07-0417R


RESOLUTION AUTHORIZING FUNDING AND RECONSTRUCTION OF PETERSON ICE ARENA.

BY COUNCILOR STAUBER:

     The city council finds:

     (a)  Peterson Ice Arena was destroyed by fire in December of 2004, at a time when the city had already recognized that there was not enough indoor ice to support all desired activities. The region has also experienced unseasonably mild winters making the period for outdoor ice short; and

     (b)  This council and the community have rallied in support of funding and constructing a Duluth Heritage Sports Center (DHSC) on the Clyde Iron Works site as well as new arena project at the DECC; and

     (c)  Various delays in starting the DHSC project continue to jeopardize the availability of indoor ice when needed in the near future; and

     (d)  The DECC addition appears to have been further deferred by the state legislature; and

     (e)  The land designated for the Kroc Center at the Wheeler Field site where Peterson Arena once stood is now again available.

     NOW, THEREFORE, BE IT RESOLVED, that:

     (a)  The proper city officials are authorized to begin planning and construction of an indoor ice arena at Wheeler Field, at, or near, the Peterson site. This Wheeler Field site project can begin on July 2, 2007, if construction of DHSC at the Clyde Iron Works site has not begun by June 29, 2007, or if the agreement with the contractor does not require completion of the Phase I not later than December 31, 2007. Further, as of July 2, 2007, if construction has not begun in accordance with terms of the signed agreement between the city and DHSC, any and all current contractual agreements between the city and DHSC are terminated on July 2, 2007;

     (b)  Funding for this project, which is authorized by this resolution, shall consist of fire insurance proceeds from the destroyed arena in amount not to exceed $500,000, capital improvement dollars assigned to Peterson prior to the fire in an amount not to exceed $100,000, the community investment trust (CIT) Fund 256 money previously encumbered for Heritage Sports Center in an amount not to exceed $1,200,000 in 2007, and CIT Fund 256 money previously earmarked for the Kroc endowment in an amount not to exceed $2,400,000 for years 2006 and 2007. If additional monies are received from any other insurance policy related to the destruction of Peterson, those monies in an amount not to exceed $1,000,000 shall be added to the facility construction budget for additional improvements. Any recreational facilities eliminated at the Wheeler site as a result of the arena placement will be replaced as practical. Money shall be spent on the project from the various sources in the order and amounts stated herein;

     (c)  The proper city officials are authorized to negotiate with ISD 709 for consideration of constructing, operating and maintaining an adjacent sheet of ice, the construction costs of said to be borne completely by the district and construction not to delay the new Peterson Arena project;

     (d)  If the city does not operate the new facility, the proper city officials are hereby authorized to negotiate an agreement with Duluth Amateur Hockey Association (DAHA) for the operation and maintenance of the new Peterson Arena in a manner similar to the Fryberger Arena. Said contract to include the following:

           (1)  Operation and maintenance to be funded by DAHA;

           (2)  DAHA will receive some or all revenues generated by the use of the arena, including concessions;

           (3)  Capital improvements, which may or may not be funded from revenues, to be the responsibility of the city;

           (4)  An operational agreement that ensures adequate time is available to the public at no charge;

           (5)  DAHA may subcontract with other institutions as needed such as ISD 709;

           (6)  Should ISD 709 develop an adjacent sheet of ice, a separate agreement would be required for DAHA and the city.


STATEMENT OF PURPOSE:  This resolution requires a 7/9 vote. The city of Duluth is in critical need of indoor ice as a result of the destructive fire loss of Peterson arena. The public, and especially our youth, lost the 2004-2005 season, the 2005-2006 season, and the 2006-2007 season. Without construction beginning as soon as possible, the city could lose the 2007-2008 season. This council is deeply appreciative of everyone’s effort to build the Duluth Heritage Sports Center on the Clyde Iron site, but issues resulting in delays in construction of this project are no longer agreeable. Also, the 2007 Minnesota state legislative session has ended without matching funds for an addition to the DECC arena. This will further strain the need for local indoor ice. Finally, with the loss of the Kroc Center project, the land and a small portion of the money already encumbered for the Kroc endowment can be used to reconstruct Peterson arena.