1990 Resolution No. 7-90 Selection of Blue Moon Development(
RESOLUTION NO. 7 -90
RESOLUTION DESIGNATING A DEVELOPER FOR THE DOWNTOWN
HOTEL PROJECT
WHEREAS, the City of Dubuque, Iowa, desires the redevelopment of the area
known as Block 14 in Dubuque Downtown Plaza ("property") as a downtown hotel
facility in order to achieve the objectives of the Downtown Urban Renewal Plan
and to assure the appropriate development of adjacent areas; and
WHEREAS, pursuant to a Request For Qualifications, four potential
developers submitted responses which responses have been duly considered by the
City Council of the City of Dubuque, Iowa; and'
WHEREAS, the City Council has determined that the qualifications and
preliminary development concept of Blue Moon Development Company of Johnstown,
Pennsylvania, are most appropriate for the project.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE,
IOWA:
Section I. That Blue Moon Development Company of Johnstown, Pennsylvania,
is hereby designated as the developer for the downtown hotel project.
Section 2. That during the period commencing on the date of the adoption
Of this resolution and for 90 days thereafter or mutually agreed upon extension
thereof, the City d the developer will jointly finalize the nature and costs
Of a hotel development project including design and financing of said project,
and will negotiate exclusively and in good faith with each other to develop a
plan for redevelopment of the property for a hotel facility for implementation
according to Chapter 403 Code of Iowa, Urban Renewal Law.
Section 3. That this resolution does not convey nor is it intended to
convey any right, title, or other interest in property.
Section 4. That the designation of Blue Moon Development Company as
developer is subject to all representations made by said company and to the
presentation by the developer of a good faith deposit in the amount of ten
thousand dollars ($10,000) which deposit shall be in the form of a cashier's
check or irrevocable letter Of credit. Said deposit shall be returned to the
developer only upon a finding by the City Council that the project will not
proceed through no fault of the developer.
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Section 5. That the developer shall acknowledge its approval and
acceptance of the provisions of the resolution by endorsing its acceptance
below.
Passed, adopted and approved this 75th day of January
ATTEST:
Mary
Ata:
Davis, City Clerk
, 1990.
ACCEPTANCE
es E. Brady, Mayor
The provisions of this resolution are hereby approved and accepted by Blue Moon
Development Company, Johnstown, Pennsylvania.
/~, /s-- 70
Date
Wi||ia: D. Renton, President
CITY OF DUBUQUE, IOWA
MEMORANDUM January 12, 1990
TO: The Honorable Mayor and Members of City Council
W. Kenneth Gearhart,'�
FROM:City Mana er g ���
SUBJECT: Selection of Hotel Developer
INTRODUCTION
The purpose of this memorandum is to report on the responses to the City
Council's request for refinement of proposals from prospective developers of a
downtown hotel project. This memorandum also presents for your consideration
and adoption a resolution designating a developer for the project.
BACKGROUND
On December 1, 1989, the City Clerk received four responses to the City Council's
Request For Qualifications to develop a downtown hotel project. The prospective
developers made presentations on December 12th and the City Council discussed
the proposals at its December 18th meeting.
After its discussion at the December 18th meeting, the Council determined that
each developer should be given additional time to resolve issues related to the
market for a downtown hotel project. City staff was directed to advise the
developers of this and to request that a Letter of Intent refining the proposals
be submitted prior to the Council's January 15th meeting. Staff advised the
developers of the Council's action on December 19, 1989.
DISCUSSION
As of this date, the staff has had a follow-up contact with each of the
developers. Three of the developers -- Select Development, Ryan Construction
and Realsource -- have advised that they do not wish to pursue the project at
this time. The fourth developer, Blue Moon Development Company, has submitted
the attached Letter of Intent in response to the Council's request. They have
advised that they wish to proceed with the project in an expeditious manner.
They will be present at the Council meeting of Monday, January 15, 1990, to
answer any questions the Council may have•regarding their proposal.
In light of the response from developers, the staff has prepared a resolution
providing for the Council's designation of Blue Moon Development Company as
developer of the project. This resolution establishes a 90 day period during
which the City will work exclusively with Blue Moon to finalize a hotel project.
Title to the land is not conveyed. This can only occur after the disposition
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requirements of the Urban Renewal Law are fulfilled. The resolution also
provides that designation of Blue Moon is subject to all the representations they
have made and to submission of a $10,000 good faith deposit.
RECOMMENDATION
The staff recommends that the City Council designate Blue Moon Development
Company as the developer for the downtown hotel project. Based upon their
submissions and revised Letter of Intent they appear to be both capable and
willing to develop the kind of project the Council has envisioned. Once the
Council has acted to designate a developer, the staff can proceed to refine the
project with the company and bring forward a proposal to dispose of the property.
ACTION STEP
The action step is for the City Council to receive and file this communication
and the communication of Blue Moon Development Company and to adopt the attached
resolution.
WKG:kak
Attachment
Prepared by -James D. Burke, Director of Community and Economic Development
IRN 11 '90 1E:37 THE HPFDHRT GPOUF P.E/7
kw Moon Development Company
400 Luray Avenue
Johnstown, Pennsylvania 15904
Phone (814) 269-3939
January 10, 1990
Mr. James D. Burke & Dubuque City Council
City of Dubuque
Dubuque, Iowa 52001
Gentlemen,
In response to your request of December 19, 1989, we would
like to submit the following Letter of Intent concerning the
development of the downtown hotel site. This proposal is based
on the results of the market study we were able to successfully
conduct over the past four weeks.
1. We incorporate #2, #3, #5, #6, #7 and #8 of our December
18, 1989 proposal letter by reference.
2. Developer will build a 200 room Clarion hotel an the
project site, consisting of 135 double doubles, 55 kings, and 10
executive whirlpool suites. The hotel will include a full
service restaurant with formal dining facilities, meeting and
banquet facilities for up to 400 persons, an indoor swimming
pool, exercise room, newsstand and gift shop, game room, sur
deck, and walkway to the Five Flags Convention center.
3. The Clarion Dubuque will be a luxury full service
convention hotel, of which none currently exist in the Effective
Market Area. First year single occupancy room rates are expected
to range from $54 to $90 (for the suites), and averaging slightly
over $61. This compares with existing single occupancy room
rates in Dubuque ranging from $23 to $75 per night (with 19% of
the rooms in the Effective Market Area currently bringing $48 or
higher) and an average daily room rate of $43.23.
4. The Clarion franchise is the luxury hotel segment
offered by Quality International. There are currently 48 Clarion
Hotels worldwide with an additional 9 under construction or
development. Attached to this proposal is a letter of commitment
from Quality International approving the award of a franchise to
us for Dubuque (subject to final review of the architects plans).
5. Total project costs are anticipated to range from 8.5 to
9.0 million dollars. The City will provide 2.5 million dollars
and we will provide 20% to 25 of the remaining costs as equity.
A lender or consortium of lenders will provide the remainder. We
reiterate our offer to post a bond in the amount of $50,000
guaranteeing our funds and our ability to secure a lender.
6. we request the city to assist us in obtaining permits,
designing traffic flows, providing city services in a timely
manner, and helping control and reroute traffic during the
construction phase when needed.
m
JRN 11 'qp 1E:'36 THE HRRJJHRT GROUP
F'.3/f
7. A revised site plan is provided, showing the relocated
skywalk to the Convention Center. As an alternative, we will
consider an underground walkway for aesthetic purposes.
8. We will guarantee an opening no later than. April 30,
1991 assuming we can work out an agreement with the City in the
near future. We will post the $50,000 bond as soon as an
agreement is reached and will pledge it to the City as liquidated
damages in the event we do not complete the hotel in accordance
with the schedule.
We are prepared to set the wheels in motion for the Clarion
Dubuque. If the conditions outlined in this Letter of Intent are
acceptable, we can use this Letter of Intent as our Agreement in
Principal. We will be at the meeting Monday night in. with
Counsel to discuss this proposal in detail and if possible, to
sign an Agreement in Principal for the development of the
downtown hotel site.
cerely,
William D.
President
W66146.1
Renton
We have read and reviewed the terms outlined in The Hardhat
Group Letter of Intent, and agree in principal to enter into a
formal Agreement with the Developer for the development of the
downtown hotel site. The City agrees to negotiate exc1usive1y
with said Developer until such time as an Agreement is reached.
Tecretary
date City of Due
Y;
TAN 11 '0 14:38 THE HARDHAT GROUP
Blue Moon Development Company
400 Luray Avenue
Johnstown, Pennsylvania 15904
Phone (814) 269-3939
P.4/7
December 18, 1989
Mr. James D. Burke
Director of Community and Economic Development
City of Dubuque
Dubuque, Iowa 52001
VIA FAX
Dear Jim,
1 spoke to Mayor Brady last night about the status of the
proposals made last week before the Review Board. He seems
frustrated and disappointed the Board was not able to obtain a
firm proposal, acceptable to the Board and with no contingencies,
for the development of the site. We would like to both address
and clarify that issue now.
During our presentation last Tuesday we spoke of our need
for a market study specific to the proposed Clarion Dubuque in
order to determine the feasibility of the project. This is a
standard requirement in planning and developing a hotel. We have
reviewed a copy of a locally commissioned market study, dated
March 21, 1989, which states that a project is feasible in the
150 to 200 room range with occupancies ranging from 56% to 73%.
The City of Dubuque has pledged to provide funds to support
the ancilliary facilities a downtown hotel would require. we
have decided therefore, based on the information in the existing
study, to make a firm commitment to build a hotel on the downtown
hotel site, We offer the following terms for your consideration:
1. Blue Moon Development Company (Developer) agrees to
build the Clarion Dubuque, a full service convention hotel
complete with indoor pool and meeting reoms, on the downtown
hotel site.
2. The structure will be similiar in scope to Option #1 in
Developer's presentation and will include a parking garage
suitable for parking in excess of 250 automobiles. Because
the site is located in a historically sensitive area, the
Developer requests the City to approve the exterior design and
appearance of the building prior to construction.
3. Developer agrees to pursue permitting and construction
in a diligent manner with the anticipation of a scheduled
groundbreaking no later than May, 1990 and an opening date no
later than April, 1991.
• JAN 11 ''30 1E:39 THE HARDHAT GROUP F./7
4. The facility will include a minimum of 150 sleeping
rooms and as many as 244 rooms. The actual number of rooms will
be determined within 30 days of the acceptance of this proposal.
Developer reserves the right to build additional rooms on the
site at a later date so long developer provides (at its expense)
one parking space for each sleeping room added.
5. The City agrees to provide the real estate at a net
nominal cost to the Developer (after allowances for easements or
rights-of-way to the City). The City warrants that there are no
adverse environmental problems with the site,
6. The City agrees to provide as much as $400,000 to the
Developer for the design and construction of either a tunnel or
aerial walkway connecting the Clarion Dubuque with the Civic
Center.
7. The City will make available to the project an
additional $2,100,000 for use in site development and
construction of parking and meeting facilities. These funds will
be disbursed at the rate of $1 per every $3 in total
project costs invested by the Developer, with the final
$210,000 of the amount to be retained by the City until an
occupancy permit is issued by the City.
8 The Developer requests the abatement of any taxes which
might otherwise be assessed during the construction phase of the
project.
Please make copies of this letter and distribute then to the
Review Board. We are looking forward to working closely with the
City on this project. I will be available at home tonight
(814-266-4998) to answer any questions which may arls.
Sincerely,
(ezidirr,
William D. Renton
President
JRN 11 '50 1E:40 THE HRRDHRT GROUP
January 5, 1990
Mr. William D. Renton
The Hardhat Group
400 Luray Avenue
Johnstown, PA 15904
Dear Mr. Renton:
IternainiCga
J. Edward Shaw
Vic,, President
Development,
Mid -Western Regain
It has been a'pleasure working with you on the development of the
Clarion Hotel and Convention Center in Dubuque, Iowa. We believe
that this is an excellent opportunity and we are very excited
about being included in this project.
Quality International has given preliminary approval and will
grant a Clarion Hotel franchise to you or the designated entity
being formed for the purpose of owning and operating this otel.
This commitment is subject to approval by Quality International
of the final plans and specifications for the proposed Clarion
Hotel.
I look forward to working with you on this project. Please
contact me if you have any questions or when you are ready
proceed with this project.
Director of Development
JES/kb
2000 Worth Racine/Chicago, Illinois 606141(312) 477-511
AX (312).327-7679 ,
JRN 11 ' 90 1E : 40 THE HRRLJHRT GROUP
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The Hardhat Group
400 Luray Avenue
Johnstown, Pennsylvania 15904
Phone (814) 269-3939
December 22, 1989
Mr. James D. Burke and the City Council
City of Dubuque
Dubuque, Iowa 52001
Gentlemen,
I have received your correspondence of December 19th
detailing the events of the council meeting the previous night.
The items requested in your letter appear, in essence, to be the
same items we have already submitted in our proposal of December
1st, our oral presentation of December 12th, and our specific
proposal letter of December 18th. In this respect, we are
pleased that we have met all the requirements of the City Council
in a timely fashion.
This request, however, has raised a number of concerns of
which we would like to make you aware. First, it can be assumed
that the other three developers who still may be under
consideration will have the advantage of the information in our
proposal with which to structure their "final" letters -of -intent,
This seems to provide an unfair advantage to the other three
developers.
Second, we have demonstrated our responsiveness in
structuring our proposal to conform with the needs and desires of
the City. We hope you will interpret this as an indication of y'
our willingness and our flexibility in working with you on this
project. Conversely, other developers are being given a
second chance because they may not have put forth the necessary
time or effort to properly prepare their proposals. Again, we do
not feel we should be penalized because we were able to put
together a proposal along the guidelines set by the City Council.
We intend to use the additional time allocated by the
Council to perform a market study for the Clarion Dubuque. This
study will recommend the optimum amount of rental rooms for the
project, a suggested ADR, and indicate the type of room mix and
amount of suites (if any) needed to compliment the project. It
will also identify our target markets more clearly.
The Council will have had four weeks to consider our
proposal and timetable to develop the downtown hotel site. We
would hope that, on January 15th, the City will agree to proceed
with our proposal in order to meet the construction deadlines
established in our letter of December 18th.
Sincerely,
atto,),454-Aq
William D. Renton
President
The Hardhat Group
400 Luray Avenue
Johnstown, Pennsylvania 15904
Phone (814) 269-3939
December 22, 1989
Mr. James D. Burke and the City Council
City of Dubuque
Dubuque, Iowa 52001
Gentlemen, r
I have received your correspondence of December 19th
detailing the events of the council meeting the previous night.
The items requested in your letter appear, in essence, to be the
same items we have already submitted in our proposal of December
1st, our oral presentation of December 12th, and our specific
proposal letter of December 18th. In this respect, we are
pleased that we have met all the requirements of the City Council
in a timely fashion.
This request, however, has raised a number of concerns of
which we would like to make you aware. First, it can be assumed
that the other three developers who still may be under
consideration will have the advantage of the information in our
proposal with which to structure their "final" letters -of -intent.
This seems to provide an unfair advantage to the other three
developers.
Second, we have demonstrated our responsiveness in
structuring our proposal to conform with the needs and desires of
the City. We hope you will interpret this as an indication of
our willingness and our flexibility in working with you on this
project. Conversely, other developers are being given a
second chance because they may not have put forth the necessary
time or effort to properly prepare their proposals. Again, we do
not feel we should be penalized because we were able to put
together a proposal along the guidelines set by the City Council.
We intend to use the additional time allocated by the
Council to perform a market study for the Clarion Dubuque. This
study will recommend the optimum amount of rental rooms for the
project, a suggested ADR, and indicate the type of room mix and
amount of suites (if any) needed to compliment the project. It
will also identify our target markets more clearly.
The Council will have had four weeks to consider our
proposal and timetable to develop the downtown hotel site. We
would hope that, on January 15th, the City will agree to proceed
with our proposal in order to meet the construction deadlines
established in our letter of December 18th.°
Sincerely,
William D. Renton
President