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HomeMy WebLinkAbout1988-07-28 Park Board MinutesEDINA PARK BOARD SPECIAL MEETING 7:30 p.m. July 28, 1988 Edina City Hall MEMBERS PRESENT: Bob Christianson, Bill Lord, Jim Fee, Bill Jenkins, Don Wineberg, Mac Thayer, Itti Furlong MEMBERS ABSENT: Andrew Montgomery, Jean Rydell STAFF PRESENT: Bob Kojetin, John Valliere, Larry Thayer, Stacey Kness Mr. Christianson called the meeting to order at 7:35 p.m. I. CONSIDERATION OF BRAEMAR ARENA/PAVILION IMPROVEMENT Mr. Kojetin indicated Phase I of improvement is the refrigeration which is being worked on now. Phase II A is refurbishing of Braemar Pavilion including new walls and locker rooms. The pavilion would be the number one facility because it is more efficient to operate year round. Mr. Christianson asked if the pavilion would be operated all year and the arena closed down. Mr. Kojetin said that would be Larry Thayer's decision. Mr. Thayer said they would probably have the pavilion open twelve months and the arena open eight months. Mr. Kojetin indicated Phase II B is a commons building between the two facilities. This would be the main entrance to the facilities. Mr. Christianson asked if the grade level of the pavilion is the same as the present arena. Mr. Thayer said there is a total drop of one foot between the arena and pavilion and this would be ramped. Mr. Kojetin further explained the Phase II A and B bid information. (See "Braemar Arena Renovation Phase II") He explained the deductions of the masonry work on the outside of the east and west ends, lockers in the figure skating room, and the sound system. Mrs. Furlong asked if the masonry work is strictly cosmetic. Mr. Kojetin said yes, the insulation factor is on the inside. Mr. Kojetin went on to say the lockers could be done at a different time at a lower cost. We could probably get a lower bid for the sound system. The basic bid includes conduit so we can go back and add a different system. Mr. Lord asked what the original estimate was. Mr. Kojetin said for Phase I and II the original estimate was $1.5 million. 'We have had two to three guesstimates ranging from $1.6 million to $2 million. Mr. Lord asked what is the next step; will this go to the Council on Monday. Mr. Kojetin said yes, we discussed a little about the Council's comments. John Valliere and I have been working on this ourselves. We would like to go through this with you on some new ideas to let you look at how we should fund this project. From that John Valliere and I will go through the scenario with you on new thoughts. Mrs. Furlong asked do you look at if the contractors are good or not. Mr. Kojetin said we go with the low bid, but we are ending up with the same contractor as Phase I. Mr. Thayer said they are doing a good job. - 1 - Mr. Kojetin distributed a location map showing the existing Normandale Golf Course and explained why it is available for acquisition. He commented on Mr. Valliere's updated report (see "Normandale Golf Course Observations and Recommendations"). The question is "Is Normandale Golf Course still profitable?" The report proposes to upgrade the course by adding a sand and dirt mixture to the existing soil. In that we would look at a possible cost of $570,000. Mr. Kojetin asked what can we do? We have a good golf operation right now. We do not want this to deteriorate. Maybe what we have proposed is to lump the total Braemar operation together. In all essence we are taking money away from the golfers but we are not taking money away from the present golf operation. We are looking for some revenue facility to support other recreation operations. Maybe this Normandale operation can create some revenue for bonds. We need some more golf that would benefit the regulation 18 holes now. We can do a good job without the Normandale course, but it would be nice to offset some of the expenses. This would also give golfers an opportunity to have more golf. Let us take the revenue from the new nine hole, Normandale, Golf Dome, and total that up to use it. Golf is being used to pay for other activities. We really want to look at this facility as a facility within itself. We do not need a golf dome, nine hole course, or executive course, but this would be a nice, good amenity that we could have to satisfy more golf that we could reap some benefit to pay for other recreational activities. Mr. Christianson said maybe the existing Braemar operation and the funds that are generated would be dedicated to the present operation. So what you are proposing is a bond issue that would raise revenue that would pay for acquisition of Normandale, a new nine hole course, golf dome, arena, and the revenue generated by these four facilities would flow back and forth. Dollars that stay in this "account" would not be used by other activities. Mr. Wineberg said I am all for Normandale. Without considering the other facilities, this will be a ten year pay back. Mr. Jenkins asked if Normandale is being operated now. Mr. Valliere said yes, there is a new irrigation system and an upgraded clubhouse. Mr. Jenkins asked if anyone checked the numbers on the golf dome from last meeting. Mr. Kojetin said these are audited numbers, and we are still waiting for the independent appraiser's results. Mrs. Furlong said I see that the three golf entities earnings can be used anywhere. Mr. Valliere said Mr. Kojetin mentioned we do not need any more golf; I disagree. There is a demand. I have been placed in a difficult situation, and all I can do is report back to you. The people that use the facility feel what that they all enjoy and like might cause the present facility to go down hill if we get into other facilities. It might would be a very acceptable situation for these people to play golf on a new nine hole course. They are fearful that if we tie other areas of the park to it that we cannot keep up with the present course's needed improvements. Mr. Kojetin's proposal is palatable. Mrs. Furlong asked why is it palatable? Mr. Valliere said because the present Braemar golf earnings stay with the 18 hole Braemar. The new facilities' revenues will go to the arena. The golfers have a plus because they have nine new holes of golf, although those profits go elsewhere. - 2 - Mr. Kojetin distributed "Braemar Golf Course New Nine Hole Financial Projection". Mr. Jenkins asked how much money is reasonably available through a bond issue. Mr. Kojetin said the revenues is a way to back up the bond. Mr. Christianson said these are not general obligation bonds without a referendum. Mr. Wineberg said why do you need the other nine holes? Mr. Valliere said the Normandale course is not a real revenue generator, but it will meet its own costs and will service its own debt. But in the future it will make money. Mr. Wineberg said I think there is an advantage in a business to have a little bit of demand for it and not have places open that anyone can play any time. I am all for it, but I would reconsider getting into the nine holes at Braemar. I am not sure. Mr. Lord said the two courses are different. Mr. Valliere said the par three golf course generated 24,000 rounds and never went above that which raised $75,000 to $78,000 revenue. Now we have an executive course that is generating 35,000 rounds and about $175,000 revenue. Mr. Christianson asked if the new nine hole course would help with the league situation. Mr. Valliere said yes, if I had to choose between Normandale and the new nine hole, I would chose the new nine hole. Mr. Lord said if Mr. Rauenhorst will almost eve us the land, we should take it. Mr. Christianson said if for no other reason to run it by itself. Mr. Valliere said if you did that you could exceed the $60,000 and make the improvements later. Mr. Wineberg said yes, that is a good idea. Mr. Valliere said investments will stabilize the peat. Mrs. Furlong said is the $60,000 not real then in terms of money that may be available? Mr. Valliere said yes, but you have to pay the debt service of the improvements. Until the debt is paid off you would not have a lot of extra money. It is a wash for ten years and then there is a profit. Mr. Lord asked if we did not make the improvements now would we have the $60,000 right now. Mr. Valliere said yes. Mr. Christianson said isn't the major feeling that Council's position is "money is money" and it doesn't matter where it comes from. Mr. Lord said I am totally in approval of this deal. Mr. Wineberg asked if the dome is a profitable deal for us. Mr. Valliere said we are at the same place as Normandale--it is a profitable deal and more than likely its profits will grow. Mr. Wineberg asked why. Mr. Valliere said for two reasons: 1. better management, 2. inflationary costs of hitting balls. It is a $575,000 structure that has a debt service. You will not have much extra capital, but down the road if it is in your hand it will make you money. Mr. Christianson said if you were to build a golf dome today, what would it cost? Mr. Valliere said the figures I have checked were $350,000 - $400,000. The dome wouldn't be as high as the present dome and would not have artificial turf. Mr. Kojetin said artificial turf would cost about $100,000. Mr. Wineberg said if the skin lasts ten years, it is a bargain. Mr. Lord said I think Ken Rosland and John Valliere have to figure that out. Mr. Kojetin said Mr. Flanagan is doing a real estate appraisal on the building. Mr. Lord said a recommendation could be done on a side deal. If those figures are not accurate, it will not be a money maker. Mr. Christianson said it is not the accuracy of the figures but the cost if we were to buy it. - 3 - Mr. Lord asked Mr. Kojetin what he is looking for. Mr. Kojetin said we have to do some more work to put this together if we will have this for Monday. He wants to know if we are on the right track. Mr. Valliere and I are looking for some level of comfort. Mr. Fee asked if we have to tie this all in to get the arena approved. Mr. Wineberg said our immediate problem now is priorities. We need to support Larry and the arena. Mr. Kojetin said the council has approved Phase I. They have not given any direction to the staff how to pay for it. They said continue with the architectural drawings of Phase II A and B and bring it back. At that time they would make a decision. One thing discussed was the cost ($108,000) of the architectural fees. The Council said they know but they still want the information. Mr. Christianson said maybe we should go around the table and state our opinions. Mr. Jenkins said I go back to our meeting two months ago. We should go with Braemar new nine hole and golf dome given those figures are right. The improvements will sustain the revenue bond and give us some profit ten years from now. I have a reservation: We are all in this together but the same time those funds should be able to be utilized for other things to fund other projects. Mrs. Furlong asked why would the golfers fear that the clubhouse would go down? That is not the way we do things. If you are keeping a first class facility, we do not let it get down. I have never seen big dollars put into the community and not taken care of. Is there any history that causes them to feel this way? Mr. Christianson said I do not think there is any past history that a nice facility is built and they fail to maintain it. Mr. Lord said I am 100 percent behind the arena construction Phase I and II, and knowing some of the thoughts of other council people, I think we should aggressively pursue the new nine hole course, golf dome, and purchase of Normandale. I think we should move ahead very aggressively. As far as paying for it, maybe we can come up with some percentage ratio for Braemar's present facility and some for the Arena's needs. Mr. Jenkins asked what amount of revenue does the golf course generate now. Mr. Valliere said there is a sizable amount of improvement being paid for right now since the new clubhouse was built. We would not be facing the problems we are facing now if we had a fund set aside. I have fears that something else will break and you will come running to the best source of revenue. Mrs. Furlong asked if there is money in the capital budget for these improvements. Mr. Valliere said yes, but are we keeping abreast? Mrs. Furlong said they would make more sense to me to beef up the capital. Mr. Valliere said I do not want to pay for things twice. These are my fears and the golfers' fears. I would like to have that fund set aside now. Mr. Fee said he is in agreement with the overall project. He has no problem with segregating the funds. The golf dome should be looked at closely. I like it in the package. The new nine hole should be even better than the expected revenues. - 4 - Mr. Mac Thayer is in agreement with the total program. The only area he is uncomfortable with is the fair market value of the golf dome. Mrs. Furlong said as far as I am concerted we should do pretty much what Mr. Lord said --aggressively pursue it now. I think it is only responsible to tie the revenue to the expenditures. I do not think the majority will like this piecemeal funding. I would rather trade that off rather than blow the whole deal. It seems like more game playing to take care of a real basic problem. If capital improvements are not taken care of in our budget, we will always be faced with this problem. I am not sure that we should do this monkey business to talk plainly about it. Does the council have theoretical objections to more golf? Mr. Jenkins said they want to know where the funds are coming from. Mr. Christianson said it has to be part of our consideration. Mr. Wineberg said I go along with Larry Thayer and John Valliere. Normandale should be acquired without the improvements and make a sinking fund at Braemar. Mr. Christianson said I think the pavilion is the number one priority. The second priority is to go over and talk to the Rauenhorst people. We would be crazy not to go with it. I don't think we should do the improvements right now. I think the new nine hole course at Braemar is a necessity. The golf dome should be researched in terms of price, advantage, inherent cost, etc. Overall I would much rather see the three new golf facilities and the arena as a package with the revenue generated from them dedicated to them. I think that some type of fund be developed and generated by the existing golf facility, so if something goes wrong they would have the money to fix it. I think we are in a new era and we have some big expenditures and we have to pay for them and then preserve them. Mrs. Furlong said in the revenue part of it do you need all the revenue to take care of it or could it be spread over a long period of time? Mr. Kojetin said I think we can balance the budget on the operation but we cannot generate enough funds to pay for the bonds. We are trying to pay for the bonds from these three facilities. Mrs. Furlong said who deems the length of the bonds? Mr. Kojetin said that is generally decided by the finance department. All park Board members are in agreement with not improving Normandale Golf Course at this time. Mr. Kojetin said the 3.5 million would also include a new executive clubhouse and a new parking lot. Mr. Fee asked what is the golf course net? Mr. Valliere said $88,000 after operations. Mr. Christianson said some improvement are Braemar improvement and they should be expected to pay for those. Mr. Wineberg said you are in a community that has facilities. Some facilities make money, others do not. Mr. Christianson asked what if we did not do Phase II B. Mr. Thayer said as long as we are upgrading, I would like to get back in the market. To go with the $300,000 is the way to go to get a premier facility. Mr. Christianson asked if it will generate revenue? Mr. Thayer said possibly with a meeting room rental. Mr. Christianson said the ice sheets will rent if you have a commons or not. Mr. Kojetin said the Edina Hockey Association and the Braemar City of Lakes - 5 - Figure Skating Association said they will donate funds each year. Mr. Thayer said the EHA had discussed a per player surcharge of $15 so if their numbers increase, their donation increases. Mrs. Furlong asked if they are enthusiastic about Phase II B? Mr. Thayer said absolutely. Mr. Kojetin said another thing is our general operating budget and capital improvements. In 1989, there is $20,000 for capital improvement, 1990 has $50,000 for a resurfaces, 1991 has $73,000 for new floor in pavilion, and 1992 $100,000 to the pavilion. This will be eliminated by doing Phase II A and B and we could take the capital dollars to offset the bonds each year. Mr. Thayer said we have to be careful about shorting the main arena. Mr. Christianson asked what happens if we say go ahead and do the Braemar pavilion. Mr. Valliere said why hasn't the council funded the arena from some source of funding. Mr. Thayer said I am confident with two arena facilities we can generate enough money to stay in the black and probably more so than we have before. I am confident that as fees go up and we can stay open eight months instead of five and a half months, we will generate more revenue. Mr. Kojetin said Mr. Valliere and I feel much more comfortable with this proposal than we did about the original one. Mr. Jenkins asked why you are more comfortable now --this one is more money. Mr. Kojetin said I am thinking about the funding and knowing it will go back to the arena. Mr. Valliere said I think that we might be short of memory if we do not remember the meeting at Arneson Acres. The golfing public is very sensitive of where the funds are going. When you say is this a harmonious proposal, I would have to say "no". Mr. Jenkins said we should keep in mind that 2 million is going back to the golf course. Mr. Valliere said but look who really pays for it --the golfers. Mr. Lord said what other facilities do we generate from? Mr. Kojetin said water and liquor stores. Jim Fee MOVED THAT THE PARK BOARD APPROVE PHASE II A AND B OF THE BRAEMAR PAVILION PROJECT AND THAT WE ALSO APPROVE AS AN OFFSET TO THE EXPENSE THE GOLF PROJECT THAT WOULD INCLUDE NINE HOLES AT BRAEMAR, LOOKING INTO THE POSSIBILITY OF PURCHASING THE GOLF DOME, AND LOOKING INTO THE PURCHASE OF NORMANDALE FROM OPUS. THE PROFITS FROM THE ABOVE GOLF FACILITIES ARE TO OFFSET THE EXPENSE GENERATED BY THE PAVILION PROJECT. Bill Jenkins seconded the motion. MOTION CARRIED UNANIMOUSLY. Bill Lord MOVED THAT THE REVENUES GENERATED BY THE EXISTING BRAEMAR GOLF COURSE FACILITY EXCLUDING THE NEW NINE -HOLE REMAIN WITHIN THAT FACILITY'S BUDGET IF AT ALL POSSIBLE. Mac Thayer seconded the motion. MOTION CARRIED. Mrs. Furlong opposed the motion. I think I understand what you are saying, Mr. Valliere, and I accept what you are saying, but I think the problems you are having go beyond Braemar. It seems to me that we are fighting the wrong battle. I believe it is a general pot because you do not know what is around the corner tomorrow. I voted against the motion to bring up the other issue that I think they should be addressed in some way which is the funding of capital improvements. Mr. Christianson concurs with Mrs. Furlong and thinks the capital funding should be addressed by someone. Mr. Fee said I think the motion will tell the council something. II. ADJOURNMENT Bill Lord MOVED TO ADJOURN AT 9:30 P.M. Jim Fee seconded the motion. MOTION CARRIED. ITEMS FOR COUNCIL APPROVAL: Jim Fee MOVED THAT THE PARK BOARD APPROVE PHASE II A AND B OF THE BRAEMAR PAVILION PROJECT AND THAT WE ALSO APPROVE AS AN OFFSET TO THE EXPENSE THE GOLF PROJECT THAT WOULD INCLUDE NINE HOLES AT BRAEMAR, LOOKING INTO THE POSSIBILITY OF PURCHASING THE GOLF DOME, AND LOOKING INTO THE PURCHASE OF NORMANDALE FROM OPUS. THE PROFITS FROM THE ABOVE GOLF FACILITIES ARE TO OFFSET THE EXPENSE GENERATED BY THE PAVILION PROJECT. Bill Jenkins seconded the motion. MOTION CARRIED UNANIMOUSLY. Bill Lord MOVED THAT THE REVENUES GENERATED BY THE EXISTING BRAEMAR GOLF COURSE FACILITY EXCLUDING THE NEW NINE -HOLE REMAIN WITHIN THAT FACILITY'S BUDGET IF AT ALL POSSIBLE. Mac Thayer seconded the motion. MOTION CARRIED. - 7 -