Loading...
HomeMy WebLinkAbout1983-03-22 Council minutesCOMPLETE DESCRIPTION OF COUNCIL ACTIVITIES MARCH 22, 1983 Iowa City Council, special meeting, March 22, 1983, 7:00 P.M. in the Council Chambers of the Civic Center. Mayor Neuhauser presiding. Councilmembers present: Balmer, Erdahl, McDonald, Neuhauser, Perret. Absent: Dickson, Lynch. Staffinembers present: Berlin, Helling, Jansen, Karr. Tape recorded on Tape 83-2, Side 2, 1043-1065. Moved by Perret, seconded by McDonald, that the ORDINANCE REZONING THE ENTIRE R3A AREA OF MANVILLE HEIGHTS TO RNC -20, be considered and given second vote for passage. Affirmative roll call vote unanimous, 5/0, Dickson and Lynch absent. The Mayor declared the motion carried. Moved by Balmer, seconded by Perret, to adopt RES. 83-65, Bk. 76, p. 174, SETTING A PUBLIC HEARING FOR 3/29/83, AT 7:30 P. M., ON THE BUDGET ESTIMATE FOR THE FISCAL YEAR JULY 1, 1983, THROUGH JUNE 30, 1984, to separate out the Transit Levy portion, putting it into the General Fund and then transferring it into the special levy. Affirmative roll call vote unanimous, 5/0, Dickson and Lynch absent. The Mayor declared the motion carried. Moved by Balmer, seconded by Perret, to adjourn to informal session, 7:05. The Mayor declared the motion carried unanimously, 5/0, Dickson and Lynch absent. YI/l�.l C. 'Ut4l1QlCuladtJ� MARY C. EUHAUSER, MAYOR ATTEST: 77b,9.,pd � _)K4 MARIAN K. KARR, ACTING CTIY CLERK MICROFILMED BY J _J JORNA -'MICR( ["AB'- CEDAR RAPIDS DES 1401 NES � A I I Informal Council Meeting March 21, 1983 4:30 p.m. Informal Conference Meeting: March 21, 1983, 4:30 p.m. in the Conference Room at the Civic Center. Mayor Mary Neuhauser presiding. Councilmembers Present: Balmer, Dickson, Erdahl, McDonald, Neuhauser, Perret. Absent: Lynch. Staffinembers Present: Helling, Karr, Schmadeke, Brachtel. Tape Recorded: Reel 83-5, Side 1, 1-1035. FY84 Operating Budget j Neuhauser noted that a second public hearing needs to be scheduled during the Special Meeting, March 22, 1983. A memo was received from R. Vitosh j regarding this matter. Agenda i I 1. Convention Burma Task Force Recommendations (Renee Jedlicka, Sheila Boyd Council members reviewed the recommendations from the Iowa j City/Coralville Convention Bureau Task Force. Questions were raised about the budget. Jedlicka stated that a base expenses (travel, i meals, lodging) figure of $200 is assumed for the bureau salesperson who will travel throughout the Midwest. Additional funding could be necessary in this area. The trade show expense covers only both rental. When at a trade show, sales calls would also be made to bus tour companies, convention site selection committees, and local organizations. At the Bureau's recommendations, Jedlicka belongs to the International Association of Convention Bureaus which requires 1 attendance at 2-3 meetings each year. Balmer noted that the Bureau recommendations to the Council are based on making it a viable Convention Bureau, able to attract visitors and money to Iowa City and Coralville. Most of the travel will be done by the proposed Sales Director. Salaries for Director in Waterloo, Cedar Rapids and Des Moines are in the $30,000 to $40,000 range. Conventions are generally bid two years in advance. The proposed bylaws will be reviewed by the Iowa City and Coralville City Attorneys. Brochures are a top priority. A visitor guide, a convention packet and free giveaways all are needed. The $250/month rent figure was submitted by the Iowa City Chamber of Commerce. Presentations to outside groups can be done at the Chamber office or possibly in bank board rooms. If the motal tax provides less funding, cuts would be made in promotion, trade shows, and travel but there is confidence that funding estimates are conservative. The Bureau's Board of Directors i will decide how to bid out operating expense budget items. The j billboard allowance covers existing billboards along the Interstate in Coralville. Although the travel budget looks high, it can be optimized by using the time in an area well through making contacts. Membership in the Convention Bureau is not dependent on Chamber of L , 141CROFILlIED BY I_ l -"JORM MICR6LAB` J -� J L j LE DAR RAPIDS • DES MOINES � � T —'1 f i Commerce membership. It was noted that the City should replace the black and gold Welcome Signs donated by Project GREEN. Street Lighting, Him 1 West and Sunset Street This intersection needs lighting, preferably before the end of the construction period. Pole delivery would take 12-20 weeks. Poles haven't been ordered and the conduit hasn't been installed. The lighting alerts drivers that it is a major intersection, particularly for drivers coming from the south at higher speeds. Cost of lighting is estimated at $6800. DOT suggests that lighting be on the wings of the roads for safety reasons. Either Road Use Tax or CIP could fund the lighting. Council agreed to go ahead with the lighting. Councilmember Balmer left the meeting. _.. Executive Session Moved by Perret, seconded by Dickson, to adjourn to executive session under Sec. 28A.5.f. to evaluate the professional competency of an individual whose appointment, hiring, performance or discharge is being considered when necessary to prevent needless and irreparable injury to that individual's reputation and that individual requests a closed session (City Clerk hiring). The Mayor declared the motion carried unanimously, 5/0, Balmer and Lynch absent. Acting Clerk Karr left the room. Human Relations Director present for discussion. Council returned to open session. The Mayor announced that the City Clerk will be treated as an administrative employee with an annual salary of $22,145 effective July 1. The City Clerk will receive city employee benefits and will be allowed to receive professional training through national and state city clerks' meetings each year. The clerk will be provided with a parking sticker when required to attend council meetings lasting past 5:00 p.m. Functions of City Clerk 1. Informal minutes (discussed in March 2 memo). Karr reviewed the costs of minute taking, as noted in the March 2 memo. The person who does the minutes needs to go to the informal meetings in order to do an efficient job. Cedar Rapids and Des Moines do very brief minutes. Iowa City stores minutes longer than the statutory five years. Erdahl noted the importance of having the City Clerk attend the informal meetings in addition to the minute taker which would still liberate the clerk from having to write them out the next day. Having a separate minute taker allows the City Clerk some flexibility in attending informal meetings. Neuhauser, Erdahl and Dickson all indicated a preference for shorter informal meeting minutes while Perret spoke in favor of more detailed minutes in order that the public can understand the decision making process. Student groups and property owners frequently request informal minutes and the minutes are sent out to about fifty addresses. It is inconvenient when someone wants to come in and listen to a tape because of space and time limitations. The Council agreed the City Clerk can rte_. _.. ...-__.__....... .._.. ._.__._..._. i MICROFILMED BY I 'JORM-'MICROLAB I i CEDAR RAPIDS DES MOINES 3 experiment with the form of the minutes and the Council will provide feedback about the most appropriate style. 2. Recordkeeping. Other communities (Cedar Rapids and Waterloo) keep files on unfinished -ongoing projects in the City Clerk's office. Once the project is done the file goes to a storage area such as an archive or engineer's office. Indexing of some sort is provided. Microfilming is limited now because of lack of equipment. Computer and microfiche systems are also considerations. Overall, a compre- hensive system that would work for Iowa City will be researched with input from other cities and state archives. At the National Meeting in May there will be information on recordkeeping. The City Clerk, will report on her findings in June. 3. Deputy Clerk. The Deputy Clerk's job description will not need to be changed. Someone will need to be hired by May. Phone calls and referrals have increased and many callers use the Clerk's office as a general information number. Also because of the location of the Clerk's office in the Civic Center, it encourages people to stop there first with their questions. Karr stated taht cemetary deeds, peddler's licenses, mobile home parks, beer, liquor and cigarette licenses are handled by the Clerk's office. She also noted that cable TV files and subdivisions are filed in the office. Council Time 1. The Tuesday, March 22, Special Informal Council meeting will cover the new hotel. 2. Helling stated that repairs are being made of vandalism in parking ramps and more vandal -proof materials are being used. Vandalism is primarily occurring on the second floor in the early evening and again after the bars close. Permit holders will be directed to the upper floors to encourage traffic where vandalism occurs. A parking report is forthcoming from the City Manager. 3. Pending List Revision. Councilmembers and the City Manager will give input to Neuhauser about revising the pending list. Meeting adjourned at 6:40. MICROFILMED BY ' 1" "JORM- "MICR6LA9- CEDAR RAPIDS • DES MOINES J Jl r -az INFORMAL CITY COUNCIL MEETING AND HOTEL/DEPARTMENT STORE COORDINATING COMMITTEE MARCH 22, 1983 7:05 PM Informal City Council meeting: March 22, 1983, 7:05 PM in the Conference Room at the Civic Center. Mayor Neuhauser presiding. Councilmembers Present: Balmer, Neuhauser, Dickson, Perret, Erdahl, McDonald. Absent: Lynch. Staff Present: Berlin, Helling, Karr, Hauer, Hayek Others Present: Zuchelli, Flynn, (City's Urban Renewal Consultants); Beck, Prietzel (representing the hotel developer); and members of Design Review Committee (Sieberling, Amert, Wegman, Wockenfuss) and members of the public and press. Tape Recorded: Reel N83-4, Side 1, 1516 -end, Side 2, 1-342. MEETING: Neuhauser expressed urgency in putting together the Urban Development Action Grant (UDAG) to build the downtown Iowa City hotel. Issues will be covered in detail to answer all questions. Zuchelli will review the UDAG process in detail. The City Manager noted that the meeting should accomplish: 1) an update for everyone on the status of the preliminary plans for the hotel; 2) an outline on the current financial arrangements for the UDAG application and the City's obligation; and 3) assurances that there are no major problems from the Council's perspective with plans on the status of the negotiations. SLIDE PRESENTATION: Hauer presented a slide show of the Hilton hotel owned by the developer in Minneapolis. The following pictures/slides were shown: 1. Minneapolis Hilton Hotel 2. Hilton Hotel and Greenhouse Restaurant 3. Inside Hotel -Lobby 4. Hotel Lobby 5. Hotel -Anchorage Restaurant 6. Hotel -Anchorage Restaurant 7. Greenhouse Restaurant 8. Hotel Conference Room 9. Hotel Laundry Area 10. Hotel Kitchen 11. Hotel Pool 12. Pool and Sauna 13. Hotel Room 14, Hotel Room 15. Holiday Inn f i MICROFILMED BY i -JORM-MICR4IL-AEI_ CEDAR RAPIDS DES MOINES � f i �l 4 Council Activities March 22, 1983 Page 2 16. Another UDAG Funded Project REVIEW OF PLANS: Gene Prietzel of Vernon Beck and Associates reviewed current hotel plans. The first floor is similar to the original Zuchelli plan with the public area on the north side of the building with the parking ramp on the southeast corner. The first level will include a formal restaurant, lounge, a greenhouse restaurant, and hotel lobby and offices. There is also about 1200 square feet of rental are for small shops available on this level. i Erdahl expressed concern there wasn't sufficient access for the high level of foot traffic using the public lobby area. The original concept was for a wide walkthrough in order not to reduce pedestrian traffic. Prietzel stated the hotel customers would not be using the same access. In order to avoid a wind tunnel effect, doors need to be provided for at each entrance. Erdahl noted the pairs of doors at the south entrance restricted the pedestrian traffic. Berlin commented that these plans, are still being revised to allow for a more open access. Zuchelli stated that had been a number of changes from the original 1 design because: 1. The original Zuchelli plan made the restaurant too internalized for the hotel, limiting the accessibility of the non -hotel diner. The new design j makes the dining area more open; 2. The property owners south of the hotel were directly in the path of the j receiving area and refuse disposal area. These functions have been effectively hidden away with a new location next to the parking ramp. 3. The current design provides better security between office functions, cashiers, elevators as well as providing a sense of arrival into the hotel lobby. The office next to the south entrance can be reduced in size to increase the south walkthrough entrance. i Erdahl asked if people will really feel at ease using the walkthrough; will they feel they are 'cutting through' the hotel? Zuchelli reiterated that it must be an inviting publicly -accessible enclosed area. Prietzel stressed that without doors, the wind tunnel effect would make the passage -way uncomfortable for everyone. i Ernie Lehman stated the parking ramp adjacent to the Old Capitol Center has not created excess foot traffic through the joining doors. Erdahl responded there would be a much higher level of foot traffic through the hotel. In response to a question by Balmer, Berlin stated the hotel lobby area is a large space and that Zuchelli will address its use later in the meeting. Prietzel noted the second floor meeting rooms could be used individually or the partition could be removed to increase the size of the rooms. The large meeting rooms will accommodate a total of 500 people at round dining tables and up to 750 people seated theater -style. The smallest rooms hold 30 people each and the medium rooms 40-50. The second floor kitchen which could be served by the first i MICROFILMED BY . JORM.."-MICR6CAe1' I CEDAR RAPIDS DES MOINES i Council Activities March 22, 1983 Page 3 floor kitchen or used independently is located next to the meeting room. Serving lanes are provided for all rooms. The second floor has a glass wall opening onto City Plaza and is accessible to the parking ramp via an enclosed bridge. The third floor will have the swimming pool and a tiered pool deck. The area will be glass -enclosed overlooking the roof of the lobby greenhouse restaurant. There are no design problems with having a swimming pool on the third floor. A typical floor layout plan includes suites, junior suites, and hotel rooms with a total of 30 rooms per floor. Some of the rooms will be adjoining rooms for a total of 208 rooms (including the 28 pool -level rooms). The first floor docking facility is accessible via an alley from Linn Street next to the ramp. Berlin noted this plan has positive impact on the development of Parcel 64-1a. The laundry is currently located in the basement; there is some consideration being a mezzanine rental area on the first floor since the �ceil� ceilings that area are v19 feet highel above • The space vacated by the original location for docking space (on the southwest corner of the parcel) will be green area. Perret expressed concern with the appearance of the driveway canopy on the I southwest corner of the hotel. Prietzel noted the current drawing is little I more than a rough sketch and the developer also wants a pleasing drive -up access with sufficient room for two cars to drive through side-by-side. Erdahl noted there will not only be hotel traffic but also bank and parking ramp traffic. Prietzel responded it was part of the challenge of working with the space available. In response to a question, Prietzel said the swimming pool canopy will be designed to prevent problems with weather (snow, rain) and falling objects. The deck area can be used for receptions, particularly in the winter. i UDAG APPLICATION (Zuchelli): The UDAG program came in effect at the end of the Ford administration and was implemented under Carter. The program is funded at a current level of $440 million per year and it is appropriated and passed in the current budget. The purpose of the UDAG program is to stimulate economic development and job activities by private enterprise. It is directed toward central cities with economic problems. The federal government makes a UDAG grant to a city after it shows it has a development project that is not economically feasible except with a UDAG. The grant is loaned to the development project under loan terms that are negotiated prior to making the grant to the city. This program is not a windfall profit to private enterprise, but rather a mortgage mechanism to insure that a project can happen which would otherwise not occur. This project is scheduled to cost approximately $16.7 million including land cost. However, that price will be adjusted as the design work is completed. Zuchelli met with the developers in an effort to pare $1 million off the hard costs of the building and an additional $1 million of soft costs (such as i MICROFILVED BY DORM --MIC R(JLA B'- -_.l .� \..-,... CEDAR RAPIDS DES MOI4E5 j r !r � C 1 . I - 1 Council Activities 1 March 22, 1983 Page 4 interim financing, developer fees, and legal fees) in order to bring the actual cost down to $15-$16 million, The average room rate will start in the the mid - $40 range. This project will be financed with a combination of Industrial Revenue Bonds (IRBs), a UDAG, and developer equity. With a UDAG, the total project cost is permitted up to a maximum to go from $20 million, but a cap of $10 million is set by the IRS for INS. Based on a reasonable rate of return derived from investment tax benefit credits, decreased interest rates from the IRBs, etc., a developer could support a personal equity investment of about $3.2 million. This leaves a gap of $3.5 million in financing; that is the amount tentatively asked for from UDAG. The Iowa City UDAG application must compete against all other hotel projects in the country proposed to HUD in the April 30th round of applications. This project must show that the benefits of this hotel to Iowa City is greater than j the benefits of the other hotels to the other cities. CRITERIA: j 1. Leverage is essentially the ratio of UDAG funds to private funds. The ratio can generally range from 1:2.5 to 1:6 with the average being 1:4 (one r UDAG dollar to every 4 private dollars spent). The 1:4 ratio would indicate a $3.3 million UDAG grant is in the middle of the leverage range. E 2. Jobs. The number of permanent jobs generated by this project (206) to the ! total grant request will be compared to the national average of $10,000 per job. The Iowa City average ($15,500/job) is above the national average and means that the City will have to defend its position in this regard. 3. Recapture is the most imporant criteria. Recapture defines the terms on which the City will get back the UDAG loan and is where Iowa City will compare very well. Zuchelli proposed City loan its UDAG to the developer as a second mortgage (which will be subordinate to the primary loan of the IRB bonds). The first mortgage, estimated at approximately a 10% interest rate wi11 be amortized over a 25 year period with a ten year call (when the outstanding principal comes due). There has never been an example of a UDAG mortgage with a longer call period than the primary mortgage so the UDAG mortgage will be 8% interest, 25 year amortization with a ten year call. (The object of UDAG is to assist the project in its early years so the second mortgage should have a somewhat lower interest rate than the first mortgage.) The UDAG money will be loaned to the developer at zero percent interest during construction with the principal and interest forgiven during years one and two of the project. Thus, for 39 months the developer gets the use of the money at no cost. In years three and four, there would be a deferment clause which says if there is cashflow after meeting operating expenses (as defined in the contract) and IRB debt service payments, then F the developer must pay 8% interest to the extent that funds are available. If there is $15,000 left after payment of the first mortgage, then the City would get $15,000. The balance between $15,000 and the full UDAG payment of $280,000/annually would be deferred until the tenth year when the tali i MICROFIL14ED BY -DORM--MICR6LA9- - -� CEDAR RAPIDS DES MOINES 1 r A Council Activities March 22, 1983 Page 5 is placed. In year five, the developer must pay the principal and interest even if it means refinancing or the City can foreclose on the property. There is no interest on the deferred interest. In the long term, the City receives money at no cost from the federal government and receives interest on the money until it all comes back to the City for its own use. If the developer refinances the project at the end of five years, the developer will then pay off the IRB and UDAG. If money is left over, the developer must pay the City the original $3.5 million from the UDAG, any deferred monies, plus $1.5 million. The $1.5 million payment is a "reward" to the City because of its help in the early years. What this means on recapture is that (in no later than ten years) the City will get back $3.5 million plus $250,000 per year (if the hotel is successful) to put into community development every year for the next ten years. If the hotel is sold for a profit in the next ten years, the City gets up to an extra $1.5 million over the UDAG loan. The City Council must have a public hearing, approve the application, and submit it to HUD by April 30th. The federal government has mandated to Congress to do one of three things: 1) fund us, 2) reject us, or 3) retain the application for the next quarter, within 45 days. Neuhauser asked about the concept of public sector financial participation. Zuchelli responded the idea of UDAG is not to force the local jurisdiction to spend additional money. The more local/state funds that are spent, the weaker the application becomes. The amount of leveraging that UDAG funds perform is considered against all funds spent at the development, including City money. In this design plan, the public easement through a site is a complex issue. The cost to create and maintain the public area implies a land disposition agreement which requires the area be open 24 hours a day, details what activities can take place there, and defines which party (in this case, the hotel developer) is responsible for building and maintaining it. The square footage of the public area and its dollar value will be defined. An arbitrary decision has been made that 50% of the accrued value of the open space is allocated to the hotel and 50% to the general public. A maintenance figure will be obtained for this space which will be deducted from the UDAG repayment. Thus, the City's general fund will never be assessed to maintain the public easement through the hotel. There would be no payment to the hotel for the easement in the years in which UDAG repayments are deferred. At the end of the ten years, the City would retain its easement but have no further responsibility for maintenance or replacement. The Council will be voting to approve the maintenance terms with the UDAG application. The City Manager suggested investing a portion of the UDAG repayment in an endowment that would be dedicated to the maintenance of City Plaza. This concept might aid the acquisition of UDAG funds because in other communities after a project is completed,'the rest of the downtown area often continues to deteriorate. Other possibilities for using the repaid loan include cultural activities, industrial development activities and community related activities. A participation clause will be included in the contract. It will be based on the net operating income after expenses is distributed first to the IRB annual debt i MCROTILMED BY ,..._.. 1 JORM MIC RGICA B�� CEDAR RAPIDS • DES MO19E5 i Council Activities March 22, 1983 Page 6 service ($1.08 million) and the UDAG repayment ($280,000). If there is still money left, the developer will receive a deferred rate of return of about 13.5% against his equity of $3.2 million. Then, if there is still cash left, it will be split between the City and the developer. The initial proposal is for 15% to be allocated to City and 85% to the developer, but at the final UDAG contract negotiations. HUD may press for a split closer to 50% for each side. In summary, UDAG funds will return to Iowa City from debt service, the participation clause and any resale/refinance profit. This method is better than receiving equity in the project because in an equity situation, the City would be liable for losses incurred by the hotel. In the participation method, the developer takes all the negative risk. The federal government will tend to view the $3.5 million UDAG money as equivalent to the City's equity and because the developer only has $3.2 million equity, they will probably press for a more equal split of profits in the participation phase. Although the City is the recipient of the grant, most negotiations with the government will take place between the central office 'and developer with minimal City involvement. Zuchelli will be directly involved in this aspect of the UDAG application. A negative performance by the hotel is anticipated in the first three years and is the reason for the escrow account. If the developer defaults the first mortgage and the lender takes title, the City might not recover its $3.5 million depending on the refinancing package. If after year five, the developer defaults on the payments to the City, the City can foreclose. Since the City doesn't want to be in the hotel business, it makes sense that the City will do everything possible to assure the hotel's success. Although the first lender isn't actually one entity, a lead bank will oversee the lender's interest. Also, even though the City might well have the single largest investment as any other single institution, the City does give up some control but doesn't give up its interest as lender. The 206 jobs estimated to be available after construction is completed are in addition to the estimated 120,000 person hours of construction work. PARKING: The hotel must have access to the equivalent of one parking space per occupied room per night plus restaurant and lounge parking. Zuchelli recommends the hotel pay a flat rate of $8000 per quarter and that any increase in rates be tied to. a corresponding increase in public parking rates so in future years, an unfriendly council couldn't price the hotel out of the parking ramp. If the occupancy of the ramp reaches a certain occupancy level and the hotel also reaches a certain occupancy level, the City will be legally responsible to fund and build the additional levels on the parking ramp. At that time, the quarterly parking payment will be renegotiated. The $8000 figure is generally in the range of previous projections for revenue from hotel use. The developer proposes to implement it in a stepped manner starting with $4000/quarter the first year, $6000/quarter the second year, and $8000/quarter the third and each succeeding year. The hotel manager would have to communicate with the parking ramp manager to assure enough spaces be reserved for hotel use because a registered guest would be entitled to a parking space under the proposal. The guest would not have to pay for the space as it would be included in the room rate. i MICROFILMED BY - 1 1 - 'JORM ""MIC RfSLAB- - -_l % CEDAR RAPIDS DES MOINES J Council Activities March 22, 1983 Page 7 The service alley will be built by the City. The developer has to sell the $10 million of IRBs before the UDAG money will be available. The IRB funds only need to be guaranteed but not necessarily in hard. Berlin stated a schedule will be prepared for the complete application. Each Council member expressed satisfaction with the presentation and readiness to proceed. The City Manager stated the Coordinating Committee will meet as additional design information becomes available. It will be noted that the Design Review Committee has worked to facilitate the project. The architect, Ed Kinney, will bring revised plans to the Design Review Committee for their approval. The meeting adjourned at 8:45 PM. i MICROFILMED BY f J_ I " JORM--MICR?JLAB- CEDAR RAPIDS DES MOINES . .. i i i i . ..