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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"� Zt,omas w.Nnvmme mf &ian F.lCi�wetl 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 Y g 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 a��m��m;i�.� - t�ttornevs .yc �aw 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 q 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