Agenda Packets - 1997/01/07 - Laserfiche WebLink

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the building. In general, the terms CommunityEducation would likelywant are their own exclusive • classrooms, approximately 3,500 square feet, and a lease rate comparable to their other leased space, 111an amount we gather is around $9-10 a square foot. Children's Home Society Another possible tenant which came to us via VB Diggs and much later in the process was the Children's Home Society. They are currently located in a Spring Lake Park school and are scheduled to be out of that building this spring. In meeting with them to review their needs and nature of their organization, it appeared they may benefit the Bel Rae according to the needs the 1996 Council was voicing. In addition to an apparent willingness to pay for space and build out costs, CHS's services seem to dovetail with some of the social services the Council was hoping to provide space for in the building. As discussions moved along, two aspects of their involvement became clear; one, they would be a substantial tenant taking up a good deal of the floor space which they need in a hurry; and two, they look to be the most profitable tenant availing themselves to the City to date. With this in mind, meetings were set up in December between the CHS and the City's architect to lay out space according to their needs, and at the same time, use that to layout a lease arrangement, which is now in the process. Because of the CHS time needs, and the simple construction time needed, this floor plan and the time needed for bidding and construction forces the City to decide quickly, as in this January, whether or not to proceed with the CHS in the building. It also, as appears on the drawings, creates the need to build an addition to the building, but because of spatial needs, the additional • would house Community Education. An understanding with the CHS that their needs created this need for the addition should be incorporated in any ongoing lease arrangement with CHS. 410 VB Diggs and More Building Space VB Diggs is a private for profit group seeking to build a four court volleyball center. They approached the City last spring hoping to find cheap land on which to build. The idea of incorporating them into the Bel Rae site started at that point with the thought that their building could complement the activities at the Bel Rae. In addition, their building will generate new property taxes which could be captured by the City if it chose to as part of a redevelopment tax increment district with the new increment being used to offset some of the up-front cost of the Bel Rae improvements. There was also interest on the Council in seeing a volleyball facility in Mounds View as an attraction, which also led to consideration of more gym-like space being built to accommodate bigger volleyball events and for the City to use if needed. While several options exist with VB Diggs involved, their ability to actually finance their building has been questionable. Their slowness in responding to City requests to show their fiscal ability has only added to the questions. Late this past fall, the Springsted, the City's fiscal advisor, notified me that VB Diggs had submitted enough information to them to suggest they are indeed financible, but further discussion would be needed to clarify their relationship with the City. I met with them in mid- December making the following assumptions(based on discussions with the 1996 Council): First, any discussion is still contingent upon final Council approval. Second, the City would not place itself in • an equity position for VB Diggs, meaning there would be no bond issue or City loan to VB Diggs and no assignment of the City's asset i.e. the Bel Rae, to Diggs for use in their financing. Third, the City