040609 CC Spec AgPCITY OF SHOREWOOD
CITY COUNCIL SPECIAL MEETING
MONDAY, APRIL 6, 2009
AGENDA
1. CONVENE CITE' COUNCIL SPECIAL MEETING
A. Roll Call
B. Review Agenda
2. MATTERS FROM THE FLOOR
3. SOUTHSHORE CENTER
Mayor Liz6e
Bailey_
Turgeon
Woodruff
Zerby _
A. Memorandum of Understanding
B. SSSP Interim Agreement
C. Shorewood Option and LMCC Offer
5755 COUNTRY CLUB ROAD
COUNCIL CHAMBERS
5:30 P.M.
Attachments Estimated Estimated Start
Time Time
(Clock Time)
5:30 p.rn.
Resident
Memo
Administrator's
memorandum
4. ADJOURN
To the Mayor and City Council of Shorewood, MN:
I am writing to you today because I oppose the sale of the Southshore Center to the
LMCC. This center is truly an asset to our community. The programs that are
offered there enrich the lives of the seniors in our community. It also serves as a
meeting place for many other groups. Minnetonka Community Education is planning
several classes for the summer. Former Congressman Jim Ramstad once held a
Town Hall meeting in the Center. Without a public meeting place like the Southshore
Center we would not have an opportunity to connect with our representative in our
own community.
I am also opposed to the manner in which the decision was made. A public
information meeting should be held any time a sale of a community asset is being
contemplated so that citizens understand what is going on and have a chance to
comment. Also, as Mr. Woodruff is also a Commissioner on the LMCC he should be
excused from voting and commenting on this matter as it is clearly a conflict of
interest for him to do so.
I would like to see that the vote taken at the City Council Meeting on March 22nd
become null and void and for the discussion to be opened to the community before
any further decision is made. I understand that the LMCC has established a very
short timeline for a decision on the matter but that is far less important that making
sure that the community has an opportunity to participate.
Regards,
Anne Straka Leland
5825 Straberry Lane
Shorewood, MN 55331
952-470-6996
Windows Live TM: Keep your life in sync. Check it out.
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5.. 5 ';0: 'i T.. CLUB 'i 10AD ~ SHC....EV.-OD, P.... AESOTA 55331-8927 ® (952) 4743236
FAX (952) 474-0128 ® www.ci.shorewood.mn.us ® cityha1I@ci.shorewood.mn.us
MEMORANDUM
TO: City Council -
FROM: Brian Heck, City Administrat
DATE: April 2, 2009
SUBJECT: Southshore Center Acquisition
Background
The Southshore Center is a joint venture between the communities of Deephaven,
Excelsior, Greenwood, Shorewood, and Tonka Bay. It was constructed with funds from
these five cities and additional contributions from private donors. The total construction
cost for the center was a little over $900,000. The City of Shorewood's was just over
$448,000. See the attached financial information.
The original agreement for the operation of the Center placed all operational and
programming costs on the Friends of the Southshore Senior Community Center (Friends).
The Friends contracted management and programming to Senior Community Services
(SCS). Revenue for the operations and programming came from Community
Development Block Grants (CDBG), other grants and aids from the state and county,
rental revenue, and charitable donations to the Friends.
This arrangement worked well for several years until the CDBG funds from the cities and
the other grants and aids were lost. When these funds were lost, the Friends and SCS
approached the Cities to make up the shortfall in operational and programming expenses.
The Cities agreed to provide the additional funding on the condition that agreement could
be reached on a long term solution to fund the operations and management of the Center.
The cities set December 31, 2008 as the deadline to have a new agreement in place.
Over the past 18 to 24 months, the cities met to discuss programming, management, and
funding of the Center. An RFP was prepared and issued and the agreement the Friends
had with SCS was terminated. The cities received two proposals, one from Sojourn and
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0.0
The president of the Friends provided written notice to the cities on February 11, 2009
that the organization dissolved and all assets were transferred to the Southshore Senior
Partners (SSSP), a non-profit organization incorporated in June 2008 to assist the Friends
in the operation, management and programming of the Center. The cities were also
notified at this time that the SSSP was going to continue to operate the center and had
signed a five year rental agreement for use of the center with the Friends.
The cities believed the dissolution of the Friends resulted in a defacto termination of the
25 year lease agreement. The cities met and the discussions changed from negotiating a
new arrangement with the Friends to how to manage the center. The City of Shorewood
met on February 23 and discussed the situation. The Council directed staff to send a
letter to the president of the Friends indicating their acknowledgement of the Friends
dissolution and objecting to the rental arrangement with the SSSP. Tonka Bay and
Greenwood issued similar letters. The five cities met again and decided to issue RFP's
for management of the facility and agreed to have Shorewood coordinate the finances and
rental issues.
Lake Minnetonka Communications Commission (LMCC)
The LMCC approached the cities with an offer to purchase the center around the first
week of March and presented an offer sheet to many of the member cities. This offer
sheet was presented to the Shorewood Council at their March 13, 2009 council meeting.
The offer was to purchase the building for $360,000 over ten years. At this meeting, the
Council stated this was not going to happen in such a short time frame and encouraged
the LMCC to consider lengthening their deadlines. At this same meeting, a motion was
made for Shorewood to exercise its option to retain the center by paying the other four
cities their original investment. Staff was also directed to develop a Memorandum of
Understanding addressing cost sharing between the cities for the operation of the center
during the interim and developing an interim agreement for management of the building
with the SSSP. The interim period established by the council was through April 30, 2009.
The Council also directed staff to obtain a commercial appraisal of the Center.
The LMCC presented a revised proposal to the Shorewood Council at their March 23,
2009 meeting. This proposal offered the City a purchase price of $432,000 consisting of
monthly payments in the amount of $3,600 over ten years and included interest. In
addition to the revised purchase price, the LMCC listed several conditions for the
purchase, one of which was for the City of Shorewood to exercise its option under the
Cooperative Agreement. Following discussion on the MOU and the interim SSSP
agreement, the Council voted to exercise its option, directed the administrator to contact
all the cities of this action by 10:00 a.m. the following day, contact the LMCC of this
decision and begin final negotiations with the LMCC based on their offer sheet.
Present Status
All four member communities were notified by telephone, e-mail, and letter regarding the
March 23, 2009 action by the Shorewood Council. The City of Deephaven held a special
meeting on Wednesday, March 25 and adopted a resolution in support of the Shorewood
action and the Tonka Bay Council discussed the issue at its regular meeting of Tuesday,
March 24, 2009. The City of Tonka Bay directed its administrator to send a letter stating
they are not opposed to the Shorewood action. The City of Excelsior sent a letter
strongly opposing the Shorewood action and demanded Shorewood cease and desist
negotiating with the LMCC. These documents are attached.
Staff amended the MOU and SSSP interim agreements based on council
recommendations. These documents are attached and are presented for consideration.
Staff met with representatives of the LMCC to discuss their offer and the conditions to be
met for acceptance by the LMCC.
Staff contacted the Church and Excelsior Historical society and spoke with several other
groups and organizations who have secured the Center for events. The message was that
the Center will remain in operation through the month of April; however there is
uncertainty on the availability after April 30. No funds have been returned or refunded at
this time and one event was moved from the Center to the Shorewood City Hall.
Staff has contacted several commercial appraisers and is waiting to hear back from a few.
Those who responded indicate a fee of between $1,000 and $3,000 with a time frame of
about 6 weeks out. Staff also located information from the League of Minnesota Cities
Insurance Trust (LMCIT). The LMCIT underwrites the property insurance for the Center
and in 2001 hired Maximus to value the property for insurance purposes. The value
assigned in 2001 by this firm was $1,023,250. In 2004, the LMCIT had a value of
$1,091,509 on the building. The present assigned value by the LMCIT is $1,189,883.00
As of Thursday, April 02, 2009, proposals have been received from 2 organizations
interested in providing management and programming of the center and I have been
contacted by another organization that will be turning in a proposal by the deadline
Friday, April 3. The member cities have not had a chance to review and consider these
proposals.
Issues and Concerns
1. Lease agreement with the Friends / Southshore Senior Partners. There is a
concern that there is still a valid agreement for the operation and maintenance of
the Center. First, the cities never officially terminated the lease with the Friends
2. Status of the MOU and SSSP interim agreements. The Council directed staff to
revise the MOU and SSSP interim agreements and bring them back for review
and consideration.
3. Exercising the Shorewood Option. The Council voted to exercise the Shorewood
option at the March 23, 2009 Council meeting. This action was taken on the belief
the lease was terminated and therefore opened the door for this action. All
member cities were notified of this City's intent and two indicated no opposition
and one city did oppose the action. Following through with this action will result
in the City of Shorewood being the sole owner of the facility.
4. LMCC proposal to purchase the center. The LMCC presented the City of
Shorewood with an offer sheet to purchase the building and the City Council
directed staff to commence final negotiations with the LMCC based on the offer
sheet. The offer sheet contains a revised purchase price and several other
conditions.
Decision /Action Items
1. The Council requested staff revise the MOU and interim management agreement
with the SSSP through the month of April. These agreements outline the cost
sharing between the cities for the months of March and April and provide the
responsibilities of the SSSP related to basic operations of the Center for this time
period as well.
2. Before moving forward with exercising the Shorewood option, the City should
formally terminate the lease with the Friends / SSSP for the operation and
management of the Center. Doing so eliminates any question as to successor
organizations and clears the way for the City to move forward with the
Shorewood option and for the cities to accept proposals from other groups for the
management and operation of the Center.
3. Executing the Shorewood option to retain the center. The council advised the
other communities that it wishes to retain the center as provided for under
Section 6 of the Cooperative Agreement. Notification of this action was sent to
all the member communities and two of the four responded supporting the action.
There are several items to consider in moving forward with the option to retain
the center regardless of potential sale to the LMCC or any other entity.
The first decision to make is if the Council wants to be the sole owner of the
Center should the LMCC proposal to purchase the building fall through. The
potential sale to the LMCC is not a guarantee and the first step toward making
this sale possible is to obtain sole ownership.
Decision /Action: follow through with the Shorewood Option or not?
If the City Council chooses to follow through with the Shorewood option, staff
recommends the following:
a. Obtain written affirmation from three of the remaining four member
communities;
b. Authorize the Attorney to conduct the necessary title work. The
estimated cost for this work is $400.00 and will take approximately
two weeks;
C. Authorize lump sum cash payment to the other communities as
follows: Deephaven $139,639; Excelsior $90,812; Greenwood
$24,569; and Tonka Bay $55,980.
d. Determine what fund to take the dollars from to make the payments.
e. Direct staff to prepare a contingency plan for the center should the
deal with the LMCC fall though. This plan should outline use and
access, rentals, review of rates, programming partnerships, covering
operational costs, etc.
It should be noted that proceeding with the Shorewood option and then
contemplating sale to the LMCC is not the best option from a financial
perspective for the City of Shorewood. Doing so places 100% of the loss on
Shorewood while all the other communities are made whole. A better option, if
sale of the center is desired, is to have the sale completed by all member cities, in
that way, all five cities will share in the loss, not just Shorewood. (See financial
analysis attached)
If the Council should choose not to follow through with the Shorewood option,
then negotiations with the LMCC on the sale of the building need to stop and
negotiations with the other Cities on the future of the Center need to continue.
4. Sale of the facility to the LMCC. The reason the Shorewood Council moved to
exercise the Shorewood option was to affect the transfer of the property to the
LMCC. In order for this action to continue, the Shorewood council must accept
and follow through with the acquisition of the Center from the other four cities as
outlined in Item 3.
There are several contingencies to be met before the sale of the property to the
LMCC can move ahead.
a. The City of Shorewood must be the sole owner and deed holder. As stated
above, title work will take approximately two weeks. Obtaining the
necessary signatures, making necessary payments and processing
documents will take approximately three weeks.
b. The building needs to be appraised. The sale of public property requires
the Council to exercise due diligence and obtaining a professional
appraisal ensures the Council is receiving adequate compensation for the
asset.
c. The LMCC must obtain approval from 2/3 of the member cities for the
purchase of the building. There are 17 members in the LMCC; therefore
12 must affirm the purchase.
d. The LMCC must obtain a Conditional Use Permit from the City of
Shorewood for the change in use. The LMCC can not apply for the
Conditional Use Permit until it has ownership of the building or has a
valid purchase agreement in hand. It is likely that a public hearing for the
CUP application will not be held until June.
Staff recommendations: Staff recommends the following:
1. Approve the Memorandum of Understanding allocating excess costs over
revenue to member cities and approve the interim agreement with the
SSSP for the management and operation of the center and that these
agreements extend at lease six (6) months.
2. Continue forward with obtaining a professional commercial appraisal of
the building. An appraisal is part of due diligence and will provide
Shorewood and the other communities with a realistic value should a
potential sale occur, whether to the LMCC or another entity.
3. Authorize the city attorney to move forward with the title work. This
process will be necessary for the sale of the building be it to Shorewood,
LMCC, or any other potential buyer.
4. Conduct a meeting with the other member cities to evaluate the proposals
to determine if there is a viable option. Following this path allows the
cities to evaluate another alternative that all five cities agreed to consider.
Part of the due diligence and oft stated "dual track".
5. Require the LMCC to obtain approval from the required number of
LMCC member cities for the purchase of the building before continuing
to move forward with the Shorewood option. The LMCC is asking the
City of Shorewood to take on substantial financial risk in exercising the
option to retain the building. The City should have some assurance the
membership of the LMCC agrees with the possible acquisition of the
Center before moving forward.
~ s
March 26. 21009
Brian Heck
City Administrator
City of Shorewood
5755 Country Club Road
Shorewood, MN 55331
Dear Brian:
339THIRD STREET
EXCELSIOR, MINNESOTA 55331
TEL: 952-474-5233
FAX: 952-474-6300
I am writing to respond to your recent correspondence informing us of the Shorewood City
Council's decision on Monday, March 23, 2009 to sell the Southshore Center to the Lake
Minnetonka Cable Commission (LMCC). 1 understand that you have been directed to inform the
other member cities that Shorewood has elected to exercise what it calls the "Shorewood Option"
and unilaterally sell the Center to the LMCC without seeking approval of the other member
cities. As you know, the Excelsior City Council has previously expressed its opposition to this
proposed sale of the Center. The purpose of this letter is to formally register Excelsior's
objection to the sale and'to the unilateral manner in which it is being pursued.
Our city attorney advises me `that paragraph 7 cif the March 4. 1996 Cooperative Agreement for
the Southshore Senior%CommunityCenter requires written approval of h\ o-thirds of the meniber
cities before'-the Center "nay be sold., I understand that the (Shorewood City Council vas
provided with the same legal advice by its city attorney on Monday evening but chose to
disregard that advice and proceed to try to negotiate a sale of the Center to the LMCC. The City
of Excelsior objects to any effort to sell the Center without the approval required by the
Cooperative Agreement. Any purchase of the Center by the LMCC or any other entity shall not
be valid unless it is approved in writing by four of the five cities that are signatories to the
Cooperative Agreement. By copy of this letter, I am reminding officials at the LMCC of this
fact so that they are aware that failure to secure written approval of four of the member cities will
render any transaction invalid.
We also object to any effort by the City of Shorewood to make decisions regarding the operation
of the Center without permission from at least a majority of the five member cities. Nothing in
the Cooperative Agreement gives Shorewood or any other member city the right to act
unilaterally on behalf of the other member cities. To the contrary, paragraph 7 of the
Cooperative Agreement expressly requires "written approval of a utiajority of the Cities" for any
"changes in the operation. of the Center." Any action to cancel upcoming events at the Center
without the approval of at least a majority of the member cities would violate this requirement.
As you know; we have convened a. working group made up of repre,cntati"ves from vaeh of the'
member cities to make decisions regarding the Center. I suggest that we continue to use that
framework to make any future decisions.
Shorewood's unilateral actions are inconsistent with both the spirit and the letter of the
Cooperative Agreement and threaten irreparable harm to Excelsior's and the other member
cities' rights under that Agreement. On behalf of the City of Excelsior, I request that Shorewood
discontinue its unilateral actions on this matter and return to working cooperatively with the
other member cities pursuant to the terms of our joint powers agreement. If I do not receive
written confirmation that Shorewood is discontinuing its unilateral actions in this matter by noon
on Tuesday, March 31, 2009, the City of Excelsior will be forced to consider other options for
securing compliance with the Cooperative Agreement.
Sincerely,
Kristi KA
Luger
City Manager
Cc: Lake Minnetonka Cable Commission
Dana Young, City of Deephaven
Roberta Whipple, City of Greenwood
Jessica Loftus, City of Tonka Bay
RESOLUTION NO. 09-09
A RESOLUTION APPROVING THE SHOREWOOD OPTION IN THE COOPERATIVE
AGREEMENT F THE S UT S O SENIOR/COMMUNITY CENTS
WHEREAS, the City of Deephaven entered into a Cooperative Agreement in 1996 with the cities of
Shorewood, Tonka Bay, Greenwood and Excelsior for the purpose of jointly constructing a community
center to serve the south lake Minnetonka area; and,
WHEREAS, Section 6 of the Cooperative Agreement entitled Termination states:
"At the termination of the lease term or termination by action and approval of the Cities, the
Center may be sold subject to the following:
(a) Shorewood Option. The City of Shorewood may retain the Center by repayment to each
of the remaining Cities an amount equal to their original capital contribution. Shorewood may
pay the remaining Cities in cash, or at its option, Shorewood may make installment payments
to the Cities over a period not to exceed ten (10) years payable in equal annual installments of
principal and interest at the rate of eight percent (8%) per annum from and after the date of
Termination.
(b) Sale to Third Party. The Center may be sold to a third party for fair market value. In the
event of sale to a third party, the City of Shorewood will assure adequate access to the Center.
The proceeds of said sale shall be allocated and paid to each City proportionate to its original
capital contribution as provided in the attached Exhibit A.
(c) Proceeds from Future Gain. Should Shorewood sell the Center to a third party within
ten (10) years of exercising alternative (a), the net proceeds of said sale beyond the original
capital contribution paid by each of the Cities shall be allocated and paid to each City
proportionate to its original capital contribution as provided in the attached Exhibit A."
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DEEPHAVEN, THAT:
The Deephaven City Council recognizes that the Shorewood Option is an integral component
of the Termination provision of the 1996 Cooperative Agreement and hereby acknowledges
and approves the City of Shorewood's right to exercise the Shorewood Option, subject to the
requirement to share the proceeds from future gain as described in Section 6 (c) of the
Cooperative Agreement.
Adopted by the City Council of the City of Deephaven this 25th day of March, 2009.
Paul A. Skrede, Mayor
Attest:
Dana H. Young, City Administrator
March 26, 2009
Mr. Brian Heck
City Administrator
City of Shorewood
5755 Country Club Road
Shorewood, MN 55331
RE: Shorewood Acquisition of Southshore Community Center
Dear Brian:
I am in receipt of your letter dated March 24, 2009 and have informed the Tonka
Bay City Council of the action taken by Shorewood to acquire the Southshore
Community Center.
The Tonka Bay City Council reviewed your letter at their regular City Council
meeting on March 24th, 2009. They have directed me to respond with their
acknowledgement of the Shorewood City Council's right to implement the
"Shorewood Option" in this instance.
Please feel free to contact me with any questions or concerns.
Sincerely,
essica Lc
Tonka Bay City Administrator
" ~ 200 ctTY OF SHc1,~,'E"'
Fax (952) 474-6533 - website: cityoftankabay.net
gam, Y T
5755 C__ UNTRY CLUB -0/_ D SHOREWOOD, MINNESOTA 55331-8927 0 (952) 4743236
FAX (952) 474-0128 ® www.ci.shorewood.mn.us m cityhall@ci.shorewood.mn.us
MEMORANDUM
TO: Honorable Mayor and Counciimembers T
Brian Heck, City Administrator
FROM: Bonnie Burton, Finance Director/Treasurer
DATE: April 1, 2009
RE: Southshore Community Center:
Financial Analysis of Proposed Sale
Financial analyses of the proposed sale of the Southshore Community Center are attached for your
review. The analyses include various facts and assumptions which are listed below:
1. The Cooperative agreement calls for an ownership interest proportionate to each City's
investment in the center. If the Center is sold to a third party, for fair market value, the proceeds
of the sale are to be allocated to each city proportionate to its original capital contribution. The
contributions are as follows:
City
Contribution $
Contribution %
Shorewood
$311,000
50.00%
Excelsior
90,812
14.60%
Greenwood
24,569
3.95 %
Deephaven
139,639
22.45%
Tonka Bay
55,980
9.00%
$622,000
100.00%
2. Shorewood paid for its formula share via a lease purchase agreement with Norwest Bank (now
Wells Fargo). The City borrowed $311,000 at 6.22% for 12 years. They made 24 equal semi-
annual payments of $18,771.97 each with a $1.00 residual buy-out. The total principal and
interest paid was $450,527.28.
3. Total actual costs of the Southshore building construction were about $871,000. These extra
costs were funded in part by additional contributions by Shorewood that were not reimbursed.
The records do not indicate any additional contributions by any of the other member cities.
41%,
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Page 2 - Southshore Center Analysis
4. Shorewood's total actual contribution amount was $448,136, according to the records. This
amount is comprised of the formula/agreement amount of $311,000; phis $137,136 additional for
items such as access road construction; sanitary and storm sewer construction; and various
construction items completed by the City due to default of the contractor. Shorewood paid for
these additional items from the street and utility funds.
Shorewood city staff has contacted several appraisers to obtain quotes and time estimates to
provide a current building appraisal to establish an estimated value for sale purposes. The
appraisal quotes range from $1,000 - $3,000 and the time estimates range from 3 weeks to 10
weeks to complete.
6. The Southshore Center value for insurance purposes is $1,189,883 for the building; $7,362 for
property in the open (fences, etc.); and $51,227 for the parking building. These values are
effective for the current year. The building was appraised in 2001 for $1,023,250.
7. The Cities received an offer from the LMCC of a total payment amount of $432,000, to be paid in
equal payments of $3,600 per month for ten years (120 payments). The LMCC indicated the
payment includes `interest'.
8. In any financial transaction of this nature, it is right to assume there is an imputed interest rate for
this stream of payments. Therefore, if the total stream of payments is $432,000, and a current
interest rate of 4.96% is assumed, the purchase price or principal loan amount would be
$340,000, with a $1 residual value.
Should Shorewood choose to exercise the `Shorewood Option' (Cooperative Agreement item
#6A), staff suggests the remaining cities be paid in cash via an internal loan from one of its utility
fiends. This is financially preferable to making installment payments at eight percent (8%)
interest.
10. To summarize the building's valuations over time:
Building Construction Cost 1996: $ 871,000
Appraised Value by LMCIT, 2001: $ 1,023,250
Current Insured Value, 2009: $ 1,189,883
LMCC Purchase Offer, 2009: $ 432,000
Conclusion
The purchase offer by the LMCC appears to be below the actual value of the property, and is less than
the original contribution of the cities over ten years ago. A sale as proposed would result in a
cumulative loss to the cities of about $282,000, using an estimated sale price of $340,000 (instead of
the sum of the total stream of payments).
If the Cities wish to proceed with sale of the Southshore Center, it would be useful to obtain a current
appraisal and determine a method of obtaining additional offers to assure the cities receive
appropriate value for their investment.
City of Shorewood
Southshore Community Center - Analysis of Proposed Sale
(A) Shorewood Option - Shorewood purchases and retains the center and makes repayment to each
of the remaining cities in an amount equal to their original capital contribution.
Original Contribution per Agreement
City
Contrib %
Contrib $
Shorewood
50.00
311,000
Excelsior
14.60
90,812
Greenwood
3.95
24,569
Deephaven
22.45
139,639
Tonka Bay
9.00
55,980
Shorewood's formula share: $ 311,000 Shorewood's Actual Contribution: $448,136
plus Payments to cities: 311,000 plus Payments to cities: 311,000
Shorewood's Investment (Basis): $ 622,000 Shorewood's Investment (Basis): $759,136
(B) Sale to a Third Party for fair market value. Proceeds are allocated and paid to each city
proportionate to its original contribution.
(Assumptions: The current offer assumes installment payments to the cities over a 10-year period;
the interest rate is based on current market rates at the term and payment amount specified by the LMCC;
additional costs of sale have not been included here that will reduce the gross proceeds, such as attorney fees,
title work, and other to be determined.)
LMCC Purchase Offer
Sale Price:
$ 340,000
Term:
10 years
Int.Rate:
4.96255
Residual:
$ 1
Payment
$3,600/mo.
Distribution to seller based on pro-rata share of proceeds:
2009 Sale
Original
Net
City
%
Proceeds
Contribution
gain/(loss)
Shorewood
50.00
170,000
311,000
(141,000)
Excelsior
14.60
49,640
90,812
(41,172)
Greenwood
3.95
13,430
24,569
(11,139)
Deephaven
22.45
76,330
139,639
(63,309)
Tonka Bay
9.00
30,600
56,000
(25,400)
100.00
$ 340,000
$ 622,020
(282,020)
Shorewood's formula share $ 311,000 Shorewood's Actual Contribution $448,136
2009 Sale Proceeds 170,000 2009 Sale Proceeds 170,000
Shorewood's loss on sale $ (141,000) Shorewood's loss on sale $ (278,136)
(C) Proceeds from future gain - the net proceeds of said sale beyond the original capital contribution
paid by each of the cities beyond the original capital contribution, shall be allocated and paid proportionate
to its original capital contribution.
See analysis (b). The sale proceeds of $340,000 are less than the original capital contribution of $611,000
therefore, there are no additional net proceeds for distribution. The events required for additional distribution to occur are:
Shorewood exercises option (a), and retains the building until a more favorable market emerges. If this occurs, and Shorewood
subsequently sells the builing at an amount greater than $611,000 within a 10-year period, the net proceeds beyond the original contribution
would be paid to each city on a proportionate basis.
SENIOR COMMUNITY CENTER PROJECT
PROJECT BUDGET VS ACTUAL
THROUGH 5/31/99
Budget Balance
Favorable/
BUDGET
Total
(Unfavorable)
Original
Revised
Actual
5/31/99
Revenues
Cooperative Grant
25,150
25,150
25,150
0
Friends Fundraising
100,000
100,000
60,000
(40,000)
City of Deephaven
139,639
139,639
139,639
0
City of Excelsior
90,812
90,812
90,812
0
City of Greenwood
24,569
24,569
24,569
0
City of Tonka Bay
56,000
56,000
56,000
0
Interest Income
10,625
23,625
36,382
12,757
City of Shorewood (Formula)
311,000
311,000
311,000
0
City of Shorewood (off site)
84,980
84,980
80,084
(4,896)
City of Shorewood ( add'I)
49,500
49,500
49,500
0
Totals
892,275
905,275
873,136
(32,139)
Costs
Construction - GEH (incl. all
Alts/C.O.s) (Does not Incl retainage)
Furnishings
Legal
Architect - Study & CUP
Architect - Design & Construct
Architect - Bond Issues
Civil Engineering (Incl. Staff)
Lega I/Testina/LSAC/Financing
SAC/WAC
Lavatory Accessories
Vestibule Mat
Misc. Contractual
Contingency
Totals
750,500 758,722 660,008 98,714
30,000
43,000
3,000
40,000
21,687
(21,687)
7,023
(7,023)
43,575
43,575
47,758
(4,183)
15,419
(15,419)
10,000
10,000
54,667
(44,667)
30,000
30,000
24,952
5,048
10,000
10,000
3,564
6,436
1,500
1,500
0
1,500
700
700
0
700
0
16,000
16,000
32,882
(16,882)
892,275
913,497
870,960
42,537
Friends of South Shore Senior Center retained $40,000 from fundraising and will
acquire the furnishings for the Center
Shorewood
Unreimbursed
costs
80,084
49,500
7,552
fF g
COMPLETED ON
TOTAL
ORIGINAL
REVISED CONTRACT BALANCE EXPENSES
PAID
GEH CONSTRUCTION CONTRACT
732,500
758,722 694,745 63,977
63,977
TSP/EOS CONTRACTS *
55,575
55,575 49,529 6,046 4,089
53,619
ENGINEERING COSTS - OSM
26,383
- STAFF
7,552
*INCLUDES - STUDY
3,000
CUP
7,000
CIVIL ENGR
2,000
DESIGN/CONSTR
43,575
55,575
01/31/1995 5,015 9
02/28/1995 1,985 14
7.000 23
01/26/1996
8,715
71
02/24/1996
6,863
31
03/29/1996
7,844
68
04/30/1996
9,804
16
05/31/1996
0
3,631
09/30/1996
1,852
125
10/30/1996
1,961
17
01/31/1997
2,615
69
2/28/97
1,307
18
03/28/1997
915
16
04/30/1997
654
5
42,529
4,067
Southshor st-B[
Base Bid
644,000
Alternate # 1 - Kitchen Equipment
34,500
Alternate # 3 - Canopy
17,000
Alternate # 7 - Blinds
1,500
697,000
Contingency - 3%
20,000
Furnishings
30,000
Design Fees
Architectual & Engineering
43,575
Civil Engineering -OSM
10,000
53,575
Owner's Expenses (1)
Legal, Concept/CUP Stage Architect,
Testing, LSAC, Misc.
30,000
SAC & WAC
Lavatory Accessories (Dispensers)
Vestibule Mat
Total Project Cost
Alternates (listed in order of priority) (2)
Alternate # 4 - Plantings - this alternate
should not be accepted, as planting costs could
be much lower outside the contract. Final
costs would be borne as described in Note (2)
above. The work described in this alternate
must be done to complete necessary landscaping.
Alternate # 8 - Operable Partitions - two
folding panel partitions to separate meeting rooms.
Alternate # 5 - Casework - additional
base storage cabinates in 2 small meeting rooms
and library.
Alternate # 9 - Tilesetting Labor - delete
main lobby carpet; labor for contractor to
install donated floor tile.
Alternate # 6 - Vinyl Wall Fabric - on corridor
and lobby walls for ease of maintenance.
Mitigation of Watershed (3)
10,000
1,500
700
842,775
18,000
15,000
9,000
3,500
REVENUES
Cooperation Grant
25,150
Friend's Fundraising
100,000
Cities' Contributions
Deephaven
139,639
Excelsior
90,812
Greenwood
24,569
Shorewood
311,000
Tonka Bay
I
56,000
Interest during Construction
i
10,625
Total Budgeted Revenues
757,795
Off-Site Work (Shorewood)
(included in bid)
Access Road (Street Fund)
Construction
Architect/En
ineerin
8,529
620
g
g
9,149
Building Demo (Water Fund)
/
Construction
10,000
f
Architect/Engineering
726
10,726
Sanitary Sewer (Sewer Fund)
Construction
19,018
Architect/Engineering
1,383
20,401
Storm Sewer (Stormwater/Other)
Construction
37,237
Architect/Engineering
2,571
39 , 808)
SAC, WAC (Shorewood)
4,896
Total Project Revenues 842,775
OD) F07/1 L OFF- -t 7-E:
j
M 081/
NOTES:
(1) These costs include legal costs for cooperative agreements & lease,
and all or a portion may be funded outside of the construction
4,000 fund (Shorewood).
(2) Alternates would first be funded from contingency, further
17,500 donations or Shorewood, in order of their priority.
(3) This cost is an estimate pending outcome of ongoing discussions
between Shorewood and Watershed District.
~t.
At the termination of the lease tern or termniation by action and approval of the
Cities, the Center may be sold subject to the following:
(a) Shorewood Option. The City of Shorewood may retain the Center by repayment
to each of the remaining Cities an amount equal to their original capital contribution.
Shorewood may pay the remaining Cities in cash, or at its option, Shorewood may make
installment payments to the Cities over a period not to exceed ten (10) years payable in
equal annual installments of principal and interest at the rate of eight percent (8%) per
annum from and after the date of Termination.
(b) Sale to Third Party. The Center may be sold to a third party for fair market
value. In the event of sale to a third party, the City of Shorewood will assure adequate
access to the Center. The proceeds of said sale shall be allocated and paid to each City
proportionate to its original capital contribution as provided in the attached Exhibit A.
(c) Proceeds from Future Gain. Should Shorewood sell the Center to a third party
within ten (10) years of exercising alternative (a), the net proceeds of said sale beyond
the original capital contribution paid by each of the Cities shall be allocated and
paid to each City proportionate to its original capital contribution as provided in the
attached Exhibit A.
7.) Dissolution Amendment Termination. The following may only be undertaken
based on the written approval of two-thirds of the Cities: (a) Sale of the Center; (b) Amendment of
this Agreement; or (c) Termination of the Lease with The Friends of South Lake Minnetonka
Senior Community Center, or any renewal, extension, assignment or subleasing thereof or
successor thereto. The following may be undertaken upon written approval of a majority of the
Cities: (a) Capital improvements; or (b) City directed changes in the operation of the Center.
8.) Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Minnesota.
IN WITNESS WIEREOF, the Cities of Deephaven, Excelsior, Greenwood, Shorewood
and Tonka Bay, in accordance with the authorizing resolution from their respective City
Councils, have caused this Agreement to be duly executed.
CITY OF DEEPHAVEN
Dated: 31ylq~
By: ! I M !
Its: City Clerk Treasu er j 1
V "F
5755 COUN ;Y CLUB ROAD ® --FIC,~EWuOD, i:lIh...ESOTA 55331-8927 0 (952) 474=3236
FAX (952) 474-0128 ® Ujww.ci.shorewood.mn.us - cityha11@ci.shorewood.mn.us
MEMORANDUM
TO: Mayor and City Council
FROM: Brad Nielsen
DATE: 2 April 2009
RE: South Shore Senior Community Center - C.U.P. Issues
FILE NO. Property (5735 Country Chub Road)
In a 26 March memorandum to representatives of the LMCC, staff advised them that
the two most significant planning issues relative to the conditional use penllit would
be parking and physical alterations to the building or site. Without the infori-nation
required as part of the conditional use pen-nit application, we are unable to do a
complete C.U.P. analysis at this time. However, since these two plamling issues may
have some bearing on the negotiations for the property, it is worth examining them
sooner than later, even with limited information.
Parking. The subject property has virtually no parking of its own. There are two
spaces situated on the site itself. The Senior Community Center appears to have an
easement for additional parking on the Badger Park property and the Badger well
house property. The Center has historically shared 45 spaces with the park. The
original C.U.P. for the Center stipulated that they would coordinate events and rentals
of the center with football and hockey games in the park.
The Center building contains 7300 square feet of gross floor area. If the building
were used entirely as office space, it would require 33 parking spaces based on the
following formula: 7300 - 730 (10%) - 200 = 32.85 spaces. Depending on how
much of the building will be used for other uses than offices (e.g. studio,
extraordinary storage needs, etc.) that number may be reduced somewhat. It appears
however, that the City should be prepared to provide an easement or a long-term lease
of approximately 30 parking spaces. Any C.U.P. for the property should contain the
stipulation that events/meetings must be coordinated with park activities.
' PRINTED ON RECYCLED PAPER
Memorandum
Re: South Shore Senior Community Center C.U.P.
2 April 2009
Somewhat secondary, but related to the parking issue, is access. Although the Center
property fronts on County Road 19, its only practical access is through the City
Hall/Badger Field parking lot. This will also require some sort of easement and/or
long-term lease agreement between the City and the prospective buyer.
Garage. The LMCC requires a garage for parking their van. They have suggested
that the shed built by the former Friends of the South Shore Center may be suitable
for their use, but would likely require some modification. They have mentioned the
possibility of raising the roof, widening and lengthening the existing shed in order to
house their van. It is worth noting that the C.U.P. that allowed the Friends to locate
the shed on park property limited the length of the building to 20 feet so as to
minimize site alteration and so as not to interfere with the football field. The amount
of alteration suggested by LMCC would also necessitate a new slab for the building.
In light of these factors, it will likely be recornrnended that a new building should be
built (either attached or detached) on the Center property. There appears to room (as
much as 25 feet) at the southeast corner of the building.
Again, this review is not considered exhaustive, but it does address the major issues
associated with the proposed use of the property.
Cc: Brian Heck
Mary Tietj en
James Landini
Larry Brown
Bonnie Burton
Sally Koenecke
Tom Scanlon
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