HomeMy WebLinkAbout9.a. Presentation by Scott Beckman, Dakota County Economic Development Partnership CITY OF ROSEMOUNT
EXECIITIVE SUN�IARY FOR ACTION
PORT AUTHORITY MEETING DATE: MAY 4, 1994
AGENDA ITEbt: PRESENTATION BY SCOTT BECKMAN, AGENDA SECTION:
DAKOTA COUNTY ECONOMIC DEVELOPMENT PARTNERSHIP EXECUTIVE DIRECTOR'S RPT
PREPARED BY: JOHN MILLER, AGENDA NO.
ECONOMIC DEVELOPMENT COORDINATOR 9 . A.
ATTACHMENTS: NONE APPROVED BY:
Scott Beckman, Executive Director of the Dakota County Economic Development
Partnership, will make an oral report explaining the role of that
organization.
RECObIl�lENDED ACTION: None.
PORT AUTHORITY ACTION:
DAKOTA COUN1'Y ECONOMIC DEVEI.OPMENT PARTNERSHII�
Proposed Plan of Work, April 1994
Fxecutive Summary
Mission 5tatement:
To promote, preserve, and actively assist with e�cpanding and diversifying the economy
and high quality employment base of Dakota. County.
Administrative Program
• Select permanent Board of Directors
• Adopt Budget and Program of Work
• Support Task Forces
� Business Retention and E�ansion
• Creaxe new BR & E programs in Member communities
• Evaluate BR & E countywide and determi.ne what role, if any, Dakota Counry
Economic Development Partnership should serve
- Convene seminars to address educational needs of local businesses
�j/:Business Attraction Program
'�� Create central clearinghouse capacity for Dakota County Economic Development
Partnership o�ce
• Create prospect identification network
• Develop and utilize marketing plan and tools
��Business Develo�ment Pro�. n
�� Research and Technology Commercialization
I • Emerging Business Incubator
- • Enterprise Facilitation
Seed Capital Formation and Incentive Financing Frogram
• Revolving Loan Funds
• Community Development Bank
• Venture Capital Funds
Infrastructure Research and Plannin�Prog_run
- Bridge Access Planning
• Landfill and Waste Disposal Planning
• Shared Government Services
Labor Force Pro�, m
• Internship and Apprenticeship Opportunities
• Labor Force Surveys
• Business/Education Linkages
Education and Communications
• Newsletters
• Annual Report and Meeting
• News Features on Success Stories
.
�
� M E M O R A N D U M
TO: Chair Kevin Carroll and Members of the Rosemount Port
Authority ,} I
k�
FROM: Mike Mil � City Attorney
DATE: May 4 , 1994
RE: Muller Family Theatre Proposal
Please find attached a series of letters and memos which have
been exchanged in the process of attempting to proceed with the
Muller project . To date, Mr. Burt and I have supplied the Mullers
and their attorney with a wide array of ineeting dates, but the
Mullers have not yet chosen to meet with us .
Please note that the Mullers, in their attorney' s
correspondence of April 19 , 1993 (bottom of page 3 ) , and April 27 ,
1994 , have taken a position that they wish the Port Authority to
proceed with the Muller proposal submitted on July 28, 1993 . In
short, what this means is that they want the Port Authority to
issue bonds for the Muller Theatre Project and they wish to
purchase the land and improvements for the total sum of
approximately $250,000 .
You may recall that essentially, this proposal was selected by
the Port Authority on August 3 , 1993 , with the governing proviso
that the Mullers enter into a Development Agreement with the Port
Authority by not later than August 17 , 1993 . The Mullers failed to
do so and, in late August of 1993 , unilaterally elected to modify
their proposal to seek conventional financing .
I will be glad to answer any questions I can at the Port
Authority meeting of May 4, 1994 .
JMM:gmo
+
M E M O R A N D U M
TO: Tom Burt
City Administrator, Rosemount
FROM: Mike Miles
City Attorney
DATE: April 14 , 1994
RE: Muller Theatre Negotiations
Since I was given the responsibility of setting up the
negotiation sessions with Bob and Mike Muller and their attorney,
I wanted to update you on events regarding that negotiation.
Shortly after our meeting on Monday, April 11 , 1994 , I was
able to reach Bob Muller, and advised him that the Port Authority
had taken virtually all steps necessary to commence a final
negotiation on a price for purchase of the ten-acre property,
construction of improvements and related terms . I also suggested
times on Apri l 12 , 13 , 14 and 15 that Tom Burt and I would make
ourselves available in order to facilitate an early negotiation
session . Bob Muller indicated that he would have to get back to me
as to how they wanted to proceed at this point .
After repeatedly calling Dan Tyson, the Mullers ' attorney, I
was finally able to reach him in mid-afternoon on April 11 , 1994 .
I also provided the same dates to Mr. Tyson and indicated the Port
Authority' s eagerness to proceed with the negotiation,
I had not received a response from Mr. Tyson by mid-afternoon
on April 13 , 1994 , so I put in another call for him. He returned
my call at the end of the day and indicated that he would not be
meeting with the Mullers until the morning of April 15 , 1994 . He
indicated that he would call me after that meeting, but that a
negotiation session at any time this week could not take place .
I will keep each of you apprised as to developments . Please
call me if you have any questions .
JMM:gmo
cc : Kevin Carroll , Chair
Rosemount Port Authority
E. B. McMenomy, Jr. , Mayor
Joan Anderson
Port Authority Member
; � ol��L, BURKE, o��l�
. LEONARD & O'BR;IEN
]ohn B.Burice,)r• Ttmod�q M.W�hh
)oseph T.O'Nei!!• Attorneys Ac I�w jc�eph J.Deu}�s,h•
Pacricic H.O'Nall• ll�omts C Am+«e
Brian F.L�«+ard• A Professional Associadon Karcn A Chu�erlik
Michael R.O'&irn n1Or'�R�
Lawtence A.Witfordt 800 Norwest Cenoer 100 South Fifth Saeet )ohn T.Kellq
Etdon).Spe+x�er,7r.• 55 East Ftkh Saeet Suiu 1200 Eric D.C.00k
Edward W.Gale Sainc Paul,Minnesots 55101 Minneapotis,Minnesora 55402 pE�
Peoa H.Gnlls Tdephone(612)227-9505 Telephone(612)332-1030 David E Gwford
)�A.Cxske Fax(612)297-G641 Fax(612)332-2740
Michdk McQuarrie Colrrm •Abo Admimed In Wiec«�
Cnover C.Sayte,lII 1(:crdficd Ral R'oP�Y��
DanidR.Tyson't RcPlyTo: Minneapolis �Nioiaara5ire'""°�°m"�
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n,«„�w.N�� April 19, 1994
Mr. J. Michael Miles
Fluegel, Moynihan & Miles, P.A.
Rosemount City Attorney
1303 South Frontage Road
Hastings, MN 55033
Re: Muller Family Theatre Proposal
Dear Ivlr.
Miles:
i We a reciate our interest in resuming negotiations with respect to the development of a Muller Family
PP Y
Theatre in the City's Business Park. As you are aware, the Mullers have always been interested in
operating a theatre in Rosemount. We now have some very serious concerns, however, about procceding
with the project. For some reason unknown to the Mullers, the Port Authority has failed to follow
through with its commitment to negotiate a Development Agreement as part of the award of the theatre
project. There have been continuous delays and an apparent unwillingness to proceed with the project.
At the same time, the City has allowed a competing developer, who lost the project to the Mullers, to
proceed with the construction of a theatre adjacent to the Business Park. Obviously, the Mullers are now
at a serious competitive disadvantage as a result of these actions, or lack of action, taken by the City and
Port Authority.
We hope you can appreciate aur frustrations. This project has been ongoing for a considerable period
of time. The Mullers contacted the City of Rosemount over a year ago, in April, 1993 to inquire as to
any interest in the possibility of developing a theatre within the City. The City's Economic Development
Coordinator, John Miller, advised the Mullers that it was their "lucky day" because the City had muldple
development incentives which could not be found in other communities. Mr. Miller advised the Mullers
that tax exempt financing was available which would make their theatre project particularly attractive.
Based upon the City's enthusiastic response, the Mullers decided to pursue the project and invited
representatives of the City to tour their theatre in East Bethel, Minnesota. Mayor McMenomy, John
Miller and city staff toured the theatre and, again, encouraged the Mullers to locate a theatre in
Rosemount. They continued to communicate the City's willingness to provide tax exempt financing for
Mr. J. Michael Miles
April 19, 1994
Page 2
the project. The Mayor and John Miller then arranged for the Mullers to tour Rosemount and look at
prospective locations for the theatre project. Once again, tax exempt financing was discussed with the
City maldng specific representations as to the terms and conditions of the financing that was available.
The Mullers even met with the City's financial advisors who confirmed the availability of the public
taxable financing.
Based upon these representations, the Mullers concluded that the theatre project was economically feasible
and proceeded to expend substantial sums on architects, engineers, attorneys and development consultants
to develop the project. On July 6, 1993 the City Administrator, Steve Iilk, advised the Port Authority
that the Mullers were a "credible developer that had come to the Port Authority in good faith and had
done everything that had been asked of them". He recommended that the Port Authority continue to
work with the Mullers and not accept any other proposals. The Port Authority then passe� a motion
unanimousl to ne otiate exclusively with the Mullers and not to consider other proposals. Shortly
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ncoura e a com tin
thereafter, however, upon informadon and belief, city staff proceeded to e g pe g
developer to submit a proposal. Without any explanation, the Port Authority on July 20, 1993 rescinded
its previous action directing exclusive negodations with the Mullers, and advised staff to request
competing proposals.
The Port Authority's sudden change of heart obviously caused the Mullers considerable concern.
Nevertheless, the Mullers continued to pursue the project believing that any process used by the City to
award the project would be fair. The Mullers were convinced that they could prevail in any comperition
for the development because of its experience, financial strength, and demonstrated success in the
industry.
A Request for Proposals ("RFP") was issued by the Port Authority on July 21, 1993. The RFP clearly
set out the process to be used by the Port Authority in selecting a developer for the theatre project. It
also included the specific criteria that would be used in evaluating the proposals. The RFP provided that
proposals were to be filed by 4:00 p.m., Wednesday July 28, 1993, and that the Port Authority would
make a decision as to a developer on August 3, 1993. The RFP also required the developer to deposit
a cashier's check, or certified check in the amount of 1'�i percent of the structure cost as security for the
developer's performance on its proposal.
The Mullers proceeded to expend further sums in developing a response to the City's RFP. The Mullers'
proposal was submitted on July 28, 1993 in accordance with the provisions of the RFP, along with a
cashier's check in the amount of$29,000.00. The proposal reaffirmed the Mullers' desire to provide the
City of Rosemount with a quality movie complex, and increased the amount of equity the Mullers were
willing to commit to the project. The Mullers proposed construction of$2,949,000.00 ten screen movie
complex on a 10-acre site located at the front of the Business Park along Highway 42. The proposal
provided that the Mullers pay the City $250,000.(}0 for the parcel of land on which the theatre would be
located and the supporting infrastructure. The project was to be financed through general obligation
bonds with an amortized payback over 15 years. The Mullers agreed to provide their personal
guaranties. The Mullers' proposal was conditioned on the City's representation that the City controlled
Mr. J. Michael Miles
April 19, 1994
Page 3
the project site and would make the site available to the Mullers as soon as possible. Construcdon was
to commence on or before September 1, 1993 with the theatre opening on March 15, 1994.
The Mullers met with city staff to clarify all aspects of their proposal on July 29, 1993. The City
Administrator and F.conomic Development Coordinator issued their "Staff Recommendation Regarding
N staff found that the Muller
T'h cit
sal on Au ust 2 1993. e
Com lex Pro , y
' n of a Theatre g
s�i�c�. r r
proposal was "superior in the following areas: (1) nature and quality of the theatre complex facility
proposed; (2) the level of interest demonstrated by the Mullers; (3) the favorable impact on the
Rosemount Business Park; and (4) the potential general henefits to the City of Rosemount". Based upon
these considerations, the staff recommended acceptance of the Muilers' proposed theatre complex. On
August 3, 1993, presentations were made by both developers to the Port Authority. Following the
presentations, the Port Authority passed a motion approving the Resolution of the Rosemount Port
Auihority accepdng the Muller Family Theatres proposal. The Resolution was based upon the condition
that the Mullers meet the financial conditions specified in the staff report and upon the negotiation and
execution of a Development Agreement.
The Mullers have, at all dmes, remained ready and willing to meet the financial conditions contained in
the staff repart. The Port Authority, however, has failed to fully negotiate and execute a Development
Agreement. There have bcen unexplained delays in securing the project site and conveying it to the
Mullers, as provided for in the Muller proposal. Soon after it was disclosed that the Guetschoff Theatres,
Inc. was purchasing certain real estate owned by ihe Carlson family, affirmative efforts were taken by
members of the Port Authority and the City Council to delay approval of the text amendment necessary
for the development of the Business Park. There was affirmative effort made by certain members of the
Port Authority and the City Council to facilitate and even expedite, the modification of the Guide Plan
ta allow the exclusion of certain property owned by the Carlson family from the Business Park, and to
rezone the property so that Guetschoff Theatres, Inc., the losing developer, could construct a competing
theatre adjacent to the Business Park on a faster time schedule than their own chosen developer, the
Mullers. � � �
The Mullers have waited patiently for the City and the Port Authority to perform and have done
everything possible to accommodate the City's concerns throughout this process. Even though the
Mullers' proposal, upon which the development award was made contemplated public finance, the
Mullers were willing to expend additional funds necessary to obtain commitment for conventianal
financing. Two previous commitments have expired, and now a third commitment has expired on April
15, 1994. Under these extraordinary circumstances, the Mullers can no longer place their capital at risk
to obtain new financing commitments. Further the recent changes in interest rates, as well as a new
theatre located next to the Business Park, make the economics of the project difficult, if not questionable.
Notwithstanding the foregoing, the Mullers are willing to resume negotiations, but only upon the
condition that these negotiations proceed on the basis of the proposal that was submitted to the City on
July 28, 1993, and the Resolution approved on August 3, 1993 by the Port Authority awarding this
theatre development to the Mullers. We enclose a copy of our proposal which clearly sets forth the terms
Mr. J. Michael Miles
April 19, 1994
Page 4
and conditions upon which we are willing to procced. We believe that the City has always been under
an obligation to proceed with the good faith negotiation of a Development Agreement in accordance with
the provisions of the Mullers' proposal. Any attempt of the City to now unilaterally change the Mullers'
proposal would clearly violate the fairness and integrity of the process used by the City to select a
developer for the theatre project.
It is unfortunate that the Mullers were not able to proceed with negotiation and execution of a
Development Agreement in accordance with their original proposal. The City and the Port Authority
through their actions have placed the Mullers at a substandal competitive disadvantage after the Mullers
fairly won the right to develop a theatre complex in Rosemount. The failure of the City to maintain a
"level playing field" has provided an unfair advantage to the losing developer and resulted in a grave
disservice to the citizens of Rosemount, and to the future development of the City. No reputable or
reasonable developer is likely to invest the time, money and effort in the City of Rosemount knowing that
commitments can be broken, and that fundamental fairness plays no role in the development process.
We would request that you advise us in the immediate future as to whether the Port Authority is willing
to proceed with negotiations based upon the terms of our original proposal. My clients, as always,
remain dedicated to try to make this project work.
Very truly yours,
O'NEILL, BURKE, O'NEILL,
LEONARD & O'BRIEN
sy —'�
Daniel . y n
DRT:cmr
Enclosures
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1303 Soucl�Frontage Rwd
tiadq�MIV 55033
.' Tele�+!►oae 612-43D-9777
C�c 612-438-9775
F�.UEGEL MOYNIHAN & N�ILES, ['A.
Donald I. Fluegel
Shawn M. hluynihan
). htichael Miles
Joan M. Fluegel
April 26 , 1994
Daniel R. Tyson, Esq.
0' NEILL, BURKE, 0' NEILL,
LEONARD & 0' BRIEN
100 South Fifth Street
Suite 1200
Minneapolis, MN 55402
Re: Muiler Family Theatre Proposal
Dear Mr . Tyson:
Thank you for your recent response to the City of Rosemount' s
request to meet to conclude, hopefully, successful negotiations on
the Muller Theatre project in the Rosemount Business Park. As we
discussed yesterday, City Administrator Tom Burt and I will be
available at your convenience at any time on the mornings of
April 27 , April 28 and April 29 , 1994 . Additionally, we can meet
with you at any time on May 2 and May 3, 1994 . Please contact me .
at your earliest convenience to set up the time amongst these
alternatives to further negotiate your acquisition of property in
the Business Park.
I must now turn to a very serious and unpleasant subject. I
have studied your letter of April 19 , 1994 with care and have
shared its contents with several officials in the City of
Rosemount. Without qualification, we are completely shocked and
dismayed at your attempt to discredit the many efforts made by the
City of Rosemount to assist your client in its development of a
movie theater in the Business Park and the many statements you make
which are outright falsehoods . Therefore, I must reluctantly
address the remainder of this letter to four subjects .
( 1 ) Your false statement that the City has been unwilling to
negotiate a Development Agreement with the Mullers;
( 2 ) The facts related to the City' s ongoing good-faith
efforts to acguire land and make it available to your
clients ;
• Daniel R. Tyson, Esq.
April 26 , 1994
Page 2
( 3 ) Your misapprehension er develoCmenthfromhtakingrplacetop
a private movie theat P
our community; and
( 4 ) Your clients ' apparent desi re A° ustu of c 1993 �andr later
t h e y m a d e t o t h e C i y 9
withdrew.
I regret the necessitY� be al�l�owed to go un halleng d t your
fallacious assertions canno
NEGOTIATION OF A DEVELOPMENT AGREEMENT BETWEEN THE CITY AND THE
MULLERS
In paragraph one of your April 19 , 1994 letter (the "Letter" ) ,
you state, "The Port Authority has failed to follow through with
its commitment to negotiate a Development Agreement as part of the
award of the Theatre project . " Your assertion is the exact
opposite of the truth, since it is the Mullers who have repeatedly
refused to execute a Development/Purchase Agreement, even when
implored to do so by City officials . The documented facts are as
follows :
1 . On August 3 , 1993, the Rosemount Port Authority passed a
Resolution authorizing the negotiation of a Development/
Purchase Agreem 1 tere th nn August 171e 1993 nd A copy�of
Authority by no
this Resolution is attached.
2 . At my urging, you and I met within a few days after the
August 3rd Port Authority meeting. During this meeting,
I advised you that the Port Authority had authorized me
to take as much time as necessary in order to negotiate
a Development Agreement and have it executed within the
necessary time frame .
3 . Despite my urgings and willingness to meet at any time to
achieve this objective, you failed to follow through with
the holding of subsequent meetings and the August 17th
deadline payment passed Whenhwetdiscussedlthis�matter
Agreement. {As an aside, ou told me that a
yesterday, it is ironic that y
Development Agreement could not be executed in August of
1993, since the Port Authority did not own the land at
that time; yet, during our negotiations in August of
1993, we both concurred that the Development Agreement
could be made contingent upon the Port Authority' s
acquisition of appropriate property. )
• Daniel R . Tyson, Esq.
April 26 , 1994
Page 3
4 . Since you and your clients were unable to commit to a
Development Agreement by the August 17 , 1993 deadline,
the "award" of the Business Park Movie Theatre project
expired, as per the terms of the Resolution.
dified our
ou si nificantly mo Y
In late Au ust of 1993 , y 9 .
5 . g
ro os
al to use conventional financing, rather than
P P he Port
t Authorit to issue bonds .
T
re uestin the Por Y
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g
Authority then indicated that it was willing to consider
your new and different proposal to it .
6 . In support of your new proposal, you and I negotiated the
bulk of the terms of a Purchase Agreement . There were
several items, including the price of the land and
infrastructure, on which we had not yet reached
agreement.
7 . As several incarnations of the draft Purchase Agreement
evolved, I presented them to the Port Authority to
prepare them for early action when you and your clients
were prepared to enter into the Agreement.
g . Among other things , the rotective h�covenantssid egarding
acted on a set of p
aesthetic matters in the Business Park. Their action was
premised, in part, on your desire to place these
conditions in the Purchase Agreement between your client
and the Port Authority. During the course of the Port
Authority' s consideration of these proposed conditions
and, even after the Port Authority took action, I
provided you and your clients with copies of same in
order to obtain your comments, so that we obviate any
disputes on the language of the covenants . Despite your
receipt of the copies on several occasions and my
frequent reminders that your input was needed so that we
could reach closure on that part of the Purchase
Agreement, neither you nor your clients ever replied to
this important portion of the Purchase Agreement.
9 . At numerous times between September of 1993 and the
present date, I have expressed an interest on behalf of
the Port Authority to proceed with the Purchave
Agreement. At no time during this period of months ,
you or your clients indicated a willingness to reach
closure on and execute this document . In fact, on
various occasions , you indicated that it would be more
prudent to wait until certain other matters were decided,
such as land and improvement costs, zoning and platting.
. Daniel R. Tyson, Esq.
April 26 , 1994
Page 4
10 . Yet now that the Port Authority has achieved ownership
,
5 1993 ro er zoning and a
ovember , P P
of the property (
N , )
the Business Park ou
final plat of the portion of Y
indicated you wished to purchase, you appear to be
attempting to further delay or perhaps even terminate the
prospect of purchasing this property by making the
untenable argument that the Port Authority does not wish
to enter into a Development/Purchase Agreement.
CITY ACTIONS IN SUPPORT OF YOUR PROPOSED PROJECT
In your letter, you assert that the City was not enthusiastic
and even attempted to delay or thwart your proposed theater
project . Once again, it is very enlightening to examine the actual
facts relating to what has transpired over the past months .
1 . You approached the City in April of 1993 as to the
prospect of obtaining public support to build a movie
theater complex in Rosemount, Minnesota . Port Authority
staff and other City officials expressed an interest in
this concept, but, of course, made no specific promises
or entered into any written agreements with your client.
2 . Nevertheless, on the strength of your clients ' strong
showing of interest, the Port Authority entered into a
Purchase Agreement to acquire approximately 80 acres of
land for the development of the Rosemount Business Park
on July 28, 1993 .
3 . On August 3, 1993 , the Port Authority selected a proposal
made by your clients for development of the theater
project under certain terms and conditions .
4 . Your clients failed to fulfill these terms and conditions
and, in fact, later made a different proposal to the Port
Authority.
5 . Despite the fact that the Port Authority, as of August
18 , 1993, had no specific assurances from your clients as
to the acquisition of land in the Business Park, the Port
Authority proceeded with closing on the Business Park
land on November 5 , 1993 . Parallel to preparing for this
closing, City staff inembers also prepared preliminary
plats and a revised zoning ordinance which would
, Daniel R. Tyson, Esq.
April 26 , 1994
Page 5
specifically accommodate a movie theater in a Business
Park zoning classification .
6 . On November 9 , 1993 , the Rosemount Planning Commission
reviewed the preliminary plat and recommended approval of
same to the City Council . The Planning Commission also
recommended a text amendment to Rosemount zoning
ordinances, establishing a Business Park zoning district
allowing the construction of movie theaters therein .
7 . On November 16 , 1993 , the Rosemount City Council
scheduled public hearings for a Business Park preliminary
plat and zoning text amendment .
8 . On December 7 , 1993 , the Rosemount City Council conducted
a public hearing and approved the preliminary plat for
the Business Park.
9 . On January 10, 1994 , the Rosemount City Council , Planning
Commission and Port Authority conducted a joint workshop
to discuss a text amendment establishing a Business Park
zoning district which, in turn, would allow construction
of movie theaters therein.
10 . On February 1 , 1994, the Rosemount City Council adopted
an ordinance creating a Business Park zoning district,
including movie theaters .
11 . From August of 1993, the Port Authority has been working
with the consulting engineering firm of SEH, in order to
establish reasonable prices for tracts of land within the
Business Park and the cost of infrastructure in the Park,
as well as surveying and platting services .
12 . On March 8, 1994 , the Rosemount Planning Commission
reviewed the Business Park final plat (which is
essentially the tract of land the Mullers indicated they
wished to purchase) and recommended approval of the plat
and the rezoning request .for the specific parcels desired
by the Mullers .
13 . On March 15, 1994 , the Port Authority adopted tentative
prices for both land and infrastructure in the Business
Park.
14 . On March 15, 1994 , the Rosemount City Council set a
public hearing for rezoning of the land desired by the
Mullers .
Daniel R. Tyson, Esq.
� April 26 , 1994
Page 6
15 . On April 5 , 1994 , the Rosemount City Council approved the
final plat for the lot desired by the Mullers and rezoned
this lot from agricultural to Business Park.
The many and varied actions undertaken by the City and its
agencies in the relatively short time since its November 5 , 1993
acquisition of the Business Park property, discredit your
unsubstantiated assertions that the City is "sandbagging" the
theater project . It is hard to imagine other municipalities, which
have to go through a multi-step process in order to create a zoning
classification for a Business Park, rezone specific property to
meet that classification and create and approve a final plat for a
lot specifically desired by your clients , could move with more
rapidity. Moreover, the City has spent many thousands of dollars
in reliance upon your clients' interest in building a theater in
the Business Park, both in staff time and in extensive engineering
fees . The incurrence of such expenditures demonstrates the City's
keen interest in the project.
PRIVATE DEVELOPMENT OF A MOVIE THEATER COMPLE%
In paragraph one of the Letter, you state, The City has
.,
allowed a competing developer, who lost the project to the Mullers,
to proceed with the construction of a theater adjacent to the
Business Park. " This statement seems to imply that, once a
developer competes for public assistance and loses to another
developer, the losing developer can forever be banned from the City
of Rosemount, even if it is willing to privately finance its
project. As you are well aware, the City could not prohibit GTI
Theaters from pursuing its own private development for the
following reasons :
1 . The competing developer whom you argue, ' lost the project
.
to the Mullers , " simply lost the prospect of placing its
theater in the Rosemount Business Park. The "contest"
was not to determine whether GTI would even be allowed to
develop property in any part of the City of Rosemount.
2 . As you and I discussed and specificaliy agreed upon on
several occasions, the City of Rosemount could not
legally prohibit GTI , through use of its own funds and
acquisition of land from a private party, from building
a movie theater complex somewhere other than the
Rosemount Business Park.
, Daniel R. Tyson, Esq.
April 26 , 1994
Page 7
3 . That is precisely what your competitor has done by
purchasing land from Carlson Properties and commencing
construction of a theater complex with absolutely no
public financing from the City of Rosemount.
4 . It is axiomatic that the "prospect" of a specific
publicly funded project often stimulates the private
sector to quickly proceed with such a project, itself .
The Rosemount Port Authority did not initiate the
Business Park/theater project plans with such an outcome
in mind, but neither the Port Authority nor the City of
Rosemount, can or should be in a position to forbid
private development when the City undertakes public
development projects .
In the second full paragraph on page three of your letter, you
contend that the City has slowed down your project, while
expediting that of GTI . Municipal decisions regarding
comprehensive guide plans and zoning are essentially legislative in
nature and City officials are given considerable latitude in their
deliberations and decision-making regarding such matters,
especially when not legally bound to a particular course of action.
Additionally, several factors independent of the City' s
activities clearly gave the GTI project a head start. First, GTI
acquired a piece of land already in the hands of the landowner in
question. The Port Authority did not have the luxury of
immediately having property to sell to the Mullers, since, as has
been discussed previously, it did not acquire title to the property
' ties were alread
resent on
until November 5, 1993 . Second, utili Y P
the site GTI selected and, thus, infrastructure planning and needs
were practically eliminated on its site .
RESURRECTION OF THE MULLERS' ORZGINAL PROPOSAL
In the iast paragraph on page three of your letter, you
condition the renewal of negotiation, on the "basis of the (Muller)
proposal that was submitted to the City on July 28 , 1993 . " In
summary, that proposal provided that the Rosemount Port Authority
issue bonds to cover the bulk of the cost of the project and that
the Mullers would pay, in effect, $250, 000 for both the land and
infrastructure associated with it.
Without belaboring what has previously been discussed in this
letter, I must suggest to you that a return to a proposal, the
terms of which your clients failed to carry out, may not be viewed
as good-faith negotiation by the Port Authority. After all, it was
you and your clients who failed to fulfill the conditions placed
, Daniel R. Tyson, Esq.
April 26 , 1994
Page 7
3 . That is precisely what your competitor has done by
purchasing land from Carlson Properties and commencing
construction of a theater complex with absolutely no
public financing from the City of Rosemount.
4 . It is axiomatic that the "prospect° of a specific
publicly funded project often stimulates the private
sector to quickly proceed with such a project, itself .
The Rosemount Port Autharity did not initiate the
Business Park/theater project plans with such an outcome
in mind, but neither the Port Authority nor the City of
Rosemount, can or should be in a position to forbid
private development when the City undertakes public
development projects .
In the second full paragraph on page three of your letter, you
contend that the City has slowed down your project, while
expediting that of GTI . Municipal decisions regarding
comprehensive guide plans and zoning are essentially legislative in
nature and City officials are given considerable latitude in their
deliberations and decision-making regarding such matters,
especially when not legally bound to a particular course of action.
Additionally, several factors independent of the City' s
activities clearly gave the GTI project a head start. First, GTI
acquired a piece of land already in the hands of the landowner in
question. The Port Authority did not have the luxury of
immediately having property to sell to the Mullers, since, as has
been discussed previously, it did not acquire title to the property
until November 5, 1993 . Second, utilities were already present on
the site GTI selected and, thus, infrastructure planning and needs
were practically eliminated on its site.
RESURRECTION OF THE MULI,ERS' ORIGINAI, PROPOSAL
In the last paragraph on page three of your letter, you
condition the renewal of negotiation, an the "basis of the (Muller)
proposal that was submitted to the City on July 28, 1993 . " In
summary, that proposal provided that the Rosemount Port Authority
issue bonds to cover the bulk of the cost of the project and that
the Mullers would pay, in effect, $250, 000 for both 'the land and
infrastructure associated with it.
Without belaboring what has previously been discussed in this
letter, I must suggest to you that a return to a proposal, the
terms of which your clients failed to carry out, may not be viewed
as good-faith negotiation by the Port Authority. After all, it was
you and your clients who failed to fulfill the conditions placed
� Daniel R. Tyson, Esq.
April 26 , 1994
Page 8
upon acceptance of that proposal by the Port Authority at its
August 3 , 1993 meeting. It was also your clients who elected not
to pursue the proposal they had submitted and manifestly changed it
at the end of August 1993, by choosing a separate funding source.
Nevertheless , Mr. Burt and I would be glad to meet with you to
discuss any financial approach you may wish to pursue.
In conclusion, I wish to renew the Port Authority' s desire to
vigorously pursue negotiations in order to sell the tract of land
you have selected in the Business Park to you . I regret that the
bulk of my letter dwelled upon negative matters , but it was
necessary to confront the vituperative nature of and untrue
statements prevalent in your letter of April 19 , 1994 . I sincerely
hope that we can put aside all such negativism and finger pointing
and, instead, pursue successful negotiations on your theater
project .
Again, please contact me as soon as possible to set up a
negotiation session .
Sincerely,
FLUEGEL MOYNIHAN & MILES, P.A.
��L��--�
J. Michael Miles
JMM:gmo
Nt K ". `�1 lv•�- _a � � v ..�-�-. . ,. . .
Cz'T'Y OF ROSF.1V10UNT
PORT AYJ1'�ORIT'Y
na�oTa courr�rr, �navrr�soTA
RESOLi7TIQN 1993-5
A, R�SO�.LI'I70N OF � ROSk�10UNT PORT AU'Y'H4RITY ACCEPT]NG
T'� MUI�i,�R FAMI,LY TH�AT�RS, IlVC. PROPOSAI,
� , the Rosemount Port Authority, through �ts staff, has established c�rtain criteria
under which it would conside,r the provision of assistance to individuals or businesses
interested in buildi,ng and aperating a mavie theater compiex in Rosemount, 112innesota;
'DV']��, Guerschoff Tbeaters, Inc. (°GTI") and Muller Family Theaters („Mullers")
have submitted writien r�esponses to sa,id criteria;
� , GTI and the Mullers have met with Rosemount Port Authority staff and legal
arid financial consultants in order to funher explore and extrapolate upon the written
responses of GTT and the Mullers;
� , Steve 7ilk and 7ohn Mill�r, port Authority staf.f, have prepared and submitted a
scaff report dated August 2, 1993 to the Port Authority recom.mending selection of a proposat
M for the consixuciiou and pperation of a theater complex ("Staff Report"); and
'VVEL��tF�,AS, tbe membcrs of the Rosemount Port Authority havc studied the rosponses
submitted by GTI and tba Mullers and the Staff�Lcport.
BE IT l�'i7RT�R R�.50LVED by the Rosemount Port Authority as follows:
1. The Staff R;e�ort �s raccived by the ltosemount Port Authority and the
star,ements and conclusions in the Staff Report are adopted by the Rosemouat
Port Autharity as its findings as to the selecdon of a proposer to construct and
operate a theater compiex in tbe City of Rosemouat, Min.nesota.
2. Accord.ingly, the proposal submitted by the Mullers, as further developed and
clarified by the Staff Report, i� selected and accepted by the Rosemounc Port
Authoriry, subject to the following specific conditions:
A. The meedng of all financial and other condidons set forth in the Scaff
��Ort.
B. The prompt submission of cash, tang-i'�Ie assets and pe�onal guar�ntees
as enumerated in the August 2, 1993 Staff R�port.
• AF'R 25 '94 l b�30 C I T Y (�F ROSEMOtJrIT . . r.�
RESQLIJTTON 1993-5
PAGE 2
C. The negotiations and ft.�ll cxecution of a Development Agreemcnt
between the Mullers and the Rosemourn Port Authority by no later tban
August 17, 1993, wtuch Agreemcnt sets forth and makcs spec�c, thc
conditions set forth in the Mullers' pr�posai as Rirthcr devcloped and
clarified in the Staff Repon, a,nd sucb other condiLions and
require�ents as the staff and legal and financial advisors to tho
Rosemount Port Authority dam appropriate.
D. The approvat of the Agre�meat descn'bed in Section 2 (C) above, by
the Rasemount City Councai.
AD4PT'ED this 3rd day of August, 1993.
und Dunn, Chair
ATTEST:
�-Step�an , Its Execu ' � ' tor
Motion by: w Seconded by:
Vot�ci in favor.Wi,ppgrmann Dunn McMe�omv Ec�wazds Sinnwellt Carrolt
----���._.m
Voted against: Anderson ��„i�,,,� � _�
. O'NEILL, BURKE, C�'NEILL
.� LEONARD & O'BRIEN
john B.Burke,Jr. Timothy M.Wabh
l�h T.o�No+u* Attomeys At Law J�h).�,)�.
Paaicic H.O'Neill• ThOR18S C'�
Brian F.Leonard* A Professional Association Karrn A.Q�amaiilc
Michael R.O'Brirn �R'��1II
Lawrrnce A.Wilfocdt 800 Norwest Center 100 South Fifth Street l�+T•�v
E�on J.Sprn«c�l��* 55 Easc Fifth Sueec Suice 1200 Eric D.Cook
��W.�� Saint Paul,Minnesota 55101 Minneapolis,Minnesota 55402 p f�
P�`H'�� Telephone(612)22?-9505 Telephone(612)332-1030 David E.Crawf'ord
jamea A.Cxske Fax(612)29?-fi6h1 Fax(612)332-2740
Michelk McQyatrie Coloa► •Also Admiard In Wismnein
Grovc C.Sayre,m tc,adfied Rd Propnev Sp�s�
Uanid R.Tyson•t Reply To: M1riIICc1pO11S �M°"�°`°�`°°`�"y°�'°"'
lhomas W.Newcome IIlt
Brian F.Kidwell
Thomas W.Newc.�ome Apri127, 1994
VIA TELE��PIER - FAX NQ. 612-4'�$-9775
AND FIRST CLASS MAIL
Mr. J. Michael Miles
Fluegel, Moynihan & Miles, P.A.
1303 South Frontage Road
Hastings, MN 55033
Re: Your Client: The Rosemount Port Authority
Our Client: Muller Family Theatres
Dear Mike:
I am in receipt of your letter of April 26, 1994. I spoke with my clients regarding the meeting time.
If the City is prepared to meet on the terms of the original proposal, we will so meet. Please contact me
with your comments.
Sincerely yours,
O'NEILL, BURKE, O'NEILL,
LEONARD & O'BRiEN
����,� � � � l
By C�
Daniel R. Tyson
DR •cmr
cc: r. Michael Muller
Mr. Robert Muller
� Actc�r��cys Ac Law �
, 1303 South Frontage�d
Hastings, MN 550�33
- Telephone 612-438-9777
FLUEGEL MOYNIHAN & M(LES, P.A. Fax612-438-9T75
Donaid J: Fluegel
Shawn M. Moynihan
J. Michael Miles
)oan M. Fluegel
April 28, 1994
Daniel R. Tyson, Esq.
0'NEILL, BURKE, 0'NEILL,
LEONARD & 0' BRIEN
100 South Fifth Street
Suite 1200
Minneapolis, MN 55402
RE: Muller Family Theatre Proposal
Dear Mr. Tyson:
I am in receipt of your letter of April 27 , 1994 . In response
to your question as to whether the City is prepared to meet on the
terms of the Mullers ' July 28, 1993 proposal, I will reiterate what
I stated in my letter to you of April 26 , 1994 .
Specifically, City Administrator Tom Burt and I will be glad
to meet with you to discuss any financial approach your clients may
wish to pursue, but I seriously doubt whether the Rosemount Port
Authority would be interested in entertaining a proposal which your
clients, in effect, withdrew in August of 1993 .
Please advise me as to whether your clients wish to proceed
with a meeting. Mr. Burt and I are still reserving the remainder
of the meeting dates I gave you in the event you wish to proceed
with a negotiation session.
Sincerely,
FLUEGEL MOYNIHAN & MILES, P.A.
��� �
J. Michael Miles
JMM:gmo
Attorneys At Law
1303 South Frontage Road
Hastings, MN 55033
Telephone 612-438-9777
Fax 612-438-9775
FLUEGEL MOYNIHAN & MILES, P.A.
Donald J. Fluegel
Shawn M. Moynihan
J. Michael Miles
Joan M. Fluegel
May 4 , 1994
Daniel R. Tyson, Esq.
0'NEILL, BURKE, 0'NEILL,
LEONARD & O'BRIEN
100 South Fifth Street
Suite 1200
Minneapolis , MN 55402
RE: Muller Fami.ly Theatre Proposal
Dear Mr. Tyson:
All of the various dates which I provided to you upon which
City Administrator Tom Burt and I would be available to meet with
you and your clients regarding the above-referenced project have
passed without your selection of one of same to further negotiate
a Purchase Agreement between the Mullers and the City of Rosemount.
As I have mentioned to you on previous occasions, now that the
Rosemount Port Authority has completed the various actions which
your clients indicated were necessary to conclude a Purchase
Agreement, we are anxious to proceed with the project.
Please indicate whether your clients are prepared to meet in
an expeditious manner to further negotiate the propose�d P ith aan
Agreement . Mr. Burt and I will be glad to supply y
additional set of dates on which we would be available to meet .
Alternatively, if your clients prefer, you can supply us with dates
convenient to your clients and we will accommodate their schedules .
Sincerely,
FLUEGEL MOYNIHAN & MILES, P.A.
fi/
�..G'��l/.!� �
��
J. Michael Miles
JMM:gmo