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HomeMy WebLinkAbout08-26-24-SWS Request for Special City Council Work Session A special meeting may be called by the Mayor or by any two Councilmembers. Reason for meeting: 1. Public Inquiries/Informational 2. Response to Public Inquiries 3. Agenda Items A. Minnesota Tournament Wellness Center (MTWC) Introduction B. MVI Hockey C. T-Mobile Site Use Agreement D. Rice Creek Commons/TCAAP Discussion E. Agenda Planning 4. Council/Staff Comments Adjourn Requested Date: 08/26/2024 Requested time: 5:00 pm Open meeting X Closed meeting Signature of person(s) making request: 08/23/2024 Mayor or Council Member Date / / Council Member Date -This section to be completed by City staff- Date received: 08/23/2024 Date meeting to be held: 08/26/2024 Time of meeting: 5:00 pm Location: City Hall All necessary posting and notices have been completed. XX/XX/2024 Signature of City Clerk Date City of Arden Hills ▪1245 West Highway 96 ▪ Arden Hills Minnesota 55112 Phone 651.792.7800 ▪ Fax 651.634.5137 ▪ www.cityofardenhills.org ARPEN HILLS Approved: September 9, 2024 CITY OF ARDEN HILLS, MINNESOTA SPECIAL CITY COUNCIL WORK SESSION AUGUST 26,2024 5:00 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Councilmember Brenda Holden called to order the Special City Council Work Session at 5:15 p.m. Present: Councilmembers Tom Fabel, Brenda Holden and Emily Rousseau Absent: Mayor David Grant and Tena Monson Also present: Interim City Administrator Jessica Jagoe; Finance Director Joua Yang; Public Works Director/City Engineer David Swearingen; and Assistant to the City Administrator/City Clerk Julie Hanson Interim City Administrator Jessica Jagoe stated with the excused absences of Mayor Grant and Councilmember Monson, she was asking for a motion from the Council for the appointment of a Temporary Chairperson. Councilmember Fabel moved and Councilmember Rousseau seconded a motion to have Councilmember Rousseau serve as Temporary Chairperson. The motion carried (2-1). 1. PUBLIC INQUIRIES/INFORMATIONAL None. 2. RESPONSE TO PUBLIC INQUIRIES None. 3. AGENDA ITEMS A. Minnesota Tournament Wellness Center (MTWC) Introduction Temporary Chairperson Rousseau welcomed the presenters and asked them to introduce themselves. 1�0 ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUSTZ, 2024 2 Jim O'Keefe thanked the Council for inviting them to share additional information about the Minnesota Tournament Wellness Center(MTWC). He introduced his brother Shawn O'Keefe. MTWC was referred to Arden Hills as a potential location for this venture. This would be a sports tournament venue. They believe there are some potential sites in Arden Hills that would be a good fit for this community, surrounding communities and the county. No site has been decided upon. He introduced his partners with Sports Facilities Company and Populous Architecture. MTWC thinks this could be transformative to the community. The design and planning of these sports venues are intended to be tourism makers and can have expansive long-term economic impacts. With their presentations, he hopes to answer two questions: 1) Is the MTWC an economic and community wellness anchor that will transform this area and 2) If the answer to question 1 is yes, how do we overcome any challenges to find the right location? This could bring hundreds of thousands of people into the community, spending their time and money here. He believes they have an unparalleled team to help answer these questions. When you build a sports tournament venue for youth, Sports Facilities Company is the first call you should make. They have 30 plus years of experience in bringing these types of venues to local communities. The team at Populous Recreation Markets are world leaders in one-of-a-kind sports destinations. They transform communities. He wanted to share a vision statement. "Arden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well maintained infrastructure, fiscal soundness and a longstanding tradition as a desirable city in which to live, work, and play." He believes that vision statement nests perfectly with what they want to bring to Arden Hills and the surrounding communities. Dan Orton, Vice President for Pre-Development for Sports Facilities Company began his presentation. He is involved in the advisory, development and management of youth and amateur sport facilities. They exist to improve the health and economic vitality of communities and the people in the communities. They do that through empowering great decision making from a data perspective, developing facilities and managing those facilities to create great outcomes. They work with public, private and institutional clients. He provided an overview of their company. They empower communities and help them consider how to serve their communities for tourism as well as for local recreation. Their youth and amateur sports facilities range from some of the largest sports tourism destinations to local seasonal water parks and aquatics. They are well versed in different sports and activities. They focus on community impact and participation. He shared a graphic and described how a project moves from concept to a finished venue. This process takes about 2-3 years, on average. They are involved in the owner's representation every step of the way. They design the facilities with operations in mind to maximize revenue generation. Their corporate structure is designed to manage facilities. Headquarters support center includes operations, accounting, marketing, event sales, recruiting team development, IT, legal ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUST , 2024 3 risk and programming. These departments support the facilities that are managed across the country. Corporate resources are supporting the on-site staff. They drive 25 million guests to their facilities, with a$250 million economic impact, annually. He shared examples of two existing facilities. There are different ways these facilities can be developed. The trend is around sports facilities and recreation anchoring mixed use developments where the private and public play a role in a partnership to help these facilities come together. Jim O'Keefe introduced team members from Populous Architecture. Ryan Settinghousen, Project Architect for Residential Markets, Goodminder Yanson, Principal for Recreational Markets and George Fantaza, MTWC owner's representative and Project Lead. Goodminder Yanson said he knows the impact this type of project can have on a community. Populous is the largest sports and recreation architectural firm in the country. Their tagline is "Drawing people together." They design buildings that people love to visit. He gave some examples of professional facilities they have helped build including Target Field and Allianz Field. Populous is committed to sustainability. He shared that the Climate Pledge Arena in Seattle, Washington is the first arena to achieve zero carbon certification. If clients are committed to environmentally sustainable buildings, this is achievable. They are always looking for opportunities to improve. He moved to examples of projects that are like what they envision for Arden Hills. These facilities invite tournaments into the community. They also provide training, high-level education and lounges for players. One of the goals is to make players feel everything is tailored to them. These facilities have a professional level atmosphere. Ryan Sellinghousen began discussion on the potential location of the facility. The focus of his presentation focused on the idea and the excitement of what the building can be. He shared some community wellness themes they keep in mind when they design a building. These themes included group engagement, flexible environment, active lifestyle, joyful moments and digital pioneering. He shared sports center photos and potential layout options for sports spaces, community fitness areas, climbing walls, athlete training facilities/lounges and social spaces/breakout areas where people can hang out between games. Community amenities can be designed into these facilities to create community assets that local residents can use. He shared the program elements for the architectural design of this facility. It would include 12 basketball courts, which could be overlayed with 24 volleyball courts and there are 6 dedicated pickleball courts. Additional elements include family entertainment center, esports, sports performance, community fitness center, flex spaces and leased spaces. He shared a floor plan sketch showing what a facility like this could look like and showing how the courts could be configured to support volleyball, basketball and pickle ball tournaments. George Fantaza discussed the economic impact of bringing Target Field to Minnesota. He said the project that is being proposed today is a catalyst for year-round community. This is not just a business endeavor. It will create a positive impact on youth and members of the community with the programming. This will bring people to this site year-round which will spur further development. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUSTXA'2024 4 Jim O'Keefe spoke about the Blaine National Sports center that brings in 5 million people a year. He stated this is an opportunity for Arden Hills and the surrounding communities to have similar recognition and economic impact. He stated they are passionate about the programming. The building is the shell that allows them to do things for veterans, for the disabled, for seniors as well as youth athletes. Whatever the community can envision in terms of programming, can be created there. He shared when you have a venue like this, it becomes a place that communities gather. He stood for questions. Councilmember Fabel asked if the individuals would have memberships, similar to a health club. Jim O'Keefe confirmed. There would be a fitness center. He noted the membership pricing is more accessible than what most health clubs charge. Councilmember Fabel asked how many acres they are looking at. Jim O'Keefe replied that the MTWC building would be about 5-6 acres under a roof. They believe they can put parking under the facility so there won't be a large parking area around the building. The design includes an attached hotel and a small orthopedics medical facility. The building itself doesn't generate a large return on investment. In a public/private partnership like this, the hotel and leased medical facility allows them, on the private side, to operate after the bond from the public side is done. There needs to be a couple different revenue streams for them to continue to maintain the building. He believes those three core buildings would need 10-15 acres. Councilmember Fabel asked who would own the building. Jim O'Keefe said MTWC would own it. Councilmember Holden stated that in essence they put no money into the building, itself. Jim O'Keefe stated they pay half. Councilmember Holden understands they facilitate the operations. She asked if the operations at their other facilities are meeting expectation. Jim O'Keefe replied that Sports Facilities Company completed the pro forma feasibility study. They run over 60 of these facilities around the country. They have never missed their pro forma numbers. Councilmember Holden asked what they did during COVID. Jim O'Keefe said in 2020, when COVID hit, they lost 43% of attendance. The following year, they rebounded to nearly the same level they were at prior to COVID. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUSTi , 2024 5 Councilmember Holden asked if they have read the limitations with the TCAAP site. The water table there is very shallow. Underground parking is almost more expensive than the building itself. Shawn O'Keefe clarified that the parking design isn't completely underground. It's half underground and then you build up. He reiterated there is no site specific and the discussion tonight isn't certain to be the location. Jim O'Keefe said they have read the reports and agreements. They don't assume that's where it will go. Councilmember Holden asked if underground parking were not available, how much more land than the 10-15 acres discussed earlier would be needed. Jim O'Keefe said it would depend on if it's a parking ramp or surface parking. If underground parking were not an option, they would look at a parking ramp to reduce the footprint. They don't want to see acres of parking surrounding the building. Councilmember Holden asked about traffic impacts. Jim O'Keefe said they haven't done a traffic study yet. Councilmember Holden asked how much traffic goes to these other facilities daily. Shawn O'Keefe said the nice thing about a tournament facility like this is that the tournament happens throughout the day. It doesn't typically create traffic issues because people are coming and going throughout the day, it's not everyone coming at the same time, like a Vikings' game. Traffic studies are very site specific, and they don't usually perform those studies until there is a definite location chosen. Jim O'Keefe said the tournaments are usually on weekends and the hotel tends to reduce the amount of traffic going in and out. He pointed out that even though tournaments will be held on weekends, they will always leave court space available for the community, not attending tournaments. Councilmember Holden asked if any of the other facilities have an arrangement where if the facility makes a certain amount of profit, the cities can be paid back from the operating revenue. Jim O'Keefe answered some do. He said in almost every case, the bonds get paid back early based on the revenues that are generated from the economic impact. They would be amicable to that discussion. Councilmember Holden asked if the facility costs $160 million, does that include all the equipment. Jim O'Keefe said they call that FF&E (furniture, fixtures and equipment) and it does include equipment. The advantage of working with Sports Facilities Company is that they are such a large entity purchasing this type of equipment, they typically save 15-20% on FF&E. 12� ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUSTX, 2024 6 Councilmember Holden said when they build a hotel there, the City gets the property taxes and that's it. She wonders how they can pay the bond back early based on people being excited to go to the facility. Jim O'Keefe said the $25 million of economic impact is based on each person attending the tournament spending $136 per tournament. He said it's not just the property taxes. It's the retail and other things when people spend money in the community. Councilmember Holden said that goes to sales tax. She stated the money the City gets is based on property tax. She understands it makes for a more vibrant community,but it doesn't increase the City's bottom line. Shawn O'Keefe said typically, it's not just the building and hotel. The surrounding area will get built up with more businesses. Jim O'Keefe shared a case study where they found the hotels, the restaurants and entertainment venues will reach out to these tournament facilities and ask what types of tournaments are going on because they staff based on the number of people anticipated to attend. Councilmember Holden asked how many full-time permanent or part time positions would this type of facility create. Jim O'Keefe said he didn't have exact numbers but thought it was a 40/60 split. There would be full time during the week, and they would have to amp up staffing with part time employees on tournament weekends. He believes a facility would have 30-50 full time positions. Temporary Chairperson Rousseau asked what the actual scope of the project is, as they used several examples that are very different in scale. Jim O'Keefe referred to the building in Kansas City that was shown earlier. That building is almost 300,000 square feet. Discussion ensued regarding square footage of similar buildings and number of courts. Councilmember Fabel noted that Ramsey County owns that land. He wondered if they have had discussions with Ramsey County. Shawn O'Keefe said they have had brief discussions with Ramsey County and they have expressed interest. There biggest interest was to serve members of the community and economic impact. Jim O'Keefe said they are aware of the pre-development agreements. He thinks the county is cautious about what they want to talk about and where. That is why MTWC has stated that they don't want to presume to go anywhere. He thinks Ramsey County will need to be an integral part of the discussion. Temporary Chairperson Rousseau asked what next steps in the process are. Jim O'Keefe said question one is does the community want it. Question two is location. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUS 2024 7 Councilmember Fabel asked how much money they are seeking. Jim O'Keefe said they would ask for half of the cost. The cost will be higher or lower based on the amenities that are included in the facility. The desired amenities are determined by the community. Turf fields or an aquatics center will increase the cost. Temporary Chairperson Rousseau asked staff if the next step would be a financial feasibility aspect or just an overall, general study of the concept. Interim City Administrator Jagoe said that if Council has interest in discussing it further, she believes the next step is for Council to direct Staff to schedule something in an upcoming work session for a full council discussion. Temporary Chairperson Rousseau would like to explore it more and continue having discussions. Councilmember Holden asked how much business a facility like this takes from surrounding businesses. Shawn O'Keefe said they are not aware of any other business that does this. Councilmember Holden said right now kids go to New Brighton because they have a gym with big courts. There is the YMCA, the Shoreview Community Center. She understands this is a different animal but it's only a different animal during tournaments. She would like to understand the impacts this might have on those businesses. Temporary Chairperson Rousseau asked if they have a market analysis of competitors. Shawn O'Keefe didn't think the feasibility study included that, but they can look at it. Jim O'Keefe admitted that there may be a detriment to a business like a YMCA but the overall impact of the community as a whole is positive. Council agreed to add this item to a future agenda to continue the conversation. B. MVI Hockey Interim City Administrator Jagoe gave a brief overview of previous discussions on this topic. She introduced Carl Kuhl from the Mounds View/Irondale(MVI)Youth Hockey Association. She noted in the agenda materials there was a letter asking for a contribution from the City. They are requesting $46,500. She opened the discussion. Councilmember Holden said she read that participation in hockey is increasing. She understands the MVI association gives grants to help cover the expensive equipment. She asked how many grants they award and how do they retain younger players. Carl Kuhl replied that a lot of the growth comes from young players. They started a program called Mini-Mays about three years ago. It is an entry level program that started at $49 for 17 sessions. It's a 30-minute session for kids ages 4-6 who have never played hockey before. Each player receives a full bag of equipment. As kids move up to the higher levels, there is a ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUST ', 2024 8 scholarship fund that can be used to cover 50% of the registration. Scholarships are awarded to kids based on parent's income. It can also be applied to if a parent loses a job. Councilmember Fabel noted from the packet materials that Arden Hills' residents make up about 12% of the participants. He asked if that is a consistent number. Carl Kuhl confirmed. He said the data from the past three years shows that number held at 12%. Councilmember Fabel said he imagines there are a lot of girls participating. Carl Kuhl replied that the growth in girl's hockey is about 25-30% over the last three years. Temporary Chairperson Rousseau asked how much it would cost to build another rink like this one. Carl Kuhl said a facility with a single sheet of ice costs $6 million. He couldn't venture a guess on the cost to build 8 rinks, today. A single sheet of ice doesn't generate enough revenue to maintain a facility. Councilmember Fabel asked how many sheets of ice they have now. Carl Kuhl said the super rink is owned by the National Sports Center. They have 8 sheets of ice. MVI is an anchor tenant in that building, along with Blaine, Spring Lake Park and Centennial. This re-vamp will be a$30 million investment. The biggest expense is the obsolete cooling system. They are moving from an R-22, Freon based system to an ammonia-based system. The anchor tenants are being asked to cumulatively put together$3 million. That would commit them to use the facility for another 20 years. MVI's portion of that is $750,000. Councilmember Fabel asked if this is like paying rent, up front. Carl Kuhl replied kind of. They guarantee that they will buy ice in the future. They still buy the ice on an annual basis. MVI receives a guarantee of 812 hours per season. They would still pay the market rate for the ice that year. It's $260/hour. They would still pay that. Councilmember Holden said Freon is bad for the environment. Carl Kuhl confirmed stating that R-22 is not being produced anymore. It is being traded between facilities right now when rinks close or upgrade. The upgrade being proposed would be a more environmentally friendly cooling system, along with lighting and other energy efficient upgrades. Councilmember Holden asked if MVI program uses this facility exclusively. Carl Kuhl replied for Mounds View and Irondale High School, if it's not 100%, it's 99.9%. This includes 8 high schools in their program. Temporary Chairperson Rousseau believes this is a much cheaper option to building our own. She asked if any of the other cities have indicated they will move forward. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUST V 2024 9 Carl Kuhl said they have made the request to all the cities. They have begun to hear back that cities would like to hear more from MVI. So, he is doing follow up meetings with those cities to get a better understanding of what they want from MVI. He said they have committed to $375,000. They have negotiated with the super rink that payment in full will be due by 2026. Temporary Chairperson Rousseau asked what would happen if Arden Hills said yes but none of the other cities put money towards it. Carl Kuhl said he would be in search of as many revenue sources as possible. When his predecessors looked at this a couple years ago, their numbers were substantially lower. They will probably raise rates this year. And those raises will happen year after year to keep up with the growth of the association. Interim City Administrator Jagoe discussed next steps. She will request an opinion from the city attorney to make sure the threshold for public purpose expenditures is being met. Temporary Chairperson Rousseau said she is interested in looking at this further. Councilmember Holden is also interested in continuing discussions. She thought maybe the amount could be spread out over three years. Councilmember Holden announced she had to leave. C. T-Mobile Site Use Agreement This item was not discussed. D. Rice Creek Commons/TCAAP Discussion This item was not discussed. E. Agenda Planning This item was not discussed. 4. COUNCIL COMMENTS AND STAFF UPDATES ADJOURN Temporary Chairperson Rousseau adjourned the Special City Council Work Session at 6:45 p.m. Q'OA�- L"I'—, A,alaid JVi4 Hanson David Grant t Clerk Mayor