HomeMy WebLinkAboutCity Council Packet 12-12-1995 SpecialPLYMOUTH CITY COUNCIL
SPECIAL COUNCIL MEETING
TUESDAY, DECEMBER 12, 1995
6:00 P.M.
Bass Lake Meeting Room
City Center, Lower Level
I. Discuss Implementation of Recreational Sports Facilities Report
Recommendations
FACILITIES INCLUDED
IN PROPOSED COMPLEX
1. Two Indoor Ice Sheets with seating for 800, eight team rooms
2. Large Leisure Pool with custom rock wall, large plantings,
ozone filtering system, customized acoustics, large water slide,
and other play features.
3. Competition Pool, eight lanes, suitable for school swim meets.
4. Diving Pool.
5. Whirlpool.
6. Small outdoor leisure pool with outdoor deck and retractable or
sliding glass windows.
7. Free carpeted locker rooms with automatic cleaning devices.
8. Two full gyms. Optional third gym for additional $500,000.
9. Four racquetball courts.
10. Large health/fitness area with several hundred machines.
11. Day Care Area.
12. Aerobics Room.
13. Small snack bar/eating area.
14. Massage Room.
15. Small Meeting Room.
16. Walkway connecting major areas.
OWNERSHIP, OPERATION, AND USAGE
1. City will own and operate ice arenas.
2. Life Time Fitness will own and operate all other
areas including pools and gyms.
3. Life Time Fitness will assume all maintenance costs for
all areas except for ice arenas.
4. Life Time Fitness will be responsible for marketing the complex.
5. All City residents will have access to all areas of the complex
at a daily fee rate that will be no higher than the average of
comparable public community centers.
6. Life Time Fitness members will have access to ice arena during
public skating hours.
7. City will name the complex in consultation with Life Time Fitness,
but the word "Life Time" must be included in the name.
8. Life Time will provide lifeguards for leisure pool and outdoor pool.
9. City will plow the parking lot and maintain the landscaping.
10. Other parking lot repair and maintenance shared equally by Life Time
and the City.
PROTECTION OF THE CITY'S INVESTMENT
1. Ground Lease. City will lease land to Life Time for 30 _years subject
to:
a) Residential use covenant allowing Plymouth residents
to use all facilities on a daily fee basis no higher than the rates
for comparable public community centers.
b) Minimum Operating Standards to be specified.
c) Comply with first mortgage requirements (making the
payments).
If these conditions are not met, after notice and opportunity to cure,
the City will have the opportunity to acquire the entire club/pool
facility subject to the first mortgage.
2. A debt service reserve of 4-6 months will be established
to allow time for the City to consider its options.
3. Life Time cannot add additional debt on the facility without the
permission of the City.
4. The City shall have the right of first refusal to buy the property upon
its sale during the 30 year lease period.
5. The City retains zoning authority over the premises.
6. The City retains the right of condemnation for any public purpose.
FINANCING AND CONSTRUCTION
1. City will pay for cost of two indoor ice arenas, at an estimated
cost of $4,800,000, with $800,000 coming from outside sources.
2. City will pay $1,500,000 toward the construction of the indoor and
outdoor leisure pools, and in consideration of Life Time Fitness assuming
all operating, maintenance and marketing costs, acting as a construction
manager for the City, and making the entire club area accessible to
Plymouth residents on a daily fee basis. Any cost overruns on the
club/pool complex will be the responsibility of Life Time. School District
284 will consider a contribution of $1,500,000 if the competition pool and
diving pool are included in the project. Life Time expects to contribute
about $5,000,000 to the club/pool complex, including about $4,000,000 in
borrowed funds.
3. Life Time Fitness will provide all parking improvements including
paving and curbs and gutters. Life Time will pay for all site lighting and
signage.
The City will pay for all grading costs, including the NURP pond area,
building drain tile, site utilities, and the landscaping.
The City may pkv for a low brick or block fence along Plymouth
Boulevard and a traffic circle at 36th Avenue and Plymouth Boulevard out
of TIF funds earmarked for Downtown Plymouth.
4. Life Time has proposed to provide design and construction
management for the City on the ice arena complex for a total cost of
six percent of the construction cost. Life Time would provide
specifications and advertise for bidding according to applicable laws.
The City would approve the specifications and award the final bid.
PROJECT BUDGET FOR CITY
i. Two indoor ice sheets with seating for 800 spectators and
eight team rooms.
Cost: $4;800,000.
Outside contributions: $250,000 from State Grant, $250,000 from
School District 284, $250,000 from Wayzata Hockey Association,
and $50,000 from City of Wayzata.
Net Cost to City:
2. Club/Pool Complex.
4,000,000.
Net Cost to City for indoor and outdoor leisure pools: $1,500,000.
3. Site Improvements.
Grading, Site Clearing, Drain Tile for Building, Site Utilities: $850,000.
Landscaping and Irrigation: $150,000.
NURP Pond: $100,.000.
Subtotal Cost: $1,100,000
TOTAL NET CITY COST:
OPTIONAL ITEMS:
6,600,000
1. Community Recreation Room. Estimated 5,500 square feet
at $70 per square foot, with catering kitchen and furnishings, cost is
estimated at: $500,000
Would serve four principal purposes:
a) allow consolidation and expansion of existing senior programs.
b) provide indoor space for many City recreation programs.
c) would serve as a support facility for outdoor amphitheater.
d) would be rented to groups for receptions etc. to offset utility
and janitorial expenses.
Pending further study, staff believes that no operating deficit would occur.
2. Third gym in club area. Guaranteed cost quoted by Life Time: $500,000
Would provide a gym for City and community programs.
OVERVIEW OF THE PROPOSAL
1. Is the proposal a good value for the money?
For an investment of $1,500,000 to $2,000,000 (depending on the
amount of site improvement cost attributed to the ice arenas), the City
gets:
Access to a full service recreation complex at reasonable
daily rate fees.
Marketing.
No operating deficits.
No maintenance costs.
Assistance with construction management.
Possibility of lower costs per square foot of construction.
The City's previous Community Center proposal in 1989 indicated a deficit of
150,000 per year, provided little or no marketing, would have cost about
12 million with only one indoor ice sheet, and was only about 60% as big
as the proposed complex.
2. Is the proposal structured well so that each party is doing the things it
does well?
The private club will have the major responsibility for construction, having
constructed a number of other clubs with many amenities at a low cost. Life
Time will also operate, market, and maintain the pool/club area, all activities it
does on a regular basis and the City does not.
The City will fund, own, operate, and maintain the ice facilities, since private
enterprise has not attempted this activity, while many cities have. The City will
be responsible for the grading of its site, since we have the soil borings, knows
more about NURP pond requirements, and has previously planned a building on
this site. The City will also landscape the grounds since we have a forestry
department and have an interest in matching the exterior of the building to
Downtown Plymouth.
3. Is our investment safe enough?
The agreement provides for a ground lease in which we can take over the entire
pool/club complex if the resident use covenant or the operating standards are not
met. For example, if the club/pool complex has a value of $8 million, the
estimated construction cost, we could assume ownership for the $4 million debt,
gaining all of our equity back and theirs as well. It also provides debt service
reserves and limits on future debt. Even if the worst case scenario happened and
we had to take over the club, we would have ownership of a 200,000 square foot
complex for a total net City cost of about $9,100,000 ($4.0 million for ice arenas,
1.1 million for site improvements, and $4.0 million in club debt). This is still
3 million less than the proposed 1989 Community Center that was only 60% as
large.
4. Is the proposed complex family friendly?
Life Time offers free day care for 1 1/2 hours for each paying patron.
Life Time offers some programming for youth.
Life Time will allow youth to swim without a parent being present
in the club area, perhaps subject to some time zoning.
Life Time will allow District 284 swim teams to practice and hold
official meets at the Club if District 284 participates as a partner in
construction.
Life Time will consider lowering initiation fees for seniors and assisting
low income youth with access to the facilities.
Life Time is not required to assist special populations to the same degree
that public agencies must, but often does so voluntarily.
5. Will the complex be public in character?
Reasonable daily fee access will be required.
City can name the complex, subject to having the name
Life Time" in the name.
Public activities will be held at the center such as school swim
meets, City recreation programs, special events, and
school hockey games at the ice arena.
POSSIBLE BALLOT QUESTION
Shall the City of Plymouth be authorized to
spend up to $5,000,000 from existing funds in
the Community Improvement Fund, to be combined
with other existing funds, for the purposes of
designing, constructing and equipping indoor
ice arena facilities, swimming pool facilities,
and related site improvements?
December 7, 1995
Dwight Johnson
City Manager
City of Plymouth
3400 Plymouth Road
Plymouth, MN 55447
Dear Mr. Johnson:
FCA, Ltd., a Minnesota corporation doing business as LIFE TIME
FITNESS ("FCA"), proposes to design and develop a major recreation
center project on City -owned land near 36th Avenue and Plymouth
Boulevard in the City of Plymouth, Minnesota, on the following
terms and conditions:
1. Ice Rink. The City intends to provide an ice arena
complex (the "Arena Complex") on its site, consisting of two (2)
indoor sheets of ice, seating for 800 spectators, and a total of
eight (8) team rooms. FCA will provide complete architectural
services to the City for six percent (6%) of the construction
contract amount. FCA will provide design specifications subject to
the City's approval and advertise for bids according to all laws
applicable to the City. The City will award the bid and FCA will
administer the construction contract on behalf of the City. The
Arena Complex will be made available to LIFE TIME FITNESS members
during public skating hours. The City will own, operate and
maintain the Arena Complex.
2. Club/Pool Complex.
a. Complex. FCA will design, construct, own, market,
maintain and operate at its sole expense, except as hereinafter
provided, an approximately 110,000 square foot LIFE TIME FITNESS
health club/pool complex (the "Club/Pool Complex") including, in
addition to the standard features of LIFE TIME FITNESS clubs:
i) a 25 meter, competition 8 -lane pool, which will
be made available without charge to Independent School
District No. 284 ("ISD 28411) teams when accompanied by
their coach. The Competition Pool will also be made
available for rent to local swim clubs at normal
commercial rates, subject to feasibility as determined by
FCA;
LMW97452
64476WAEST PARKWAY, SUITE 275 • EDEN PRAIRIE 9 MN • 55344 • PHONE 612.947.0000 FAX 612.947.0077
Mr. Dwight Johnson
Page 2
December 7, 1995
ii) a diving pool, which will be made available to
ISD 284 teams when accompanied by their coach;
iii) a large, preeminent quality, indoor leisure
pool, incorporating a custom rock wall, large plantings,
ozone pool filtering system, customized acoustics, and a
large water slide and other play features;
iv) a whirlpool;
v) a small outdoor leisure pool with outdoor deck
and retractable or sliding windows; and
vi) larger than usual family locker rooms.
b. Residential Use Covenant. The Club/Pool Complex
will be available to all residents of the City of Plymouth on
a daily fee basis that will be no higher than that charged for
comparable public community centers in the metro area.
Subject to feasibility as determined by FCA, the Club/Pool
Complex will similarly be made available to residents of ISD
284.
C. Operations. The Club/Pool Complex will be
marketed, maintained, and operated without cost to the City by
FCA. FCA will provide lifeguards for the leisure pool and the
outdoor pool areas as a part of its operations.
d. Site Development. FCA will pay for the cost of all
site lighting, parking lot construction including bituminous
surfacing, outdoor signage, and curb cuts and gutters. The
City will be responsible for the construction of the NURP pond
and any mitigation or reclamation of wetlands. The City will
provide the land for the Club/Pool Complex and 600 parking
spaces, and will be responsible for all other necessary site
work for the entire project, including site clearing, grading,
earthwork, subbase for parking surface, construction of the
Traffic Circle on Plymouth Boulevard and 36th Avenue, drain
tile, site utilities, fencing, landscaping, and providing a
buildable pad for the Club/Pool Complex.
e. Capital Contributions. The City and the ISD 284
will each contribute One Million Five Hundred Thousand and
no/100 Dollars ($1,500,000.00) toward the cost of construction
of the Club/Pool Complex. As an option, FCA will include a
third gym in the Club/Pool Complex (in addition to its
standard 2 gyms) to be made available to Plymouth residents
and City programs as determined by the City for payment of an
additional Five Hundred Thousand and no/100 Dollars
500,000.00). LIFE TIME FITNESS members may use the third
gym when it is not in use by the City. FCA shall be
responsible for any excess construction costs for the
Club/Pool Complex. In the event ISD 284 does not participate,
LMW97452
FC100-18
Mr. Dwight Johnson
Page 3
December 7, 1995
the competition pool will be replaced by the standard LIFE
TIME FITNESS lap pool, the diving pool shall be eliminated,
and ISD 284 will not acquire any special usage rights in the
facilities.
f. Ground Lease. The City will lease the land
underlying the Club/Pool Complex to FCA under a 30 -year ground
lease, with rental payments of $1 per year and an option to
purchase at the end of the lease for $100,000.00. In
addition, the City shall have the right to terminate the
ground lease after notice and opportunity to cure, upon
violation by FCA or its successor of the obligations to (i)
perform the residential use covenants, (ii) comply with
specified minimum operational standards, or (iii) comply with
the first mortgage. FCA shall own fee title to the Pool/Club
Complex improvements subject to the ground lease. The City's
fee interest under the ground lease shall be subordinate to
FCA's construction and permanent financing and refinancing in
an amount not in excess of the greater of (i) $4,000,000, or
ii) the greater of(x) the then current balance thereof and
y) 50% of the appraised value. FCA shall use its best
efforts to obtain for the City notice of default and
opportunity to cure rights from the first mortgagee. The
ground lease shall provide that FCA will not secure any
additional debt with the real property consisting of the
Club/Pool Complex without the prior written consent of the
City. FCA will also establish a 4-6 month debt service
reserve on the first mortgage which can be accessed by the
City to cure defaults in the first mortgage. The City/ISD 284
capital contribution shall be funded as reimbursement for
tenant improvements to be constructed in accordance with City -
approved plans and specifications and shall be disbursed by a
title company, subject to normal lien waiver and other
requirements.
g. Right of First Refusal. During the term of the
ground lease, the City shall have a right of first refusal
upon the sale of the Club/Pool Complex.
3. Land Use Approvals. The commitments contained herein are
subject to the City's approval of any necessary changes in zoning,
comprehensive plan, and platting for the entire project. The
whole parcel shall be platted into at least three separate lots,
consisting of, at least, (i) the Arena Complex, (ii) the Club/Pool
Complex, and (iii) the parking.
4. Parking Lot and Covered Walkway. The parking parcel
shall be subject to non-exclusive, perpetual reciprocal easements
in favor the Arena Complex, the Club/Pool Complex, and any other
LMW97452
FC100-18
Mr. Dwight Johnson
Page 4
December 7, 1995
improvements located on the entire site. The City shall be
responsible for plowing the parking lot and maintenance of
landscaping. There shall be no charge to FCA or its customers for
parking, except that all other repair and maintenance of the
parking lot shall be performed by FCA and the costs thereof shall
be shared equally by the Arena Complex and the Club/Pool Complex.
The Arena Complex and the Club/Pool Complex shall also be subject
to a reciprocal easement for the covered walkway to be constructed
alongside both and each party shall bear all costs of operation and
maintenance incurred in connection with the portion of the covered
walkway located on their respective parcels. The wall between the
Arena and the Club shall be a common wall and the parties shall
enter into a standard common wall agreement.
5. Administrative, Insurance and Legal Costs. FCA will
assume all administrative, architectural, construction management,
and legal costs relating the construction of the Club/Pool Complex,
and, if the successful bidder, the Arena Complex, not including any
City staff time or expenses by the City Attorney. FCA will
maintain proper insurance on all portions of the construction work
for the City until the construction is complete and the City has
taken possession of the Arena Complex.
6. Name of Complex. FCA will have the right to have the
name of its LIFE TIME FITNESS club included on signage near the
main entrance to the center. The overall recreation center will be
named by the City in consultation with FCA, provided that "LIFE
TIME" will be included in the name, such as LIFE TIME Sportsplex or
LIFE TIME Sports Complex.
7. Referendum. The entire project is subject to approval
by the residents of the City of Plymouth in a referendum to be held
by February 1996.
The foregoing constitutes a non-binding proposal which shall have
no legal effect but which shall form the basis for the parties to
negotiate a binding legal agreement.
LMW97452
FC100-18
Mr. Dwight Johnson
Page 5
December 7, 1995
FCA, Ltd., dba LIFE TIME FITNESS
By
Bahram Akradi
Its President
Accepted as the basis for negotiations and having no binding legal
effect.
The City of Plymouth
By
Its
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COSTS OF PUBLIC COMMUNITY CENTERS
Maplewood:
Cost: $12,600,000 including land and furnishings
Size: 88,000 square feet
Features: Leisure Pool, Lane pool, Gyms, Racquetball
Courts, 276 seat theater, Event Room, Weight
Room.
Shoreview: (opened in 1990)
Cost: $6,200,000 not including land.
Size: 65,000 square feet
Features: Leisure Pool, Gym, gymnastics area, Event
Room, meeting rooms, weight room.
Plymouth: proposed Community Center in 1989
Cost: $12,000,000 not including land.
Size: 120,000 square feet
Features: One indoor ice sheet, leisure pool/lap pool,
two gyms, senior/community meeting center,
aerobics room, three racquetball courts, teen
room, indoor playground, weight/fitness room.
ALTERNATIVE SCENARIOS FOR RECREATION FACILITIES
12,690,000 (1,500,000) 11,190,000 27,120, 000 4,500,000 31,620, 000
6.5 million ($13.9 million 20,430,000
capital cost) capital cost)
With Life Time All Public Cost
Capital Cost Operating Total Capital Cost Operating Total
423,000 50, 000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423, 000 50, 000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,0001 1,054,0001
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50, 000) 373,000 904,000 150,000 1,054,000
423, 000 50, 000) 373,000 904,000 150, 000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50, 000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50, 000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50, 000) 373, 000 904,000 150, 000 11,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,000 904,000 150,000 1,054,000
423,000 50, 000) 373,000 904,000 150,000 1,054,000
423,000 50,000) 373,0100 904,000 150,000 1,054,000
12,690,000 (1,500,000) 11,190,000 27,120, 000 4,500,000 31,620, 000
6.5 million ($13.9 million 20,430,000
capital cost) capital cost)
ALTERNATIVE SCENARIOS FOR RECREATION FACILITIES
12,690,000 (1,500,000) 11,190,000 35,130,000 5,400,000 40,530,000
6.5 million ($18 million 29,340,000
capital cost) capital cost)
With Life Time All Public Cost
Capital Cost Operating Total Capital Cost Operating Total
423,000 50, 000) 373,000 1,171, 000 180, 000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50,000-) 373,000 1,171, 000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
423,000 50,000) 373,000 1,171, 000 180,000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
423,000 150,000) 373,000 1,171, 000 180, 000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,01111 50,000) 373,1100 1,171,000 180,000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
4L3,111111 50,000) 373,000 1,171,CCC 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
4213,000 50, OOO) 373,000 1,171, 000 1180,000 11,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
423,000 50, 000) 373,000 1,171, 000 180,000 1,351,000
423, 000 511, CC0) 373, 000 1,171, OOC 180, CCC 1, 351, OCO
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
423,000 50,000) 373,000 1,171,000 180,000 1,351,000
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12,690,000 (1,500,000) 11,190,000 35,130,000 5,400,000 40,530,000
6.5 million ($18 million 29,340,000
capital cost) capital cost)
NET OPERATING REVENUES
DOUBLE ICE SHEET FACILITIES
Minnetonka: (1993)
Revenues: 555,506
Expenditures: 507,040
Net 48,466
Burnsville: (1994)
Edina:
Minneapolis:
Revenues: 782,592
Expenditures: 689,388
Net 93,204
Revenues: 630,000
Expenditures: 603,880
Net 26,120
Revenues: 592,469
Expenditures: 560,931
Net 31,538