Agenda Packets - 1996/06/03 - Laserfiche WebLink

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STAFF REPORT PAGE THREE 111 An option to combine the two above options was determined to be the best alternative, but one that still has a lot of work to go. Essentially, VB Diggs would finance their part of the facility and the City would develop their side. From the City's perspective, this option should isolate it from any financing risk of the VB Diggs side. VB Diggs will have to get its own financing and appears to be able to finance only four courts. The City would be looking at the Bel Rae as its main activity center, which has been the assumption all along, but the interest in two or four more courts will have to be considered relative to financing options, and I will return to this in a minute. As far as the four court portion of the building, a tax increment generated from the VB Diggs side of the building can be anticipated, although as of this memo, an amount still hasn't been determined. I think this is an important point because the use of any increment, should it be a significant amount, may place VB Diggs interest and the City's interest on the same side. We should expect VB Diggs to want to either minimize their property taxes or have some or all of their property taxes returned to them in order for them to secure their financing. Since we don't know how much that is now, we can only anticipate the situation. If the project generates a given amount of increment, and for example,the City returns half of that to VB Diggs and keeps the other half to cover Bel Rae costs, Diggs is getting a property tax break and the City is taking another revenue to offset project expenses. From this perspective, the City has an interest in seeing VB Diggs succeed. As of now I cannot quantify that for the Council, but I think it ought to be kept in mind because VB Diggs will probably be asking for it. They should also be reminded that their land costs for this site may go hand in hand with any request. These are negotiating points. This also gets back to the issue of the additional court or gym space. I think VB Diggs would like to see these courts built. The Council will need to determine its desire to see such court space because I doubt they will be financed in any way other than through the City. If the Council sincerely wants two or four'more"' courts, expect to consider an arrangement where the City finances this space for VB Diggs. There will be risk in this, but that is your option and one that would have to be flushed out more. This is where I stand today with this project. Before the work session, Cathy and I will be meeting again with Thistle and O'Meara to prepare for Monday evening, and hopefully to have the proforma set up to show some of the costs and revenues projected for the concept. I am somewhat miffed not to have those by now, but the ,increment estimate is the sticking point. I would like to add a few editorial comments. I am not sending any drawings or estimated figures in this packet because I am asking the Council to consider how you will do this project together. Yes or no judgements on aspects of the concept will not assist in facilitating discussion. This is one of the reasons why you should expect to see something that appears to contain everything but the kitchen sink on Monday, meaning all the conditions, expectations and wants are included. The presented costs will likely create gasps, but they are not intended to sway Council members in their decisions, but merely to set the widest possible parameters to contain all the interests I have heard you express. Your bottom line will be just that, what are you willing to pay for what you want in a facility. My recommendation for Monday evening therefore will be to spend some time reviewing the concept. I would like to spend the initial time on the subject reviewing what I have written here and what more work we have done by meeting time, and then open it for general discussion.