordinator of the meeting only. At this meeting representatives from all interested ice user groups will select dates and times for their activities. Once the schedule is completed, Southwood Management will forward the schedule to the Arena Advisory Committee for approval. Southwood Management will publish the approved schedule and maintain said schedule for all parties involved. If an organization wishes to use the facility for a special event, be it ice or non-ice use, the organization will be required to complete an event request form. This form will be forwarded to the Arena Advisory Committee for their approval a minimum of 60 days prior to the event. The 60 day minimum can only be waived by the affected group. Before approving any changes in the facility master schedule the Arena Advisory Committee will consult with the user that is being displaced to determine if a hardship will occur. Special events are defined as any event that necessitates the covering of the ice surface, installing a stage or utilizing the ice surface for a professional performance similar in nature to a Disney on Ice type production. Special Events will be limited to no more than 6 times per year. I recommend that the Resolution, Development Agreement and Lease Agreement be submitted to the City Council for consideration at 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_100109.doc Preparers Barry A. Lindahl, Esq. Address: Suite 330, 300 Main Street, Dubuque, IA 52001 Telephone: (563) 583-4113 RESOLUTION NO. 391-09 DISPOSING OF AN INTEREST IN REAL PROPERTY 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; and 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 and WHEREAS, on October 5, 2009, the City Council pursuant to notice published as required by law held a public hearing on its intent to dispose of the foregoing interest in the Property and overruled all objections thereto; and WHEREAS, the City Council finds that it is in the best interest of the City to approve the disposition of such interest in the Property. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Council of the City of Dubuque approves the disposition of the City's interest in the foregoing-described Property pursuant to the Development Agreement and Lease Agreement. Section 2. The Mayor is hereby authorized and directed to sign this Resolution and the Development Agreement and Lease Agreement in accordance with their terms. Passed, approved and adopted this 5th day of October, 2009. ;~ Roy D. ~; uol, Mayor ~ ; Aftest: Jeanne F. Schneider, City Clerk F:\USERS\tsteckle\Lindahl\Dubuque Community Ice\ResolutionDisposinglnterest_092909.doc EXHIBIT A-1 W M R' Z F 01 U W N W z 0 U W Z N d~~s ~~ U ' ~_ J H ~L Or'~ ~< .o`, ~ ~~ _.--- ~i ~ 1 1 . ~~~ ~ ~. p~ ~ ~ • • _ ~ M y w~ x yy~~ N ~~ `PS1 ` a 1 Q ~ ` !n 8 ~ 7 g ~~ 2 d 0 ~ ~ $4~$ o 2 ~~ ~ (~~ de ~~s ~ 6 C1~~~ a0 ~p N ~g ~ ~ ~ O ~1A~ ~~ /- ~i ~~ti~ ~~ ~ /~ .~ Z ~- 0 0 m_ ~~ H $~ O F M .es ~ s NOTICE OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA, ON THE MATTER OF THE INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY 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 & is the nolo a punuc nearing on the 5th day of Octo- ber, at 6:30 p.m. in the Historic Federal Build- ing, 350 West Sixth Street, Dubuque, Iowa, at which meeting the City Council proposes to dispose of an inter- est in the following de- scribed real property by Development Agree- ment between and among Dubuque Ice & Recreation Center, Inc., Dubuque Racing Asso- ciation, and Battlefield Dubuque, LLC and lease agreement with Dubuque Community Ice & Recreation Cen- ter. Inc. the more At the meeting, the City Council will re- ceive oral and written objectionsfrom any resident or property owner of said City to con- est in above, the Agreement, or will abandon %e'proposal. By order of the City Council said hearing and appeals there from shall be held in accord- ance with and gov- erned by the provisions of Section 403.9 of the Code of Iowa. This notice is given by order of the City Coun- cil of the City of Dubu- que, Iowa, as provided by Chapter 403 of the Code of Iowa. Dated this 25th day of September, 2009. Jeanne F. Schneider, CIVIC, City Clerk It 9/25 STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: September 25, 2009, and for which the charge is $25.77. Subscribed to before me, a N ary ublic in and for Dubuque County, Iowa, this �9i� day of 20. Public in and for Dubuque County, Iowa. 6 MARY K. WESTERMEYER P� Commission Number 154885 ..My comet. Exp. I�E6_ t, �011