HomeMy WebLinkAbout2.c. Life Time Partnership Update
EXECUTIVE SUMMARY
City Council Work Session: March 7, 2023
AGENDA ITEM: Receive Update on Life Time Project AGENDA SECTION:
Discussion
PREPARED BY: Logan Martin, City Administrator
Dan Schultz, Parks & Rec Director AGENDA NO. 2.c.
ATTACHMENTS: None APPROVED BY: LJM
RECOMMENDED ACTION: Informational update only.
BACKGROUND
City Staff and the project team from Life Time have been working diligently on final preparation of
documents and plans to move the project into its implementation phase. At this point, staff anticipates
bringing the finalized Lease Agreement to the City Council for execution at its March 21 meeting. As
such, staff would like to remind the Council on the main components of the lease prior to that meeting.
Below is a discussion of key items in the lease, and staff will be prepared to discuss further at the work
session.
• Life Time will operate an approx. 100,000 SF facility featuring indoor / outdoor pool and water
slides, indoor and outdoor café / bistro (with liquor sales), exercise facilities, gyms, outdoor
pickleball courts, child’s play areas, salon and day spa, etc.
• Estimated Project cost of $48 million
o City contributes $21 million
o Life Time funds $27 million in project funds and services provided (architect, engineer,
construction manager, etc.)
• City owns the building and retains the asset in perpetuity
o Life Time leases the building from the City
o Annual lease payment is equal to their portion of the bond payment (i.e. payments for the
$27 million portion of the debt)
o City acts as financial lender for the deal, utilizing bond capacity to acquire funds. City
assumes risk of lease default by operator. A new tenant would be pursued in that instance,
or the sale of the City-owned asset would occur to pay off any remaining bond debt.
• Life Time pays to furnish and maintain the building for the life of the lease
o No annual City costs to maintain or repair the building or grounds
• Rosemount residents receive the following benefits:
o No initiation fee
o Reduced monthly rates ($10 off for individual, $15 off for couple, $20 off for family)
o Optional “summer membership” from June – August reduced by $50 for individuals, $75
for couples, and $75 for families (to support pool utilization and span the summer break
for students)
o 4 guests passes per household annually (first 5 years, with 2 year extension)
o A scholarship fund will be created to fund 66% of 75 family memberships (funded by City
and Life Time) to assist families in need
• Life Time pays all taxes and utilities (estimated $250,000 a year in taxes)
• 30-year lease, with renewal options
o Annual lease in years 31-40 will be ½ of the debt service payment (approx. $600,000 to
$700,000 based on final bond amounts)
The next steps in the project include final document approvals (lease, development agreement, etc.),
receipt of public bids for construction, and completion of land closure. The current schedule anticipates a
June land closure, with earthwork and construction starting thereafter.
RECOMMENDATION
Informational item only.