Agenda - Council Work Session - 02/14/2017

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CC Work Session 2. 2. Meeting Date: 02/14/2017 Information Title: Discuss Concept Development Project: Case of Flagship Fitness & Aquatic Center - 5:50 - 6:15 - 25 Minutes Purpose/Background: PURPOSE Purpose (A) Receive proposal from Flagship Fitness for a roughly 65,000 sf, two-story, high -amenity, family -based, fitness and aquatic center, to be located in The COR. Flagship Fitness is proposed to be privately owned and operated (not a non-profit). Preliminary estimated total project costs are nearly $20M. Flagship Fitness is asking for the City to partner in the project, with a contribution of about $3M (free land and TIF). Adrian Haid, CEO/President of Flagship Fitness, will be in attendance of this meeting; along with Jeff Minea of Lee & Associates. Mr. Haid and Mr. Minea would like to introduce their project proposal to the City Council. Purpose (B) Provide staff with preliminary direction on how to proceed with this prospect. Please see alternatives section for details. BACKGROUND Staff was approached by Flagship Fitness in December 2015. Over the past year, staff has been working with Flagship Fitness to identify a project budget (i.e. sources and uses funds), concept site layout, and identify a primary private funding partner for the project. Please see attached supporting information. ALTERNATIVES Staff believes the proposal before the City Council (Flagship Fitness) is a "kick-start" to the City's much anticipated "Community Center" discussion. The discussion (or desire) for a Community Center in Ramsey is reflected in the City's Strategic Plan, Capital Improvement Plan (CIP), COR Master Plan, Citizen Survey, and various other City documents. In that context, staff developed the following general alternatives for this case. Alternative 1: Proceed ahead with Flagship Fitness proposal now City Council is generally interested in moving forward with further investigating the Flagship Fitness proposal exclusively, right now. In other words, move forward with negotiating this specific Flagship Fitness proposed project now, without investigating other avenues for community centers (see alternative below). If this was the direction of Council, staff would suggest the following process steps: (A) select a site, or a couple potential sites. (B) negotiate the deal, purchase agreement, and business subsidy. Also negotiate the scope of services the City will require/ for being a partner in the deal. (C) complete the entitlement process, site plan, platting, etc. If the Council did select this alternative, staff would suggest requiring the prospect to provide a clear financing commitment from the project's primary equity partner (and a better description of that equity partner). At this point, staff has only been able to get a verbal commitment. Staff is being told the equity partner wants to see how serious the City is before providing something in writing (the equity partner is PDI and/ or Associated Bank). Also, depending on site location, staff believes this project will likely trigger several "other" development costs (and challenges) not outlined in the scope of the attached project budget. Those items should be further vetted moving forward.