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HomeMy WebLinkAbout9.b. Letter of Intent for Dakota Fieldhouse EXECUTIVE SUMMARY City Council Regular Meeting: November 17, 2015 AGENDA ITEM: Letter of Intent for Dakota Fieldhouse L.L.C. AGENDA SECTION: New Business PREPARED BY: Dwight Johnson, City Administrator AGENDA NO. 9.b. ATTACHMENTS: Proposed Letter of Intent APPROVED BY: ddj RECOMMENDED ACTION: Motion to approve the attached letter of intent with Dakota Fieldhouse L.L.C. and authorizing the Mayor and City Clerk to sign it. BACKGROUND Earlier this year, the Council held a recreational summit with our leading athletic associations serving Rosemount. RAAA indicated that indoor court/gym space is the top priority and need for them. In addition, the City has previously identified the need for a public swimming pool facility. Mr. Dan Corley, dba Dakota Fieldhouse L.L.C., has been developing plans for a large private indoor athletic facility which would include both substantial court space and a swimming pool. Based on discussions with staff, Mr. Corley is willing to provide public access to Rosemount residents for the pool and facilities through daily fees and also provide 5000 hours of court time to RAAA, all at rates to be negotiated. In return, Mr. Corley requests development assistance primarily for land acquisition and/or site development. An overall amount of City assistance of $1 million has been discussed, and staff has preliminarily determined that the majority of the assistance could come from implementation of a common economic development tool known as tax abatement for the facility. If the project proceeds and is completed, residents would gain access to significant new tax-paying recreational facilities at a capital cost that would be a fraction of the cost of an equivalent publicly constructed facility. DISCUSSION The Council reviewed the concept of a Letter of Intent on October 12th and November 9th. The draft letter was developed based upon previous discussions about reviewing economic assistance that could be provided to a private developer providing proposing to provide a needed or desired service to the community. The City Attorney has taken the concept outline and developed the attached Letter of Intent. The letter of intent is not binding on either side, but is meant to be a good faith framework for a subsequent development contract. In general, the agreement provides significant public access to new recreational and athletic facilities in the community in return for development assistance from the City for site acquisition and/or site development for the project. RECOMMENDATION Staff recommends approval of the Letter of Intent and work cooperatively with the project under the general terms of the letter. 469981v3 MDT RS215-1 LETTER OF INTENT BETWEEN THE CITY OF ROSEMOUNT AND DAKOTA FIELDHOUSE L.L.C. The City of Rosemount, Minnesota is a municipal corporation with offices at 2875 – 145th Street W., Rosemount, Minnesota 55068 (the “City”), and Dakota Fieldhouse LLC, a Minnesota limited liability corporation, with offices at 16963 Evening Terrace, Lakeville MN 55044 (the “Developer”). Developer has requested that the City provide certain assistance in connection with the development of property located at a site to be determined (“Property”) in the City. The proposed development would consist of an approximately 60,000 square foot field house facility that includes swimming facilities, court spaces and a walking track (the “Project”). In order to make the Project financially feasible, Developer has proposed that the City provide the Developer with financial assistance for site acquisition and site development costs. In order to make the Project financially feasible, the parties have determined to negotiate in good faith toward a more definite development contract regarding the Project. The parties desire to enter into this Letter of Intent setting forth their respective responsibilities during the period while the City considers Developer’s request. NOW, THEREFORE, the City and Developer hereby mutually agree as follows: 1. The City will direct its staff and legal and financial consultants to review and analyze the Project and potential financing assistance, including for example tax abatement, park dedication credit, or use of Capital Improvement Funds. 2. The City and Developer will negotiate towards a more definitive development agreement providing generally for: (a) financial assistance from the City in an amount up to $1 million, or in an amount determined by the City, relating to site acquisition, site development and construction of any public improvements for the Project area in order to make the Project feasible; (b) timely construction of the Project by the Developer with an anticipated completion date of December 31, 2018; (c) standards for repair, maintenance and operation of the facilities on the Property; (d) use of the facilities by the City and its residents; (e) handling of legal disputes; (f) terms for daily rates for use of the facilities by Rosemount residents and persons who work in the City; (g) 5,000 hours of court time for the Rosemount Area Athletic Association at a rate to be determined; (h) payment by Developer of certain fees and costs incurred by the City, as negotiated by the parties; and (i) other matters as determined necessary by the parties. 3. The Developer will cooperate with the City’s review and analysis, and provide to the City all documents and information requested by the City in connection with that effort. 4. The parties agree and understand that the City’s agreement to provide financial assistance for the Project is subject to: (a) the City’s ability to meet all the requirements of Minnesota Statutes and other applicable laws relating to such assistance; (b) City approval of all 469981v3 MDT RS215-1 necessary land use applications; and (c) negotiation and execution of a definitive Development Agreement regarding the Project which, when executed, will supersede all obligations of the parties hereunder. Nothing in this Letter of Intent obligates the City to approve the Project or any Developer request for assistance, and any Development Agreement is subject to approval by the Rosemount City Council. 5. Either party may at any time terminate this Letter of Intent with 10 days’ written notice to the other. Upon such termination, neither party shall have any further obligations to the other under this Letter of Intent. 6. This Letter of Intent automatically terminates if the City has not approved a Development Agreement for the Project by December 31, 2016. 7. This Letter of Intent does not constitute or create any binding or enforceable obligation on the part of either party. No such obligation shall be created except by the execution of a Development Agreement containing the terms and conditions of the proposed Project as shall be mutually agreed upon by the parties. By the signatures below the Developer and the City mutually accept the terms and conditions identified herein this ______ day of __________, 2015. DAKOTA FIELDHOUSE L.L.C. CITY OF ROSEMOUNT By: Its Mayor Its _______________________________ By: __________________________________ Its City Clerk Its __________________________________