05/14/1990 Council Minutes (2) - Laserfiche WebLink

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86 COUNCIL WORK SESSION INSIDE SPORT PROPOSAL MAY 14, 1990 Mayor Bisel called a work session of the Lino Lakes City Council to order at 5:35 F.M., Monday, May 14, 1990. Council Members present: Neal, Kuether, Reinert, Bohjanen. Council Members absent: none. City Planner, John Miller; Fiscal Consultant, Ron Batty; City Administrator, Randy Schumacher and Clerk - Treasurer, Marilyn Anderson were also present. The purpose of the meeting was to review options presented by the Inside Sports for financial assistance from the City of Lino Lakes. Mr. Schumacher asked Mr. Batty to present the two (2) proposals and requested direction for the Staff from the City Council. Mr. Batty explained that several proposals for financial assistance have been received from Inside Sports. Some options are not "doable" for one reason or another. The most recent proposal involves using gross revenue bonds. This is an acceptable option but does involve some obligation on the part of this City. Mr. Batty explained how this type of financing would involve the City and explained that if Inside Sports were unable to meet their financial commitment, there would be the need to levy ad valorem taxes on the entire City to cover the City's obligation. A second option was outlined by Mr. Batty. This option involves the installment and lease purchase options that was allowed by State legislation and is now being cancelled by the State. This option is only available until July 1, 1990. The City would purchase the property under an installment agreement and then lease the property to Inside Sports for something less than the purchase price. (This would be a subsidy to Inside Sports) Inside Sports would then build the facility. The Council discussed why the City should be involved in the financing of Inside Sports. It was noted that the developers of this facility have approached several other cities with the same proposals and no other city has expressed interest. The developer has noted that this facility would attract other commercial ventures to this City and would expand the employment base in the City. The Council asked why the developers do not obtain bank financing. Mr. Batty explained that the facility is unique and if the developer was unable to meet his commitment, there would probably be no other use for the facility. This makes banks nervous. - Several questions were raised. Is this a valuable enough development and does the City want it here? Also, if the City does not offer assistance, will the developer go to another city? Mr. Batty noted that the developer did make a presentation to the Economic Development Committee and would like to make the same presentation to the Council.