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181 <br />COUNCIL WORK SESSION DECEMBER 20, 1990 <br />Mr. Munson explained that Inside Sports and the City of Lino <br />Lakes will sell revenue bonds for the balance of the project. <br />The City will not be liable in case of default but will get a fee <br />for issuing the bonds. The City will be expected to "replace" <br />the school property with other land. The school will accept land <br />outside of the MUSA boundary. Total cost to the City is <br />estimated at $105,000.00. Mr. Munson said the City would be <br />expected to sell twenty five (25) acres of the school property to <br />Inside Sports for $1.00. In addition the City will be expected <br />to issue permits and licenses as needed for the construction and <br />operation of the facility. <br />The facility is already preleased fifty (50) of the fifty two <br />(52) weekends in the 1991/1992 season. Piper, Jaffray will <br />determine if the prelease agreements are correct, if the income <br />projections are correct and if the feasibility report prepared by <br />Inside Sports is correct. A feasibility report will be given to <br />the City for their review. It should be received by the end of <br />January or middle of February, 1991. <br />Mayor Bisel asked about the revenue bonds that will be issued for <br />the financing of the facility. Mr. Munson explained that the <br />full faith and credit of the City is not behind these bonds and <br />there is no responsibility or liability to the City if Inside <br />Sports is unable to repay them. Mr. Schumacher will check with <br />the City Attorney to determine what effect this bond issue would <br />have on the City. <br />Mr. Munson said that the proposal being presented today differs <br />from the previous proposal in that the City will have no <br />liability for the operation and maintenance of the facility. He <br />also noted that if the feasibility study does not indicate that <br />this facility can maintain itself, Piper, Jaffray, Hopwood will <br />not underwrite the project. (Piper, Jaffray, Hopwood is <br />requiring that Inside Sports provide 1/3 of equity in project, <br />that a satisfactory feasibility report be submitted and that at <br />least 60% of the 1991/1992 season be preleased. Preleasing <br />requires that a cash deposit be made.) <br />Council Member Kuether asked if a "no compete" clause will be <br />required by the City. Mr. Munson said that Inside Sports would <br />be happy to sign this clause. <br />Council Member Reinert noted that Inside Sports is using the land <br />as part of the 1/3 requirement from Piper, Jaffray, Hopwood. He <br />felt that in effect Inside Sports would be using the City's <br />equity. <br />Council Member Neal noted that about two (2) weeks ago another <br />dome opened. Mr. Munson said that this was a golf dome. It was <br />PAGE 3 <br />1 <br />1 <br />1 <br />