DISCLAIMER

 

06-0692R                                                          REPLACEMENT


RESOLUTION RESCINDING RESOLUTION 05-0088 IN ITS ENTIRETY AND CONDITIONALLY COMMITTING FUNDING SOURCES FOR ACQUISITION OF A COMPLETED PUBLIC PARKING LOT AND PAYMENT FOR FUTURE PUBLIC RECREATIONAL USE AND PROGRAMMING AT A NEW FACILITY TO REPLACE PETERSON HOCKEY ARENA.

BY COUNCILOR GILBERT:

     The city council finds as follows:

           A fire has destroyed the Peterson hockey arena; and

           The destruction of the hockey arena deprives the citizens of a necessary and heavily used recreational facility; and

           A replacement facility should be promptly constructed; and

           Duluth Heritage Sports Center Corporation (DHSC) desires to construct a replacement arena that is available for public recreational use and programming at the former Clyde Iron site which is a blighted area; and

           DHSC has certified and provided documentation satisfactory to the city’s finance director that DHSC has secured an unconditional bank loan commitment in the amount of $1,800,000; and

           The city desires to provide public parking for the replacement facility and as an incentive to further economic development in the area; and

           The city further desires to provide for future public recreational use and programming for the public at the replacement facility; and

           The acquisition and operation of a public parking lot in conjunction with the delivery of economic development incentives and public recreational opportunities in a blighted area is a public purpose.

     NOW, THEREFORE, BE IT RESOLVED, that when the necessary conditions set forth in this resolution are fulfilled, the city of Duluth shall do the acts necessary to pay for acquisition of the completed public parking lot adjacent to the replacement facility and pay for future public recreational use and programming for the public in the replacement facility. The source of the city’s matching expenditure shall be the following funds in the amount shown:

           First, balance of $500,000 not previously expended or obligated from the proceeds of any insurance policy paid for by the city covering Peterson arena for its loss by the fire and explosion that occurred (these monies are included in the term “Peterson replacement monies”);

           Next, balance of $100,000 not previously expended or obligated from the capital improvement program general fund which had been dedicated to heat, ventilation and air conditioning improvements at Peterson arena (these monies are included in the term “Peterson replacement monies”);

           Next unless the city’s chief administrative officer (CAO) determines to use it earlier, $935,075 from a Minnesota department of employment and economic redevelopment (DEED) redevelopment grant with a match in the amount of $935,075 evidenced by the completion of the city’s turnback-funded street improvement projects at Carlton and West Michigan Streets and, if said match is not of a sufficient value, from the Peterson replacement monies;

           Next unless the city’s CAO determines to use it earlier, $1,047,288 from a DEED contamination clean up grant with a match in the amount of $592,712 provided by DHSC and the city with the city’s portion not to exceed $278,575 payable from the Peterson replacement account;

           Next unless the city’s CAO determines to use it earlier, $875,075 from a second DEED redevelopment grant with a match in the amount of $875,075 provided by DHSC; and

           Next, $1.2 million from the Community Investment Trust Fund 256 (these monies are included in the term “Peterson replacement monies”).

     BE IT FURTHER RESOLVED, that each expenditure by the city of Duluth set out above is subject to the following conditions:

     (a)  A building and site design is approved by the director of the city’s department of administrative services and the city engineer;

     (b)  A realistic construction budget certified by an architect is created;

     (c)  Proof that DHSC owns the property upon which the replacement facility is to be constructed;

     (d)  Executed construction contracts for the construction of the replacement facility as designed and pursuant to the construction budget have been received by the city;

     (e)  Copies of loan commitments and other financing commitments obtained by DHSC in a form acceptable to the city’s finance director together with evidence of the extent of DHSC’s equity participation, if any, that the total of said commitments and said equity participation are not less than the total construction and soft costs for the replacement facility;

     (f)  The aforesaid DEED grant monies are available, agreements regarding the grant monies are in place, and match monies have been approved;

     (g)  A development agreement is approved by the city council and entered into with DHSC and other necessary parties pursuant to which the replacement arena will be built and owned by DHSC;

     (h)  Concurrently with item (g) above, an operating agreement is approved by the city council and entered into with DHSC pursuant to which the city will pay for future public recreational use and programming for the public;

     (i)  All contracts, acts, or fund transfers are authorized by law; and

     (j)  For any state funding secured, the local match will be comprised of no more than 50 percent city of Duluth funds and the remainder privately raised and donated funds;

     (k)  Upon satisfactory completion of the contamination cleanup, the replacement facility and the public infrastructure, the infrastructure will be acquired by the city;

     (l)  Upon the city’s acceptance of the public infrastructure, the city will draw down the state grant monies and provide these and the city funding to DHSC;

     (m)  The city’s share of all costs, either acquisition or program-related, shall not exceed $1,800,000 including costs previously expended or obligated from the Peterson replacement monies.

     BE IT FURTHER RESOLVED, that to be enacted, this resolution requires the affirmative vote of seven councilors because the funding plan includes money from the community investment trust fund.

     BE IT FURTHER RESOLVED, that in the event the development agreement and operating agreement are not executed on or before April 1, 2007, this resolution shall no longer be in effect.


STATEMENT OF PURPOSE:  This resolution sets out a mechanism for funding the acquisition of a completed public parking lot adjacent to the replacement hockey arena and funding future public recreational use and programming for the public in the replacement facility. If development and operating agreements are not executed on or before April 1, 2007, this resolution is no longer in effect. Additional project information is provided in the memorandum attached to the hard copy of the resolution.