Agenda Packets - 1996/12/02 - Laserfiche WebLink

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11/22/96 15:40 FAX 612 223 3002 SPRINGSTED INC. Q002/002 85 E.SEVENTH PLACE,SUITE too SAINT PAUL,MN 55101-2143 612-223-3000 FAX 61I-223-3002 410° SPRINGSTED Public Finance Advuors November 22, 1996 Mr. Chuck Whiting, Clerk-Administrator Mounds View City Hall 2401 Highway 10 Mounds View, MN 55112-1499 Re: Sports Facility Financing with V.B. Digs, LLC Dear Mr. Whiting: We have been provided with the financial projections for a new volleyball sports facility for V.B. Digs as prepared by their accountant, Gregory J. Schmidt, P.A. Based on the information provided in the financial projection, it appears that there is sufficient information for them to • approach a banker to provide the financing for their portion of the project cost. There has been considerable discussion on both sides as to who moves first, and it appears to us that the next step is for the developer to bring a banker to the table. There are several areas that need to be discussed and agreed upon between the City and the developer. As a start, it is obvious that the banker is going to be concerned about whether the facility to be financed is a separate building or is attached to the City's property; whether the City will be constructing, on its own, a gymnasium which would be available to the developer for tournaments and other revenue-producing activities; management and operating agreements; and a host of other issues that will affect the ability to finance the facilities. It is my assumption that one of the major concerns of the banker would also be related to the mortgage on the property and the marketability of that property in the event of defaults by the developer. I do not think that any additional discussions between Digs and the City would produce measurable gains without the presence of the banker so that all parties are aware of the give- and-take required to make the project work and whether or not, in the eyes of the developer, the banker or the City, it is practical to proceed any further. For this reason, I would recommend that the City request the developer to bring its banker to the table at this time. Springsted would be willing to assist the City in its negotiations or discussions with these parties. Respectfully, Ce,/ • Ro aid W. Langness • Managing Principal eks SAINT PAUL,MN MINNEAPOUS,MN EROOKFIELD,WI OVERLAND PARK,KS WASHrNCTON,DC IOWA CT.LA