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Home My WebLink About2003-09-11 Info Packet~ CITY COUNCIL INFORMATION PACKET CITY OF IOWA CITY September 11, 2003 www.icgov.org IP1 City Council Meeting Schedule and Work Session Agendas IP2 Memorandum from City Clerk: Meeting Schedule through December IP3 Memorandum from Senior Housing Inspector: Change to Inspection Procedures IP4 Building Permit Information - August 2003 IP5 Iowa City Police Department Use of Force Report - August 2003 IP6 Agenda: September 18 Economic Development Committee IP7 Iowa City Airport Business Plan (Airport Business Solutions) '~-' Meeting r~ city Council Schedule and September C~T¥ OF ~Ow^ C~T~ Work Session Agendas www.icgov.org TENTATIVE FUTURE MEETINGS AND AGENDAS · MONDAY, SEPTEMBER 22 EmmaJ. HarvatHall 5:30p Special Council Work Session · TUESDAY, SEPTEMBER 23 Emma J. HarvatHall 7:00p Special Council Formal Meeting · MONDAY, OCTOBER 13 Emma J. Harvat Hall 6:30p Special Council Work Session · TUESDAY, OCTOBER 14 Emma J. Harvat Hall 7:00p Special Council Formal Meeting · WEDNESDAY, OCTOBER 15 North Liberty 4:00p Special Council Work Session Joint Meeting: lC Schools, JC Board of Supervisors, Cities of Coralville and North Liberty · MONDAY, OCTOBER 27 Emma J. Harvat Hall 6:30p Special Council Work Session · TUESDAY, OCTOBER 28 Emma J. Harvat Hall 7:00p Special Council Formal Meeting · MONDAY, NOVEMBER '10 Emma J. HarvatHall TBA Special Council Work Session 7:00p Special Formal Council Meeting · TUESDAY, NOVEMBER 11 Emma J. Harvat Hall Veterans' Day Holiday - City Offices Closed Meeting dates/times/topics subject to change FUTURE WORK SESSION ITEMS Regulation of Downtown Dumpsters Downtown Historic Preservation Historic Preservation Stormwater Utility Airport Business Plan City of Iowa City MEMORANDUM DATE: September 10, 2003 TO: Mayor and City Council FROM: Marian K. Kart, City Clerk I RE: Meeting schedule through December At your September 8 & 9 meetings the following meeting schedule was agreed upon for the remainder of the 2003 year: September 22 - Special Work Session September 23 - Special Formal October 13 - Special Work Session October 14 - Special Formal October 27 - Special Work Session October 28 ~ Special Formal November 10 - Combined Special Work Session and Special Formal (TBA) November 24 - Special Work Session November 25 - Special Formal December 15 - Regular Work Session December 16 - Regular Formal Tentative schedule subject to change. Special meetings called as necessary. U/03revision IP3 MEMORANDUM To: City Council From: Norm Cate, Senior Housing Inspector Date: September 4, 2003 Re: Change to inspection procedures The demand for inspection services has been increasing due to neighborhood code enforcement expectations, continuing expansion of the rental housing market and enforcement of newly adopted ordinances. In addition, without increasing staff to meet this growing demand, the current service level will be impossible to maintain. Operational change~ must be considered. The following four operational changes would be undertaken on a trial basis. HIS will evaluate each operational change at the end of one year to determine whether or not to continue with the change. While these changes may potentially pose some risk to tenants and the quality of the community's housing stock, we believe these changes minimize that risk with safe and well-maintained property while continuing with current inspection procedures on poorly maintained property. 1. SELF-CERTIFICATION OF OWNER-OCCUPIED UNITS WITHIN RENTAL STRUCTURES (a) Current Practice The practice for inspections of owner-occupied units within a structure requiring a rental permit is to enter the unit and inspect only the fire/life-safety components of the unit. Routine maintenance items within the unit are not cited. (b) Operational Change For owner-occupied units in multi-family buildings with rentals built after May l0th, 1989, and all owner- occupied townhouse style structures, HIS proposes to eliminate the practice of entering the unit. Owners of owner-occupied units would be required to complete a fire and life-safety inspection checklist and return the form to their property manager. Those checklists will become part of the city's rental property file. (c) Discussion The time spent obtaining entry and subsequent follow-up reinspections makes gaining compliance in owner- occupied units a difficult, time-consuming process. This operational change would eliminate the need for entry and follow-up inspections without notably compromising the fire and life-safety status of the structure. Multi-family buildings built after the above date were required by the Uniform Building Code to provide an increased level of fire-separation between units, thereby increasing the fire-safety of the entire structure. In townhouse style units, direct exiting to the public way is provided, thereby eliminating common area exiting concerns. HIS will conduct a full inspection of an owner-occupied unit if requested by the owner. 2. RANDOM UNIT INSPECTION (a) Current Practice The practice for rental licensing inspections is to inspect all units, common areas and exterior/yard areas of every structure requiring a rental permit. (b) Operational Change For multi-family buildings with twelve or more units, HIS proposes to randomly inspect one-half the units and will retain the discretion to inspect all thc units if the inspector has reason to believe substantial problems may exist in other units. Owners/property managers would certify all units have passed an HIS inspection checklist sheet no more than a week before the scheduled licensing inspection. Those checklists will become part of the city's rental property file. All common areas, fire/life-safety systems and exteriors of structures would continue to be inspected. (c) Discussion This operational change would reduce thc initial rental permit inspection time for thc inspector and owners/managers in properties that are well maintained and exhibit a responsible "track-record". Random selection of units for inspection should help maintain owner/property manager accountability and compfiancc with the housing code. 3. REDUCED RENTAL INSPECTIONS ON NEW MULTI-FAMILY BUILDINGS (a) Current Practice The practice for new multi-family structures is to conduct the first rental licensing inspection two years after the issuance of the building's certificate of occupancy. (b) Operational Change For new multi-family construction, HIS proposes that at the time of the first rental licensing inspection only common areas and exteriors will be inspected. Owners/managers will certify all units have passed the HIS inspection checklist sheet. The checklists will become part of the city's rental property file. This first reduced rental licensing inspection would be a one-time occurrence only. A full inspection would be conducted at the next regularly scheduled rental licensing inspection. The inspector would retain the discretion to inspect all units if he/she has reason to believe substantial problems exist within units. (c) Discussion This operational change would recognize the increased level of safety inherent in new construction. In buildings requiring test and maintenance certification of sprinkler and alarm systems, those certifications will be obtained and all common area fire and life-safety items will be inspected. 4. FOCUS REINSPECTIONS ON FIRE/LIFE-SAFETY SYSTEMS AND SIGNIFICANT MAINTENACE ITEMS. (a) Current Practice The practice is to return to a rental property if violations were cited during the rental licansing inspection. These reinspections are to verify that all items cited on the notice of violation have been corrected. (b) Operational Change HIS proposes to focus its reinspections on violations of the fire/life-safety system components of buildings and any significant maintenance items. If a fire/life-safety or significant maintenance violation exists during the initial inspection, the inspector will return to verify that those items have been repaired and are in compliance. Routine maintenance items will be cited if found in violation as usual during the initial inspection but those items will not necessarily require the inspector to make a return visit to seek compliance. (c) Discussion This operational change would focus our return visit time primarily to fire/life-safety items only, thereby saving inspector travelling time and expense with no compromise to the tenant's safety. Inspectors would retain the discretion to reinspect for all items noted on the notice of violation if he/she has reason to believe substantial problems exist within units. The advantage of a two-year inspection cycle allows inspectors to check for compliance on maintenance items cited during the previous inspection at the next regularly scheduled rental licensing inspection. Due to the continued growth in the construction of new multi-family buildings, and with no end in immediate sight, these operational changes will allow us to meet our commitment to enforce the City of Iowa City's Housing Code for two years at best without additional staff. It is our belief that the current two-year inspection cycle for multi-family buildings will help us to implement these operational changes without substantial risk to tenants and our community's housing stock. Nevertheless, without additional staff at this time we will not be able to sustain the current level of response to zoning and nuisance complaint investigations, such as junk, garbage, inoperable vehicles, parking on grass, etc. A meeting to discuss these operational changes has been scheduled for September 23rd, 2003 with the Greater Iowa City Apartment Owners Association's membership. 3 BUILDING PERMIT INFORMATION August 2003 KEV FOR ABBREVIATIONS · Type of Improvement .' ADD - Addition ALT- Alteration REP - Repair FND - Foundation Only NEIF - New OTH - Other type of constructbn Type of Use: RSF- Residential Sing[e Family RDF - Residential Duplex RMF - Three or more residential RAC - Residential Accessory BuiMing MIX- Mixed - NON - Non-residential OTH- Other Page: 2 City oflowa City Date: 9/9/2003 Extraction of Building Permit Data for To: 8/1/2003 From: 8/31/2003 Census Bureau Report Type Type Permit Number Name Address lmpr U__~ Stories Units Valuation BLD03-00687 PROCTER & GAMBLE HAIR 2200 LOWER MUSCATINE ADD NON 1 0 $4,000 5' X 22' SINGLE STORY ADDITION BLD03-00502 SRC INVESTMENTS CORPOI 2208 N DODGE ST ADD NON 1 0 $3,000 OUTDOOR SEATING AREA FOR RESTAURANT I Total ADD/NON permits: 2 Total Valuation: $7,000 ~ BLD03-00651 FRANTZ CONSTRUCTION C~ 1473 BUCKINGHAM PL ADD RMF 1 0 $15,825 FOUR SEASON PORCH Total ADD/RMF permits: I Total Valuation: $15,825 BLD03-00659 LOUIS A FRANK 3607 LOWER WEST BRANt ADD RSF 1 0 $110,000 SINGLE STORY BEDROOM ADDITION BLD03-00703 YUNXIA Q & PATRICK J O'IE, 2634 HILLSIDE DR ADD RSF 1 0 $34,600 ADDITION TO SFD BLD03-00631 MATTHEW T WHITTAKER 8 947 WEEBER ST ADD RSF 1 0 $34,220 16' X 12' THREE SEASON PORCH WITH 12' X 12' OPEN DECK BLD03-00571 BOLLINGER, BARBARA J 49 REGAL LN ADD RSF 1 0 $24,352 SUNROOM ADDITION FOR SFD BLD03-00574 RICHARD E KERBER REVO£ 425 LEXINGTON AVE ADD RSF 1 0 $18,200 DECK ADDITION TO SFD BLD03-00658 BARRON BREMNER 2132 LEONARD CIR ADD RSF I 0 $12,500 12' X 18' SCREEN PORCH BLD03-00570 THOMAS G & SUSAN M NEY 35 PEMBROKE LN ADD RSF 1 0 $12,000 12' X 12' SCREEN PORCH BLD03-00676 ROBERT R MIKLO & MATTI- 900 N JOHNSON ST ADD RSF 1 0 $5,000 26' X 14' UNCOVERED WOOD DECK BLD03-00638 CHARLES ELLIS FREYERML 3006 WAYNE AVE ADD RSF 1 0 $3,000 CONVERT A CARPORT TO A GARAGE BLD03-00644 KAREN L KUBBY & JOSEPH 728 2ND AVE ADD RSF 1 0 $2,500 11' X 14' SCREEN PORCH BLD03-00569 RAYMOND H & ROXANNE I: 1020 CARVER ST ADD RSF 1 0 $1,623 FRONT PORCH FOR SFD BLD03-00649 KEDAR N & SUSHAM L MAI' 59 AMBER LN ADD RSF I 0 $1,500 10' X 12' UNCOVERED WOOD DECK BLD03-00602 KHURRAM & SHAHEENA Q: 1203 EMILY CT ADD RSF 1 0 $700 3' X 3' LANDING AND STAIRS TO GR2kDE I Total ADDAtSF permits: 13 Total Valuation: $260,195 ~ BLD03-00665 CHRIS CAR 1621 S 1 ST AVE ALT NON 1 0 $73,000 1191 SQUARE FOOT RESTAURANT BLD03-00655 ERIC BACHNER 1423 WATERFRONT DR ALT NON 2 0 $65,000 REMODEL SHELL SPACE TO STORAGE, KITCHEN AND MERCANTILE Page: 3 City of Iowa City Date: 9/9/2003 Extraction of Building Permit Data for To: 8/1/2003 Census Bureau From: 8/31/2003 r epon Type Type Permit Number Name Address Impr U~ Stories Units Valuation BLD03-00625 WALDEN SQUARE INVESTI¥ 763 MORMON TREK BLVE ALT NON 1 0 $45,000 INTERIOR ALTERATION OF TENANT OFFICE SPACE BLD03-00616 REGINA HIGH SCHOOL 2140 ROCHESTER AVE ALT NON 1 0 $4,000 REPLACE GLASS WALL WITH BRICK Total ALT/NON permits: 4 Total Valuation: $187,000 ~ BLD03-00662 BOYD CROSBY CONSTRUC5 19 AUDUBON PL ALT RDF 1 0 $12,000 FINISH BASEMENT PER ORIGINAL PLANS BLD03-00614 JEFF SOUKUP & JIM ALBRE~ 2009 -11 TAYLOR DR ALT RDF 1 0 $1,000 INSTALL EGRESS WINDOW BLD03-00598 STEVE M LONG 520 S GOVERNOR ST ALT RDF 2 0 $250 DEMOLITION OF EXISTING WALL AND CONSTRUCTION OF WALL IN EXISTING DOORWAY TO CHANGE ONE BEDROOM APT. INTO STUDIO APT. Total ALT/RDF permits: 3 Total Valuation: $13,250 ~ BLD03-00613 FRANTZ CONSTRUCTION CI 1627 CLIFFORD LN ALT RMF 1 0 $925 FINISH STORAGE AREA IN BASEMENT BLD03-00668 KEYSTONE PROPERTY MA/~ 1116 OAKCREST AVE ALT RMF 3 24 $744 REPLACE DOUBLE HUNG BEDROOM TO A EGRESSABLE CASEMENT Total ALT/RMF permits: 2 Total Valuation: $1,669 [ BLD03-00628 BRIAN F MULLAN & KARYb 821 CYPRESS CT ALT RSF 1 0 $108,000 KITCHEN/FAMILY ROOM REMODEL BLD03-00632 RICHARD CROOKS & CHRIS I005 MUSCATINE AVE ALT RSF 1 0 $25,000 CONVERT ATTIC TO BEDROOM BLD03-00608 PRUESS, CHRISTINE S 1013 PHEASANT VALLEY: ALT RSF 2 0 $16,000 FINISH BASEMENT BLD03-00682 TODD I HOUGE & LAURA H~ 503 SCOTT PARK DR ALT RSF 1 0 $16,000 CONVERT SCREEN PORCH TO THREE SEASON BLD03-00573 IOWA CONSTRUCTION GR© 3707 DONEGAL CT ALT RSF 1 0 $10,000 FINISH BASEMENT BLD03-00671 GRANT & MARTA VANBEEt 242 MAGOWAN AVE ALT RSF 3 12 $10,000 ADD THREE WALLS TO DIVIDE UPSTAIRS INTO TWO ROOMS BLD03-00680 ROBERT DEAN & JANICE M 1519 SPRUCE ST ALT RSF 1 0 $I0,000 BATH REMODEL BLD03-00431 UNIVERSITY OF IOWA CREI 60 GOLDFINCH CIR ALT RSF 1 0 $9,174 COMPLETE S.F.D. BLD03-00612 MEP, ZIN HAMM CONSTRUC' 25 PHYLLIS PL ALT RSF 1 0 $9,000 BASEMENT FINISH BLD02-00227 GREG HUANG & WENDY ST 4739 CANTERBURY CT ALT RSF 3 0 $7,500 BASEMENT FINISH OF SFD BLD03-00511 SALLY IDESSA BLACKMON 1026 WASHINGTON ST ALT RSF 1 0 $6,500 INSTALL 3/4 BATH ON 1ST FLOOR Ps.ge: 4 City of Iowa City 9/9)2003 Date: Extraction of Building Permit Data for To: 8/I/2003 Census Bureau From: 8/31/2003 t epon Type Type Permit Number Name Address Impr Use Stories Units Valuation BLD03-00677 UNTRAUER, MICHAEL A 2878 STERLING DR ALT RSF 1 0 $6,000 INTERIOR REMODEL BLD03-00301 DAVID JACOBSON 862 TIPPERARY RD ALT RSF 1 0 $4,000 BASEMENT FINISH WITH TWO BEDROOMS AND BATH BLD03-00583 JAE C RETZ & ROBERTA TII 600 MANOR DR ALT RSF 1 0 $4,000 REPLACE FOUR BEDROOM WINDOWS BLD03-00508 PATRICK M & VIVIAN M AK 1313 ASH ST ALT RSF 1 0 $2,850 INSTALL TWO EGRESS WINDOWS BLD03-00591 THADDEUS A HACKNEY 310 MELROSE CT ALT RSF 1 0 $1,000 WINDOW REPLACEMENT IN BASEMENT AND REPLACE WALLS BLD03-00652 HAROLD S & MARY ANN MI 721 KIRKWOOD AVE ALT RSF 2 0 $950 INSTALL BATHROOM 1N BASEMENT BLD03-00589 DELORES A PENCE 1216 KIRKWOOD AVE ALT RSF 1 0 $0 CONVERT DUPLEX TO SINGLE FAMILY [ TotalALT/RSF permits: 18 TotalValuafion: $245,974/ BLD03-00482 GERDIN INVESTMENTS 2630 INDEPENDENCE RD NEW NON I 0 $8,989,450 350,000 SQUARE FOOT WAREHOUSE BLD03-00603 ALAN WlNN 2730 NAPLES AVE NEW NON 1 0 $959,000 12,000 SQUARE FEET OFFICE BUILDING BLD03-00685 STEVEN G LENNING 2238 HEINZ RD NEW NON I 0 $301,000 80' X 210' SINGLE STORY STORAGE BUILDING BLD03-00690 KEVIN J & CAROL A KIDWE 2414 FREEDOM CT NEW NON 1 0 $48,000 30' X 90' SINGLE STORY METAL BUILDING I Total NEW/NON permits: 4 Total Valuation: $10,297,450 I BLD03-00657 PHI RHO SIGMA 117 FERSON AVE NEW OTH 1 0 $24,000 KEYSTONE RETAINING WALL BLD03-00630 NICK & NORA LC 321 MCLEAN ST NEW OTH 1 0 $3,000 INSTALL 8~ FENCE ON SIDES AND REAR YARD I Total NEW/OTH permits: 2 Total Valuation: $27,000 I BLD03-00642 ARLINGTON DEVELOPMEN' 4433 BERKLEY LN NEW RAC 1 0 $113,400 3 DETACHED GARAGES FOR 12 PLEX 4433 THROUGH 4455 BERKLEY LANE BLD03-00695 TERRY L STAMPER HOLD1N 1319 1327 FOSTER RD NEW RAC 1 0 $16,000 24' X 36' DETACHED GARAGE BLD03-00575 JAMES K & ANN E ELMBOR, 728 PARK RD NEW RAC 1 0 $13,000 DETACHED GARAGE ADDITION FOR SFD BLD03-00708 JAN POWERS 500 3RD AVE NEW RAC 1 0 $5,000 16' X 26' DETACHED GARAGE BLD03-00679 RAE JEAN LANTZ & RACHEl 9 GEORGETOWN CIR NEW RAC 1 0 $3,000 12' X 16' STORAGE SHED Puge: 5 City of Iowa City Date: 9/9/2003 Extraction of Building Permit Data for To: 8/1/2003 Census Bureau From: 8/31/2003 tteport Type Type Permit Number Name Address Impr Use Stories Units Valuation TotalNEW/RAC permits :5 TotalValuafion: $150,400 [ BLD03-00674 HODGE CONST. 83 ARBORHILL CIR NEW RDF 1 2 $287,500 DUPLEX WITH ATTACHED 2 CAR GARAGES 83-85 ARBORHILL CIRCLE BLD03-00621 ARLINGTON DEVELOPMEN' 167 NOTTING HILL NEW RDF I 2 $278,440 RDF WITH ATTACHED 2 CAR GARAGES 167-169 NOTTING HILL LANE BLD03-00624 ARLINGTON DEVELOPMEN' 135 NOTTING HILL NEW RDF 1 2 $278,440 RDF WITH ATTACHED 2 CAR GARAGES 135-137 NOTTING HILL LANE BLD03-00623 ARLINGTON DEVELOPMEN' 136 NOTTING HILL NEW RDF 1 2 $245,313 RDF WITH ATTACHED 2 CAR GARAGES 136-138 NOTTING HILL LANE BLD03-00622 ARLINGTON DEVELOPMEN' 151 NOTTING HILL NEW RDF 1 2 $242,183 RDF WITH ATTACHED 2 CAR GARAGES 151-153 NOTTING HILL LANE Total NEW/RDF permits: 5 Total Valuation: $1,331,876 i BLD03-00208 DIAL LAND DEVELOPMEN~I 1080 SILVERCREST WAY NEW RMF 3 24 $3,095,862 24 UNIT APARTMENT BUILDING BLD03-00640 ARLINGTON DEVELOPMEN' 4433 BERKLEY LN NEW RMF 3 12 $1,198,000 12 PLEX 4433-4435-4437-4439-4441-4443-4445-4447-4449-4451-4453-4455 BERKLEY LANE BLD03-00664 A.M. MANAGEMENT 2707 TRIPLE CROWN NEW RMF 3 12 $774,640 12 PLEX WITH ATTACHED GARAGES BLD03-00643 ARLINGTON DEVELOPMEN' 4433 COURT ST NEW RMF 2 6 $725,400 6 PLEX TOWNHOUSES WITH ATTACHED 2 CAR GARAGES 4433-357-37-39-41-43 COURT STREET BLD03-00286 DUCK CREEK ASSOCIATES 4 DUCK CREEK PL NEW RMF 2 4 $501,591 TWO STORY FOUR UNIT BUILDING. 4-8-12-16 DUCK CREEK PLACE. Total NEW/RMF permits: 5 Total Valuation: $6,295,493 BLD03-00485 H B H DEVELOPMENT INC 335 GREEN MOUNTAIN Dt NEW RSF 1 1 $340,000 S.F.D. WITH THREE CAR GARAGE BLD03-00560 RON SCHINTLER INC. 35 LARKSPUR CT NEW RSF 2 1 $309,550 S.F.D. WITH TWO CAR GARAGE BLD03-00647 ARLINGTON DEVELOPMEN' 4438 BUCKINGHAM LN NEW RSF 1 1 $247,000 SFD WITH ATTACHED 3 CAR GARAGE BLD03-00626 ARLINGTON DEVELOPMEN' 4547 DRYDEN CT NEW RSF 1 1 $230,000 SFD WITH ATTACHED 3 CAR GARAGE BLD03-00561 HP CUSTOM HOMES LLC 1546 TOFTING AVE NEW RSF 1 1 $225,000 SFD WITH ATTACHED 2 CAR GARAGE BLD03-00636 KEVIN KIDWELL 1019 GOLDENROD DR NEW RSF 1 1 $195,337 S.F.D. WITH TWO CAR GARAGE BLD03-00601 PETER DUONG 2373 KRISTIAN NEW RSF 1 1 $188,000 S.F.D. WITH TWO CAR GARAGE Page: 6 City of Iowa City Date: 9/9/2003 Extraction of Building Permit Data for To: 8/I/2003 Census Bureau From: 8/31/2003 eport Type Type Permit Number Name Address Impr Use Stories Units Valuation BLD03-00637 KEVIN KIDWELL 1029 GOLDENROD DR NEW RSF 1 1 $186,000 S.F.D. WITH TWO CAR GARAGE BLD03-00633 ARLINGTON DEVELOPMEN' 155 ASHFORD PL NEW RSF 1 1 $185,000 S.F.D. WITH THREE CAR GARAGE BLD03-00599 MERLIN HAMM 3722 ELGIN DR NEW RSF 2 1 $180,100 S.F.D. WITH TWO CAR GARAGE BLD03-00634 ARLINGTON DEVELOPMEN~ 63 ASHFORD PL NEW RSF 1 1 $180,000 S.F.D. WITH THREE CAR GARAGE BLD03-00635 A1LLINGTON DEVELOPMEN' 51ASHFORD PL NEW RSF 1 1 $180,000 S.F.D. WITH THREE CAR GARAGE BLD03-00627 ARLINGTON DEVELOPMEN' 4559 YORK PL NEW RSF 2 1 $175,000 SFD WITH ATTACHED 3 CAR GARAGE BLD03-00672 SOUTHGATE DEVELOPMEN 3735 ELGIN DR NEW RSF 2 I $168,404 SFD WITH ATTACHED 2 CAR GARAGE BLD03-00590 SOUTHGATE DEVELOPMEN 3719 ELGINDR NEW RSF 1 1 $147,000 S.F.D. WITH TWO CAR GARAGE BLD03-00646 NICHOLAS GRIMM 773 TIPPERARY RD NEW RSF 2 1 $146,000 S. F. D. WITH TWO CAR GARAGE BLD03-00610 S G A CONSTRUCTION 1NC 2340 KRISTIAN ST NEW RSF 1 1 $145,000 S.F.D. WITH TWO CAR GARAGE BLD03~00693 JOHN COOK 3704 ELGIN DR NEW RSF 1 I $137,148 S.F.D. WITH TWO CAR GARAGE I Total NEW/RSF permits: 18 Total Valuation: $3,564,539~ BLD03-00675 LORENZ BOOT SHOP 132 S CLINTON ST REP NON 1 0 $16,448 REROOF COMMERCIAL BUILDING BLD03-00615 GARY FINK 116 WASHINGTON ST REP NON 3 0 $5,000 REPAIR REAR WALL OF STRUCTURE WHICH SUPPORTS 2ND AND 3RD FLOOR BLD03-00611 KiNG STINGRAYS 128 1/2 WASHINGTON REP NON 1 0 $4,298 FIRE REPAIR TO WAX ROOM AND BEAUTY SALON BLD03-00681 GRAPHIC PRINTING & DESI~ 939 MAIDEN LN REP NON 1 0 $3,900 REROOF TotaIREP/NON permits: 4 Total Valuation: $29,646 BLD03-00645 EDMONDSON, JOYCE M GR] 516 S DODGE ST REP P-,AC 2 0 $2,000 REROOF DETACHED GARAGE NEW SHEATHING Total REP/RAC permits: 1 Total Valuation: $2,000 I BLD03-00654 ROBINSON, THOMAS M 402 CHURCH ST REP RDF 1 0 $4,000 REPAIR FRONT PORCH AND MAKE SMALLER FRONT PORCH BLD03-00683 CHAMBERS AGENCY 603 E BURLINGTON ST REP RDF 1 0 $2,000 REPAIR COVERED FRONT PORCH Total REP/RDF permits: 2 Total Valuation: $6,000 Page: 7 City of Iowa City Date: 9/9/2003 Extraction of Building Permit Data for To: 8/1/2003 From: 8/31/2003 CQBSHS Bureau Report Type Type Permit Number Name Address Impr Usc Stories Units Valuation BLD03-00617 MARK OGDEN 18 N DODGE ST REP RMF 2 0 $6,000 RE-ROOF NEW SHEATHING AND SHINGLES BLD03-00552 ALPHA PHI HOUSE CORPOR 906 COLLEGE ST REP RMF 1 0 $3,800 WINDOW REPLACEMENT OF SORORITY BLD03-00697 KEITH CHAPPELLE 430 N DUBUQUE ST REP RMF 1 0 $310 REPLACE FRONT STAIRS I TotalREP/RMF permits :3 Total Valuation: $10,110~ BLD03-00667 HAROLD A & EUNICE J SCH 1405 SYCAMORE ST REP RSF 1 0 $11,676 REPLACING ALL WINDOWS 1N HOME BLD03-00587 R BRUCE & MARGARET W ? 10 WELLESLEY WY REP RSF 1 0 $10,000 ROOF REPAIR BLD03-00669 LEWIS W & BARBARA A ST~ 3127 HASTINGS AVE REP RSF 1 0 $9,559 STORM DAMAGE REPAIR TO ROOF SYSTEM AND DRYWALL REPAIR BLD03-00618 MATT MITCHELL & APRIL I: 815 N LINN ST REP RSF 1 0 $3,800 REPLACE FRONT PORCH BLD03-00650 CHARLES D CUTTLER 1691 RIDGE RD REP RSF 1 0 $3,500 EMERGENCY REPAIR OF CARPORT AND HOUSE BLD03-00704 GONTERO, LYNN A 1558 PRAIRIE DU CHIEN R REP RSF 1 1 $3,000 DECK REPLACEMENT FOR SFD BLD03-00629 JAMES B & BECKY J BUXTC 112 N JOHNSON ST REP RSF 1 0 $600 REPLACE WOOD DECK UNDER PORCH ON SOUTH SIDE OF HOUSE 6' X I0' BLD03-00619 MARILYN C KRACHMER 337 MACBRIDE DR REP RSF 1 0 $550 DECK REPLACEMENT BLD03-00648 JAMES B & BECKY J BUXTC 112 N JOHNSON ST REP RSF 1 0 $300 REPAIR COVERED PORCH DECK I Total REP/RSF permits: 9 Total Valuation: $42,985 II 1 GRAND TOTALS: PERMITS: 101 VALUATION: $22,488,412 I IOWA CITY POLICE DEPARTMENT USE OF FORCE REPORT August 2003 OFFICER DATE INC # INCIDENT FORCE USED 58, 54 08-01-03 3-38751 Open container When the officer advised the subject he was under arrest he also told the subject, who had been sitting on a bench, to stand up. The subject did not comply until the officer grabbed him by the left arm. At that time the subject actively resisted the office's attempts to handcuff him and knocked the handcuffs fromthe officer's hand. The subject was then directed to the ground were he continued to resist being handcuffed. The officer deployed a chemical agent and the subject then cooperated by placing his behind his back. 51 08-02-03 3-38954 Criminal Mischief The officer observed the subject break a window and then mn. The officer chased him a short distance while giving him verbal commands to stop. When the officer caught the subject he directed him to the ground. The subject then complied with verbal commands to place his hands behind his back. 54, 13, 58 08-02-03 3-38979 Fight Subject was handcuffed without incident but then tried to pull away and kick the officers. He was told to lie on the ground but refused to do so and continued to try to actively resist.. An officer deployed a chemical agent and the subject then complied with officer commands. 55 08-03-03 3-39127 Fight Officer was in a foot chase with subject who had been in a fight. The officer caught the subject and directed him to the ground. Subject then cooperated with the officer. 55 08-14-03 3-41033 Man with a gun Officer responded to a report of a man ~vith a gun. When the officer amved several subjects fled. The office pursued one subject on foot and directed him to ground. Subject kept his hands under him and refused to show them to the officer. The officer OFFICER DATE INC # INCIDENT FORCE USED used his flashlight as a lever to pry his hands out from under him and handcuff him. 3 08-15-03 3-41296 Possible armed subject Officer responded to a complaint ora subject who maybe armed. The officer grabbed the subject by the right arm and escorted him to the floor. The subject did not resist and no further force was needed. 58 08-16-03 3-41410 Bar Check The subject refused to comply with the officer's verbal directions to step outside where the officer could more easily interview him. The officer grasped the subject by the arm and escorted him from of bar. 56 08-20-03 3-42280 Shoplifter When the subject was told she was under arrest she pulled away from the officer. The officer directed her to the ground where she was handcuffed. 37 08-22-03 3-42619 Public Intoxication The subject refused to be handcuffed and clasped his hand onto his wrist. The officer directed him to the ground and used a hands control technique to get his hands in a position where a second officer could handcuff him. 21 08-22-03 3-42767 Animal Complaint The officer used his side arm to dispatch a opossum that had been severely injured by a dog. 14 08-24-03 3-43123 Loud Party Officers were trying to break up a large fight and had told the subject to leave. After refusing to leave she was told that she was under arrest and to place her hands behind her back. When she refused to comply with officer commands the officer tried to grab her arm, but she pulled away. The officer then used a hands control technique to place her hands behind her back and handcuff her. Because the subject had very small wrists she was able to slip out of her handcuffs. The officer then placed her against a squad car where he again placed handcuffs on her wrists. 26, 31 08-24-03 3-43168 Out with subject Subject had nm from officers but stopped after 5-6 blocks. The officer ordered him to the ground, but he did OFFICER DATE INC # INCIDENT FORCE USED not comply. The officer directed him to the ground and handcuffed him. 6 08-26-03 3-43562 Out with subject After the subject had been placed under arrest he refused to get into the patrol car. The officer physically directed him into the patrol car. 58 08-26-03 3-43567 Public Intoxication The subject was told multiple times by an officer to back away from a second officer who was in the process of making an arrest. The first officer advised the subject that he was under arrest after he yelled at and advanced on the 2ad officer. The subject began to flail his arms and was about to flee when the officer grabbed him by the arm. The subject then atternpted to pull away from the officer as he refi~sed to be handcuffed. The officer then exposed the subject to a chemical agent, but he continued to actively resist. The officer placed him against a nearby building and handcuffed him with the assistance of a campus officer.. 9, 54 08-27-03 3-43820 PAULA The officer was investigating the subject for PAULA and was in possession of a fake ID. When he attempted to grab the ID back from the officer and mn the officer grabbed him. With the assistance of another officer the subject was directed to the ground where he continued to resist. The officer used a hands control technique to place the subject's hands behind his back to hand cuff hin~ 54 08-28-03 3-44080 Theft 5th After the officer informed the subject that he was under arrest the subject attempted to walk away. When the officer grabbed the subject's shirt to stop him the subject quickly turned around. The officer grabbed the subject's right arm and attempted to place it behind his back, but the subject kept trying to pull away. The officer directed the subject to the ground where he was handcuffed. 19 08-28-03 3-44293 Bar Check The arrested subject refused to comply with officer requests to get into the squad car. The officer exposed the OFFICER DATE INC # INCIDENT FORCE USED subject to a chemical agent when he started to kick the officer. 54 08-30-03 3-44644 Bar Check While the subject was being written a PAULA ticket he ran from the officer. The officer pursued him and directed hira to the ground. He was handcuffed without further incident. 38, 15 08-31-03 3-44929 Burglary The subject, who appeared agitated, refused to comply with verbal commands and was directed to the ground by the officer where he was handcuffed. 57 08-31-03 3-44976 Assault/Fight Officer observed subject punching another person who was on the ground. The officer grabbed the subject by the upper body and directed him to the ground where he was handcuffed. CC: City Manager, Chief, Captains, Lieutenants, Training Sergeant, City Clerk, Library IP6 AGENDA City of Iowa City City Council Economic Development Committee Thursday, September 18, 2003 9:00 a.m. Lobby Conference Room City Hall 410 East Washington Street 1. Call to Order 2. Approval of Minutes - August 21, 2003 - August 29, 2003 3. Set Date for Next Meeting 4. Economic Development Strategy - Overview 5. Discussion and Recommendation on CDBG Application - Oasis Falafel 6. Other Business - Criteria for CDBG proposals - Standardized Forms for Financial Information 7. Adjournment MINUTES CiTY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE THURSDAY, AUGUST 21, 2003- 10:00 AM CIVIC CENTER - LOBBY CONFERENCE ROOM MEMBERS PRESENT: Ernie Lehman, Dee Vanderhoef, Ross Wilburn '~ MEMBERS ABSENT: None .o STAFF PRESENT: Steve Nasby, Tracy Hightshoe OTHERS PRESENT: Irvin Pfab, Mary Lou Erlacher, Joe Raso, Jamie Powers Call To Order Ernie Lehman called the meeting to order at 10:00 AM. Approval of Meeting Minutes from May 13, 2003 MOTION: Vanderhoef moved to approve the minutes as submitted. Wilburn seconded the motion. All in favor, motion passed 3-0, Set Date and Time for Next Meeting The committee agreed the next meeting date as September 18, 2003 at 9:00 AM. ICAD - General Update and Location One Information System (LOIS) Joe Raso, President of Iowa City Development Group (ICAD), was present to update the committee concerning ICAD activities. Raso discussed several successful projects that ICAD has been associated with. · United Natural Foods, which was recently approved for funding, is moving forward and the concern of wetlands has been determined to be a non-issue. Proctor and Gamble has been working on several projects and there will be an event in conjunction with ICAD on Friday, August 29, 2003, where Senator Grassely will be present to speak. Aisc on August 29, 2003, ALPLA, who serves Proctor and Gamble, will have an event at 10:30 AM with Mayor Lehman, Raso and others present to speak. Raso said this will be a great celebration for the entire region and specifically Iowa City, and it is easy to see the importance of Proctor and Gamble in our area. · Moore North America/Moore Wallace has been through some changes recently due to their acquisition of Wallace Computer Systems. They are moving lines into Iowa City and will be looking to hire graphic designers and customer service representatives over the next several months. · Marsh Advantage America has a new facility opening at Northgate Corporate Park in Iowa City. ICAD worked closely with Marsh on the project to keep the office in iowa City as they were looking at Tulsa and St. Louis as other possible locations. Raso updated the committee on tools and instruments that ICAD has developed to aid them in helping companies come to and grow in the area. · Raso distributed a packet with an ICAD activity report, a highlight of the organization activities for the last year. Included in the report is a labor-shed survey. The survey outlines the area regionally but also has a labor-shed survey specifically for the Iowa City area, for those who are focused on the south end of the corridor. The survey allows ICAD an opportunity to share with companies what the market looks like in terms of workforce skills and wages required for different individuals. They have used this survey to help several businesses that were looking to hire additional staff or looking to possibly expand in the Iowa City market. They are talking with the State to have this done annually because all communities within the state need this kind of data/information to compete with the larger cities. · Raso discussed a CD-ROM employment directory that ICAD has developed that lists 225 company's within the region. It provides the user a description of the company and the type of jobs they would typically have available. The CD-ROM will go to community colleges and colleges in the Midwest when Priority One attends career fairs to talk with students. It not only sells the city but the entire region because it links the user with the Corridor Careers website, which has job postings. · Raso distributed a wage and benefit survey to the committee; it was completed last year and is currently under revision. The survey is done on a regional basis and provides information to prospective employers about the current wage rate for different jobs in this area. It also breaks down the high, Iow, and starting wage, what the benefits are, and also segments the manufacturing from Economic Development Committee Minutes August 21, 2003 Page 2 non-manufacturing positions. The survey is done in conjunction with Manpower and Priority One, who compiles and analyzes the data. Vanderhoef questioned if they provide any information concerning the cost of living for the area. Raso replied that they do not, but there are many other websites that provide this kind of city to city comparative information. Vanderhoef asked if the occupation descriptions are standardized. Raso said they are standardized but they review and if a job appears to be new and unique they would make a new category. Raso provided information on the Skills 2006 Study. The study is done with Kirkwood Community College and Priority One and they are surveying approximately 250 public and private businesses, in a seven county area, to find out their expectations for hiring in the next 3 years. They are also asking the businesses if the hiring is from new jobs created or due to retirement or attrition. The study will include information about the skills required for any new jobs and if the skill requirements for existing jobs will be changed. A study of this kind was done in 1998 and helped Kirkwood develop curriculum for specific industry sectors. The new information, due out in October 2003, will also help in determining if specific curriculum should be developed to address the areas particular employment needs. Wilburn asked who makes the link with the University of Iowa and Kirkwood Community College with new businesses and jobs available. Raso said a combination of ways are used, job fairs, Iowa Workforce Development, Kirkwood for training, and the University can also be contacted. Raso concluded by saying that most work done by site location consultants is done on line, after regular business hours. Raso said he had worked with a utility company in Kansas City and they developed a wesite called Location One Information System, and it was a kind of holding tank for data about communities and buildings, sites and markets, that was searchable. This company does not serve the Iowa City market but the ICAD website is based on the same principles. The ICAD website houses information concerning all seven communities in the area and provides an overview of the city including maps, leading employers, demographics, taxes, utilities, labor force, local contacts, education, government, and web links. With the help of the city community development staff, they have been able to populate the database for Iowa City. The website also allows posting of available business sites in the market, by industrial park or lots available. The visuals on the website will also be expanded to include photos of the area. The key is accurate and timely information that can be accessed in one website that will save time for everyone. Lehman said he thinks Iowa City is getting a good return on their investment with ICAD. He said it is important to have this information and will be sharing it with the council. Workplace learninq Connection - Proqram Sustainability Mary Lou Erlacher was present to address the committee concerning the sustainability of the Workplace Learning Connection program. Erlacher provided a graph for the committee about information collected in a survey administered to students who participated in services through the Workplace Learning Connection. She said the information from last year and this year is very similar. It was determined that when students are connected with school to career activities, a one day job shadow, a 90 hour internship, or workplace tours, they feel much more connected to career opportunities in their communities. They know what happens inside the buildings on their streets and they know what kinds of opportunities are available there. Building relationships with employers is important, they found that approximately 1/3 of the students, after having the school to work experiences with local employers, said it positively impacts their desire to live and work in Iowa. Edacher said the primary reason for her visit is to share with the committee how the Workplace Learning Connection is sustained. The organization began with a federal school to work grant and with several business partners. They began the program as a good tool for career development for students and a good tool for work force development. With these things working together and listening to businesses, improving the skill level of the workforce and encouraging the young people to stay in the area then it is also a good tool for economic development. This is the kind of system they are trying to build, a solid system and a system of value that would then need to be supported by all the people who use and benefit from it. They started with the local schools, met with a task force of school superintendents and came up with a funding formula for the schools. There is a model used for Benton County for example, where the schools would allocate $1 dollar per student in K-5, $2 dollars for Economic Development Committee Minutes August 21,2003 Page 3 6-8, and $4 dollars for students 9-12. This would be a line item in their budget for career development activities. All districts are required to have a K-12 career development plan for their district as a part of their yearly comprehensive school improvement plan. She said this is generally a weak part of most district plans. If the three school districts in Benton County contributed at the proposed level for career development activities, it would raise about $8800 per year. Erlacher is now going to the business community in Benton County asking if they will match the education line item to help support the activities of the children in their county. Last year, Erlacher approached Linn County and they approved a four-cent per capita allotment out of their community and economic development fund. They see this as a good system for economic development and something to be used when talking with businesses about possible expansion or relocation to the area. When putting all of this together with the regional support from Kirkwood and Grantwood they are a 501C3 partnership between Kirkwood and Grantwood Area Education Agency, and with other regional funds, it gives them an annual budget of $350,000. This is the system they are trying to build, with a regional office in Linn County; they want to open satellite offices to serve 2 counties in the east, west and south. There are several counties on board currently, all contributing at different levels. Lehman asked what is Johnson County's commitment. Erlacher said they have not committed yet but she has been told that there will be money budgeted for the program in the future. Vanderhoef asked about the interest in the program locally. Erlacher said before they started the Iowa City office, there were about 68 students from City High School that participated in the job-shadowing program. Since opening the Johnson County office and with program coordinator Nancy Quellhorst being in the schools and working with the teachers, they have had over 400 students participate in job shadows this year. They also had 35 internships this year, lots of tours, speakers and a job fair last spring at West high School. Vanderhoef said she would like to see a model put together for Iowa City to invest into this program. This is an opportunity to get young people headed into more meaningful careers for themselves, to keep them in the community and promote economic development. Lehman said this would be put on a council agenda for discussion. Ross Wilbum excused himself from the meeting due to a conflict of interest concerning any items related to CDBG funds, as his employer is a recipient of CDBG funds. CDBG Application - DeLuxe Bakery Jamie Powers, owner of Deluxe Bakery was present to discuss her application. Deluxe Bakery is currently a home-based business and is now expanding and opening a storefront on 812 South Summit Street. Powers is requesting $15,000 in CDBG assistance to make capital improvements. Powers has secured private funding for the site acquisition and operational expenses. Powers said she wants the business to be in and serve a neighborhood. She wants to restore the exterior of the building, add patio seating, add a handicap access ramp and add 2 hard surface parking spaces in the rear of the building. Lehman asked what percentage of the business is anticipated to be walk in customers. Powers said approximately 40 percent will be retail and 60 percent will be wholesale, i.e. wedding cakes. Lehman said he does not think there is enough walk-in business in the Longfellow area to constitute 40 percent of her business. Powers agreed but said that Summit Street is an arterial street with great traffic and there is a real need for this type niche pastry business. Lehman asked if the application meets the requirement needs for CDBG funding. Nasby clarified the business will be retaining 1 job (owner) and creating 1 full time equivalent job (2 part time jobs), and this meets the requirements for CDBG funding as a micro-enterprise. Powers said she anticipates having to hire another full time employee by the end 2003, she would also like to work with Kirkwood and provide an opportunity for a student intern. Lehman said that because she has secured financing for the business start up, the bank is showing confidence in her plan. He also noted that the business is in a neighborhood and is a nonconforming use. It is important that if this is to be a successful operation it needs to be as compatible with the neighborhood as possible. The changes that Powers is suggesting are a benefit to the neighborhood and Economic Development Committee Minutes August 21,2003 Page 4 to the business. Lehman said he is impressed with the application and they need more time to discuss the matter, as today's meeting must conclude due to time constraints. A special meeting needs to be scheduled; the committee and applicant agreed upon Friday, August 29, 2003 at 8:30 am. Adjournment MOTION: Vanderhoef moved to adjourn the meeting. All in favor, motion passed 2-0. The meeting concluded at 11:01 AM. data on citynt/pcdlr~nu~eslecodevledcO$-21-O3.doc Minutes Council Economic Development Committee Friday, August 29, 2003 - 8:30 AM Lobby Conference Room Members Present: Ernie Lehman, Dee Vanderhoef Members Absent: Ross Wilburn Staff Present: Steve Nasby, Tracy Hightshoe Others Present: Irvin Pfab, Jamie Powers Recommendation To Council: It was approved by the Council Economic Development Committee to recommend a $15,000 CDBG loan for 5 years at 3% interest rate to commence in January 2004, for capital improvements for a new storefront business, Deluxe Bakery, located at 812 South Summit Street. Call To Order The meeting was called to order at 8:35 AM. Discussion and Recommendation on CDBG Application - Deluxe Bakery This meeting was scheduled at the request of committee members in order to continue the discussion of the CDBG application submitted by Deluxe Bakery. Deluxe Bakery is currently a home-based business that is now expanding and opening a storefront on 812 South Summit Street. Wilburn was not present due to a conflict of interest, as his employer is the recipient of CDBG funds. Lehman reviewed the applicants' request of a CDBG grant of $15,000 for capital improvements. He noted the profit/loss statement that was submitted did not include interest expenses on the loan received from the bank. Jamie Powers, owner of Deluxe Bakery, said the paperwork submitted to the City was completed prior to the final approval of the bank loan. As a side note, Lehman said the staff and committee need to work on simplifying the applicant profit/loss and balance sheet forms for the committees review purposes. Lehman asked the applicant if the work on the interior of the business had started. She said the inside work was currently in process, but nothing had been done to the exterior of the building. Lehman clarified that the grant requested was for work to be done on the exterior of the building. Vanderhoef noted the qualifier for CDBG funds is job creation. Powers responded that at least one full- time and 2 part-time positions would be created. Powers also anticipates sales will be greater than projected and although family had helped out last year, she wants to keep the business professional and may need to hire more part-time help. Nasby said the business is located in a historic district of Iowa City and CDBG is federal money, any exterior work done must comply with the Secretary of the Interior's Standards for Rehabilitation in addition to any other applicable federal rules. Powers said she had been working with Shelley McCafferty, Historic Preservation Planner, to determine what work can be done. Due to City regulations, the bakery will not be categorized as a restaurant and that will limit the number of tables and seating available. Powers is planning to have a bench in the front window, 2 small tables inside and a bench outside in the front of the building. She is also planning to add an aggregate stone area to the front of the building because it is a shady area and grass does not grow well in that area. Other improvements are painting the building, paving rear parking spaces, and possibly the addition of a handicap accessible entrance. Lehman said he has had a problem understanding the financial information provided, it is difficult for any average person to understand due to the technical and complicated nature of the forms. However, the bank appears to be satisfied with the applicants' ability to open the business. The bank is not only loaning money for the real estate but also for the business. Therefore, this seems to be a viable project or Powers would not be receiving conventional financing. Lehman then noted 2 thoughts on the project: the business will go forward with or without participation from the city, and it is a nonconforming use in a historic neighborhood. Because of these 2 points, he said he does not have a problem recommending to Council that they approve a loan for Powers at an attractive interest rate. The business needs to be as compatible as possible with the historic neighborhood and the loan could be used to make the business more attractive and fit in better with the neighborhood. It is not absolutely necessary that the city participates, but it is in the best interest of the community and neighborhood that the business be as attractive as possible. Vanderhoef agreed with Lehman. She said the business has good potential and because they are trying to build and strengthen the neighborhoods, this could make the neighborhood more attractive and appealing. She mentioned a concern of the possibility of increased traffic. Lehman said this is really a non-issue because the project has been approved by the city and is going forward. However, the addition of hard surface parking in the rear of the building may address any traffic issue. Lehman said the loan from the bank is at 5.9% for the building and there is also a private loan for the business, done through the bank, for 3.0%. He also said this is a very viable business, and the concept of CDBG loans is to help people do things that might not otherwise be able to be done. But, because this is a nonconforming use, it is in a neighborhood and neighborhoods are something the city greatly values, and because the improvements would enhance the property by making it more attractive to the neighborhood, the city does have a function with this project. Vanderhoef added the exterior of the business would probably not get the care that is needed in the beginning because Powers will be focusing on the start up of the business. Powers agreed with Vanderhoef and said the exterior work would have to wait without the help of CDBG money. MOTION: Vanderhoef moved to recommend to Council that they approve a CDBG loan for capital improvements for the Deluxe Bakery for $15,000, at 3.0% interest rate, for 5 years that would commence in January 2004. Lehman seconded the motion. All in favor, motion carried 2-0. Lehman and staff said they will try to have this item on the agenda of the September 9, 2003 City Council Meeting. Powers said she would be present at the meeting to answer any questions. She also thanked the committee for their support. Adjournment MOTION: Vanderhoef moved to adjourn the meeting. Lehman seconded the motion. All in favor, motion carried 2-0. The meeting was adjourned at 9:10 AM. Data on citynt\minutes\pcd\edc8-29-03.doc Economic Development Strategy CITY OF I0 WA CITY December 1999 Economic Development Strategy With the defeat of the local option sales tax referendum, the options the City has to obtain the revenues necessary to meet the needs and desires of Iowa City residents has been further limited. Although the tax referendum was defeated, the desire for services and facilities has not seemed to abate. Many of our citizens' requests are financed from the General Fund. Even if a City Council was willing to raise property taxes, for all practical purposes this is not possible due to State regulated property tax levy limits. Since the message is the City must rely on the property tax and by law, City Councils are very limited in their ability to raise existing taxes, our recourse appears to be to increase the amount of taxable property in the City. We are not suggesting pursuing this as an "expansion at any cost" manner but approaching it in a thoughtful managed way. Because of the structure of the Iowa prepedy tax system, commercial and industrial development is the most fiscally advantageous development for local governments. What follows is a policy proposal for a more aggressive role on the part of the City government to foster commercial and industrial development in Iowa City. We would suggest addressing this issue from the perspective of three of the six most common strategies of economic development: business retention & expansion, business attraction, and entrepreneurship (the other three being: tourism/convention, downtown development, and workforce development). Prior to listing an action plan for these three specific areas, we feel it is necessary to address three issues that impact our overall approach to economic development. They include the relationship between ICAD's economic development activities and the City's economic development goals; the perception held by community members and others that the community could be more business-friendly; and the limited resources directed toward economic development activities. Iowa City Area Development Group. Though ICAD does an adequate job of promoting the greater Johnson County area, the structure and operation of ICAd, by its very nature does not completely promote the interest of Iowa City in the area of economic development. Since ICAD serves more than one community in Johnson County, ICAD cannot promote one specific area over another. When a prospect considers sites in more than one Johnson County community, ICAD does not advocate for Iowa City. A different relationship must be established with ICAD, one in which the shadng of information is improved, so that the City can do a better job of promoting locations within the Iowa City corporate limits. Instead of pemeiving ICAD as the lead economic development agency for Iowa City, ICAD's role should be more of a partnership with Iowa City. Working with prospective new businesses and expanding existing businesses should reflect the City's more active role. A More Business Friendly Community. Whether its true or not, a perception exists that Iowa City could be a much more business friendly community. Many hold the view that Iowa City, when compared to other communities in the area, is overzealous in terms of its regulations, both in terms of the number and severity of the requirements. Iowa City is known for its active and vocal citizenry and they do not wish to lose the "unique character of Iowa City." This can often be interpreted as an anti-growth sentiment. The community must be constantly reminded of the need to expand the tax base in order to be able to afford the projects and services the community desires. Expanding the tax base does not mean the community will lose its unique character as long as the new development occurs in a way that is consistent with and respectful of existing development. The recently adopted comprehensive plan includes techniques to do just that. We must continually educate the community regarding these issues. City staff will need to become more sensitive to its approach of facilitating and regulating new development in the community. With recent changes in the area, the attractiveness of new development to occur in nearby communities has improved. The options for commercial retail developers are more attractive in other area communities given the shift of the area retail interests toward Corelvllle. In addition, the attractiveness of locations In and near the 1-380 conldor between Coralville and Cedar Rapids also places a competitive disadvantage on industrial and commemial land in southeast Iowa City. The leadership positions of the City organization need to set the tone for a new approach to development. The approach must become "how can we make it happen in Iowa City. This does not mean we abandon the goals the City has established for new developments in the community, but how city staff discusses these goals with developers is often critical to the success of a prospective development project. Though as a staff we have little control over ,the attitudes of each City Council towards economic development in the community, City Council attitudes have a significant impact on economic · development in the community. Though every Council member may consider themselves "pro- economic development", a question I would pose to you is have we made economic development a true priority. Have our actions been reactive not proactive towards economic development. With the proposals that follow we can take a more proactive approach towards economic development. We must continually review how we approach development in the community. In particular, we must seriously undertake a review of municipal regulations and how they are enfomed. The perception of the community and others is critical at this juncture as we attempt to foster industrial and especially commercial development. Limited Resources Available for Economic Development. In the past, several economic development projects have been proposed which would have required significant financial resources. These projects included such items as a city-owned industrial park, a speculative industrial building, a small business incubator, a business information center, and redevelopment of the old landfill (current Public Works yard) along S(~uth Riverside Drive at Highway 6. An expanded proactive economic development program will likely require additional staff resources or the reallocating of staff resources to implement the expanded program. Is economic development a critical enough issue to commit additional resources to these projects and activities? Actions for a Stronger Economic Development Role for the City The following lists actions we can reasonably take in selected, key areas of economic development to implement a more aggressive approach to economic development and building the City's future tax base: Retention & Expansion Conduct an annual business retention survey to gather information about existing businesses, evaluate the satisfaction with governmental and area support services, explore company growth plans, and offer assistance where appropriate. · Evaluate and make changes to the City's regulatory process.. · Develop area redevelopment plans and/or invest in public spaces in areas of the community, such as the Sycamore Mall, South Riverside Drive, Towncrest, and the Northside Marketplace areas. · Conduct a retail and office market analysis to identify potential retail and office market niches in defined commercial areas. · Establish a comprehensive package of tax incentives and/or a revolving loan fund for Iow- interest loans for economic development projects. · Promote community leadership to promote and support economic development activities within Iowa City. Business Attraction · Prepare materials that specifically market and promote Iowa City as a place to do business and live. · Enhance the City's relationship with commercial and industrial developers and property owners in order to improve opportunities for development projects within Iowa City. · Develop a plan for future industrial park land in southeast Iowa City and near the airport. · Construct an industrial speculative building. · Take ,a more active role in marketing and promoting Iowa City through cooperative efforts with ICAD, IDED, and MidAmerican Energy and other regional economic development interests. · Evaluate the need and plan for, if necessary, new commercial cores in the community as well as the 'revitalization/renovation of existing commercial areas. Entrepreneurshlp · Support the development of a Business Information Center through exploring the creation of a one-stop business development facility Have economic development play a more important role in CDBG allocations. · Develop a financial assistance program for start-up businesses using CDBG funds and develop a Iow-interest loan program for targeted businesses. · Periodically consider the incubator concept, and when appropriate, pursue the development of one in Iowa City. · Develop relationships with businesses at the University's Technology innovation Center (TIC) and develop opportunities for their expansions in Iowa City. · Develop a relationship with the directors at the National Advanced Driving Simulator to' determine spin-off business opportunities in iowa City. We have focused on these three areas~ rather than including tourism, the downtown and workforce development, because we feel this is where the most critical need is now and where theCity needs to take new initiative. In addition, the City has invested and plans to continue to invest significant resources in the downtown area. Future Economic Development Work Program City of Iowa City Economic Development Division Retention & Expansion Conduct an annual business retention survey to gather information about existing businesses, evaluate satisfaction with governmental and area services, explore company growth plans, and offer assistance where appropriate. · With as.sistance from urban and regional planning students, develop a survey instrument and means of annually surveying Iowa City businesses · Conduct the business retention survey and summarize its findings. · Follow-up on issues of concern to iowa City businesses · Continue annual business retention survey process ($2,500-$3,000 annually). Evaluate and make any necessary changes to the City's regulatory process. · During the City's planned review of the Uniform Development Code evaluate any necessary changes to the City regulatory process dealing with commercial and industrial projects. · Implement consultant's r~commendations. Develop area redevelopment plans and/or invest in public spaces in areas of the community, such as the Sycamore Mall, Towncre~t, South Riverside, and the North$ide Marketplace areas. · Conduct meetings with property owners and tenants in these areas to determine the level of redevelopment and/or invest in public spaces. · tf necessary, hire landscape firm to prepare public improvement design plans and/or redevelopment plans. ($90,O00-$110,000). · If necessary, construct physical public improvements ($?,???,???). Conduct a retail and office market analysis to identify potential retail and office market niches in defined commercial areas. · Hire marketing consultant to perform market analysis. ($40,000-$50,000) · Work with business and property owners in retail/office areas to convey information from market study and develop strategy to act on results. Establish a comprehensive package of tax incentives and/or a revolving loan fund for Iow interest loans for economic development projects. · Develop marketing materials that outline financial assistance programs available in Iowa City for business development projects. · With assistance from the Small Development Business Center and in cooperation with area banks, pursue the establishment of a targeted Iow interest loan program. · Pursue the development of a fa(~ade renovation iow-interest loan program for buildings in targeted areas. ($??,???) Promote community leadership to support economic development activity within Iowa City · Establish preliminary discussions with area leaders regarding forming such a group. Business Attraction Prepare materials that specifically market and promote Iowa City as a place to do business and five. · Meet with ICAD/CVB/Chamber of Commerce to review materials already'available to determine what supplemental materials are required. · Prepare supplemental marketing materials specifically promoting Iowa City. ($2,000-3,500) · Develop a professional presence for the City and its economic development activities and programs on the Web. Enhance the City's relationship with commercial and industrial developers and property owners in order to improve opportunities for development projects within Iowa City. , Develop contacts with area commercial/industrial developers and property owners. Develop a plan for future Industrial park land in southeast Iowa City and on the airport properly, · Identify development costs. Develop a speculative industrial building. · Identify location for speculative building. · Prepare a proposal for public/private partnership/ownership. · Construct speculative building. ($1.25-$1.5 million) Take a more active role in marketing and promoting Iowa City through cooperative efforts with ICAD, IDED, and MidAmerican Energy. , City staff to participate in the development of prospect proposals and prospect site visits. · In conjunction with iCAD Council Economic Development Committee to visit major employers in the community. · Establish a quarterly Breakfast with the City Council Economic Development Committee series to provide businesses an opportunity to meet with City officials to discuss issues of concern ($1500-$2000). · City staff and/or Council Economic Development Committee to participate in "Sell Iowa" trips with the Iowa Depadment of Economic Development ($2,000-$3,000). Evaluate the need and plan for, if necessary, new commercial cores in the communib/. · As part of the retail office market analysis, identify need for future commercial cores. · If necessary, rezone property for future commercial cores. Entrepreneurship Support the development of a Business Information Center through exploring the creation of a one-stop business developme~'lt facility. · Explore possibilities of co-locating a new Business Information Center with the Small Business Development Center, SCORE offices, and other business development groups · Preferably locate in a high-visibility street level location. Develop a financial assistance program for start-up businesses using CDBG funds and develop a Iow-interest loan program for targeted businesses. · Prepare application for CDBG funds. ($50,000 CDBG funds, $25,000 general funds, $25,000 private sector funds). · If application for CDBG funding successful, establish start-up business financial assistance program. Periodically consider the incubator concept, and w~ hen appropriate, pursue the development of one in Iowa City. · Call a meeting to once again explore the incubator concept. · Perform a feasibility study outlining the framework for establishing an incubator, if the decision is to proceed. ($25,000-$35,000) Develop relationships with businesses at the TIC Center and develop opportunities for their expansions in Iowa City. Develop a relationship with the directors at the National Advanced Driving Simulator to determine spin-off business opportunities in Iowa City. · Make contact with the TIC Director to discuss Iowa City's role in assisting TIC Center businesses. · Hold individual meetings with TIC businesses. · Meet with Director of the National Advanced Driving Simulator. · Prepare marketing materials specifically targeted towards TIC businesses and NADS spin-off businesses. This work program assumes a diminished role for the Economic Development Coordinator in downtown work and activities. It also assumes contracting for specialized work such as drafting redevelopment plans, market analyses, design work for capital projects, and development of marketing materials. City Council Economic Development Policy Committee In order to accomplish our proposed'economic development strategy, funds need to be allocated for such a purpose. As the City Council you will face competition from many interests for limited resources. Many of the requests if not the overwhelming majority require General Fund support. The General Fund, as you are aware, is also that fund which is most difficult to balance due to not only the stringent state regulations but also it is the fund targeted for new operations, programs, and other initiatives. However, if we are to make economic development a priority and not ~jeopardize our financial integrity, particularly as it relates to the General Fund a source of financing must be found. Proposed in the FY2001 three-year financial plan is a $500,000 economic development account from which we would implement the economic development strategy. Additionally, proposed in our capital improvement plan, $2 million in general obligation debt authority for the purposes of a speculative industrial building, land acquisition for an industrial park, and/or any other related capital cost for the economic development strategy. The $500,000 economic development strategy account will be financed by the use of reserve funds in our water system, wastewater, landfill, and where appropriate, from our road use tax reserves. This financial policy will require a repayment of these monies to the reserves at some time in the future. The policy on repayment can be discussed and a direction decided upon as we consider the economic development strategy. Also in order to implement the economic development strategy and create the high profile policy it deserves, we propose a creation of a City Council Economic Development Committee. This committee would be made up of three City Council members. We believe the policy to be so important to our economic future that the close scrutiny of and leadership by our elected officials is critical. We would note that in order to implement the policy effectively it would likely require frequent such as monthly meetings, the ability to be able to respond to requests for involvement in meeting~ in Des Moines and other economic development centers and be part of a team to pursue specific economic development projects. This committee will generally assume leadership of this policy, create repot[lng mechanisms to the City Council, and through the staff assistance of the economic development coordinator help administer the economic development account. I would also expect the involvement of the Director of Planning, City Manager, and Director of Finance in this policy. December, 1999 APPLICATION FOR BUSINESS FINANCIAL ASSISTANCE CITY OF IOWA CITY Economic Development Division 2003 Application for Business Financial Assistance Projects INSTRUCTIONS · An "Application for Business Financial Assistance Projects" should be completed when requesting financial assistance to directly assist a private business. An "Application for Economic Development Support Projects" should be completed for projects and programs that support economic development activities such as micro-business enterprise training programs, area business development programs, or specific area fa~:ade renovation programs. · Prior to completing an application, an applicant is strongly encouraged to contact the City's Economic Development Coordinator to discuss the project for which they are requesting funding. (See contact information at bottom of this page). · If this application is reproduced, it must remain in the original format and order in its entirety, or the application may be returned for correction. An electronic copy of the application is available in Microsoft Word or on the City's Web site (www. icgov.org). · Fill out the application completely. If any questions are left unanswered or required attachments are not submitted, an explanation for the omission must be included. · Only typed applications will be accepted and reviewed. · Application Deadlines: The City Council Economic Development Committee meets the third Thursday of the month. Completed applications for Business Financial Assistance projects should be submitted to the Economic Development Coordinator two weeks prior to the meeting at which the applicant wishes to have the Committee review the application. However, under special circumstances the Economic Development Committee will call special meetings to review Business Financial Assistance Applications. · Submit completed applications, with attachments to: Steven Nasby Community and Economic Development Coordinator City of Iowa City 410 E. Washington Street Iowa City, IA 52240 Phone: (319) 356-5236 Fax: (319) 356-5009 City of Iowa City Application for Business Financial Assistance Business Requesting Financial Assistance: Business Name: Oasis Falafel Name of Authorized Person to Obligate the Business: Naftaly Stramer Business Address: Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 Business Contact Person: Naftaly Stramer Title: Partner Telephone: 319-621-8483. Fax: E-mail Address: nstramer~.yahoo.com Business Federal ID#: TBD Date of Application Submittal: Auqust 28, 2003 Release of Information and Certification NOTE: Please read carefully before signing I hereby give permission to the City of Iowa City (the City) to research the company's history, make credit checks, contact the company's financial institution, and perform other related activities necessary for reasonable evaluation of this proposal. I understand that all information submitted to the City relating to this application is subject to the Open Records Law (1994 Iowa Code, Chapter 22) and that confidentiality may not be guaranteed. I hereby certify that all repre- sentations, warranties or statements made or furnished to the City in connection with this application are true and correct in all material respects. I understand that it is a criminal violation under Iowa law to engage in deception and knowingly make, or cause to be made, directly or indirectly, a false statement in writing for the purpose of procuring economic development assistance from a state agency or political subdivision. SIGNATURE OF COMPANY OFFICER AUTHORIZED TO OBLIGATE BUSINESS: NOTE: The City will not provide assistance in situations where it is determined that any repre- sentation, warranty or statement made in connection with this application is incorrect, false, misleading or erroneous in any material respect. If assistance has already been provided by the city prior to discovery of the incorrect, false or misleading representation, the city may initiate legal action to recover city funds. Section 1: Description of Business and Proposed Project 1.1. Describe in detail the proposed "project" (for example, company relocation, plant expansion, remodeling, new product line, size of building expansion, number of new jobs, amount of investment in machinery and equipment etc.): Oasis Falafel is a new food outlet providing fresh falafel, Mediterranean fast food for takeout. Freshly made foods such as hummus, baba ganoush, Mediterranean salad, and tehina will be sold as well as French fries and cold beverages. All food ingredients are served inside a fresh pita pocket bread. Oasis Falafel is at the center of downtown Iowa City in the Old Capitol Mall and will serve as a destination for hungry people and an attractive option for pedestrian traffic. The Mall serves as a thoroughfare and shopping area for University of Iowa students, faculty and staff, and other Iowa City citizens who work and pass through the downtown area. Normal hours of operation are Monday to Sunday, 11 AM to 8PM. Oasis Falafel will cater to late night patrons with late night hours Thursday to Saturday, 11 PM- 2 AM. Oasis Falafel is owned by Oasis Falafel L.L.C. The partners of Oasis Falafel L.L.C. are Naftaly Stramer (50%), Ofer B. Sivan (40%) and Ori J. Sivan (10%). Oasis Falafel is seeking start-up funding to be used to purchase kitchen equipment, cover remodeling cost, working capital and line of credit. 1.2. Provide a description and history of business: Oasis Falafel is a new business. A unique Vegetarian and Vegan (no animal products what so ever) Mediterranean style food outlet, Oasis Falafel provides original, freshly made falafel, hummus and baba ganoush (Mediterranean style eggplant), and Mediterranean salad, all served in pita pocket bread. Cold soft drinks will also be sold. Oasis Falafel will be a take-out only establishment, the sandwiches are to be eaten while standing or taken to go. Delivery of the above products in bulk for individuals or organizations will be part of the services offered. Oasis Falafel will neither use nor sell any animal-products. Falafel, hummus and baba ganoush are the favorite foods of the masses in Mediterranean countries because of their economical deliciousness. In Israel, for example, people eat falafel standing at small falafel shops at every major corner of every city. Falafel is made from fresh and healthy ingredients with every order. Oasis Falafel is in the Old Capitol Mall, with a store front inside the mall and access to Washington Street through which sales can occur. Location and customer base are covered in the Marketing Plan section. Normal operation hour are Monday to Sunday, 11 AM to 8PM. To serve the late-night population, Oasis Falafel will add special late-night hours on Thursday - Saturday from 11 PM - 2 AM. Late-night business will occur through the Washington Street access, facing the city's central bus area. 1.3. Describe the organizational structure of the business, including any parent companies, subsidiaries, sister companies, etc. Oasis Falafel L.L.C. owns Oasis Falafel. The partners of Oasis Falafel L.L.C. are Naftaly Stramer (50%), Ofer B. Sivan (40%) and Ori J. Sivan (10%). Both Naftaly Stramer and Ofer Sivan will be full time working managers of Oasis Falafel. 1.4. List the names of the business owners and the percent of ownership held by each. See section 1.3 1.5. List the business' five-digit and six-digit North American Industry Classification System (NAICS) codes or the primary and secondary Standard Industrial Codes (SIC codes)). The new NAICS code (as of 2002) is: 72211 - "Limited Service Restaurants". The SIC code is 5812 - "Carry Out Restaurants". 1.6. Will the project involve a transfer of operations or jobs from any other Iowa City or Johnson County facility or replace operations or jobs currently being provided by another Iowa City or Johnson County company? If yes, please indicate the facility(s) and/or company(s) affected. No 1.7. What date will the project begin? We have been working on establishing the restaurant for the last few months. We would like to open for business at the end of September 2003. 1.8. Has any part of the project been started? If yes, please describe. Oasis Falafel L.L.C. was established. We are in the final negotiation phase on the lease with the owners of Old Capitol Mall and have everything ready to start purchasing equipment and supplies, quotes for remodeling the leased space and apply for necessary licenses. Section 2: Financial Contributions to the Proposed Project 2.1. What type and amount of financial assistance are you requesting from the City (for example, grant, forgivable loan, loan, property tax exemption, tax increment financing rebate, etc.)? We are seeking a Community Development Block Grant (CDBG) of $20,000. 2.1a. If Community Development Block Grant Funds are being requested, please describe how the proposed project addresses the priorities, strategies, and goals cited in CITY STEPS 2001-2006. Oasis Falafel is a micro-enterprise business. Oasis Falafel employment opportunities will cater to low to moderate-income people including minorities and students. Oasis 4 Falafel hopes to employ 1.5 to 2.5 FTE in the first two years of business. If Business goes well Oasis Falafel may hire up to 3.5 FTE in second or third years of business. 2.2. Explain why assistance is needed from the City, and why it cannot be obtained elsewhere. (Specific supporting documentation evidenced by cash flow statements, income statements, etc., is requested.) If the City did not provide financial assistance, could the project proceed? Oasis Falafel L.L.C. applied for a commercial loan from local financial institutions like UI Community Credit Union, Hills Bank and US Bank. Banks are hesitant to finance the business with a commercial loan as it is in its start-up phase. We are still negotiating with several banks, but if we cannot get a commercial loan from a bank, we will have to use our personal funds, which are limited. Therefore, we are applying to the City of Iowa City for help in getting the business up and running. We doubt if we can open this business without the assistance from the City, 2.3. In what form is the business contribution to the project? Please explain clearly (for example, sale of stock, equity investments, subordinated debt, etc.). The partners in Oasis Falafel, L.L.C., owners of Oasis Falafel, will contribute their personal funds to the business. 2.4. Identify all agencies or institutions involved in the project (financial and otherwise) and what their involvement is: · Mr. Paul Heath, Director, University of Iowa Small Business Development Center (SBDC). · Mr. Albert G. Moonsammy, R.E.H.S., M.S.E.H. Environmental Health Specialist, Johnson County Department of Public Health. · Apex Construction Company, Iowa City, Iowa provides overall leased space remodeling and coordination. · Mr. Bruce Haupert, of the Iowa City law firm Leff, Haupert, Traw & Willman provides legal assistance. · Mr. Robert Rehfuss CPA PLC of Coralville provides accounting services · Mr. John Raley from John Raley Insurance Office will provide Insurance services · Hills Bank, Iowa City Branch, provide business-banking services. · Mr. And Mrs. Jacques and Dani Zrihen, present owners of HaShalom Restaurant, a Mediterranean restaurant located in Chicago, are consultants and mentors. HaShalom Restaurant has operated under Jacques's ownership and active management for the past 15 years. · Other Vendors · Hawkeye Equipment and Food Services · Sysco Food Services of Iowa, Inc. · Rapids Wholesales Equipment · Sam's Club · HyVee Food Stores · Super Wal-Mart 2.5. What type and amount of security will the assisted business provide the City? If no security is offered, an explanation must be provided. Note: as a general rule, for those businesses not publicly traded, personal guarantees are required in addition to other pledged business assets. Mortgage $_ What seniority or position? Lien on $ What seniority or position? Personal guarantee $ Other $ None (if none, please explain) Current equity in the business is $25,000 in equipment and supplies. Oasis Falafel L.L.C. owners investment will add $20,000 in capital. 2.6. Summary of Project Costs and Proposed Financing Sources SOURCES (Summarize All Sources From Question USE OF FUNDS 2.7) Activity Cost A B C D Land acquisition $ Site preparation $ Building acquisition $ Building construction $ Building remodeling $25,000 $10,000 $5,000 $10,000 Machinery & equipment $25,000 $5,000 $10,000 $10,000 Furniture & fixtures $ Permanent working capital $15,000 $5,000 $5,000 $5,000 (detail:) Other Other $ TOTAL: $65,000 $20,000 $20,000 $25,000 $ 2.7. Terms of Proposed Financing Code Source (include all sources in Question 2.6) Amount Type(l) Rate Term Source A: Owners Investment $20,000 Equity Source B: City of Iowa City $20,000 Grant/Loan Source C: Commere Bank (TBD) $25,000 Loan TBD TBD Source D: $ I Total: $65,000 mFor example: forgivable loan, direct loan, grant, equity, tax abatement, etc. 2.8. Generally a decision by the City on this application can be expected within 30 days of receipt of the application. If there is an urgent need for a more immediate decision on this application, please indicate the desired timeframe and the reason for the urgency. Our target open to business date is end of September 2003. It will help if the City can approve the grant/Loan by this date, or approved the grant/loan for Working Capital and equipment use. Section 3: Quality of Jobs to Be Created 3.1. How many employees are currently employed by the company worldwide (total employment including all locations, subsidiaries, divisions, affiliates, etc.)? N/A 3.2. If an existing Iowa City business, how many total individuals have been employed by the company at the Iowa City facility during the past year? N/A 3.3. If awarded funds, how many new full-time employees will you add to the payroll at the Iowa City facility within 12 and 24 months of the award date? The business acknowledges if it fails to create the jobs pledged below by the end of the project period and maintain them for a period of time (usually 36 months from the date of the award), it may be required to reimburse City funds for the employment shortfall, if the loan/grant was based on job creation. Full-Time: Pad-Time: 1.5 12 months 12 months 1.5 Cumulative Cumulative Full-Time: 2 (Day Manager) Part-Time: 1 24 months 2 24 months 2.5 Cumulative Cumulative Note: Jobs created or retained using Community Development Block Grant Funds must be "held by" or "available to" Iow- or moderate-income individuals. 3.4. What is the estimated annual payroll for the new employees resulting from this project? Excluding salaries for the two owners/managers first year annual payroll for new employees is around $21,000. For year two if the business is doing well, we assume that we will hire full time replacements for the two owners/managers. This will increase the payroll to around $90,000. 3.5. What is the starting average hourly wage rate (not including fringe benefits) projected to be: For the new employees? $7.0/hour and $8.0/hour for Night Manager 8 For existing employees? N/A, For existing and new employees? N/A 3.6. in the following table, list positions and hourly rates for each job classification to be created and retained. List of Positions and Hourly Rate for Created and Retained Positions (use additional sheets if needed) No. Hours Hourly Create Retain Position Title Per Week Rate of Pay X Prep/Clean 20 $7.0 X Cashiedsales 33 $7.0 X Night Manager 15 $8.0 Note: Every applicant should provide average hourly wages for all new and existing jobs which meet or exceed the average county wage rate by industry. Ninety percent of the project positions should have a wage greater than the federal poverty wage rate for Iowa City (30% of median income for a four person household in Iowa City). Under special 9 circumstances, consideration will be given to those companies who cannot meet this requirement. (Contact the Economic Development Coordinator at the City for current figures.) 3.7. Will any of the current employees lose their jobs if the project does not proceed? If yes, how many? Explain why: 3.8. Please describe the types of worker safety programs that would be available for your employees. Food Management, Food Safety and Workplace Safety. 3.9. Does the business provide standard medical and dental insurance for full-time employees? If so, what percentage of the standard medical and dental insurance package expense does the company provide? As we plan to hire full time employees only after year one, this is N/A for now. After year one, Oasis Falafel will consider benefits to full time employees after 6 month of service, taking into account the effect on the growth of the business. Section 4: Economic Impact 4.1. Please document how much of your operating expenditures (raw materials, supportive services, machinery, equipment, and labor) will be spent within Johnson County. Any inventory material that is available in Johnson County, will be purchased within Johnson County. Oasis Falafel will use local suppliers for all of it purchases (see 2.4). 4.2. What Johnson County companies do you expect to sell to that currently buy from non-eastern Iowa companies? What percentage of your sales will fall into this category? 4.3. What other Johnson County companies could be considered to be your competitors? Oasis Falafel~s main direct competitor in the Iowa City downtown area is the Pita Pit, a Canadian franchise. The Pita Pit serves falafel, humus and baba ganoush in a pita wrap. Pita Pits' falafel is delivered frozen from Canada, de-frosted, and cooked on a hot surface. This adversely affects the quality of the food. The food at Oasis Falafel is prepared using fresh ingredients daily, which adds an authentic Mediterranean touch. China Star, also located in the Old Capitol Mall, does not serve falafel but does serve fast, economical lunch fare (Chinese food) just a short distance away from our l0 location. Since non-vegetarians enjoy falafel as much as vegetarians, Oasis Falafel draws both vegetarians and non-vegetarians from China Star. There are few exclusively vegetarian (diary with no animal flesh) selections in downtown Iowa City (Masala) and only one Vegan restaurant (The Red Avocado) with a high priced menu, located a several blocks away from the heart of downtown. Oasis Falafel will be the only restaurant in downtown Iowa City to offer economical Vegan Cuisine. 4.4. How will this project benefit the City/County? Oasis Falafel will provide a variety of new and unique food items to Iowa City residents. This will improve the cultural diversity of the City of Iowa City. 4.5. How will this project grow the property tax base of Iowa City? If Oasis Falafel becomes a successful business after a few years of operation, Oasis Falafel L.L.C. will consider purchasing its own property in the Iowa City area, in order to expand the business. 4.5 Beyond the present project, what future growth potential is there for the Iowa City operation? Expend to a second location in Iowa City. Open a pita bread bakery, which will sell to local and out of town businesses. Section 5: Environmental Impact 5.1. Please describe the energy and resource efficiency programs, waste reduction, waste exchange, and recycling programs at your Iowa City operation. Minimize waste by using recyclable material where possible. 5.2. Do you use recycled materials in the production of any products or through the provision of any services at your facility? If so, please describe. Where available, all paper products in Oasis Falafel will be from recycled paper. 5.3. Will you be treating, transporting, storing, and disposing above ground, on or about your business premises, in tanks or otherwise, for any length of time or for any purpose: petroleum products, agricultural or other chemicals, waste oil or other liquid waste, or any other inflammable, corrosive, reactive, or explosive liquid or gas? If yes, please specify. Yes. Cooking oils, which will be recyclable. 11 5.4. Will the Iowa City operation develop renewable energy resources or products that conserve energy? If so, please describe. ]No Section 6: Community Involvement; Compliance with Law; Repayment Agreement 6.1. Please describe your business' history of contributing to the community through volunteer work, financial contributions, or other means. If a new start-up business, please describe commitment to becoming involved in the community. Oasis Falafel is a new business, so there is no business history. However, Oasis Falafel is planning to participate in community events such as, The Iowa City Jazz Festival, The Iowa City Art Fare, Cultural Diversity Day and other community programs/events. 6.2. Has the business been cited or convicted for violations of any federal or state laws or regulations within the last five years (including environmental regulations, Occupational Safety And Health laws, Fair Labor Standards, the National Labor Relations Act, the Americans With Disabilities Act)? If yes, please explain the circumstances of the violation(s). No 6.3. Financial assistance from the City of Iowa City requires a repayment clause in the loan agreement with the City. The repayment clause requires a prorated repayment of the financial assistance if the company does not meet its job attainment obligation and other obligations of this agreement. Is the company willing to enter into a loan agreement that contains a repayment clause? Yes. Section 7: Required Attachments Check off each attachment submitted. If not submitted, explain why. [ X ] Business plan (if new business) [ X ] Profit and loss statements (2 year projections) [ X ] Balance sheets (2 year projections) [ ] Letters of commitment of project funds (from banks, applicant, etc.) 12 N/A Description of fringe benefits provided to employees N/A Copies of the company's quarterly Iowa "Employer's Contribution and Payroll Report" for the past year and a copy of the most recent monthly payroll register [ X ] Map indicating the location of the project within the community [ X ] Cost estimates for construction, machinery/equipment, permanent working capital, and purchases. [ ] Certificate of Good Standing from the Iowa Secretary of State or an authorization to conduct business in Iowa. [ ] Certificate of Incumbency listing the current board of directors and current officers if a corporation or a listing of the general partners if a partnership [ ] Corporate resolution authorizing the application for City funds [ ] Corporate signatory authorization naming an officer to execute the City application and City loan documents, if approved [ ] Other Explanation/other comments: Upon review of a submitted application, the City reserves the right to request additional information in order to assist the City with its evaluation of an application. 14 Oasis Falafel- Business Plan Naftaly Stramer, Partner Ofer B. Sivan, Partner Ori J. Sivan, Partner 716 River Street 1025 Briar Drive 1025 Briar Drive Iowa City, IA 52246 Iowa City, IA 52240 Iowa City, IA 52240 (319) 621-8483 (319)-331-2827 (319) 353-4837 nstramer~yahoo.com ofer~askforparts.com sivan~engineering.uiowa.edu Prepared August 2003 By Nafialy Stramer, Ofer B. Sivan and Ori J. Sivan 1 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 TABLE OF CONTENTS GLOSSARY OF TERMS ...................................................................................... 3 1_ STATEMENT OF PURPOSE ........................................................................ 4 2 THE BUSINESS ............................................................................................ 4 2.1 Description ............................................................................................................. 4 2.2 Organization Structure ........................................................................................ 5 2.2. I Ownership ................................................................................................... 5 2.2.2 Management and Personnel ........................................................................ 5 2.3 Resources ............................................................................................................... 5 2.3.1 Accountant .................................................................................................. 5 2.3.2 Inst~rance ..................................................................................................... 6 2.3.3 Legal ........................................................................................................... 6 2.3.4 Banking ....................................................................................................... 6 2.3.5 Other: Consultants ...................................................................................... 6 2.4 Products ................................................................................................................. 6 2.4.1 Menu ........................................................................................................... 7 2.4.2 Names of Suppliers: .................................................................................... 7 3 MARKETING ................................................................................................ 7 3.1 Client Base ............................................................................................................. 7 3.2 Location ................................................................................................................. 8 3.3 Competitors ........................................................................................................... 8 3.~4 Advertisement & Promotion ................................................................................ 9 3.4.1 General ........................................................................................................ 9 3.4.2 Online .......................................................................................................... 9 4 FINANCIAL DOCUMENTS ......................................................................... 10 4.._[] Summary of Financial Needs ............................................................................. I0 4._~ Sources and Uses of Funds ................................................................................. ]0 4._.~3 Start-up Costs~ Cash Flow and Balance Sheet ................................................. Il 4.._~4 Two-year Income Proiection .............................................................................. 17 2 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 4.._~5 Break-Even Analvsis ........................................................................................... 18 _5 ATTACHMENTS ......................................................................................... l0 5.1 Menu + Sales (estimated) .................................................................................... 19 5.2 Cost of Labor (estimated) ................................................................................... 20 5.3 Location Map ...................................................................................................... 21 5..~4Amortization Table for $25000.00 Loan at 6% (Bank) ................................... 22 5._~5Amortization Table for $20000.00 Loan at 3% (CDBG) ................................ 31 Glossary of Terms Hummus: A flavorful dip of chickpeas and sesame-seed paste (tehina). Falafel: Deep-fried balls of ground chickpeas Baba Ganoush: Roasted eggplant mixed with tehina sauce. Tehina: Sesame seed paste. Mediterranean Salad: A refreshing course of finely chopped tomatoes, cucumbers and onions, with oil and a hint of coriander and parsley. ETYMOLOGY: Arabicfa~fil, pl. offilfil, pepper, probably from Sanskritpippal~. See pepper. ETYMOLOGY: Modem GreekpYtta, pita, pie, cake, bread. 3 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 1 Statement of Purpose Oasis Falafel is a small food outlet providing freshfalafel, Mediterranean fast food for takeout. Freshly made foods such as hummus, babu ganoush, Mediterranean salad, and tehina will be sold as well as French fries and cold beverages. All ingredients are served inside freshpita (pocket bread). Oasis Falafel is at the center of downtown Iowa City in the Old Capitol Mall (see section Error! Reference source not found. "Location Map") and will serve as a destination for hungry people and an attractive option for pedestrian traffic. The Mall serves as a thoroughfare and shopping area for University of Iowa students, faculty and staff, and other Iowa City citizens who work and pass through the downtown area. Normal hours of operation are Monday to Sunday, 11 AM to 8PM. Oasis Falafel will cater to late night patrons with late night hours Thursday to Saturday, 11 PM - 2 AM. Oasis Falafel L.L.C. owns Oasis Falafel. The partners of Oasis Falafel L.L.C are Naftaly Stramer (50%), Ofer B. Sivan (40%) and Ori J. Sivan (10%). Oasis Falafel is seeking start-up funding to be used to purchase kitchen equipment, cover remodeling cost, working capital and line of credit. 2 The Business 2.1 Description A unique Vegetarian and Vegan (no animal products what so ever) Mediterranean style food outlet, Oasis Falafel provides original, freshly made falafel, hummus and babu ganoush (Mediterranean style eggplant), and Mediterranean salad, all served in a pita pocket bread. Cold soft drinks will also be sold. Oasis Falafel will be a take-out only establishment, the sandwiches are to be eaten while standing or taken to go. Delivery of the above products in bulk for individuals or organizations will be part of the services offered. Oasis Falafel will neither use nor sell any animal-products. Falafel, hummus and babu ganoush are the favorite foods of the masses in Mediterranean countries because of their economical deliciousness. In Israel, for example, people eat falafel standing at small falafel shops at every major comer of every city. Falafel is made from fresh and healthy ingredients with every order. Oasis Falafel is in the Old Capitol Mall, with a store front inside the mai1 and access to Washington Street through which sales can occur. Location and customer base are covered in the Marketing Plan section. 4 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 Normal operation hour are Monday to Sunday, 11 AM to 8PM. To serve the late-night population, Oasis Falafel will add special late-night hours on Thursday - Saturday from 11 PM - 2 AM. Late-night business will occur through the Washington Street access, facing the city's central bus area. 2.2 Organization Structure 2.2.1 Ownership Naftaly Stramer (47), Ofer Sivan (25), and Ori Sivan (27) are the owners of Oasis Falafel LLC. Naftaly Stramer is a 23-year veteran of the Information Technology industry. For the last four years Naftaly has served as Vice President of Software Engineering and Quality Assurance. Naftaly brings his executive experience to the partnership which includes, but is not limited, to managing a large staff and handling armual budgets of $8M - $1 OM. Naflaly also brings 10 years of direct involvement in Quality Assurance, which will be a huge plus for the business. Ofer Sivan is a recent graduate of the University of Iowa with a degree in Electrical and Computer Engineering. Ofer has applied his engineering studies and creativity working at the U of I school of Music Recording Studio and at WSUI AM 910. Ori Sivan has dreamed of opening a falafel stand for over 10 years. The original concept and business plan for Oasis Falafel was drafted in 1994. Ori has extensive experience in organizing and financing (fundraising for) community events including: 40th Annual Paul D. Scholz Symposium (University of Iowa) and The Society of Hispanic Professional Engineers Midwestem Expo 2003. 2.2.2 Management and Personnel Both Naftaly Stramer and Ofer Sivan will act as Owners/Managers. Oasis Falafel plans to hire additional help, which will accumulate to 1.5 - 2.5 full time equivalent (FTE) 2.2.2.1 Duties and Responsibilities of Managers Managers will be responsible for purchasing, receiving, scheduling employees, cooking, prepping, serving and sales, and cleaning. When the business is performing well and is profitable, Oasis Falafel will hire a full time manager to run the business. 2.2.2.2 Duties and Responsibilities of Employees Employees will be responsible for cooking, prepping, serving and sales, and cleaning. 2.3 Resources 2.3.1 Accountant Robert Rehfuss CPA PLC of Coralville provides accounting services. 5 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 2.3.2 Insurance John Raley Insurance Office provides insurance 2.3.3 Legal Oasis Falafel's attorney is Bruce Haupert of the Iowa City law firm Leff, Haupert, Traw & Willman. 2.3.4 Banking Hills Bank, Iowa City branch. 2.3.5 Other: Consultants Mr. Paul Heath, Director of The University of Iowa Small Business Development Center is helping with directing us to small business resources. Mr. Heath knowledge and experience is a great resource in developing this business plan. Oasis Falafel uses Mr./Mrs. Jacques and Dani Zrihen, present owners of HaShalom Restaurant, as consultants and mentors. HaShalom Restaurant is a Mediterranean restaurant located in Chicago and has operated under Jacques's ownership and active management for the past 15 years. The Chicago Sun-Times, the Chicago Tribune, and WBBM News Radio AM 780, among others, review Jacques and Dani regularly. 2.4 Products Falafel sandwiches are the main product to be sold at Oasis Falafel. This hot, tasty, and healthy meal is filling and inexpensive. As described in more detail below, the low cost of ingredients and their long shelf life, allows Oasis Falafel to operate with little overhead and high profit margin. The basic falafel sandwich and accompanying salads are high profit margin products; sales of these products will provide Oasis Falafel with a reliable income. Oasis Falafel is also prepared to be flexible to customer demand and expand its operation to provide more products and services. Oasis Falafel is prepared to add a host of salads to its menu and is planning to do so by offering a "Salad of the Day" and/or "Soup of the Day" and gauging customer response. Oasis Falafel is also prepared to begin catering and/or offering delivery service should sufficient customer demand develop. Sales of salads in bulk (1/2 lb to 1 lb) are a high profit-margin activity, which Oasis Falafel plans to commence shortly after opening. The table below (2.4.1) shows the ingredients and sale price for all food items. See attachments 5.1 "Menu + Sales (estimated)" and 5.2 "Error! Reference source not found." for a description of the process of preparing the food, cost of ingredients and profit margins. Estimated average profit margins on food sales are 85%. 6 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 2.4.1 Menu Sale ITEM Price All sandwiches served in Pita Bread + Mediterranean style Salad + Vegetables + Tehina Sauce Hurnmus Sandwich $3.50 Baba Ganush Sandwich $3.50 Falafel + Hummus Sandwich $3.75 Falafel + Baba Ganush Sandwich $4.00 Mediterranean Style Salad+ Vegetables only Sandwich $3.00 Extra Hummus or Baba Ganoush $0.50 Cold beverage - Coke Products $1.50 Juice $1.50 Bottled water $1.50 Potato chips $1.00 The above ingredients will be supplied by a variety of suppliers, to insure steady flow of ingredients and to find the most competitive prices. 2.4.2 Names of Suppliers: Hawkeye Food Service Food, Equipment, Supplies HyVee Food Food, Supplies Wal-Mart Food Supplies Sam's Club Food, Supplies A1-Kyam Food 3 MARKETING 3.1 Client Base University of Iowa affiliates, local business people, and shoppers comprise the client base for Oasis Falafel. The University of Iowa (UI) has almost 30,000 students and 10,000 employees. Majority of students and employees are in downtown Iowa City several days 7 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 a week. Downtown Iowa City serves as a retail and service center to many more people that are not affiliated with the UI. Falafel is a well-known food that will attract a diverse customer base. Falafel vendors are common in many countries in the world, including Europe. We plan to attract many of the UI's international students and faculty. Falafel is also well liked by young Americans because of its healthy ingredients. We believe that this will attract the general student population searching for a fresh and healthy lunch alternative. Falafel is also 100% vegetarian and in fact Vegan. This is expected to attract those in the local community that have stringent eating habits for moral, religious, or health-related reasons. The demand for Eastern and Mediterranean foods is demonstrated by the fact that there are many Eastern and Asian markets/grocers (East West, Afro-Asian, Aoeshe, etc.) and restaurants featuring ethnic foods in Iowa City and Coralville. In general, there is a clear demand for ethnic foods as evidenced by the presence of many Mexican, Chinese, Japanese and Sushi, Thai, and Vietnamese restaurants. 3.2 Location Oasis Falafel's central location is one of its prime attraction. Oasis Falafel is located at the North end of the Old Capitol Mall in the center of downtown Iowa City (see map). Oasis Falafel will have a storefront inside the mall and a window to Washington Avenue (see floor plan and map below). Adjacent to the mall, on Washington Avenue, are the Cambus, Iowa City, and Coralville transit centers: The transit hubs add even more pedestrian traffic to the area and are expected to increase sales at Oasis Falafel. Iowa City bar patrons are a great source of business to existing food stores in the downtown area. The location of Oasis Falafel is the only store at the Old Capitol mall with access to Washington Avenue. Oasis Falafel plans to operate late hours on Thursday - Saturday from 11 PM - 2 AM. With minimal advertisement, due to Oasis Falafel's prime location, we will be able to serve economical Mediterranean cuisine at a high profit margin. 3.3 Competitors Oasis Falafel's main direct competitor in the Iowa City downtown area is the Pita Pit. The Pita Pit serves falafel, humus and baba ganoush in a pita wrap. Pita Pits' falafel is delivered frozen from Canada, de-frosted, and cooked on a hot surface. This adversely affects the quality of the food. The food at Oasis Falafel is prepared using fresh ingredients daily, which adds an authentic Mediterranean touch. We believe that our fresh, authentic cuisine will attract 60-70% of Pita Pit's falafel clientele. 8 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 China Star, also located in the Old Capitol Mall, does not serve falafel but does serve fast, economical lunch fare (Chinese food)just a short distance away from our location. Since non-vegetarians enjoy falafel as much as vegetarians, Oasis Falafel draws both vegetarians and non-vegetarians from China Star. We estimate that we can attract at least 25% of their clients. There are few exclusively vegetarian (diary with no animal flesh) selections in downtown Iowa City (Masala) and only one Vegan restaurant (The Red Avocado) with a high priced menu, located a several blocks away from the heart of downtown. Oasis Falafel will be the only restaurant in downtown Iowa City to offer economical Vegan Cuisine. 3.4 Advertisement & Promotion 3.4.1 General Falafel is food for everyone. First time patrons who eat falafel often don't even realize that there is no meat inside the sandwich. Iowa City has a highly concentrated population, centered about downtown and word of mouth travels very quickly. Promotions and discounts help get people introduced to our delicious products, and encourage repeat customers. Coupons are an excellent way to draw customers who are attracted by the economical aspect of our products. Oasis Falafel plans to employ punch cards, whereby each customer gets a free sandwich for every ten purchased at full price. This system rewards our regular customers and shows our appreciation for their business. Iowa Citians are voracious newspaper readers. The Add Sheet is a free advertisement newspaper distributed every Wednesday on the comers of downtown Iowa City. Their distribution is high at, 24,000 copies per week (source: The Add Sheet). The Daily Iowan is provided free to all students and faculty. Students regularly peruse the advertisements to see what is going on in town. The Daily Iowan's circulation is 20,500 during the school year. The yellow pages are provided to every residential and business phone company in the area, approximately 25,000 are distributed in Iowa City/Coralville every year. Oasis Falafel will use the above advertisement media. 3.4.2 Online 3.4.2.1 Web Site In order to create a falafel community and to obtain customer feedback and opinions, we plan to operate a website in which people can make comments and suggestions and ask questions. To encourage feedback from customers, Oasis Falafel plans to make downloadable coupons available to those who provide comments, suggestions or feedback to the website. 9 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 4 Financial Documents 4.1 Summary of Financial Needs Oasis Falafel is seeking a $25,000 SBA APPROVED BANK LOANS to help with: Start-up cost: · Kitchen and other equipment needs. · Remodeling the existing space in Old Capitol Mall. Ongoing Working capital: · Wages and Payroll taxes · Advertisement and promotions · Cost of goods sold and miscellaneous expenses. 4.2 Sources and Uses of Funds Use of Funds Source of Funds Activity Cost A B C D Leased Space Remodeling $25,000 $10,000 $5000 $10,000 Equipment + Supplies $25,000 $5,000 $10,000 $10,000 Operations +Working $15,000 $5,000 $5,000 $5,000 Capital + Line of Credit Total $65,000 $20,000 $20,000 $25,000 Sources: A - Owners Investment B - City of Iowa City Community Development Block Grant Program grant/loan C - Hills Bank, Iowa City Branch. 10 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 4.3 Start-up Costs, Cash Flow and Balance Sheet Start-Up Costs Equipment $23,140 Licenses and filings $400 L.L.C filings and Legal $1,000 Accounting $500 Remodeling $19,075 Starting Inventory $1,445 Advertising $1,000 Rent (First month + Security deposit) $2,000 Total Start-Up Costs $48,560 Equipment List Price Capital Expenditure Deep Fat Fryers (2) $1,260 Sandwich Top Refrigerated Station $2,400 Cash Register $300 Ice Machine + Bin $2,400 Equipment Stand (48"X30"X24") $250 Convection Oven $800 Hotplate, Counter Unit $500 Freezer (reach in 1 door) $2,150 Fridge (reach in 2 door) $2,350 Pots & Pans $450 Heating Lamp $100 Message Board $30 Blender (1 GAL) $750 Meat Grinder $800 Cutlery $100 Sign (indoor + outdoor) $3,000 ANSUL Fire Suppression +hood $4,500 Sub Total (Capital Expenditure) $19,140 Sub Total (Supplies) $500 Total $19,640 Remodeling Plumbing $1,500 Electricity $1,500 Hood + duct work + vents $11,075 Miscellaneous $5,000 Total $19,075 11 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 12 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 ICash Flow Year 1 (Estimated) Estimated I Total Year 1 Start-Up Cost $48,572 Loans/Cache in $65,000 1. CASH ON HAND (end of year) $43,936 2. CASH RECEIPTS (a) Cash Sales $190,297 (b) Collection from Credit Accounts $0 (c) Loan or other Cash Injection $0 3. TOTAL CASH RECEIPTS $190,297 4. TOTAL CASH AVAILABLE $60,777 5. CASH PAID OUT Cost of Goods Sold $23,513 (a) Purchases (Merchandise) $0 (b) Gross Wages (Excluding Withdrawals) $86,928 (c) Payroll Expenses (Taxes, etc.) $13,039 (d) Outside Services $0 (e) Supplies (Office & Operation) $0 (f) Repairs and Maintenance $2,400 (g) Advedising $1,800 (h) Car, Delivery & Travel $0 (i) Accounting & Legal $2,200 (j) Rent (fixed + CAM) $11,898 (k) Telephone $900 (I) Utilities $6,000 (m) Insurance $3,000 (n) Taxes (Real Estate, etc.) $0 (o) interest $1,984 (p) Other Expenses (specify each below). $0 (q) Miscellaneous (Unspecified) $0 SUBTOTAL: $130,149 (s) Loan Principal Payment $5,570 (t) Capital Purchases $0 (u) Other Start-Up Costs $0 (v) Reserve and/or Escrow $0 (w) Owner's Withdrawal $0 6. TOTAL OPERATION EXPENSES $135,719 (Total 5a thru 5w) 6. TOTAL CASH PAID OUT (operating $159,232 expenses + cost of goods sold) 7. YEAR END PROFIT (LOSS) $31,066 (3 minus 6) 8. CASH POSITION AT YEAR END $47,494 (4 minus 6) Ratio Analysis Labor to Revenue Ratio 53% 13 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 ICash Flow Year 2 (Estimated) Estimated I Total Year 2 1. CASH ON HAND (end of year) $76,070 2. CASH RECEIPTS (a) Cash Sales $195,350 (b) Collection from Credit Accounts $0 (c) Loan or other Cash Injection $0 3. TOTAL CASH RECEIPTS $195,350 4. TOTAL CASH AVAILABLE $92,910 5. CASH PAID OUT Cost of Goods Sold $23,513 (a) Purchases (Merchandise) $0 (b) Gross Wages (Excluding Withdrawals) $86,928 (c) Payroll Expenses (Taxes, etc.) $17,386 (d) Outside Services $0 (e) Supplies (Office & Operation) $0 (f) Repairs and Maintenance $2,400 (g) Advertising $1,800 (h) Car, Delive~ & Travel $0 (i) Accounting & Legal $2,200 (j) Rent (fixed + CAM) $11,898 (k) Telephone $900 (I) Utilities $6,000 (m) Insurance $3,000 (n) Taxes (Real Estate, etc.) $0 (o) Interest $1,722 (p) Other Expenses (specify each below). $0 (q) Miscellaneous (Unspecified) $0 SUBTOTAL: $134,233 (s) Loan Principal Payment $5,832 (t) Capital Purchases $0 (u) Other Start-Up Costs $0 (v) Reserve and/or Escrow $0 (w) Owner's Withdrawal $0 6. TOTAL OPERATION EXPENSES $11,564 (Total 5a thru 5w) 6. TOTAL CASH PAID OUT (operating $163,578 expenses + cost of goods sold) 7. YEAR END PROFIT (LOSS) $31,771 (3 minus 6) 8. CASH POSITION AT YEAR END $79,266 (4 minus 6) Ratio Analysis Labor to Revenue Ratio 53% 14 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 IBalance Sheet - Year I (Estimated) Estimated Estimated Start-Up Year Sep-03 End Assets Current Assets: Cash $16,428 $47,494 Marketable Securities $0 $0 Accounts Receivable (Net) $0 $0 Total Current Assets $16,428 $47,494 Fixed Assets: Equipment $23,140 $23,140 Leasehold improvement $19,075 $19,075 Inventory $1,457 $2,081 Less: Accumulated Dep. $0 $0 Total Fixed Assets $43,672 $44,296 Other Assets $0 $0 Total Assets $60,100 $91,790 Liability Current Liabilities: Accounts Payable $0 $0 Notes Payable (this year) $0 $5,570 Other: $0 $0 Total Current Liabilities $0 $5,570 Non-Current Liabilities: Long-Term Debt $45,000 $39,430 Less Notes Payable (this year) $0 $5,570 Other: $0 $0 Total Non-Current Liabilities $45,000 $33,860 Total Liability $45,000 $39,430 Equity Owners Investment $20,000 $20,000 Retained Earnings $0 $31,066 Total Equity $20,000 $51,066 Total Liability + Equity $65,000 $90,496 15 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 I Balance Sheet -Year 2 (Estimated) Estimated Estimated End of Year Sep-04 End Assets Current Assets: Cash $47,494 $79,266 Marketable Securities $0 $0 Accounts Receivable (Net) $0 $0 Total Current Assets $47,494 $79,266 Fixed Assets: Equipment $23,140 $23,140 Leasehold improvement $19,075 $19,075 Inventory $2,081 $2,081 Less: Accumulated Dep. $0 $0 Total Fixed Assets $44,296 $44,296 Other Assets $0 $0 Total Assets $91,790 $123,561 Liability Current Liabilities: Accounts Payable $0 $0 Notes Payable (this year) $474 $6,306 Other: $0 $0 Total Current Liabilities $474 $5,306 Non-Current Liabilities: Long-Term Debt $39,430 $39,430 Less Notes Payable (this year) $474 $6,306 Other: $0 $0 Total Non-Current Liabilities $38,956 $33,124 Total Liability $39,430 $39,430 Equity Owners Investment $20,000 $20,000 Retained Earnings $31,066 $62,837 Total Equity $51,066 $82,837 Total Liability + Equity $90,496 $122,267 16 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 Finacial Results - Year I Finacial Results - Year 2 $35,000 $70,000 $30,000 $60,000 $25,000 $50,000 $20,000 $40,000 $10,000 $20,000 $0 $0 ($5,0OO) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ o o o o o o o o o ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ o o o 0 Income (Las) ,-~- Net Sal~ Month End Balan~ ~ Income (Las) --m-- Net Sales Month End Balance 4.4 Two-year Income Projection Net Sales $190,297 100.00% Cost of Goods Sold $23,513 12.36% Gross Profit $166,784 87.64% Operating Expenses $135,719 71.32% Operating Income (Loss) $31,066 16.32% Depreciation $0 0.00% Income (Loss) before Income Taxes $31,066 16.32% Federal and State Income Taxes $0 0.00% Net Income (Loss) $31,066 16.32% Totals ~percent I RETAINED EARNINGS (FORCASTEDI Year I ~Year I I Beginning Balance $0 Owner Draw $0 Add Net Income (Loss) $31,066 Ending Balance $31,066 17 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 Totals percent STATEMENT OF INCOME IFORCASTED Year 2 Year 2 Net Sales $195,350 100.00% Cost of Goods Sold $23,513 12.41% Gross Profit $171,836 87.59% Operating Expenses $140,065 55.74% Operating Income (Loss) $31,771 31.86% Depreciation $0 0.00% Income (Loss) before Income Taxes $31,771 31.86% Federal and State Income Taxes $0 0.00% Net Income (Loss) $31,771 31.86% Totals percent RETAINED EARNINGS (FORCASTEDI Year 2 Year 2 Beginning Balance $31,066 Owner Draw $0 Add Net Income (Loss) $81,771 Ending Balance $62,837 4.5 Break-Even Analysis $0 $50 $100 $150 $200 i From the above chart it can be estimated that sales at break even is $152,000. This translates to sales of 520 units of falafel per week. 18 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 5 Attachments 5.1 Menu + Sales (estimated) Daily Daily Moray Monthly Sale Sales (# Daily Cost of Sales (# Moray Cost of ri'By1 ~ce mits) ~es($) r, wrs($) trits) ~es($) ~tems(~ All items ccxres in Pita + rvlcicle FalaFel+BabaC-.-.-.-.-.-.-.-.-.~__r.h ~.00 8 ~ $1-.,~ 218 ~7'4 $11@.C Fala~el + Htrrrrus (l~ight Sales - TI~ Fri, Sat- averaged Daily)$3.75 28 $106 $10.81 733 $2~750 $281.£ Total food it~-¢~ 129 476 $55.54 3354 $1Z367 $1,4~ Pot~o CNps $1.00 13 $13 $1.29 310 $310 $30.,c Tc~s 245 $643 $77 6347 $16,701 $2,01 Sales F_~__or 1.2 19 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 5.2 Cost of Labor (estimated) MAN=Manager/Partner(NafialyStramer) $10.0 AMN=Manager/Partner (Ofer) 10 PTS=Part Time Staff- TBH $7.0 SMAN=Night Manager - TBH $8.0 Weekday staff Saturday staff HoUrs staffing staff Hours staffing staff Cost(S) Cost(S) 10 11 MAN + AMN 20 10 11 MAN + PTS 17 11 - 12 MAN+AMN+PTS 27 11 12 MAN+PTS 17 12- 13 MAN+AMN+PTS 27 12- 13 MAN+PTS 17 13 14 MAN+AMN+PTS 27 13- 14 MAN+PTS 17 14- 15 MAN+AMN 20 14- 15 MAN 10 15- 16 MAN+AMN 20 15- 16 MAN 10 16- 17 MAN+AMN 20 16- 17 MAN 10 17 - 18 MAN + AMN + PTS 27 17 - 18 MAN + PTS 17 18- 19 MAN+AMN+PTS 27 18 19 MAN+PTS 17 19 - 20 MAN + AMN 20 Totals 132 20 - 21 MAN + AMN 20 Totals 255 Sunday staff Night staff Hours Staffing Staff HOurS staffing staff cost(s) Cost(S) 11 12 AMN 0 22 - 23 SMAN + PTS + PTS 22 12 - 13 AMN + PTS 17 23 - 00 SMAN + PTS + PTS 22 13 14 AMN + PTS 17 O0 - 01 SMAN + PTS + PTS 22 14 - 15 AMN 10 01 - 02 SMAN+PTS +PTS 22 15 - 16 AMN 10 02 - 03 SMAN+PTS +PTS 22 16 - 17 AMN 10 Totals 110 17 18 AMN 10 Totals 74 Total Labor Cost (Monthly) $7,244 20 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 5.3 Location Map VACANT First Floor Leasing Plan o. 6.,~ ~o ~o. ~C~I~L 21 OASIS FALAFEL Old Capitol Town Center, 201 South Clinton, Suite 105, Iowa City, Iowa 52240 5.4 Amortization Table for $25000.00 Loan at 6% (Bank) Amortization Table for $25000.00 borrowed on Sep 1, 2003 Month Year Payment ($) Principal Paid Interest Paid ($) Total Interest Balance ($) Oct-03 $ 365.21 $ 240.21 $ 125.00 $ 125.00 $ 24,759.79 Nov-03 $ 365.21 $ 241.41 $ 123.80 $ 248.80 $ 24,518.37 Dec-03 $ 365.21 $ 242.62 $ 122.59 $ 371.39 $ 24,275.75 Jan-04 $ 365.21 $ 243.84 $ 121.38 $ 492.77 $ 24,031.91 Feb-04 $ 365.21 $ 245.05 $ 120.16 $ 612.93 $ 23,786.86 Mar-04 $ 365.21 $ 246.28 $ 118.93 $ 731.86 $ 23,540.58 Apr-04 $ 365.21 $ 247.51 $ 117.70 $ 849.57 $ 23,293.07 May-04 $ 365.21 $ 248.75 $ 116.47 $ 966.03 $ 23,044.32 Jun-04 $ 365.21 $ 249.99 $ 115.22 $ 1,081.25 $ 22,794.33 Jul-04 $ 365.21 $ 251.24 $ 113.97 $ 1,195.22 $ 22,543.09 Aug-04 $ 365.21 $ 252.50 $ 112.72 $ 1,307.94 $ 22,290.59 Sep-04 $ 365.21 $ 253.76 $ 111.45 $ 1,419.39 $ 22,036.83 Oct-04 $ 365.21 $ 255.03 $ 110.18 $ 1,529.58 $ 21,781.80 Nov-04 $ 365.21 $ 256.30 $ 108.91 $ 1,638.49 $ 21,525.49 Dec-04 $ 365.21 $ 257.59 $ 107.63 $ 1,746.11 $ 21,267.91 Jan-05 $ 365.21 $ 258.87 $ 106.34 $ 1,852.45 $ 21,009.03 Feb-05 $ 365.21 $ 260.17 $ 105.05 $ 1,957.50 $ 20,748.86 Mar-05 $ 365.21 $ 261.47 $ 103.74 $ 2,061.24 $ 20,487.39 Apr-05 $ 365.21 $ 262.78 $ 102.44 $ 2,163.68 $ 20,224.62 May-05 $ 365.21 $ 264.09 $ 101.12 $ 2,264.80 $ 19,960.53 Jun-05 $ 365.21 $ 265.41 $ 99.80 $ 2,364.61 $ 19,695.11 Jul-05 $ 365.21 $ 266.74 $ 98.48 $ 2,463.08 $ 19,428.38 Aug-05 $ 365.21 $ 268.07 $ 97.14 $ 2,560.22 $ 19,160.30 Sep-05 $ 365.21 $ 269.41 $ 95.80 $ 2,656.02 $ 18,890.89 Oct-05 $ 365.21 $ 270.76 $ 94.45 $ 2,750.48 $ 18,620.13 Nov-05 $ 365.21 $ 272.11 $ 93.10 $ 2,843.58 $ 18,348.02 Dec-05 $ 365.21 $ 273.47 $ 91.74 $ 2,935.32 $ 18,074.55 Jan-06 $ 365.21 $ 274.84 $ 90.37 $ 3,025.69 $ 17,799.70 Feb-06 $ 365.21 $ 278.22 $ 89.00 $ 3,114.69 $ 17,523.49 Mar-06 $ 365.21 $ 277.60 $ 87.62 $ 3,202.31 $ 17,245.89 Apr-06 $ 365.21 $ 276.98 $ 86.23 $ 3,288.54 $ 16,966.91 May-06 $ 365.21 $ 280.38 $ 84.83 $ 3,373.37 $ 16,686.53 Jun-06 $ 365.21 $ 281.78 $ 83.43 $ 3,456.81 $ 16,404.75 Jul-06 $ 365.21 $ 283.19 $ 82.02 $ 3,538.83 $ 16,121.56 Aug-06 $ 365.21 $ 284.61 $ 80.61 $ 3,619.44 $ 15,836.95 Sep-06 $ 365.21 $ 286.03 $ 79.18 $ 3,698.62 $ 15,550.92 Oct-06 $ 365.21 $ 287.46 $ 77.75 $ 3,776.38 $ 15,263.46 Nov-06 $ 365.21 $ 268.90 $ 76.32 $ 3,852.69 $ 14,974.57 Dec-06 $ 365.21 $ 290.34 $ 74.87 $ 3,927.57 $ 14,684.23 Jan-07 $ 365.21 $ 291.79 $ 73.42 $ 4,000.99 $ 14,392.43 Feb-07 $ 365.21 $ 293.25 $ 71.96 $ 4,072.95 $ 14,099.18 Mar-07 $ 365.21 $ 294.72 $ 70.50 $ 4,143.45 $ 13,804.46 Apr-07 $ 365.21 $ 296.19 $ 69.02 $ 4,212.47 $ 13,508.27 May-07 $ 365.21 $ 297.67 $ 67.54 $ 4,280.01 $ 13,210.60 Jun-07 $ 365.21 $ 299.16 $ 66.05 $ 4,346.06 $ 12,911.44 Jul-07 $ 365.21 $ 300.66 $ 64.56 $ 4,410.62 $ 12,610.78 Aug-07 $ 365.21 $ 302.16 $ 63.05 $ 4,473.67 $ 12,308.62 Sep-07 $ 365.21 $ 303.67 $ 61.54 $ 4,535.22 $ 12,004.95 Oct-07 $ 365.21 $ 305.19 $ 60.02 $ 4,595.24 $ 11,699.76 Nov-07 $ 365.21 $ 306.72 $ 58.50 $ 4,653.74 $ 11,393.05 Dec-07 $ 365.21 $ 308.25 $ 56.97 $ 4,710.70 $ 11,084.80 Jan-08 $ 365.21 $ 309.79 $ 55.42 $ 4,766.13 $ 10,775.01 Feb-08 $ 365.21 $ 311.34 $ 53.88 $ 4,820.00 $ 10,463.67 Mar-08 $ 365.21 $ 312.90 $ 52.32 $ 4,872.32 $ 10,150.77 Apr-08 $ 365.21 $ 314.46 $ 50.75 $ 4,923.08 $ 9,836.31 May-08 $ 365.21 $ 316.03 $ 49.18 $ 4,972.26 $ 9,520.28 Jun-08 $ 365.21 $ 317.61 $ 47.60 $ 5,019.86 $ 9,202.67 Jul-08 $ 365.21 $ 319.20 $ 46.01 $ 5,065.87 $ 8,883.47 Aug-08 $ 365.21 $ 320.80 $ 44.42 $ 5,110.29 $ 8,562.67 Sep-08 $ 365.21 $ 322.40 $ 42.81 $ 5,153.10 $ 8,240.27 Oct-08 $ 365.21 $ 324.01 $ 41.20 $ 5,194.30 $ 7,916.26 Nov-08 $ 365.21 $ 325.63 $ 39.58 $ 5,233.89 $ 7,590.63 Dec-08 $ 365.21 $ 327.26 $ 37.95 $ 5,271.84 $ 7,263.37 Jan-09 $ 365.21 $ 328.90 $ 36.32 $ 5,308.16 $ 6,934.47 Feb-09 $ 365.21 $ 330.54 $ 34.67 $ 5,342.83 $ 6,603.93 Mar-09 $ 365.21 $ 332.19 $ 33.02 $ 5,375.85 $ 6,271.73 Apr-09 $ 365.21 $ 333.86 $ 31.36 $ 5,407.21 $ 5,937.88 May-09 $ 365.21 $ 335.52 $ 29.69 $ 5,436.90 $ 5,602.35 Jun-09 $ 365.21 $ 337.20 $ 28.01 $ 5,464.91 $ 5,265.15 Jul-09 $ 365.21 $ 338.89 $ 26.33 $ 5,491.23 $ 4,926.26 Aug-09 $ 365.21 $ 340.58 $ 24.63 $ 5,515.86 $ 4,585.68 Sep-09 $ 365.21 $ 342.29 $ 22.93 $ 5,538.79 $ 4,243.40 Oct-09 $ 365.21 $ 344.00 $ 21.22 $ 5,560.01 $ 3,899.40 Nov-09 $ 365.21 $ 345.72 $ 19.50 $ 5,579.51 $ 3,553.68 Dec-09 $ 365.21 $ 347.45 $ 17.77 $ 5,597.28 $ 3,206.24 Jan-10 $ 365.21 $ 349.18 $ 16.03 $ 5,613.31 $ 2,857.05 Feb-10 $ 365.21 $ 350.93 $ 14.29 $ 5,627.59 $ 2,506.12 Mar-10 $ 365.21 $ 352.68 $ 12.53 $ 5,640.12 $ 2,153.44 Apr-10 $ 365.21 $ 354.45 $ 10.77 $ 5,650.89 $ 1,798.99 May-10 $ 365.21 $ 356.22 $ 8.99 $ 5,659.88 $ 1,442.78 Jun-10 $ 365.21 $ 358.00 $ 7.21 $ 5,667.10 $ 1,084.78 Jul-10 $ 365.21 $ 359.79 $ 5.42 $ 5,672.52 $ 724.99 Aug-10 $ 365.21 $ 361.59 $ 3.62 $ 5,676.15 $ 363.40 Sep-10 $ 365.21 $ 363.40 $ 1.82 $ 5,677.96 $ 5.5 Amortization Table for $20000.00 Loan at 3% (CDBG) Amo~zatlon Table for $20000.00 borrowed on Sep t, 2003 Payment($)Il 264,27 Il 264.27 II 204.27 II 264.27 Il 264.27 II 264.27 II 264.27 II 264,27 II 264.27 I1 264.27 II 264.27 II 264.27 IPrincipalPaid($)ll 214.27 II 214.80 II 215.34 II 218.88 Il 215.42 II 215.90 II 217.50 II 218,04 II 218.50 II 219.14 II 219.68 II 220.23 I taterestPaid($)l[ 50,00 II 49.46 Il 48,93 II 48.39 Il 47.85 II 47.31 II 46.77 II 46.22 II 45.68 I1 45.13 il 44,58 II 44.o3 I Totallnterest($.)JL 5o.ooJ[ 9o.4~_JI 148.39 II 196,78 Il 244,63 II 291,94 II 338.70 II 384,93 II 430.60 Il 475.73 il 520.32 II 564.35 Balance ($)1l 19785.731[ 19570.931119355 591119139.721118923.30 II 18706.341[104~8.84 II 18270.801118052,21 II 17833.07 I[ 1761339 II 17393.15 Month 10 11 12 1 2 3 4 5 6 7 8 9 [ _ Payrnent{$)tI 264.27 II 264.27 It 264.27 II 26427 II 26427 II 264.27 II 264.27 Il 264.27 It 264.27 11 264,27 II 264.27 Jl 264.27 jPrincipaIPaid($)tI 220.78 II 221.34 I1 221.89 II 222.44 II 223,00 II 223.56 II 224.12 Jl 224.68 Il 225.24 II 225,8o II 226.37 tl 226.93 I Interest Paid ($)]l 43.48 II 42.93 II 42.38 II 41.82 II 41.27 II 40.71 II 40.15 ]1 39,59 It 39.03 il 38,47 II 37.90 Il 37.33 TotaHnt.. ?rest{$)ll_.6_07.~3 ]1 850.78 Jt 693.14 II 734.00 II 776.23 II o15.o4 II 857.09 II 000.00 Il 935.71 II 974.17 II lO12.o8 II 1049.41 Ba~_~nee {$)1117172.371116951.0_~Jt10729.15 I116506.711]16283.71 ti 15080.151115838.04J115011361l 15350.121115100.32]114933.961114707.03 Month 10 11 12 1 2 3 4 5 6 7 8 9 P~w~t{s)ll 254.27 II 2~4.27 It 284.27 II 264.2~1 264.27 II 204.27 II 284,27 II 284.27 I1 254.27 II 254.27 II 204.27 ~ 204.27 IPrincipalPaid($)ll 227,50 II 228.07 Il 220,04 II 229.21 II 229.70 tl 230.36 II 230.93 II 231.51 I1 232.09 Il 232.07 II 233.25 II 233.03 I InterestPaid($)ll 36,77 II 36.20 It 35,63 II 35.o5 It 34.48 II 33.91 II 33,33 II 32.76 II 32.18 I1 31.60 ti 31.02 II 30.43 Total Interest ($)tI 108618 II 1122.38 II 1158.01 II 1193.06 II 1227.55 II 1261.46 II 1264.79 II 1327.55 II 1359.72 Il 1391.32 II 1422.34 II 1452.77 Balance ($)]114479.53 II 14251.46 I114022.82 ll13703.81 I]13553.83 Il 13333.48 ll13102.54 ll12871.03 l]12035.95 I]12408.28 II 12173.0_3 Il 11939.19 M;;,;II 210 0 II 2;; I1 II 2;7 II 20 07 II 29 07 II 2;o7 II 20=7 II 20 07 il 20'07 II 20 07 II 20 07 Payment($)ll 264.27 II 264.27 II 204.27 II 264.27 II 264.27 II 2~.27 II 264.27 II 264,27 II 264,27 Il 264.27 II 264.27 II 264.27 IPrincipalPaid($)jl_ 234.4_2~1 235.00_]] 235.59_JL~36.18 II 236.77 II 237.36 If 237.96 II 238.55 Il 239.15 II 239.75 II 240.34 II 240.95 ] Interest Paid ($)]] 29.85 J] 2926 II 28.67 il 20.O9 II 27.49 II 28.~O Jt 25.31 II 25.71 J{ 25.12 II 24.02 Il 23.92 II 23,32' T°tallntarest ($)11 1482.62 II 15~1.65JI 1540.55 II 1550.64 II 1596.13 ]1 1623.64 It 1649.35 I1 1675.06 Jl 1700.18 II 1724.70 II 1748,62 II 1771,64 L. ~a~ance($)~1~114~9.77~11234.1~1~998.~1~761.23j~1~523~6~1~285`91~1~647~3~I~ 9808.21 II 9568.46 11.~_28.12 IL9087.17 Month 10 11 12 1 2 3 4 5 6 7 8 9 Payment($)lI 264.27 11 264.27 Il 264.27 II 264.27 Jl. 264.27 j] 264.2.7_jI 264.27 II 254.27 II 264.2! II 264.27 Il 264,27 II 264.27 I Princ~al~.Pai~dJSj][ 241.~5_~_11 242.15 II 242.7~JI 243.36 1t_243.97_~1 244.58 II 245,19 II 24581 II 246.42 11 247.64 II 247.66 II 248.27 I ]nto~e,tPai~($)ll 2272 II 22.11 It 21.51 II 20.90 Il 20.29 Il 19.6~L 1907 II 10.45~ ~7L2Z-~J.84 1 17.23 II 18.51 II 15.99 totallntere~t 1794.66 II 1816,77 II 1838.28 II 1059~1 1070.48Jl 1899,15 II 1918.23J 1935,69 1964.64 1971.76 1988.38 2004.37 ~Ls645.03J18003~18~360.72 11..5117.3~Jlz~73~.3~JI 7020.6o II 7383.00 1l~_37.0o II 6891.37 Jl 6644.34 II 639~.~ II 0148.41 M::':fil_2;$o II 2;;8 tl 2;$0 II 2;0 II 20 09 II 2029 It 20"00 It 20'00 It 20N II 20'00 I[ 20 00 IL20 00 Pa)f_ment($)lI 2~4,~7 II 264,27 II 264,27 II 264,27 II ~4_~.~71 =~4,2~ II 264,27 ~1 264.27 Jl 264,27 Il 264,27 112~.27 ~l 264.27 ~Prlncl~lP~dJ~JI 249.52 ]1 25o.14 II 25°.7~1 251.39JI 252o2 It 252.,5 II 253.28 tl 253.92 II 254.55 II ~55.~9 II 255.83 ~1 ~5.3~ 14.75 II 14.12 II ~3.~ II t2.87 It ~:64 II ~.~ I1 ~o~s Il ~0.35 II 9.71 II ~.08 II 8.44 Toallntamst ($)jI 2019.74 I1 2034.49 ~1 2048.6~Jl 2062.11 II 2074.98 II 2087.23 ~1 2098.~ JI 2109.83 JI 2120.17 II 2129.89 II 2138,97 II 2147.41 Balance ($)~1 5899,51 II 5~50.00 II 53~.55 II 5149.09 II 4897.69 II 4645.67 ]1 4393.02 ~1 4139.74 ~1 3885.82 II 3631.27 II 3376.08 II 3120.26 ~~l 264.27 II 264.27 II 264.27 II 264.27 Jt 264.27 ~l 264-2~ Il 264.27 ~1 264.2~ II 264.27 II 2~.27 II 264.27 ~~1 257.11 II ~57.75 II 258.3~1 259.~ Il 259.69 II 260.34 Il 260.99 ~l 261.64 II 262.29 II 262.95 II 263.61 ~~1 7.~ II s.5~ II 5.57 It 5.23 II 4.55 II ~.93 II 3.28 II 2.63 II 1.97 II 1,32 II ~~~1 ~l~S.ss II 2174;76 ~12~79.98 Il 2i~.56 II 2188.49 Il 2ig~;~ II ~94;40 II 2i~,37 II 2197.69 II 21~.34 ~~12~o~.~ ~12348.93 Il 20~.64 II ~53~.50 II ~57~.~ II 1311.48 II ~0~.49 II 788.85 II s2s.s~ II "~53.~' 11" APR-22-0B TUE 9:57 AM JPEC FAX NO, 319 353 2445 P. 2 FINANCING TH~ BU$INESS Christine K. Pa~ek Associate Director, Sm.ll Business Development Cemer (319) 335-3742 I. Flow to ~pply for ~ bank Ioa~. II. Criteria baakem tree in m~klng haan deci~iom. lrmding out and workina., with an e~m-epreneurial banker. More about th~ numbers. · P,c-~hing start up co ars, ,, Projecting sales. RECE[VED: 4-22- 3; 10:57AM~ 319 363 2445 => CITY OF lA CITY PCO[ ~3 APR-22-03 TUE 9:57 AM JPEC FAX NO, 319 353 2445 I. How to AI~ for a Bank Lo~m A. Make appointments and visit more than one Imak or loan officer. B. Be fully prepared. Use the "Loan Application Checklist." C. Ask the f~llowing questions: I. What 1~ been your experiance lending to similar businesses? 2. How long does the approval process take? 3. Once approved, how long will it take for tha funds to be disbta-sed? This is especially importam if you are ~lm,zting invastor and/or gram monies which are a condition of the bank loan. 4 What other documentation might be required for the loan closing? IL Criteria Mo~t Banker~ Use In Making Loan De. ion (~r tbe 5 C's of Cr~lir) A~ Capital I. Ideally, a bank wants you to comnbute 20%-3(~/~ of the total start up costs of your business. However, there ar~ exceptions and alternatives to using all of your own cask You may borrow part of all of~e dov,~ payment, apply for a Small Business AdrMnistcation (SBA) Low Doc loan and/or a Targeted Small Business (TSB) 8ram and/or low interest loan. B. Collateral 1. A banker will evaluate the collateral your business vail have to offer on a dbconnted bazb. Ideally, the value of tim business collateral, plus any personal collateral should be t:l or higher. 2. After taking into consideration all sources of capital and collateral, a short&Il in either area could be addressed with a SBA ~r~,~. " APR-22-03 TUE 9:58 AM JPEC FAX NO. 319 353 2445 P. 4 1. Ideally, a banker wants to ~ that the gross c~lsh flow (n~t profit plus depre~gon plus im~) pmjacied for the busin~s~ will cover ~Tn,~l principal and imerest p~/ments on the loan by Iff. X or mere. Flow~v~r, som~ busln~s ventures, considered to be highe~ ~ requires higher debt service coverage ratio. 2. The bar~ mey make an exception i~ there i$ ~ strong ~econda~ repayment source (e,g. a second income and/or a personal guarar~O. 3. A b~ker relies on tho projo~ons, the in~orro~on supporting you~ projections, comparison to industry ratios and his/her experience with similar businesses to evaluate the capacity to repay the loan. D. Conditions 1_ A banker will eval,~te both the inIemal and ~'ternal conditions to de~erminotheir offec~s ou the probable sut~.~ss of your pm'tl~tnr b~siness. 2. E~ramples of internal conditions include your ability +.o man~e t~e business, n~ the skills and knowled~ of key personnel. Buying an existing business also pres~ a gre~er number of internal factors to consider. E~ernal conditions generally include those pnrticul~ to your type of business and the economy in general. E. Character or Credit 1. A banker considers the repayment history ofyour personal debt as the p~imn~ indientor of how yon will repny the bustnes~ loan HI. How to fred and work with an entrepreneurial banker. A. Definition of an entreprenem~ bnnker 1. A~ entrepretlenrial bnnlt~r pla~ea an initial emphasis on intuition rather than the facts in lending decisions. 2. Due to the fact that lenders are not investors, as they lend th~4r depositon money, ~ cannot be disregarded. Overall, lenders look for the facts to comStm or deny their intuition. 3 A. PR-22-03 TUE 9:59 AM JPEC FAX l, IO, 319 353 2445 P. 5 ' A lende~ s intuitio~ ma~. override a shortfalI in the ca-edit coz~ideraliol~a listed below. a. Capk~l (Equity in the busineu or project). b. Collsteral (Security for t~e c. The lender may address a shortfall in capital and/or collateral with an SBA.m.~mntee and/or personal collateral. 4. A lenders intuition is not litcetv to ovemde a shortfall in the following credit consider~o~. a. Capacity (to rep~y the b. Conditions (internal and external). c. Character (credit history of the business and the owners). 5. Lenders are 8enerally more flexible with loan applications under $50,000. B. How ~o ~nd an entreprenotrial banker. t. Start with your own personal bank 2. Ask other small business owners, especially those who own businesses similar to yours. 3. Ask accountants, auorneys and other business professionals. 4. Look for bn-~ rha~ have smnt~ business products and services, new banks or bn,~tc_~ that are new ~;o commercial lending. B. What tl~ bank~ will expect from yotr 1. Preparmion a. Use all available resources (i.e. SBDC, JP£C and/or Fa~Tra¢, ~m.~II business classes, h'brary, accountants, attorneys and other professionnls). Have written informtion fully prepared. ¢. Show that you have explored all your options (i.e. start-up vi. purchase of an existing business, leasing vs. purchasln~). d. Be conservahve in financial projections. e, If you are preparing a business plan, foous on q,,.~!ty a_~4 not quantity. Be sure to substanthtte your projections. APR-22-03 TUE 9:59 AM JPEC FAX NO. 319 353 2445 P, 8 2. Commltm~ b. T~me and 3 F~us 4, H. mili~ ~q~s U~ ~ ~ ~ ~ ~P f~ ~ ~s ~ ~k. yo~ le~ ~e~ ~ ~ ~d ~o~) ~h~. b, FoBow ~o~ ou ~ d~o~. C. ~ you ~d ~ ~m ~ ~r~ 1.To ~ ~ b~'s d~sito~ ~ in ~nS I~g d~ous, To ~ ~o~. To play "~'s To ~e m~e~ons, e~i~ly wh~ it avoidi~ ~mre c~h flow probit. 4. To pro, de o~er ~ ~or i~on to y~. 5. To look ~r w~s to ~e a lo~ ~ ~le ~ ~ the b~ 6. To ~ve you oth~ ~ons ~ y~ ~e ~ d~ ~ a I~. 5 A?R-22-O~ TUE lO:O0 AM SPEC FAX NO. 319 353 2445 P, 7 Adv~fsin6 direct mail $ n~wsf~per $ r~lio si~s $ ' ' B~di~g ~p~i~ U~ Lic~es ~ssio~ L~ $_~ ~ ~m~el~ations $ .... *Wo~g ~R~ ~or ~e follo~n~ ~h a sep~e ~ incl~ mod~ ~b~, ~plier, and qu~ n~t) E~pmem P~¢~s $ ~to~ O~oe $ s'- T~l~e~ble ~pment $ TOT~ C~ ~Q~ $, , , MONTI..ILY CASH FLOW PROJECTION ~ ~ T~ ~ , ~ ~-: ..... ~(~ ~ , ,. ~ ~:~.~ ~ .... - ~ ' John Pappajohn Entrepreneurial Center The University of Iowa Business Plan Review Worksheet Company Name: Executive Summary_ (circle one, llowest, 10 highest): 1 2 3 4 5 6 7 8 9 10 Excellent Good Needs Improvement Length is appropriate (one or two pages) [] [] [] Identifies key features of the business [] [] [] Describes overview of the market potential [] [] [] Specifies goals of the entrepreneur(s) [] [] [] Provides a good overview of the business plan [] [] [] Comments: Product/Service Section circle one, llowest, 10 highest): 1 2 3 4 5 6 7 8 9 10 Excellent Good Needs Improvement Includes detailed description of unique features [] [] [] Describes production/delivery processes [] [] [] Identifies supphers/vendors [] [] [] Lists legal/regulatory requirements [] [] [] Includes future plans for growth [] [] [] Comments: Technology (circle one, 1 lowest, 10 highes0: 1 2 $ 4 5 6 7 8 9 10 Excellent Good Needs Improvement Describes technology components [] [] [] Identifies relevant intellectual property [] [] [] Considers obsolescence/competing technology [] [] [] Includes plans for product development [] [] [] Comments: Management Section (circle one, llowest, 10 highest): 1 2 3 4 $ 6 7 8 9 10 Excellent Good Needs Improvement Lists key management positions [] [] [] Identifies individuals/special skills [] [] [] Includes outside advisors [] [] [] Demonstrates solid management team [] [] [] Comments: Marketing Section (circle one, llowest, 10 highest): I 2 3 4 5 6 7 8 9 10 Excellent Good Needs Improvement Provides an overview of the industD- [] [] [] Describes current size and growth potential [] [] [] Lists potential target markets [] [] [] Discusses competitive issues [] [] [] Includes description of potential customers [] [] [] Describes penetration strategies [] [] [] Demonstrates strong understanding of the market [] [] [] Comments: Financial Section (circle one, llowest, 10 highest): 1 2 3 4 5 6 7 8 9 10 Excellent Good Needs Improvement Identifies start-up costs for the venture [] [] [2 Lists potential sources of start-up financing [] [] [] Provides appropriate income statement projections [] [] [] Contains monthly cash flow projections [] [] [] Includes corresponding balance sheets ~ [] [] Clearly states profit potential [2 U [2 Projections and assumptions appear appropriate [] [] [] Comments: Appendix (circle one, llowest, 10 highest): 1 2 3 4 5 6 7 8 9 10 Excellent Good Needs Improvement Includes rclevant supporting materials [] [] [] Comments: GeneralComments (circle one, llowest, 10 highest): 1 2 3 4 5 6 7 8 9 10 Excellent. Good Needs Improvement Spel[ing/Gran~nar are correct [] [] [] Math/Tables are correct [] [] [] Professional appearance and format [] [] E] Comments: OverallEvaluation.(circle onesllowest, 10 highest): 1 2 3 4 5 6 7 8 9 10 Excellent Good Needs Improvement Business Plan [] [] [J Comments: Total Business Plan Score: Other Criteria: Please rate from 1 - 10, with 10 being highest rating. Level of Impact (jobs created, infrastructure, economic diversification) __ Uniqueness of Project/Technology Owner investment in project Leverage (ability to leverage Wellmark funds with other sources of funding) Recommendation for Further Action Approve plan as is and forward to Equity Dy'nam/cs for final revie~v [] Partially approve; entrepreneurs directed to address minor comments and resubm/t [] Return to entrepreneurs for major revisions to the plan as indicated [] Reject plan and return to entrepreneurs [] Reviewer: Date: The Workl~lace 325 ~as~ Wash~n~o~ S~ ,030~h^~ Learning ~ ~ ~ "~ Ced~ Rapids, Iowa 52403 Conn~tion~ (319) 341-3530 (phone) (319) 398-1~0 (phone) (319) 338-~58 (f~) (319) 398-1~1 (f~) September 3, 2003 /~r. Steve Nasby For the ]bwa City, City Council Economic Development Committee 4tO E. Washington Street Iowa City, IA 52240 Dear Steve, Thank you for facilitating the opportunity for The Workplace beaming Connection to meet with the Economic Development committee one more time; I appreciated being able to share the funding strategy following presentation of the service delivery side by Nancy Quellhorst. Please extend my thanks, also, to Ms. Vanderhoef, Mayor behman, and Mr. Wilburn. We appreciate the consideration for our program and look forward to discussing this concept further to develop a model for city financial participation as a part of the support for economic and community development. The Iowa City community does not lack generous individuals, employers, or organizations; it is our plec~ure to be a part of this community and this opportunity. Thank you for your thoughtful community support. I look forward to hearing from you. Sincerely, / Mary Lou Erlacher, Director Business Solutions Iowa City Area Development Group Open for business Development New warehouse, business parks increase options /~r ~ t t ~ r $ ~s and readiness go hand-in meet trucking regulations, attowing h, great when the communities drivers to deliver to major metropolitan Midwest best are recognized nationally,., markets--Chicago, Minneapolis, location in nation! )n is all about comparisons. Omaha, Kansas City and St. Louis--and David Lelterman's Businesses looking to locate or expand backhaul merchandise in one day. pop culture icon, "Top have new options thanks to the entre- Gerdin, who owns more than 1.75 Ten" list goes well be- preneurial efforts of area developers, million square feet of warehouse space yor~d the humor factor. Most location decisions are based on in Iowa, Illinois and Nebraska (1.45 mil- From sports to educa- a combination of factors, Joe Raso, lion is located in Iowa), is building a tion, recreation to Ioca- president of the iowa City Area Devel- 350,000 square-foot building in Scolt Six tion, Americans are opment Group, says land and infrastruc- Industrial Park, Constructed by Septa- captivated by rankings, ture are essential ingredients to site se- gon of Cedar Rapids, the new building It's a race everyone lection. "Our ability to offer companies at Liberty Drive and Independence wants to win. multiple 'ready' sites is most desirable." Road represents Naturally, the Iowa Raso says there's a good number of Gerdin's second City area is no excep- industrial and commercial sites of vary- for the Iowa tion. News reports and lng sizes available. "We don't, however City-based in- ~ ~ ~,~ ~tH~ "~ ~ clippings touting our have many open buildings, In many dustrial park, ' area's accomplish- ways, our area represents an immature and his largest ments are great re- market, In a slow economy this is good, stand-alone T~/~'~'' ~ :~:' · ~ ~'~ sources that help Iowa but it can be a deterrent when compa- warehouse to U~, City Area Development nies must move quickly." date. Group and Priority One Raso estimates 70 percent of site Io- Based on ~v~,~. staff market the entire cation specialists look for existing build- verbal commit- Cedar Rapids/Iowa City ings. A preexisting building can cut a menfs and handshakes about half of Technology CorridorTM project's lead time from six to nine the new space is commilffed, Gerdin nationally, months down to three, Raso says, "In a says building on speculation is always i~ In July 2003, Expan- competitive market lead time is critical.' risky. About 98 percent of the calls he sion Management Locally, nearly all the open land for receives about renting space are from magazine reported the development is privately held, Raso "lookers," Midwest is an excellent says, "As a result, developers are footing Gerdin says, "If you go ahead and place for businesse~ fo the bill for costly infrastructure. That's a build without a lease, you'll probably locate, The Iowa City benefit to the communities we serve get burnt. But, if you wait until a project area ranked 11th and taxpayers," is filled before building, you'll miss some among all major U,S. No one is more surprised about the opportunities, Over time it will fill up." cities, Des Moines lack of available warehouse space or 8usiness parks add ranked number 1 and more willing to do something about it Cedar Rapids number than Russ Gerdin, The chairman and to area's avai/ab/e sites 6. CEO of Heartland Express is surprised The Realtor's mantra--locofion-- The magazine's others haven't discovered what he has describes two of our areo's newest Mayor's ChallengeTM known all along: the area along Inter- business and industrial parks: Aviation states 80 and 380 is perfectly situated to Development Matters Open for Business continued on page 2 continued on back page Skills 2006 reviews labor from employer view A new survey of employers in the Cedar participated via phone interviews. Rapids/Iowa City Technology CorridoFM is un- The survey groups occupational categories. der way. Skiffs 2006 addresses anticipated hir- and asks employers for a three-year projection. ing pafierns and skill needs of basic sector em Baird said, "It's hard for companies to predict players in the region, beyond three years, A lot has changed in the The new report replaces Skills 2000, Dee last three years, Just look at how 9/11 changed Baird, vice president of Continuing Education our routines and the way we do business." and Training Services at Kirkwood Community The Skills 2006 report will be released in ac- College, said current information is needed to tober to participating employers and Technol plan education curricula and training initiatives ogy Corridor partners. for our region. "It's time for us to do a compre- The Cedar hensive study," Rapids/Iowa City The new study is based on the 2002 Cedar Technology Cor~ Rapids/Iowa City Technology Corridor ~M Clus- ridorTM is a part- ter Development Report. Baird said, "We're nership between ~_~,~ ~r~ r~ ~,~,~'~.,'~ ' interviewing state's leading business sectors in Priority One and this region. Specifically. those linked to life sci- the towa City ences--hedthcare, advanced manufactur- Area Develop- ing--food and hygiene products and informa- ment Group, the tion solutions--computer and educational ser- University of vices." Iowa, Kirkwood In June, a two-part survey was mailed to Community Col- the human resource directors and CEOs of 250 lege, Alliant Energy. MidAmerican Energy and regional companies. Companies were asked the Cedar Rapids Area and Iowa City Area to report their planned hiring and to project Chambers of Commerce, Together, they mar- hiring needs through the year 2006, Employers ket the entire region nationally and internation were also asked to report education and train- ally to connect business with resources to en- ing requirements, including majors and areas hance and stimulate growth in the corridor of emphasis, and internship availability, area, The Cedar Rapids/iowa City Technology Nearly $0 face-to-face interviews were con- CorridorTM area encompasses 12 communities ducted with employers that participated in the in and around Johnson and Linn Counties. SkiIIs 2000 study, Other employers in the study · Open for Business continued from page 1 access to Highways 1, 6 and ety of uses," 218, the tocation is prime for The lots are available for Commerce Park in Iowa City development, A new street, sale or long-term lease. The ] 7 and WesfCor Business Park in Ruppert Road, provides easy pad-ready sites range in size Cordville, These new parks are access throughout the 54-acre from 38,000 to 300,000 square ready for development, Both park, feet. have new roads and infra- Tracy Overton of Iowa Re- SouthGate Development structure in place, (Editor's alty Commercial represents owns two key locations along note: Our area offers multiple the property for the city. Over- Highway 6 in Coralville-- sites complete with infrastruc- ton says our area's character- WestCor Business Park and ture, This piece introduces two istics and qualities create an Coralville West, WestCor Bud- new sites,) important part of the city's ness Park, visible from and ac- Owned by the City of Iowa economic policy. "The city has cessible to Interstates 80 and City, Aviation Commerce Park made a major investment in 380, is zoned for light industrial is centrally located on the the business park to offer a city's south side, With quick range of properties for a vari- Open for Business continued on page $ 2 Iowa City Area Dowlopment Group se/ects a new mark he Io9© that has 9 oup, which symbolizes Ion9 repre- our business clients, inves- senfed the Iowa tars and the communities City Area Devel- we serve," opment Group Raso is pleased with the is retiring. The sleek-looking new mark nonprofit economic devel- and the organization's blue opment organizQtion is and gray colors, "The new adopting a new, updated design adapts well for a version. Iowa City Area Development Group variety of uses and number Joe Rase, president of the of mediums, including the Iowa City Area Development Group, said after Internet," 20 years it's time to retire the old logo and col- Morrow, whose firm specializes in print, Inter- ors. The economic development organization net and photography, said a new mark repre- celebrates its 20th anniversary this fiscal year, sents the client, their environment and a wide Reggie Morrow of AdPro Design designed range of audiences served by the economic the modern, new mark The Iowa City graphic development organization. "It's exciting to design firm was selected to create new materi- work with the Iowa City Area Development als following a yearlong brand positioning Group, The new mark and colors were de- study. Numerous business and community signed to be subtle. We wanted a mark that is leaders led the review for the Iowa City Area easy to read and easily identifiable," Development Group, Morrow said the Iowa City area is first-rate. Raso said, "The classic, new look represents "The design doesn't have to yell. I think people our organization very well. I think it will have a will become accustomed to seeing the new lot of staying power. You'll notice the new mark used often and in some surprising new mark incorporates our name, not just an acro- ways,' nym, And, we're emphasizing the word · Open for Business continued from page 2 the east, As development cc net of the park as soon as con- curs, the street will be ex- struction and permilffing and commercial properties, tended, arching south of the schedules allow. Braverman Coralville West is a commer- Iowa Interstate Railroad, Con- estimates WestCor Business cial and residential property sumers Cooperative Society Park will be built out in seven- north of Highway 6 (bisected and Hawkeye Foodservice to years. by Jones Boulevard). intersect with Highway 6 west Across Highway 6 north and Mace Braverman, president of the former FS mill, Railroad bisected by Jones Blvd, South- of SouthGate Companies, says crossing lights were added this Gate is developing another much of the land in these two summer, 40-acre site for commercial developments has been held Braverman expects to de- and residential properties in in his family since the ~ 930s. velop approximately 100 acres Coralville West, Across the Additional properties were pur- of the 140-acre area. The re- street on Liberty Drive, Windmill chased in the 1950s and 1960s, maining woods and land Point will open a new assisted Braverman says, "Inexpensive along Clear Creek will be living this fall, land purchased long ago al- given to the city for trail ex- Coralville officials say it lowed us to wait until the time pansion, won't be long before the city was right for development, Biesser Lumber is currently expands to fill the 2,200-acres We're fortunate." the only tenant on the site, annexed in the 1970s, WestCor Drive provides ac- They plan to move to a 10- cess to the business park from acre site in the northwest car- · 3 Business Report Purchase means an expansion for area The marriage of the na- Department of Eco- tion's largest natural and or- nomic Develop- ganic food distributor and the ment and Iowa City largest volume distributor of Area Development natural foods in the Midwest Group, region brings growth fo the United Natural Iowa City area. Foods will receive Late last year when United an incentive package that in- benefit of its members. Natural Foods purchased cludes a $300,000 Community Blooming Prairie's first ware Blooming Prairie Cooperative, Economic Betterment Ac- house was located on the the parent company consid count (CEBA) state loan. of third floor of a building that ered moving the Iowa City which $180,000 is forgivable also housed New Pioneer Co- plant to a neighboring state, and a six-year, $1 million prop- ap, one of its biggest retail ac- Instead, the new owners will erty tax rebate on the as- counts. The original inventory expand the Iowa City Ioca- sessed value of the building fit on of an one side of an 8 V2 tion, improvements, by 11-inch sheet of paper. The warehouse, located at In exchange, the company In 1975, the company ex- 2340 Heinz Road, plans a $9.6 must keep a minimum monthly panded to Nebraska when million, 140,000-square foot ex- average of 300 employees several buying clubs joined parisian that will create more working at an average salary Blooming Prairie. New support than 130 new jobs. of $11.75 per hour and expand and sales volume resulted in This summer, a team effort the Iowa City facility, numerous changes: the ware was launched to retdn'~:he 30- Blooming Prairie is an Iowa house incorporated, pur- year old company in Iowa success~ It has grown from a chased its first truck and be- City, The decision was small, shoestring operation to gan making deliveries, Expan- reached in cooperation with a leading distributor of organic sion to Illinois followed in 1985. representatives of United Natu- and natural products. In 1988, the distributor pur- ral Foods and officials from the Founded in 1974 as a coop- chased a Minneapolis-based City of Iowa City, Kirkwood erafive, the fledging company warehouse and began serving Community College, Mid- of three part-time employees the Midwest natural foods American Energy, the Iowa operated exclusively for the market from two locations. · Bri; ly in the News -... the U,S, Conference of Mayor's 2003 Metro · Communi-- Colle e Week ma-az ne Economies Report, Nationwide, Iowa City / .... ~/~ g ~ Y , ranked 89th in growth from 1992 to 2002 with a ~raTea drKwooa ~ommunity ~olle.qe 32na in - ~ - +h h ~' ~' ~ ~ ',~ ~ O Z percent grow.,, ~esTing .-.e,~ar ~apl,~S I the nation on a national list of the most de- ' ' ! gree-productive two-year schools. KCC is (158th at 5.4 percent) and Des Moines (189th !ranked fourth in the nation for the number of at 5,1 percent), · Iowa Values Board elects officers agricultural degrees conferred, 12th in conser- Holmes Foster of Clive was elected as chair- vation and natural resources and 43rd in arts and science degrees. KCC is also 15th in the person of the Iowa Values Board and Craig nation for total associates degrees for non- Lang of Brooklyn was elected vice chairper- minority students. Statistics are from the U.S. son, Other voting members of the board are Department of Education (2001-02 data), Kathy Alden of Dougherty, Bonnie Barney of Tiffin, Mary Chapman of Des Moines, Nancy · In July, The Gazette reported Iowa City's Dunkel of Dyersville, Gerald Kirke of West Des gross metro product (GMP) of $3.7 billion ranks Moines, John Lisle of Clarinda, Marcia Nichols 280th out the nat on's 319 metro areas That's ....... : _ ur Jonn~u~, t~en~y ~uyer u~ ~.euar ~apla~, anu a ~gure on par WITh ivlaceaonia, uamDoaia or Tob Shine of Milford I Afghanistan, The findings were announced at Y ' 4 Business Report Moore Wallace to expand Iowa City operations, add employees Terger of Moore North in the United States, and Wallace Cam- Canada, Europe vices, announced to and Latin America. stockholders in May, has given The next few an I~va City business a new months are likely to name and increased responsi- be challenging for bilities. Miller and Lois Haw- The combined company, kins, Moore Wallace named Moore Wallace, is one director of the Iowa of the world's largest providers City customer service center, recruiting from an area like of commercial print, direct- as staff is hired and trained, ours is the loyal employees, mail, customer communica- The front office will undergo and the ability to hire new tions, forms, labels and distribu remodeling to accommodate graduates from the University tion services, approximately a 25 percent of Iowa.' Hawkins, a 35-year Scott Miller, vice president increase in staff, veteran of Moore Wallace, of manufacturing for Moore Currently, 200 people work helped open the customer ser- Wallace, says the local cam- in customer service. Another vice center for the Iowa City pany is looking to fill up to 40 140 employees are involved in facility in 1994 when the cam- customer service center posi the manufacturing side of the pany went to a hub satellite tions. "We're pleased with the business, which opened at its operation to improve econo- growth opportunities for our current location in 1948. mies of scale, trim overhead Iowa City facility," The Iowa City facility's cus- costs and improve cycle time. It also means equipment tamer service center is staffed The Iowa and production will shift to the daytime hours, 7 a.m. to 7 p,m, City depart- local company from other Some of the new customer ser- ment grew plants, he adds, The Iowa City vice representatives will work a when some plant is one of 19 manufactur- second shift. Production and of its Man- lng facilities in the U,S. Miller manufacturing employees roe, Wis,, says, "Iowa City was selected work 24-hours-a-day, 7-days a operations to expand its manufacturing week. were trans- production and customer ser- Iowa City customer service ferred in vice center because our Mid- representatives will assist more 2000. west location offers central dis- than 450 Moore Wallace sales Hawkins tribution and we have the abil- staff located throughout the says the For- ity to service customers on U.S. and Canada. Hawkins says tune 400 both coasts,' three employee categories company The Moore Corporation was are needed locally, In addition has grown founded in 1882 and is cred- to assisting with order place- by creating new products and ited with inventing the business ment, customer service center serving customers, The cam form. Wallace was founded in employees process orders to pany helped customers move 1908 as a one-man commer- release inventory efficiently from pencil and paper forms cial print operation, In 1992, and cost-effectively to cus- to computer forms. "Moore they invented the first Win- tamers throughout the nation sold solutions and equipment, daws-based information man- and Canada, The company and bundled cost efficiencies agement system in the printing has a comprehensive training for the customer,' Hawkins industry, Together, they em- program focusing on orienta~ adds. "At Moore Wallace we ploy approximately 18,000 em- tion and detail processing, focus on quality and service.' ployees and serve customers Hawkins says, "The value of Development Matters continued from page 1 "iowa Cih/is one of the coolest places to work, play, study and live in North America," The examined labor and operating costs in 329 major mosphere of "something to do for everyone" is metropolitan cities. The study analyzed the supported with locally-owned bookstores, eth- workforce for education, reliability and avail- nic r~staurants, cafes with gallery space, sum~ abilib of scientists and engineers. And, com- mar festivals and recreational activities for all, munities were reviewed for affordable quality Students come for academics and want to of life experiences; high-quality healthcare stay for life, and the best public schools to train the next As our organization works to connect busi- generation of workers, nesses with resources to help grow our local The Mayor's ChallengeTM said the following economy, these national rankings create is critical to location: a business-friendly tax awareness and draw attention to our member and regulatory climate, a superior logistics in- communities' assets, frastructure and a combination of transporta- I,~ Welcome New Xnve$[ors: tion offerings, including air, rail, water and · GEICO Direct highway access, · Hy-Vee I~ Just last month, Outside magazine ranked Iowa City number 10 on its list of "40 Best Col- lege Towns," According to the magazine, e-mail info wanted In an effort to keep our investors informed of our The sensible alternative. activities and events, the Iowa City Area Develop ment Group is asking for your current e-mail ad- dress. We'd like to send you information, news re- leases and announcements of upcoming events. If /ou'd like to receive our e-notice info, please send /our e-mail address to Linda Schreiber at schreJber@iowacitya rea.com. Iowa City Area Development Group Inc. PRSRT STD 325 East Washington Street U.S. Postage iowa City, Iowa 52240 Paid 319.354.3939 Iowa City, iowa www.iowacityareadevelopment.com Permit No. 268 City of Iowa City 410 East Washington St. Iowa City, IA 52240 FILED 2~g~ SEP -k ~I'i 9:12 Ci"i-~ ~, ~ iOWA I0 WA CITY AIRPOR T BUSINESS PLAN Iowa Ci~, Iowa i ii- Airport Date of Report: September, 2003 'ii -- j~usi1~}~,~S ~ Solutions Table of Contents Executive Summary Chapter 1 - Introduction & Historical Analysis Chapter 2 - Statistical Analysis Chapter 3 - Management and Operations Chapter 4 - Airport Documents Chapter 5 - Marketing Strategy Chapter 6 - Financial Analysis Appendix Rates and Charges Policy Leasing Policy _.Airport ,owaCi ^i,,o,t..s,.ess P,a. FII_ED 1 Executive Smnmary September 2003 Zl] 3SEP-h / Pi 9:12 DRAFT EXECUTIVE SUMMARY C;iTY IOWA CITY, IOWA This Executive Summary is presented to the City of Iowa City, Iowa to provide the City and the Iowa City Airport Commission with an introduction to the multiple goals contained within the Iowa City Airport Business Plan that follows. Specific action items presented in this summary are shown for quick reference only as a prelude to the Business Plan report, justification can be found within the Plan itself in the Chapters reflected herein. Based upon our analysis, the three primary : succes: , Iowa City Airport are: 1) to improve the image of the Airport both nationally, 2) the overhead needed to operate the facility on a daily basis, · the Airport to reduce and/or eliminate general ~ relatively many other size tax subsidy required for airport operations has a continuing perspective. Many comments were received by throughout the course of the Plan's development sitive ' the has on the community and the University of Iowa. has of this situation and allowed a negative perception Airport management has been reactive rather than image-building for the facility. The City from the activities of the Airport, and this fact needs to considered to be good given a more communications with local governmental leaders, and a more style. Additionally, although the untimely departure of the previous created a significant financial drain on the Airport, the current FBO appears to be on solid ; and represents a regional business with an excellent reputation. Jet Air, Inc. appears to be in a strong position to assist the Airport in improving operations through a "team management" approach. Given the proper structure, and measured milestone achievement incentives, the City and the FBO could move forward with a plan that could potentially improve the financial position of the Airport and the FBO. This situation would not only help the Airport financially, but - Airport - Business Solutions Iowa City Airport Business Plan 2 Executive Summary September 2003 DRAFT also improve service levels to the end users of the Airport through the incentives provided and demonstrate to the community the commitment to responsible fiscal management of this public asset. It should be noted that there are potential areas where the Airport may be able to gradually increase revenues; however, many of the following recommendations wi achievable without the City making significant alterations to Airport staff and mana including, but not limited to, a contract management agreement with the FBO to management and operation of the Airport. will be addressed in greater detail within the body of this document, Recommendations/Action Items f'r'l aa. Chapter 1 (Introduction · ~roactive business community and ~n with the Chapter 2 · at comparable airports Play a strot r role in economic development in the area University Activity for aviation £ Chapter 3 (Management and Operations): II~ The FBO Owner/Manager should take a more active role in management and development of the Airport ~l Immediately begin to implement new organizational recommendations _Airioort Solutions Iowa City Airport Business Plan 3 Executive Summary September 2003 DRAFT Ill Continue oversight by the Airport Commission Il Make adjustments to lease agreements Il Begin aggressive joint marketing efforts Il Restructure advisory and communications distribution to City leaders Il Management team needs to be able to mana imnltaneously Il Aggressively seek development and installation ~rec~s~on landing approach Il Maintain a high level of safety and security Ill Provide excellent customer service Chapter 4 (Airport Documents): Il Adopt Leasing Policy rtl :~ Il Adopt Rates and Charges Policy .. ~;~ -- Il Develop Minimum Sta~ ~ '~' Il Prepare better lease lank!! ,F leases Il Require security depo~~~ Il emerg~,~phone afl~ddress list on all tenants Cha[ ~ student population (potential pilots) nedia list surveys milestone-based marketing plan raction with aviation trade associations Make Airport and FBO better known in national and regional aviation circles Air~oort Business Solutions Iowa City Airport Business Plan 4 Executive Summary September 2003 DRAFT Chapter 6 (Financial Analysis): II Reduce and/or eliminate tax subsidy to Airport II Increase T-Hangar rates II Improve fuel volumes II Restructure management of the Airport ~ad II Develop milestone incentives for the FBO II Improve financial tracking of revenues and e II Review the direct and indirect economic II Negotiate with the City for II Complete a facilities audit and f~ II Complete an energy Within the report that follows, Business outline many of the issues that have historically impacted Airport as offering potential alternatives to maximize the effectiveness while facilitating revenue enhancement and s rtl _ Airport -- Business Solutions Iowa City Airport Busincss Plan 1 Chapter 1-Introduction & Historical Analysis FI...~[i) September, 2003 SEP-t gM 9: 2 CHAPTER 1 - INTRODUCTION & HISTORICAL ANAL YSIS The City of Iowa City owns and operates a general aviation airport that is located approximately 2 miles southwest of the City center. The Iowa City Airport (FAA Identifier IOW) is managed by a five- mcmher Airport Comnrission under Chapter 330.17- 330.24 of the 1995 Iowa City Code of Ordinances; Title 13-1. The Airport provides acconrrnodations for propeller and turbojet aircraft and helicopters, serves as a stimulus to the local economy through j salaries, local business support, University of Iowa access. Flight activities include flight training, corporate aviation, ~!:geScy services, rec'i;egfi0nal flying and private aircraft operations. The Airport Business Plan herein ~nti}~ hiimerous issues ~,i~ {ecommendations relative to the management operation and development oft~ alrp~ ~ Within each section of thi~ :~irport Busine~:~ Plan, recommendations and/or requirements are included as potential acfidhS for im~iementation rela[~ to the strategy contained herein. Airport Solutions has rcsea{C~ m~n~'~ m lh~ ~?eparation of this plan and met with Airport and Business City staff i 1 ~r~:~ ~r~e an Ai~o~ Business Plan that enables the City to have an efficiently-managed and fitl~)ally secure airport Strategic'APpro~qh This Iowa Ci~ty~ ~i[po~t Business Plan is predicated upon a strategic approach, which is an expression of qualitativa}~:xpectations to demonstrate that the City has engaged in sound, progressive management of its facilities by the end of a five-year planning period. By the year 2008, the Airport Commission must establish an organization that will not only operate in a business-like manner, but also serve the public in ways that exceed their expectations. Furthermore, the strategic apporach is one where _ Airport -- Business Solutions Iowa City Airport Business Plan __ ~ 2 Chapter l- Introduction & Historical Analysis 0 September, 2003 DRAFT I the focus on safety and security is the cornerstone of the core orgamzatmna,~,~tefs, strat achievement, and to the greatest extent possible promote f'mancial self sufficiency. '-- --- '~' ~'-~ In addition to the foregoing, the future strategy for the Airport must include communtcat~on and consensus among the Mayor, City Council, City Manager, g the long-term role of the Airport. With the addition ora more structured ~ it is anticipated that the Airport can continue to be a safe and active general an improved asset to the community. It is also anticipated that Fund Subsidies through an innovative cooperative operating prtmary service on the field. As reflected in the proposed Strategic Mission a major responsibility of the Iowa City Airport to not only provide quality facilities, but a a positive image in the local community, while promoting economic for the As part of this Business Plan strategy, the City should also place role as a prominent, responsible "citizen" and community involvement through interaction ~business and political leaders and community organizations helps that the City will be presented in a positive manner for its as well as being recognized as a and plans designed to protect the conununity and its The of the 2ommission to operate the Airport in a self-sufficient manner without tax subsidies i! The City and Airport Commission is committed to using best-management operating the Airport, guided by policy decisions that define the appropriate balance the quality of services provided and the cost of those services. Based upon these goals and objectives, Airport Business Solutions has developed the following Strategic Mission Statement for the Iowa City Airport. z Airport -- Business Solutions Iowa City Airport Business Plan e-.o 3 Chapter 1- Introduction & Historical Analysis ~ ~-~ September, 2003 DRAFT '"o Strategic Mission Statement -- provide safe, high-quality general aviation facilities, and to co~uall)~_ To strive to improve the quality of service at the Airport innovative approaches and proven industry standards. We will our tenants, users, and community needs in effective, and financially efficient manner. HISTORICAL ANAL YSIS In the course of the development oft ; Plan for tN Airport Business Solutions (ABS) conducted interviews of the the Airport Commission Chairman, and the local FBO Iowa City Staff Planners, Economic Development ABS reviewed a number Plan, the Airport Relocation Feasibility Study, Iowa Department Reports, Airport Financial Statements, management documents. It should be noted that for this project came from the office of the Airport A included discussions with, and research input data from, national aviation including, but not be limited to, National Association of State Aviation Officials National Air Transportation Association (NATA), National Business Aviation Association (NBAA), Aircraft Owners and Pilots Association (AOPA), General Aviation Manufacturers Association (GAMA), and the American Association of Airport Executives (AAAE). These organizations enhanced our research through access to information they monitor within the _Airport -- Business Solutions Iowa Ciiy Airport Business Plan 4 Chapter 1- Introduction & Historical Analysis September, 2003 DRAFT industry, as well as providing ABS with pertinent contact names of industry leaders from their memberships. Information reviewed from all contacts included, but was not limited to, the following: I Based Aircraft 81 Flight Operations 81 Fuel Sales Detail · FBO Operations · Airport Inventory O = I Comparison with Regional Airports The following is a summary of data obtained, to arrive conclusions and recommendations discussed further herein. Based Aircraft During the 5-year 1999 3, the population at IOW averaged around 62 aircraft. 2003 engine aircraft added to bring the total to 64. Almost all of the 1 light single ! aircraft (51), with 12 multi-engine aircraft and I FAA 5010 forms, as reported by the Airport Manager from the Airport Manager appears to be estimates counf aircraft population will begin to increase slowl' to in the national economy and with the addition of a precision two to three years. The flat trend aircraft at IOW is reflective of the mid-west region relative to airports of similar size and scope, exception of charter and fractional 'aircraft ownership, the national trend in general aviation aircraft ownership has also been flat with little or no new aircraft added at most airports. There have been some exceptions, including airports along the eastern seaboard, west coast and desert southwest. However, general aviation has remained relatively flat with some signs of expansion in _Airport -- Business · ~'~ Solutions Iowa City Airport Business Plan 5 Chapter 1- Introduction & Historical Analysis September, 2003 DRAFT the last two quarters of 2003. The anticipated trend for IOW is consistent with forecasted regional and national trends with moderate increases of 2% to 3% per year over the next five years. This is an average "across the board" increase based on aircraft activity projections and does not include any additional growth that may be seen through aggressive marketing programs or additional improvements to the Airport such as an instrument approach. These factors will be further disc in the financial analysis section of this plan report. Flight Operations The Iowa City Airport has no air traffic nor is one the near future. In 1991, there were 22,500 aircraft e It is clear that these two years' figures were and not Likewise, it should be noted that FAA activity reports for the years (as reported ger) indicate take-off and landing activity at 26,400 operations, are clearly "non- scientific" estimates only and not indicative of~ reported activity available for the Airport is for the endin~ and July 2003 (18,980). Similar to based aircraft, the n operational activity is also related to national economic trends operational trends over the past several months have see like other airports in the region, activity over the next five years barring any major economic ~ terrorist _Airport - Business Solutions Chapter 1- Introduction & Historical Analysis September, 2003 2009 $£p -~, ~/~ 9:13 DRAFT It should be noted that the highest level of traffic in and 2003 (more than 68 percent) is derived from itinerant aircraft, of the activity being during daylight hours. This level of transient survival of the Airport, and a boon the local community since transient )end money in the area during staurants. 2001 2003 LQ~~' ~615 ~$>~ 18.5% 3,606 19% , t ~ i6 ~¢~ 68% 12,906 68% Air T~}:~,~g 2,Iii ~ ~ 11% 2,088 11% Milita~ ~%g;~ :¢~ 28~:~: 1.5% 380 2% Total ~g~ ~. ~0 100% 18,980 100% .Airport -- Business Solutions ,owaCi,y^i o ,..si.essPl. FILED 7 Chapter 1- Introduction & Historical Analysis September, 2003 Z003 S~P -~4 ~ 9: I 3 D~FT Fuel Sales C[]'Y CLERK IOWA OlT IOWA The best way to gauge a general aviation ai~oWs activiw level is to review the vol~e of ~el sold. At IOW, the ~eling operations have historically been provided by ~e Fixed Base Operator (FBO), who is presently Jet Air, Inc. Jet Air is a ~ll-service fixed base op is headqua~ered in Galesburg, Illinois. The Iowa CiW location operates as a satellite ~s overseen by a local on-site manager who has ~I1 daily decision-making au~oriW. The hel sales and charter se~ices from the Iowa CiW and Galesb~g locations, and and other suppo~ se~ices. Without the economies of scale and of operating ~O as a satellite operation, it is ~likely that the business would be a single-entiW at IOW under current m~ket conditions. As was seen in the ~[ at IOW, there was little interest in ~e faciliw because of the track foyer operator. The CiW is foffunate to have a qualiW operator in the ~el semites on the field. Cu~ently, the Ciw is dependent upon this providing the Ai~o~ Commission with a ~el flowage fee of $0.10 During the past 5-year period, fuel sales have been slight 2001 the transition to the new operator. However, based upon sales t~ou 2003, it is estimated the 2003 year-end ~el volumes will 165,000 , that was achieved in 1999. With even a minimal amount at present, the Ai~o~ should see volumes slowly the economy improves and with the addition of a precision YTD 2003 1998 1999 2000 2001 2002 2003 Annualized Jet 49,203 43,922 34,320 54,151 29,025 49,757 Avgas 99,522 121,569 100,130 73,360 90,919 65,466 112,227 Total 148,725 165,196 144,052 107,680 145,070 94,491 161,984 _Airport ~'-- Business Solutions Iowa City Airport Business Plan Chapter 1- Introduction & Historical Analysis I I ' . " September, 2003 Iowa City Fuel Flowage i r t allons) IOWA CIT'{ 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1998 1999 2000 2001 2002 2003 Annualized [g Jet I AvgasI FBO Op erations ,::¢: Iowa City Airport has ,perator." Jet Air took over operations from Iowa Cit~ Flying Service (IG!~) in 20(~;~i' ICFS abandoned the facilities and their defaulted on their leag~ ~i~t~fh~ ~ity. After liffie or no respdnse to a Request for Proposals for FBO services, the Airport Q:0!mTn!ssion e~!bred into nego!t~;lOnS with Jet Air to provide urgently-needed services on the Airport. lease agreement with the City the runs from January five-year option periods are also available at the discretio!i ~f Jet A r , Jet Air operates the 1OW base as a satellite operation to their h6m~ ~peratlon at Company has an excellent reputation for quality line service (refub[ing) and aircraft t~alnten~nce services in the industry, and is also widely known for their expanding air chhg~r services. :Airport -- Business Solutions FILED Chapter 1- Introduction & Historical Analysis September, 2003 20~ 8[P -~ ~ 9~ [ 3 D~FT Airport Inventory 0I'}Y CLERK IOWA CiTY IOWA Most of the se~ice ~d hangar facilities on-ai¢o~ at IOW are located on ~e east side of the Ai¢o~ adjacent to Riverside Drive. The aviation facilities reflect good condition, including the Ai~oWs Te~inal building, which has recently been renovated, include the Teminal building, five co~orate hangars, 59 T-hangars, an FBO ~d numerous other miscell~eous buildings or l~d parcels leased to both tenants. Although Air~ort Business So[utionx received a brief summaw of the Ai¢o~, none of the ac~al lease documents were provided b) requested. ' of the T-hangar leases are not cu~ent, or are in ~e [irected to the lease comparison document that is in ~e Addendm. Fuel at IOW is supp vehicles self-fueling system. The City owns the two above ground fuel gallons, to include one 10,000-gallon tank for AvGas/100LL and In to '. east side field, there is also a 54-acre Aviation Commerce Park on the corranercial ~ the Airport was originally planning to lease this land After investing over $5 million dollars in >r no interest from prospective tenants. Currently, the the ~ directly to the City who provided the money for ' Commission has been in discussions with the City to facilitate of "land ¢' transaction to lower the debt load of the Airport relative to the Commerce it would be in the best interest of the Airport to keep this land for the continued financial "drain" on the Airport's budget related to the lease-up period, would like prevent the Airport from ever becoming financially self-sufficient. .Airport -- Business Solutions Iowa City Airport Business Plan 10 Chapter 1- Introduction & Historical Analysis September, 2003 DRAFT Regarding Airport infrastructure, IOW currently has three concrete runways in a traditional military triangle configuration. Runway 7/25 is 4,355 feet in length by 150 feet wide with non-precision approaches and PAPI lights at both ends. There is a displaced threshold on Runway 25. Runway 12/30 is 3,900 feet in length by 150 feet wide and is also non-precision. Runway 17/35 is 2,533 feet long and 150 feet wide, and has a displaced threshold on 17 and VASI lights at the a However, it is important to note that Runway 17/35 is scheduled to be completion of an FAA- supported obstruction mitigation program and the development of ~ ~-~ Comparison with Regional Airports ~ [-1-1 In comparing the Iowa City regional basis, five regional areaa,~irports for research and analysis. These airports because of~ reasons to compare and contrast airside facilities. Additional will be provided in the Financial Analysis section. AirPort Based AnnUal Longest Precisi°n FUel Service Aircraft Operations Runway Approach ~> ~* ~way 7/25 None 1 FBO service ~ 2 4~~' Runway 18/36 None Limited services BellP Muscatlne ~:~ !~( Asphalt }~5~:~ 36 '~} 14,000 Runway 6/24 None 1 FBO service Municipal ~* ,~:~ ~a~ff Concrete 5,500' x 100' provider ~?~ ~ 5,600 Runway 18.36 None 1 FBO service 4,000' x 75' provider Municipal :~3; Concrete Tipton 8 2,000 Runway 11/29 None Limited se~ices Municipal 3,000' x 60' available Concrete Cedar Rapids 151 92,000 Runway 9/27 Multiple ILS 2 FBO se~ice Municipal 8,600' x 150' providers (Eastern Iowa) AsphalffConcrete _Ai~ort ~ B~iness ~ Solu~ons lowa City Airport Business Plan 11 Chapter 1- Introduction & Historical Analysis September, 2003 DRAFT The Iowa City Airport offers good facilities and Airport infrastructure to enable it to safely operate within the context of this five-year plan. In fact, the Airport has wide (150') runways that are typically only found at large air carrier airports. In addition, the Airport has an excellent service provider who is committed to providing a range of services both locally (on-airport) and regionally (Galesburg). Nevertheless, in order for the Airport to continue to growth an~ :gion, both the FBO and Airport mana :in the community, and to improve communications with the Mayor and City only be accomplished through more direct dialog with the City Manager. More this approach will be provided in the Mana Action items: Il Increased proactive with ss community and community organizations I1 Increased interaction with .Airport ~ Business Solutions Iowa City Airport Business Plan 1 Chapter 3 Management and Operational Structure September, 2003 DRAFT CHAPTER .3 - MANAGEMENT AND OPERA TI ONAL S TR UCTURE Appropriate management structure and operational procedures for the Iowa City Airport are critical components in moving the Airport and to ultimately reach a financial level at or near self-sufficiency. As such, ABS has organizational structure relative to management for the Airport for both immediate As a prelude to further discussion on financial and marketing issues the is offered regarding management controls and approach. Thi: Current Situation Changes to Reporting Procedures & Control Shared/Contract Mana Current Situation co It should be noted leaders, businesses, and the ~ area. As far back as 1994, the Iowa City conservatively placed the impact of the Airport at exceeds $2 to $2.5 million annually. ~g a general aviation airport in the community, benefit of having a close-in regional airport. Benefits by way of employment (wages and salaries), lodging, food, entertainm services. Indirectly, the community benefits from access to aircraft charter, flights, flight instruction, small package freight, and general and private industry/business. Based upon interviews and our direct observation of the current situation, it is the opinion of ABS that the current management and administration of the Airport is barely adequate, and there are several deficient areas that need to be addressed. The safe operation of the Airport from a flight standards :Airport -- Business Solutions Iowa City Airport Business Plan 2 Chapter 3 - Management and Operational Structure September, 2003 DRAFT perspective is good, with the Airport's infrastructure including runways, taxiways, and navigational aids being well-managed through the assistance of FAA personnel and procedures. However, the management of day-to-day airport administrative functions, including record keeping, communications, documentation, financial control, and marketing, are all severely lacking and need to be The Airport currently has no formal policy on leases or rates and charges, no and Regulations or Minimum Standards, and no formal or informal marketing plan. as lease negotiations seem to be protracted and lengthy due to t ~. of the Airport Manager. As an example, lease negotiations with a tenant actually at a Commission meeting whereby the tenant presented his to the punic venue. The Conmfission even considered forming a ~zith the Lease negotiations are situations whereby the Airport Manager, must to negotiate leases with Airport users based upon procedures, and parameters established by the Airport Commission. ~ss by committee" is not the best way to run an Airport. The Airport 1 able to n and work with the tenants directly, establishing a mutually growth at an airport. Currently, the Airport discussing them with the Commission. response to daily issues and undermines ~Se abilitl~bf the Manager to serve the to and routine matters, ingofior the al issues is not productive. r' - a business the Airport has a serious ~mag le of the structure and a general lack of schedule,~comm~ication between Manager the City Manager, as well as a lack of communication between the Airport Commiss Manager, a situation has developed that has created an adversarial relationship between and the City Administration. Currently, the City Manager has direct managing authorit) City, with the exception of the Airport. However, the City Manager does have a reporting responsibility to the Mayor relative to the financial and operational viability of the Airport. This creates an uncomfortable situation for the City Manager in that he must answer to the Mayor when there are issues at the Airport, but has little authority to seek change. Over the _ Airport -- Business Solutions Iowa City Airport Business Plan 3 Chapter 3 - Management and Operational Structure September, 2003 DRAFT past several years, it appears the lack of communication between the Airport Manager/Commission and City Manager has created a situation whereby the dialogue that is taking place is being done in the print and broadcast media. This situation, combined with the financial subsidies that the City provides to keep the Airport running, has created a two-fold negative effect on the communip of the Airport. Due to public outcry, various media reports and articles have of the Airport Commission and the outright closure of the Airport, an issue that moot, unless the City wants to pay back the Federal Government the millions of the FAA through Grant Assurances. The public needs to be made and the University, not only financially, but The Airport Manager and Commission, has not had ;sue, and a renewed emphasis must be focused in this area. A new public and directed toward the voting public, the local business community, and nnne of tt~ will CD become Fel Changes to ement of the Ai~o~, several item~ould be remain in effect to continue to provide an unbiased business Airport ,/ The Airport policy, but not be involved in daily decision-making The Airport Manager, or managing entity, needs to be empowered to make daily operational and service-related decisions c Airport -- Business Solutions Iowa City Airport Business Plan 4 Chapter 3 - Management and Operational Structure September, 2003 DRAFT The Airport Manager, or managing entity, must have a more formal structure for reporting to the Chairman of the Airport Commission on a weekly basis · / The Airport Manager, or managing entity, relationship to the City Manager, and provide a weekly · / The City Manager should maintain a full-time not as an officer, but as a full voting member and ,/ The Airport Manager, or managing entity, in the and be more active in national continuin~tucatic~ (7) -<2 i Shared/Contract M: ~> " In evaluating the City should consider turning over the mana namely, the Airport's fixed base operator. In this . be done directly by the sharing the duties as the Airport Manager, with the ~ and management controls, as if they were a City employee. With the agreement, which there are several models available from other airports, IOW ~ solve many of the problems it faces. It is understood that Iowa City Airport was managed by the FBO some years ago. However, research has indicated that at that time there was not a very well-defined approach or reporting structure, c Airport -- Business Solutions Iowa City Airport Business Plan 5 Chapter 3 Management and Operational Structure September, 2003 DRAFT and that the FBO owner was unwilling to work with the City to better develop the Airport and the increase the air traffic coming in to the field. Under the latest and most common contractual agreements municipalities and FBO management companies, some of the critical items that must be has day-to-day decision-making authority and under what parameters, the f pricing controls, ensuring quality service standards, standardized financial reporting reporting procedures, and ultimately, the management/marketing advantages of this scenario include: ,/ Although the FBO would want some significant reduction in the Airport'! realized, i~Santly n~ing the ~C3 ~ ,/ Improved market presence in the aviationS! ~%-1 ,/ who are i , on-site, who could assist~ main~nance and upkeep of the for marketing the Airport and it services, both ,/ private enterprise and business point of view, with a total focus on quality services to the end user. ,/ Abilit) financial milestones and targeted service goal incentives that will motivate the FBO/Airport Manager to get the Airport "in the black" and keep it there. -Airport -- Business Solutions Iowa City Airport Business Plan 6 Chapter 3 - Management and Operational Structure September, 2003 DRAFT The FBO must be motivated to provide this service and there are a number of ways to provide on- going financial and lease incentives that will allow both the City and the FBO to benefit as the Airport grows and business improves. Further discussion of this scenario will be provided in the financial analysis section of the Business Plan. Action items Chapter 3: The FBO Owner/Manager should management and development of the Airport Immediatel~ Continue oversight by the Airport The City Manager ould maintain .time position on the Airport Commission, not as an t ~t representative of the Ma Make adjustments to lease a Be distribution to City leaders Mana be several goals simultaneously installation of a precision landing approach I of safety and security c Airport -- Business Solutions Iowa City Airport Business Plan 1 Chapter 2 - Statistical Analysis September, 2003 DRAFT STATISTICAL ANAL ¥SIS An important aspect of the development of an Airport Business Plan is a statistical analysis of not only local economics and demographics, but more importantly, the state of the aviation industry on a local, regional, and national basis. Within the Plan's development process, ABS completed research and used their extensive experience and knowledge to provide Iowa City with reasonable operational projections for the Airport (as noted in the financial section). This research is performed to identify trends, as well as to determine effective ways to interest aircraft owners in relocating to or using the Iowa City Airport. Such projections are essential to the development of future operational and potential revenue projections. Trends considered include: ~ Local Demographics ~ Local and Regional Economic Development ~ Comparison with National Aviation Statistics Local Demographics The Iowa City Airport is located in the eastern part of Iowa and is within the city limits of Iowa City. Iowa City is the home of the University of Iowa and reflects a population of an estimated 62,200 full time residents. The City is located in Johnson County, which has an overall regional population of approximately 111,000. During the fall and winter months, the community also benefits from the student population of the University, which increases to nearly 30,000 people. The City is located south of Interstate 80 at approximately a mid-point between Cedar Rapids, Iowa and Davenport, Iowa. In order for the Airport to succeed, the City and the County must maintain economic strength. Iowa City is highly dependent upon the University of Iowa as the primary generator of the economy. Because of the consistent nature of the University, including continuous student and health research activity, the area's economy has historically been very stable. Although no community is completely _Airport -- Business Solutions Iowa City Airport Business Plan 2 Chapter 2 - Statistical Analysis September, 2003 DRAFT recession proof, over the past several years, Iowa City has fared better than many other areas in the upper mid-west. The community also benefits from a diverse mixture of telecommunications, manufacturing, services, tourism, and extensive health care facilities. In addition, the area focuses on a constant dedication to maintaining a high quality of life within the region. The population of Johnson County increased by 4.2% from 1990 to 2000 and is predicted to stay strong and continue this pace into the next decade. Median family income is well above the State of Iowa and National U.S. averages. The median family income average for Iowa City is $57,568, followed by the National U.S. average at $50,046, and the State of Iowa at $48,005. Unemployment in the area is very low, with the County reflecting an overall unemployment rate of only 2.4 percent in 2001, compared to the State of Iowa at 3.3 percent and 4.8 percent for the U.S. With regard to the local employment base, the County's largest employers are the University of Iowa (26%), University of Iowa Health Center (8%), Hy-Vee (2%), and ACT (2%). Iowa City Iowa United States $57,568 $48,005 $50,046 Iowa City Iowa United States 2.4% 3.3% 4.8% _Airport - Business Solutions lowa City Airport Business Plan F[LE[~ 3 Chapter 2 - Statistical Analysis September, 2003 DRAFT Local and Regional Economic Development Cl]'Y ' ' IOWA DWA As previously indicated, ~e Universi~ is the dom~ant con~butor to the Iowa Ci~ economy, followed by heal~ se~ices. The top 14 largest employers are as follows: University of Iowa 17,311 University of Iowa Hospitals and Health Services 5,857 Iowa City Community Schools 1,600 Veteran's Administration Hospital 1,300 Hy-Vee Grocery 1,300 Mercy Hospital Health Services 1,150 American College Testing (ACT) 1,100 Lear Automotive Products 930 Oral B Laboratories 800 Rockwell International Communications 729 MCI Mass Market Services 633 City of Iowa City Governmental Services 580 Procter & Gamble Health Care & Beauty Products 560 Systems Unlimited Assisted Living 478 The Iowa City Airport has benefited directly from the University through numerous charter flights, air ambulance, and sports-related aircraft operations. The University accounts for approximately 30 to 45 flights per month with many other operations related to business and general itinerant travel. A review and analysis of business growth, family income demographics, and the local economy, generates the theory that given the stable economy and growing industrial and population figures in the County, as well as other areas that generally impact the region, the Iowa City Airport should continue to :Airport -- Business Solutions lowa City Airport Business Plan 4 Chapter 2 - Statistical Analysis September, 2003 DRAFT maintain its current level of activity with some small increases anticipated due to improvements in the national economy and the addition of an instrument landing system on the field. However, in order to maintain current activity levels and accommodate anticipated growth, Airport management must carefully and diligently plan improved marketing strategies and aggressive changes to administrative structure. Comparison with National Aviation Statistics Besides the local social and economic factors, trends within the aviation industry were also considered in the preparation of this Plan. While national aviation averages are slightly higher than in the Mid-Western Region, the trends have a tendency to mimic one another. The following analysis reviews the number of pilots by type of rating. This statistic is significant since it is believed the vast majority of Iowa City tenants are private pilots, with only a small percentage having commercial ratings. Additionally, with the limited of flight schools on the Airport, it is likely that the Airport is not benefiting from student pilots that could become future tenants. (Note: It is a major concern that the Airport is not taking advantage of the massive student population for prospective flight training students.) Also included in these statistics are the numbers of certifications issued for various aviation support professions. Although at the time of this writing the FAA's statistical analysis on pilot certifications has only been completed through 1998, the detail is included herein for the purpose of comparing Iowa City with national trends. _Airport - Business Solutions Iowa City Airport Business Plan FI[~ED 5 Chapter 2 - Statistical Analysis September, 2003 DRAFT CITY Number ofA,rmen b Calenda/r~Y~v~ Typ o,¢ .i cate 1992 1,994 1,9% Private (1) 288,078 283,700 284,236 261,399 254,002 247,602 247,226 Commercial (1) 146,385 143,014 138~728 133,980 129,187 125,300 122,053 Student 114,597 103,583 96,254 101,279 94,947 96,101 97,736 Airline Transport (1) 115,855 117,070 117,434 123,877 127,486 130,858 134,612 Rotorcra~ (only) 9,652 9,168 8,719 7,183 6~961 6,801 6,964 Glider (only) 8,205 8,328 8,476 11,234 9,413 9,394 9,402 Lighter-th~-Air (2) N/A N/A N/A N/A N/A N/A N/A Recreational 187 206 241 232 265 284 305 Pilot Total 682~959 665,069 654~088 639~184 622~261 616,340 618~298 Mech~ic (3,4) 384,669 401,060 411,071 405~294 329,239 332,254 336,670 Gro~d Ins~ctor (3) 73,276 76,050 77,789 96,165 68,573 69,366 70,334 Flight Engineer 61,022 60,277 59,467 60,267 61,459 62,544 63,700 Parachute Rigger (3) 8,163 8,417 8,631 11,824 10,269 10,336 10,459 Dispatcher (3) 12,264 12,883 13~410 15,642 13,272 13,967 14,804 Flight Navigator 1,154 1,039 990 9 l 6 847 782 712 Repai~ (3,4) N/A N/A N/A 61,223 50,768 51,643 52,909 Nonpilot Total (5~6) 540~548 559~726 571~358 651~31 534~427 540~892 549~588 ~ Includes pilots with an ai~lane-only ce~ificate. Also includes ~ose with an ai~lane and a helicopter an~or glider certificate. 2 As of 1990, lighter-th~-air Wpe ce~ificates were no longer issued. ~ Nmbers represent all ce~ificates on record. No medical examination required. Data for 1996 limited to certificates held by those ages 70 ye~s and less. 4 Phor to 1995, repai~an ce~ificates were included in the mechanic catego~. 5 Beginning in 1995, these co~ts include non-pilots previously excluded because their ad~esses were incomplete or they requested that their names be withheld ~om mailhg lists. These individuals were excluded prior to 1995. 6 Sta~ing in 1996, data are not comparable to earlier years. _ Air~ort - Business Solutions Iowa City Airport Business Plan 6 Chapter 2 - Statistical Analysis September, 2003 DRAFT When isolating the foremost type of pilot categories found at Iowa City (Private Pilots), national statistics show declining numbers for this seven-year period. However, increases have been noted in Transport categories, which relate to additional pilots for charter and larger transport category general aviation aircraft. With the modest growth in population within the County and the nearby large population centers, and if the Airport is able to attract new students from the University, the Airport should be able to improve its financial situation. National Pilot Certifications by Type 0 50,000 100,000 150,000 200,000 250,000 300,000 Il Private [] Commercial [] Rotorcraft J Source: FAA In addition, in analyzing the industry trends in the past few years, the industry has seen significant increases in the areas of aircraft charter, fractional ownership and aircraft management. This is primarily due to loss of air carrier service at regional airports, and demands for increased security, which is provided to users of private aircraft. _ Airport - Business Solutions Iowa City Airport Business Plan 7 Chapter 2 - Statistical Analysis September, 2003 DRAFT With the high level of activity within this sector of general aviation, Iowa City should be benefiting from increased flight activity as indicated by the trend to improved fuel sales in the past few months and the projection that 2003 fuel volumes will reach the peak that was achieved in 1999. As discussed in Chapter 1, the Airport needs to maintain better records relative to operations, tenant activity, and competitive activity at surrounding airports. The Airport is not taking advantage of the large student population nearby for new student start-ups and associated flight activity. It is the experience of ABS that flight schools that are near significant populations of 18 to 24 year olds, such as the case at Iowa City, have better new student activity that other comparable flight schools. Moreover, increased flight training means additional fuel towage and related services. The Airport, in association with the FBO, must work with the University to develop co-op programs for students to learn to fly through elective class programs. Action items Chapter 2: Il Better record-keeping of Airport operations and related activities ~ll Continually monitor rates and fees at comparable airports ~l Play a stronger role in economic development in the area ti Monitor Demographic Business and University Activity for aviation opportunities I Focus on new student flight training activities through cooperative marketing efforts between the Airport, FBO, and University of Iowa O ~ _~ m · g-"'1 4" _ Airport -- Business $olutio ns Iowa City Airport Business Plan 1 Chapter 4 Document Review September, 2003 DRAFT DOCUMENT REVIEW As part of the development of the Iowa City Airport Business Plan, ABS has reviewed existing management structure currently utilized by the City. We have identified that the Airport operates without the typical guiding documents normally seen at a municipally-owned public airport. In this section, ABS will provide recommendations on steps to develop these documents. In addition, ABS has identified and developed certain property management documents for consistent and efficient Airport operations. Documents included in the Appendix section of this Business Plan include Leasing Policies and a Rates and Charges Policy. Leasing Policy Rates and Charges Policy Minimum Standards Standard Lease Language Airport Business Solutions Chapter 4 Document Review September, 2003 ~{]~ SIP -[4 ~[~ 9: DRAFT Leasing Policy CITY CLERK IOWA CITY,, IOWA Included in the process of developing this Business Plan, ABS prepared a series of Leasing Policies for the Airport, including: Leasing Policy for Commercial Aeronautical Activities - This document is intended to provide potential and current tenants an understanding of the policies and processes used by the Airport Conunission when leasing property or providing access to the Airport by entities intending to provide commercial aeronautical services. Leasing Policy for Non-Aeronautical Commercial Properties - This same document can be utilized to provide potential and current commercial tenants an understanding of the policies and processes used by the Airport Commission when leasing commercial property for non- aeronautical purposes on the Airport. These documents set forth the parameters for leasing Airport land, or accessing Airport property, and have established the following purposes: Maintain City's public use Airport in a safe manner to ensure that the Airport can fulfill its role as required in a emergency response system Preserve investment in the Airport Facilitate orderly management of the Airport Ensure provisions of high-quality leasing procedures, services, and consistent quality of facilities Provide equitable and uniform treatment of all tenants and users Advance qualified aviation-related services on the Airport To assist the Airport Commission in the orderly development of the Airport To ensure compliance with applicable laws, regulations, executive orders, policies, guidelines, and requirements as they relate to the application and acceptance of Federal Funds ~ ~rport -- Business Solutions Iowa City Airport Business Plan 3 Chapter 4 Document Review September, 2003 DRAFT Facilitate and foster good relations with all local Airport communities and their residents Enable conformity with the approved Airport Master Plan To make the Airport available for public use on reasonable terms without undue discrimination I1 Assist the Airport Commission in maintaining a fee and rental structure with thCdgoal of financial self-sustainability Ensuring economic growth by providing access to State, regional, lo~ca~j~nd ~ttiorm]-'] markets ,_~? -~ I Rates and Charges Policy '~' The purpose of a Rates and Charges Policy document is to set forth a standardized system for the establishment of rates and charges which will be imposed equally on all users of the Airport and to comply with the Federal Aviation Administration Final Policy regarding Rates and Charges published in the Federal Register, Volume 61, Number 121 on June 21, 1996. It is the intent of this policy to benefit the public by the establishment of a standardized system of rates and charges, which is based on the following obligations: A. Ensure compliance with applicable legal requirements regarding Airport rates and charges through local communications, negotiations, and resolution with the Airport users. B. Ensure the rates, charges, and fees imposed on the aeronautical users of the Iowa City Airport are fair and reasonable. C. Make the Airport available for public use on fair and reasonable terms without unjust discrimination. Ensure that any Airport tenant is subject to the same rates, fees and charges as are uniformly applicable to other tenants offering similar services or utilizing the similar facilities at the Airport. _ ~irport , , ,, --Business · .~ Solutions Iowa City Airport Business Plan 4 Chapter 4 Document Review September, 2003 DRAFT D. Maintain a rate, charge, and fee schedule that guides the Airport toward the continuing goal of financial self-sustainability. E. Utilize revenue generated from Airport activities and services only for aeronautical purposes (no revenue diversion). F. At the discretion of the Airport Commission, the Airport may, from time-to-time, apply special rates and fees for and in accordance with the Federal Aviation Administration. Minimum Standards Although the preparation of Minimum Standards was not part of this assignment, ABS has provided general guidelines for the Airport Commission to use as they prepare this document, including the AAAE/NATA Minimum Standards Guidance Document. The Airport's commercial aeronautical operators and are much in need of a detailed set of standards prior to increased development of the Airport. Standard Lease Language The Airport Commission has multiple leases to maintain and manage, and the~ase agr. e. ements vary widely. The different types of lease agreements are a result of differing negotiated payment terms, purposes of the lease, and the type of property leased over the years. The leases have been developed by the Commission over time and implemented over many years. The leases include a variety of lease types to include the following: c Airport -- Business Solutions Iowa City Airport Business Plan 5 Chapter4 Document Review ~'IL~.~L~) September, 2003 ~ Ai~lane Hangar Lease ' Aimlane Tied°wu Space Lease IOWA · Storage Area/Co.orate H~gar Lease · ~et Air Business Lease Airplane Hangar Lease - To simplify the management of the 59 hangars, the City should consider having all leases expire on the same date. This would allow the Commission a single date from which to issue notices for any rent increases or document verification. If a tenant leases a hangar during the year, the agreement should be only for the balance of the year and expire when all other hangar leases expire. Moreover, the current agreement does not require the individual tenants to carry general liability insurance. This should be required at a specified amount that names the City and its employees as an "additionally insured", and further require that each tenant provide annual notification of insurance to the Airport Manager. The general liability amount should be for no less than $50,000. Additional comments are: 1. The lease should prohibit the storage of flammable or hazardous materials. 2. The lease should allow for entry of City personnel with 24-hour notification or immediately in the case of an emergency. 3. Although there is a provision that states the tenant cannot sublet, a default provision should be added that states that if a tenant sublets a hangar without written consent from the Commission, that tenancy is forfeited. 4. A security deposit equal to one month's rent should be required. 5. A provision for the Manager to conduct annual hangar inspections should be added. 6. The appropriate size and type of fire extinguishes should be required of each tenant. 7. Addresses and emergency phone numbers should be included on each lease. Airplane Parking Lease - To simplify the management of the City's aircraft parking (tiedown implies the City has secured the aircraft) leases, the Commission should also consider having all of these leases expire on the same date. This would allow the Commission a single date from which to issue notices for any rent increases or document verification. If a tenant leases a tiedown during the year the agreement should be only for the balance of the year and expire when all other tiedown leases expire. _ Airport ,,,,,, ""Business · ,-~ Solutiom Iowa City Airport Business Plan Chapter 4 - Document Review 6 September, 2003 DRAFT Moreover, general liability insurance be required ht a specified amount that names the City and its employees as an "additionally insured", and further require that each tenant provide annual notification of insurance to the Airport Manager. The general liability amount should be for no less than $20,000. Additional comments are: 1. A security deposit equal to one month's rent should be required. 2. The name of the agreement should be "Airport Parking Agreement." Airports have been sued because the name "tiedown" represents that the airport had supplied secure ropes, cables, or chains, and made sure that all aircraft were secure. When air~fi hav~l~roken free, the airport has been held liable. 3. Change all references to tiedowns to aircraft parking. 4. Addresses and emergency phone numbers should be included on each lea~ Storage Area/Corporate Hangar Lease - To simplify the management of the-3~irport .s-aircraft storage area leases, the Commission should consider having all leases expire on the same date. This would allow the Commission a single date from which to issue notices for any rent increases or document verification. If a tenant leases a storage area/hangar during the year the agreement should be only for the balance of the year and expire when all other storage leases expire. Moreover, the agreement must require the individual tenants to carry general liability insurance. This should be required at a specified amount that names the City and its employees as an "additionally insured", and further require that each tenant provide annual notification of insurance to the Airport Manager. The general liability amount should be for no less than $20,000. Additional comments are: 1. A security deposit equal to one month's rent should be required. 2. The lease should prohibit the storage of flammable or hazardous materials. 3. The lease should allow for entry of City personnel with 24-hour notification or immediately in the case of an emergency. 4. A provision for the Manager to conduct annual storage area inspections should be added. 5. The appropriate size and type of fire extinguishes should be required of each tenant 6. Addresses and emergency phone numbers should be included on each lease. 2Airport ' -- Business Soluu'o Iowa City Airport Business Plan 7 Chapter 4 Document Review September, 2003 DRAFT FBO Business Lease - This again is a very specific lease agreement with various troublesome terms and conditions. The Lease is well below market due the rapid departure of the last service provider. The 5-year agreement began on January 1, 2002 extends through December 31, 2006. The lease provides for the FBO to pay no rent in the first 3 months of the agreement, $1,000 per month in months 4 through 12, $1,500 per month in months 13 through 24, and $3,000 per month in months 25 through 60. The favorable rate was due in part to the needs of the City to provide certain Airport activities and services. (NOTE: Airport Business Solutions was not provided a full copy of the FBO lease, despite several requests.) In addition to the aforementioned rent, the Lessee is required to remit to the City a fuel flowage fee of $0.10 per gallon of retail fuel dispensed. Given that this is a primary revenue source from this lease, and the only source subject to adjustment, the City should consider increasing this fee to $0.12 per gallon at the earliest opportunity. Moreover, audit provisions should be in place to ensure that this requirement is being met to its full requirement. (Note: The previous FBO was paying $0.25 per gallon, which was well above industry averages. However, a $0.12 per gallon fuel flowage fee is reasonable and should be negotiated.) Although it is unknown what insurance limits currently exist, the Lessee should carry a general liability policy of a minimum of $1,000,000. In addition, as discussed in Chapter 3, the Airport should consider negotiating a separate, independent operating agreement with the FBO to begin day-to-day management and maintenance of the Airport, which would provide a "win-win" financial situation for the City and the FBO. Such an agreement would benefit the FBO by allowing it to utilize certain "economies of scale" by cross-utilizing FBO personnel to manage and maintain the Airport facilities, while allowing the City to continu~e their efforts of a goal of financial self-sufficiency. ~ C) co 2 Airport Solutions Iowa City Airport Business Plan 8 Chapter 4 - Document Review September, 2003 DRAFT Action items Chapter 4: Il Adopt Leasing Policy Il Adopt Rates and Charges Policy Il Develop Minimum Standards Il Prepare better lease language for new leases Il Require security deposit on all leases Il Prepare and maintain emergency phone and address list on all tenants Il Consider negotiating a separate, independent operating agreement with the FBO to handle day-to-day management and maintenance of the Airport . Airport -- Business Solutions Iowa City Airport Business Plan 1 Chapter 5 - Marketing Strategies September, 2003 DRAFT MARKETING STRATEGIES In the development of the Iowa City Airport Business Plan, Airport Business Solutions has completed a market analysis to profile the most probable marketing process for the Airport. Moreover, this section provides a series of marketing strategies to assist the Airport in working with the local community, creating quality media relations, and enhancing the base knowledge of user perceptions through the use of well-orchestrated surveys. Included in the strategy are the following: i Marketing to the Community .x> ~ m I~l Media Relations C) -'~ -,o ~ II Surveys ~ :~ ffi Participation in Trade Associations ~ · Market Strategies .~ One of the keys to maximizing Airport development is marketing. While the direct benefits that an airport contributes to its community are relatively obvious (jobs, transportation, emergency services), it still faces the obstacles of the "unknown" to the uneducated (crashes, noise, aircraft utilization). Moreover, the "vocal minority" tends to be better at pleading their case than does the aviation enthusiast. As such, marketing is a vital tool to an airport's acceptance within the community it serves. The Iowa City Airport marketing efforts have been generally nonexistent due to the lack of priority and focus on this issue. The focus has been primarily on the business of managing the airside facilities, and that is important. However, from a business management perspective, little has been done relative to meeting with community leaders, industry leaders, and trade associations. The Airport management team should utilize the vast resources of AAAE and NATA on a more regular basis. More info will be provided on these trade organizations in a later paragraph. At present, the Airport is "taking a beating" in the media relative to the subsidies required to keep the Airport going. However, relative to the overall City Budget, the subsidy to the Airport is insignificant, especially when considering the numerous benefits offered to the community by the Airport's existence. Most Airport subsidies, particularly for general aviation reliever facilities, can _ Airport - Business Solutions Iowa City Airport Business Plan 2 Chapter 5 - Marketing Strategies September, 2003 DRAFT approach the millions of dollars. However, from a community image perspective, the Airport Commission and City Administration must do everything possible to minimize the amount of money provided to the Airport. The management team at the Airport must also make a better case for the Airport relative to its benefits to the community. Even though most residents don't fly out of the Airport, they do benefit economically from the aviation activity there, particularly from the itinerant flyers coming to the area and the University's utilization of the field and its services. Those in the media and the public voicing their displeasure in editorials must also realize that shutting down the Airport is basically moot. If the Airport were closed, the City would have to pay back millions of dollars in Federal grants that have been provided by the FAA to the Airport over the years. The Airport and City agreed to keep the Airport open and available for public use during the 20-year term set forth in the FAA grant assurance requirements. Moreover, the City must continue to pursue all available grants for further Airport expansion in order to maximize all available revenue producing opportunities. What is Marketing? "Marketing is the process of anticipating, stimulating, developing, managing and satisfying customer needs through exchanges between the organization and the customer. ''~ "The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. ,,2 ~ Marketing in Action, K. Tuckwell, Prentice Hall, 1991 Marketing News, American Marketing Assocmtlon _Airport Business Solutions Iowa City Airport Business Plan 3 Chapter 5 - Marketing Strategies September, 2003 DRAFT Marketing to the Community Marketing in the aviation arena can take on many personas. The following are a few areas for the City to consider in educating the community about the contributions of the Iowa City Airport. Airport Open House An Airport Open House event can be held on an "ad hoc" basis or as an annual event that helps enhance visibility of the Airport and/or tenants. This type of event normally improves relationships within the local community. The first Open House will require the most effort. After that, the groundwork and procedures will be established for future events. Make no mistake, this is a time- consuming event that requires the resources and time of several individuals. However, Airport volunteers and interested community members can help reduce the time required of the Airport staff Airport Management should have the ultimate responsibility for planning and overseeing the event, but a key to a successful open house is getting others involved. A committee (utilizing the Airport Commission, FBO Management, City Manager and others in the business community) is the most effective way to keep everyone who needs to be involved up to date with the event activities and progress. Additional external individuals or groups that could assist in the process may include: Local Chamber of Commerce University Student and Faculty Groups Flying Clubs Local Police and Firefighters Military personnel Local service clubs _ Airport - Business Solutions Iowa City Airport Business Plan 4 Chapter 5 - Marketing Strategies September, 2003 DRAFT Prior to the event, the Open House spokesperson should arrange interviews with the local media, making sure to include local community leaders and Commission members in the interviews. Additionally, a series of news releases should be prepared and released in the weeks preceding the event. Activities during the event should include at least the following: Information on the Airport's econordc benefit to the community Local TV and radio personalities doing remote broadcast from the event (weather reporters work very well) Bury an Airport time capsule, developed by local schools Paper aircraft building contest ~> Static aircraft displays --~ C'; Face painting for kids of all ages .-~ Information booths manned by commercial tenants displayln~ their services-- Refreshments, which can be handled by local service groups to raise m~y for-'X~elr organizations Essay contest for elementary school children, with the winner announced during the Open House. The topic should be "Why Airports Help Our Neighborhood" In preparing for the event, there are a few basic housekeeping issues that must be addressed. Have someone in charge of taking photographs, insure you have a public address system for making announcements, and include a designated announcer. Do not forget to have an adequate number of toilet facilities and a group assigned for clean-up after the event. Think about where you will be parking cars, and if it is a remote location, how the people can be transported to the Airport activity center. Have clear and simple signs directing people to the various activity areas, and keep staff informed so that they may answer pre-event phone calls correctly. In addition, decide on a "rain date policy". Be sure and say "THANKS", both publicly and personally, and all volunteers on the committee should receive special recognition. _Airport -- Business Solutions Iowa City Airport Business Plan 5 Chapter 5 - Marketing Strategies September, 2003 DRAFT Contests for Kids Another way to promote good community relations is to reach out to the children of the community. Within the halls of the terminal building, examples of artwork from area students can be posted. An option on expanding this activity is to hold an Airport poster contest. Establish basic judging rules and let local officials do the judging. Display all entrants in the terminal, as long as possible, with the winning poster displayed for a year. This will bring people to the Airports that may not normally visit the facility. Select a basic theme for the posters, but let the kids' imagination determine the rest. Select the size for the posters and make sure the rules are written so kids can understand them. Tenants or local merchants may want to be involved with judging or awards. Media Relations Often, the media is the first and only contact with the local community, as well as with some tenants, elected officials, and area business owners. Therefore, it is important to know what "works for" the local news channels and individual reporters assigned to the Airport. Using the media wisely can be beneficial to the Airport, but you must be willing to talk to them about both positive and negative events (when appropriate). This is especially important in Iowa City, where the local media has been especially vocal and generally negative toward the Airport. While you can certainly use the media to help promote the Airports, be sure to only use them when you have a real news story. Hosting media representatives at the Airports can be a valuable tool, as it can help them understand how the Airports function for better accuracy for future broadcast accuracy. It can also serve to help establish a positive relationship with the Airport Management team. Also remember that if you want to get a good media turnout, food and beverages are always good incentives. Be prepared for emergencies. Let the media know in advance what the procedures are, where they can assemble for information, and who are the appropriate contact person(s). This can be accomplished ~ Air~oort -- Business Solutions Iowa City Airport Business Plan 6 Chapter 5 - Marketing Strategies September, 2003 DRAFT via an advance letter, and reinforced during the hosted media event. Provide the media with basic Airport information and a glossary of commonly used aviation terminology. When in an interview, it is difficult to admit to bad news or ignore a bad situation. However, it is always safer to respond honestly to difficult questions. In the event that you have limitations on responses to certain subjects, tell reporters that, "information is not available at the moment" or "I will have to get back to you." Try and avoid the "no comment" statement. Keep an updated media list. This will assist in distributing news releases and should be updated at least once a year. The list will also help in determining the appropriate "release" for different types of news stories, as some stories may be of more interest to local news than Statewide news. The Airport Manager is usually the point-of-contact; however for certain stories you should have pre-selected alternative contacts (e.g., Airport Commission Chairman, Legal, or City Manager, when the Manager is unavailable). Surveys Surveys are by far the most popular method of collecting data. Although the Airport is not overly busy, with only a staff of one, only so much can be accomplished. Therefore, we suggest that the FBO management and Commission teamwork together to better develop a strong plan for "mass marketing." Consistent collection of information from Airport users and tenants is an important activity. Surveys can provide a quick, inexpensive, efficient, and reasonably accurate means of assessing general information from Airport users and the competitive marketplace. Whether a survey is to be conducted via telephone, personal interviews, or via mail, to be successful in the survey process you must complete certain basic steps: O _Ai~Fort - Bt~_Mness Solutions Iowa City Airport Business Plan Chapter 5 - Marketing Strategies September, 2003 DRAFT O Determine the objective of the survey · Develop a sampling plan · Solicit approvalifnecessary · Write the field procedures · Develop distribution area · Execute the program · Collect the data · Analyze the data · Report findings and recommendations Personal Interviews increase the likelihood that all questions will receive answers and usually provides a higher participation. Additionally, this forum creates an opportunity for the interviewer to use props and visual aids. However, the potential exists that the interviewer may cause the respondent to provide answers to please the interviewer rather than revealing true attitudes, opinions, or beliefs. A standard questionnaire should be prepared and random interview should be done at least once a month. Be sure that the interviewer understands how to properly conduct the survey in a standardized format. Telephone Surveys are the most popular method for conducting surveys. Information gathered is usually complete and respondents are generally more willing to provide detailed and reliable information. However, telephone interviews have a distinct disadvantage because it is easier far a respondent to refuse to participate. As such, make you questions brief and specific, and try to limit the call to 5 minutes. We recommend the Airport prepare a user database and conduct random samplings twice each year to gain an understanding of the needs and desires of the City customer. Staff should also use this method to collect information from competing airports regarding activity, pricing and development plans. Mail Surveys are self-administered questionnaires that are sent to respondents through the mail with an effective introductory letter. Care must be exercised to ensure that the questionnaire is clear, concise, easy to complete, and reflects a professional layout. Mail surveys are usually low-cost and can provide more information than a phone or personal interview. While a mail survey can be sent to a much ' _Airport -- Business ..'~ Solutions Chapter 5 - Marketing Strategies September, 2003 2883 %? -4 AM 9:09 DRAFT larger sampling group, this type of survey has a low return rate. H~¥et~.~t{ng postage-paid return recd~kl~ envelopes will greatly improve the chance of a return. It is me'~h-port consider these processes only after developing an agreement with the FBO to assist with surveys, then perhaps the use of mail surveys not less than bi-annually to gather information from local citizens and businesses may prove the best strategy. In addition, the FBO can also survey other service needs relative to their business and take an approach that is somewhat neutral and distanced from City administration, which is better for image and liability reasons. Participation in Trade Associations The Airport Management team must focus additional resources and time participating in aviation trade associations. In particular, two organizations are of key importance they are the American Association of Airport Executives (AAE) and the National Air Transportation Association 0NATA). AAAE is the organization that represents airport management and airport entities relative to airport issues and airport related management and operational practices. NATA is the group that represents FBOs, charter companies, flight schools and other aviation service companies relative to management and operations. Participation in these organizations provides a wealth of information on what other aviation service organizations and airports am doing to solve problems, market, and survive in today's volatile economic climate. With a minimal investment in association dues, the Airport would have access to seminars, articles, papers, media presentation materials, best practices data, training information, security policies and much mom from other member entities. In addition, membership in these groups brings a better level of notoriety to the Airport and helps to market to facility to other potential end users of the field. It is understood that the current Airport Manager is a member of AAAE; however, it appears that the membership has been limited and little or no participation in presentations, seminars and AAAE committee meetings has been accomplished. This is essential to facilitating new ideas relative to expanding the Airport and managing it more effectively and efficiently. _ Airport -- Business Solutions Iowa City Airport Business Plan 9 Chapter 5 - Marketing Strategies September, 2003 DRAFT 21103SEP -h AM 9= 09 Market Strategies CWo' CL RK IOWA IOWA The conception of marketing strategies requires management to design efficient and effective programs based upon the following decision-making elements. While we have only identified limited areas, strategies should include: tlr Marketing objective - What is the objective for this planning period? ~ Target market - What market segments will be selected? tlr Positioning strategy - How will it be presented to the selected market segment? ~ Allocation of resources - Who will be dedicated to do the market research, advertise, personal contact, incentives, and reporting? Consideration of marketing the Airport now leads us to understanding the strengths and weaknesses of eacl~ Airport and to review the financial history and consider potential revenue from our marketing and development efforts. Action items Chapter 5: Plan Airport Open Houses Hold Contests for area youth Host media events Take advantage of University student population (potential pilots) Keep updated media list Conduct user surveys Develop a milestone-based marketing plan Increase interaction with aviation trade associations Make Airport and FBO better known nationally and regionally Conduct surveys Develop a marketing plan ~ Airport -- Business Solution~ Iowa City Airport Business Plan 1 ChapterS-Financial Analysis FILED September, 2003 -- FINANCIAL ANAL YSIS CITY CL_E/qK IOV,,¢, CITy IOWA An essential part of this analysis included on-site interviews and surveys to determine the financial strengths and weaknesses of existing Airport operations. Identification of an Airport's strengths and weaknesses is crucial in developing realistic projections, as well as in assessing potential growth opportunities and identifying where improvements are needed. Included in this assessment are overviews of the past revenue and expenses and an overview of anticipated future revenues. In addition, ABS has provided a prioritized list of recommended improvements to facilitate the highest potential for success. Items to be reviewed and/or recommended include: Operational Activity Trends Budget Analysis Financial Projections Self Sufficiency Projections Economic Impact Operational Activity Trends While the marketplace in Iowa City has been nearly flat over the past couple of years, the facility is showing signs of a slow comeback. Fuel volumes are slowly picking up and industry trends indicate gains coming in charter, fractional ownership, and general use of personal aircraft. Forecasts, based on current management operations, are for continued but slow (2%) financial growth in the next five years. As such, if Iowa City continues under the current operating practices in place today, and the Airport Con~nission decides to not change the management scenario, operations will show this minimal general economic growth. However, if the Airport Commission begins to manage and market the facility more aggressively and changes to a management team approach, annual income could increase more significantly over the next five years. _Airport - Business Solutlom Chapter 6 Financial Analysis September, 2003 2O03SEP-I+ AH 9:09 DRAFT A significant restriction to increased business or flight act~t~(a~.~}~ity is the lack of a precision instrument landing system approach. This situation is [t[~e~lt~"/4rn~/~with the Airports plan to mitigate various obstructions in the Airport area. This mitigation is required by the FAA in order to be considered for a new approach and Federal fimding is available for this activity. As such it is projected that the Airport Commission will be successful in achieving this situation with the help of the FAA. This is anticipated to significantly increase aircraft activity at Iowa City. Airport Budget Analysis Very little financial information was provided directly by the Airport Manager, with most of the information coming from the City's Finance Department. While it is understood that the financial responsibility and accounting for the Airport is handled by City Administration downtown, it is surprising to note that the Airport Manager had very little financial information on file at the Airport office. Information for this analysis came from a number of source documents including Departmental Adjustments for FY01, FY02 and FY03, General Fund Tax Subsidy estimates, Airport Revenue Summary FY97 FY03, and the January 9, 2003 Memo from the Finance Department to the Airport Manager "As Presented to City Council". (It should be noted that there is not an individual financial document available for the Airport that depicts revenues, expenses, profit/loss and general fund subsidies in one consolidated form.) Because of these factors, it appears that Airport management has little or no "buy-in" to the accounting process and that there is no responsibility or interest in monitoring the financial status of the Airport on a timely basis. However, based upon standard industry practice, it is our recommendation that the Airport Manager monitor the Airport's revenues and expenses on a monthly basis, as well as be accountable for any discrepancies from budget. This will allow the Airport Manager to provide a more timely analysis of activities, expenses, and other factors to allow intelligent management decisions, as well as to be held accountable for all financial activities. In order to run the Airport like a business, better financial tracking and pro-active management practices must be put in place. If financial self-sustainability is the goal of the City for their Airport division, then significant changes must be made in the administration and management of the facility, which includes the City : Airport -- Business Solutions Iowa City Airport Business Plan 3 Chapter 6 - Financial Analysis FI September, 2003 ~r~*'r 2flit3 SE? -I~ ~ 9:09 Manager playing a more active role with the Airport Commission. If should be noted that several separate documents were provided for Revenue, Expenses, and General Fuji ouo~,,u3re-'~n~ none of the IOWA CiD, IOWA documents seem to fie togethe~ o~ balance. Revenue Analysis Revenue information was derived from the "Airport Revenue" summary; however, no revenue projections were provided for FY 2004, 2005 or 2006. Revenue summary for 1999 through 2003 is as follows: Description 1999 2000 2001 2002 2003 Building Rentals $168,065 $180,852 $173,943 $134,022 $173,251 Land Rental $32,018 $38,082 $31,842 $36,062 $6,643 Miscellaneous Other $2,112 $27,845 $2,662 $14C $13,813 Other Commissions $10,422 $15,967 $5,738 $7,801 $17,818 Equity Transfer SC $0 $39,844 SC $0 TotaIRevenue+ Subsidy $240,617 $326,746 $353,629 $332,825 $378,225 Expense Analysis The primary document used to analyze the expenses of the Airport is the January 9, 2003 memo from the Finance Department to the Airport Manager "As Presented to City Council". This document had the most detail and indicates the budget expenses for 2002 (actual) and 2003 through 2006 (projections). A summary of this document is as follows: _Airport -- Business Solution~ Iowa City Airport Business Plan 4 Chapter 6 - Financial Analysis September, 2003 DRAFT Description 2002 Act. 2003 2004 2005 2006 Airport Employee Wages & Benefits 111,802 117,433 123,594 129,743 135,517 Supplies and Equip 7,477 8,924 18,535 18,906 19,283 Services,Utilities,Charge-backs,Misc 100,587 112,963 122,882 105,726 107,621 lnterfund Loans 125,155 84,990 85,440 85,440 85,440 IT°talBudget I 345'0211 324'3101 350'4511 339,815[ 347,861[ When reviewing expenses for the Iowa City Airport, the projections seem to be consistent. Projections for wages and benefits are anticipated to increase at approximately 4.5 percent through the period. Supplies and equipment jump significantly in 2004 primarily due to a $10,000 line entry for building improvements and materials. Services, Utilities and Charge-backs drop slightly in 2005 and 2006 due to a $19,000 reduction in the line item noted as "Loss Reserve Payment." Based upon a status quo scenario, the Airport will continue to require subsidy payments in the range of $150,000 to $190,000 range well into the future. As noted in the Expense Allocation graphic below, Personnel costs are a significant portion of the budget (36%), while the Interfund Loans are also significant at 26 percent of the budget. As noted previously, if the Personnel costs could be reduced significantly and the City and Airport Commission could work out a land swap or other accounting method for allocation of the land improvement loan, the Airport could be immediately self-sufficient. Moreover, the change to a "team approach" of the FBO taking over day-to-day management and maintenance of the Airport is more realistic to propose, as it seems unlikely that the City will make changes to the Interfund Loan. _Airport Business Solutlon Iowa City Airport Business Plan FILED 5 Chapter 6 - Financial Analysis September, 2003 ~1~0] SEP -14 ~N 9:09 OITV CLEfll, --.. JgWA CFIT, IOWA 2003 Expense nocauons (Budget) lnterfund Loans 26% Personnel 36% Supplies & Equip. 3% Services, Util, Chgbacks, Misc. 35% Financial Projections In conjunction with analyzing the historical revenues and expenses at the Airport, a more defined matrix of financial projections for the forecasted five-year period has been provided to assess the potential for self-sufficiency. The projections contain important assumptions based upon activity projections, management changes, and cooperation by the FBO entity to move forward with a team management approach of the Airport. _Airport -- Business Solutions Iowa City Airport Business Plan 6 Chapter 6 - Financial Analysis September, 2003 DRAFT Historically, the City has used General Funds to make up the deficit between revenues and expenses. The following spreadsheet is provided to depict how the Airport could move closer to self- sufficiency. The following assumptions are applied to the financial projections. 1. The Airport will contract with Jet Air to provide management and maintenance services for the City. This will create an immediate reduction in the overhead of the airport. However, it should also be understood that this scenario would also create some nominal costs for the Airport operation to compensate the FBO for services provided. 2. The management team of the City, Airport Commission and the FBO will begin additional aggressive marketing and public relations activities. This will increase fuel volumes by 4% in FY 2004, 6% in 2005, 8% in 2006, and 10% in Years 2007 and 2008. A new base fuel flowage fee rate of $0.12 per gallon is also recommended (currently at $0.10 per gallon). This means an additional $0.02 per gallon on the "base" of 160,000 gallons, plus the percentage increases noted above. 3. Additional hangar revenues will be generated by increases to rental rates. It should be noted that Iowa City is generally in the middle of the marketplace when cost of services and hangars are compared with the other regional airports listed in Chapter 1. It is believed that the market could bear some increases in this area and still maintain a competitive scenario. Other than Cedar Rapids, IOW ranks as one of the best airfields in the area relative to runways and other infrastructure. In addition, with the addition o£an Instrument Landing System (ILS), the Airport will be much improved, and be in a position to charge more for T-hangars because of this market situation. Hangar rates are project to be increased by $15.00 per month in FY 2004, an additional $15.00 per month in FY 2005, an additional $15.00 per month in 2006, and remain at that level throughout the remaining projection period. ~,o C)-< j ~ ~ _Alert - Business $olntlon~ Iowa City Airport Business Plan 7 Chapter 6 - Financial Analysis September, 2003 DRAFT Financial Self-Sufficiency Projections 2004 2005 2006 2007 2008 Estimated Subsidies Under Status-Quo $180,000 $187,000 $194,000 $200,000 $208,000 Adjustments Per Assumptions Elimination of Salaries and Benefits Add Back Compensation for FBO $12,000 $15,000 $18,000 $21,000 $24,000 Additional Fuel FIowage Fees Additional T-Hangar Revenue rotal Subsidy Required (New Scenario) $54,412 $46,594 $38,281 $39,995 $42,481 Based upon the above scenario, which is conservative and achievable, it is suggested that the Airport may never be totally self-sufficient without the benefit of new development or non-aviation revenues from the Airport Commerce Park or other sources. However, the relative amounts of subsidies under this scenario are minimal and relatively insignificant when compared to other comparable general aviation airports nationwide, as well as the total Iowa City budget. In addition, regarding the accounting of the land improvement loan, the Airport could become self-sufficient depending upon the approach taken on the 54-acre land parcel that is currently for sale. It is also recommended that at the end of the five-year initial term of the FBO, that the lease be renegotiated based on a more realistic rate analysis. Changes would be based upon the FBO's current status and financial strength due to increases in charter and other services, as created by continued investment in and resultant growth of the Airport. As the FBO grows, due to marketing efforts by the management team, the City should also benefit from increased business. If the FBO reaches certain established milestones, then the Airport should be given back a percentage of the profit. This should be structured so that as the FBO business "ebbs and flows", the Airport shares in the ups and downs. However, this scenario would only take place over and above the management scenario as outlined in the financial projections noted above. It must be ~in-win~enario from a business perspective for this to work. ~ C) ~-~ .-< F-- !TI Solutions Iowa City Airport Business Plan 8 ChapterS Financial Analysis FILED September, 2003 O~q' 3103 SEP -t~ I[M 9:09 Economic Impact While an extensive economic impact study of~CP/~i~a~ direct component of this Business Plan, consideration of the Airport's value to the community must be considered relative to its overall economic contribution to the region. When considering the economic value of the Airport to the community served, credit must be applied to the measures of overall economic activity that can be assessed such as gross revenues, economic value added, employment, and labor income. In addition, consideration must be given to capital investment, taxes, tourism, and population. Gross Revenue is defined as the total annual income derived from direct economic activity less inter- business purchases and sales. Economic value added is the measure of value added economic activity includes wages, interest payments, depreciation, dividends, overhead and corporate profit. Employment figures should be documented in terms of total person-years of all airport-related employment. Labor income is comprised of the total annual wages, salaries and benefits received as a result of airport- related employment. Capital investment is considered as the replacement cost of all capital assets permanently stationed at the Airport. This includes Airport land, buildings and facilities, Airport utilities, and dedicated Airport operations equipment. An assessment of capital investment provides a guide to the size of the public asset. The FAA recommends specific guidelines for calculating an airport's economic impact. The various components of an airport's total economic impact are estimated through comprehensive economic assessment, including airport and aviation industry surveys, interviews via phone, passenger or user _Airport $olution Iowa City Airport Business Plan 9 Chapter 6 - Financial Analysis September, 2003 DRAFT surveys, mail and on-site visits. Under FAA methodology, economic impact is divided into three categories: direct, indirect and induced. Direct Impacts - Direct impacts are generated by economic activities carried out at the airport by tenants, FBOs, and airport management. Most direct impacts occur on the airport grounds. The distinguishing feature of a direct impact is that it is an immediate consequence of airport economic activity. Indirect Impacts Indirect impacts are derived from economic activities that are attributable to the airport, but are not direct part of the aviation industry. These activities include services provided by travel agencies, hotels, restaurants, retail establishments, and other non-aviation related tenants. Many indirect impacts occur off-site and are a result of expenditures of airport users, and represent economic activity that would not have likely have occurred in the absence of the airport. Induced Impacts - Induced impacts result from the economic multiplier effects of the direct and indirect impacts. These are the resulting increases in employment and incomes, as well as the corresponding increases in expenditures, that occur in addition to the combined direct and indirect impacts. Successive "rounds" of spending and new development around the airport create these induced impacts. For example, most of the take-home income earned by airport employees goes to local businesses and becomes income to the business owner and their employees. In summary, the value of an airport to the community it serves extends well beyond the physical boundaries of the airport itself. While serving as an important piece of the transportation system in its community, as well as contributing value through the provision of emergency services, it is also a substantial contributor to the economy of the community it serves. Iowa City Airport management must do a better job of projecting this to the community. Iowa City Airport Business Plan I 0 Chapter 6 - Financial Analysis September, 2003 DRAFT Action items Chapter 6: I~l Reduce and/or eliminate tax subsidy to Airport i~ Increase T-hangar rates and fuel flowage fees ~l Improve fuel volumes ~l Restructure management of the Airport to reduce overhead I~ Develop milestone incentives for the FBO I~l Improve financial tracking of revenues and expenses illl Review the direct and indirect economic impact of the Airport all Negotiate with the City for a land swap of industrial park property ~l Complete a facilities audit and facilities needs assessment I~ Complete an energy and environmental study _Airport - Business Solutions Rates and Charges Policy for the Iowa City Airport Presented to Iowa City, Io~,a Date: September, 2003 Rates and Charges Policy 2 Iowa City Airport FILED Table of Contents CI i'( CLi-JRt< Section IOWA CI?~, IOWA Page 1. Statement and Purpose of Policy ................................................................... 3 2. Definitions ................................ ' ............................................................. 6 3. Establishment of Rates and Charges ............................................................. 11 4. Types of Rates and Charges ....................................................................... 13 5. Adjustments of Fuel Flowage, Access, Tiedown, and Special Use Fees ................... 17 6. Adjustments of Unimproved Land, Improved Land, and Facility Rents .................... 18 7. Appraisal/Market Rent Analysis Standards ..................................................... 21 8. Penalties .............................................................................................. 24 9. Revenue Diversion ................................................................................... 25 Rates and Charges Policy 3 FILED 2093 SEP ltt 9: I O Section I Statement and Purpose of Policy CITY t. LEF.,K .._ IOWA CIT , IOWA Iowa City, Iowa (City) owns and operates the Iowa tAry ~viumcipal Airport (FAA Identifier IOW). As set forth by the Federal Aviation Administration (FAA) by way of its Airport Sponsor Assurances, any airport developed with Federal grant assistance is required to operate for the use and benefit of the public and is to be made available to all types, kinds, and classes of aeronautical activity on fair and reasonable terms and without unjust discrimination. As the Airport sponsor, the City receives Federal airport development funding. This Rates and Charges Policy will assist the City in maintaining compliance with the Airport Sponsor Assurances, so as not to jeopardize their ability to obtain future Federal airport development funding. This policy has further been developed to assist the Airport in competing fairly with other airports and to maintain fiscal responsibility and oversight of the assets entrusted to the Airport by the residents of Iowa City. The purpose of this document is to set forth a standardized system for the establishment of rates and charges which will be imposed on all users of the City-owned Airport and to comply with the Federal Aviation Administration Final Policy regarding Rates and Charges published in the Federal Register, Volume 61, Number 121 on June 21, 1996. This policy statement was adopted by the City on the day of ,2003 and is not retroactive, but is applicable to all future leases, as well as renewals or assignments of existing leases, unless invalidated by terms and conditions of an existing lease. It is the intent of this policy to benefit the public by the establishment of a standardized system of rates and charges, which is based on the following obligations: A. Ensure compliance with applicable legal requirements regarding Airport rates and charges through local communications, negotiations, and resolution with the Airport users. B. Ensure the rates, charges, and fees imposed on the aeronautical users of the Airport is fair and reasonable. Rates and Charges Policy 4 Iowa City Airport C. Make the Airport available for public use on fair and reasonable terms without unjust discrimination. Ensure that any airport tenant is subject to the same rates, fees and charges as are uniformly applicable to other tenants offering similar services or utilizing the similar facilities at the Airport.. D. Maintain a rates, charges, and fee schedule that guides the Airport toward the goal of financial self-sufficiency. E. Utilize revenue generated from Airport activities and services only for aeronautical purposes (no revenue diversion). F. At the discretion of the Airport Commission, the Airport may, from time-to-time, apply special rates and fees. All existing and prospective commercial tenants are required to review the City's Minimum Standards document dated and the City's Leasing Policy dated Rates and Charges Policy Iowa City Airport 5 Section 2 Definitions GIT ( aeronautical Property: Any property located ~1~]t~ ~T)~irb(~perations Area (AOA) that supports or directly provides an aeronautical use. (Also known as airport Property.) Aeronautical Use: Any activity that involves, makes possible, or is required for the safety or operation of an aircraft. Agreement: A written contract between the City and a Tenant that specifies the terms and conditions under which the Tenant may conduct aeronautical activities or access the airport properly. Airport: Iowa City Airport, and all of the City-owned or leased real or personal property, buildings, facilities and improvements within the boundaries of the Airport, as it presently exists or as may exist when hereafter modified, expanded, or developed. Airport includes all of the facilities shown on the most current Airport Layout Plans or drawings when available. Airport Manager: The designated individual or duly authorized individual appointed by the Airport Commission to administer and manage all operations and facilities of the Airport, and to supervise all Airport projects. Airport Operations Area or AOA: The Airport property used for aircraft landing, takeoff, or surface maneuvering including the hangars, navigation, and communication facilities. Appraisal: A valuation process conducted by a qualified and experienced appraiser to estimate the current fair market value of Airport property or facilities for rate-setting or adjustment purposes. Based Aircraft: An aircraft that the owner physically locates at the Airport for an undetermined period and whenever absent from the Airport, its owner intends to return the aircrafi to the same Airport for long-term storage. Base Term: The specified initial term of a lease, excluding any specified renewal options. Rates and Charges Policy 6 Iowa City Airport Commercial Activity: Those services provided to the public by a person, business, concession, operator, or agency for compensation or hire. An activity is considere~l a commercial activity even if the business is non-profit, charitable, or tax-exempt. This commercial activity also applies to sublessees. Consumer Price Index or CPI: A measure or indicator of inflation established and published by the United States Bureau of Labor Statistics for cost-of-living and economic purposes. CPI used by the City to determine periodic adjustments for Airport user rates and charges. Existing Leases: Those lease agreements currently in place at the Airport at the time this policy is adopted, in which specific leasehold areas and improvements are defined, and a termination date is specified. FAA: The Federal Aviation Administration. ~, C3 '~' ~ .... Fair Market Rent: The most probable rental rate that a property should bring in ~a~:~fi'petit~e and .~> ~ open rental market, c:~ Fair Market Value: The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale. This includes the assumptions that the buyer and seller each act prudently and knowledgeably, and the price is not affected by undue stimulus. (Also known as Market Value) Fixed Base Operator (FBO): A full service commercial operator who engages in the primary activity of aircraft refueling and, some or none of the following secondary activities: airframe and power plant maintenance, flight training, aircraft rental, air charter or taxi, avionics maintenance and sales, and aircraft storage/hangar rentals. Fuel Flowage Fee: A fee payable by each entity dispensing fuel for each gallon of aviation fuel sold, or transferred on Airport property. General Aviation: Any aviation-related activity, property, or operation, excluding air carriers and military activity. Rates and Charges Policy ~,a 7 Iowa City Airport 0 ~ Lease: A written contract between the City and a Tenant (Lessee) that speci.f'-~e rearms conditions under which the Tenant may occupy and use certain Airport facilities and/or ~c~' rty.TM ~ Leasehold: A defined parcel of land, and any improvements thereon, which is leased to P~erson for their exclusive aeronautical use. (Also known as Leased Premises) Leasing Policy: A City policy document that contains standardized lease application and renewal procedures, lease terms and conditions, sublease rights, insurance requirements, capital investment considerations, and other lease-related information. Lease Renewals: Those extension or renewal options granted by an existing lease contract, which with the approval of the City, may be exercised by the Lessee upon scheduled expiration of the base term of the lease. Market Rent Analysis: A valuation process conducted by a qualified and experienced appraiser or aviation consultant to estimate the current fair market rent of Airport property or facilities for rate-setting or adjustment purposes. Minimum Standards: A City document that contains the minimum requirements that shall be met by operators at the Airport engaged in commercial aeronautical activities. New Leases: Agreements with parties who are not leasing land or improvements at the Airport, or new agreements with existing Lessees for additional land and/or improvements at the Airport, which are not leased by the Lessee upon adoption of this policy document. Permit: The administrative approval issued by the City to a Person to conduct a specific aeronautical activity. Person: An individual, corporation, firm, partnership, association, organization, or any other group acting as a unit, to conduct business on the Airport. Person includes a trustee, receiver, assignee or similar representative. Rates and Charges Policy 8 Iowa City Airport Point oflngress/Egress: The area where the City's Airport property adjoins a Tenant's property to facilitate aircraft access to/from the AOA. Revenue Diversion: The use or appropriation of revenue generated from Airport activities and services for any purpose other than the operations, maintenance, and capital improvements of the Airport. Self-Fueling: The commercial operation of an unmanned stationary fuel tank and dispensing equipment for general use via card reader. This includes the operation of Persons utilizing this type of equipment to provide fuel for sale or reuse. Self-Service: An aircraft owner, who may adjust, repair, refuel, clean, and otherwise service his/her own aircraft, provided the is performed by the aircraft owner or his/her direct employees with resources supplied by the owner. The services must be conducted in accordance with rules and standards established by the City. Sublease: A written contract approved by the City, stating the terms and conditions under which a third-party leases space from a Lessee at the Airport for the purpose of providing commercial aeronautical services at the Airport. Tenant: Any person, partnership, corporation or other entity that leases property or facilities from the City at the Airport. Tiedown: The Airport property that is designated for parking based or transient aircraft. Transient Aircraft: An aircraft that is visiting. C) " ~ ... Rates and Charges Policy 9 FI!_ED Section 3 Establishment of Rates and Charges Z003 SIP - L~ ~M 9: ] 0 ' ; "LEK methods ~ ~rates, Iowa Ciw has the option to utilize various ~ ~ charges, and fees for ~e public use or tenancy of the Ciw's Ai~o~ prope~ and hcilities. The CiW also has the option to grant Ai~o~ use privileges by contract, agreement, pe~it, or the direct assessment of fees. A tenant may be granted a lease agreement, under which it pays ~e CiW either an agreed rent for a defined land parcel, a hangar or other hciliW it occupies, or a vmable payment (related to ~el flowage, volme of business, aimrafi operations, etc.) for ~e use of the Ai~o~ prope~ by its own aircraft or those of its customers or a combination of these fees. The Ciw shall use the following methodologies for assessing Ai~og user rates ~d charges: A. Existing Leases - All extension options granted by an existing lease, which may be requested by the Lessee and require the approval of the City, shall be subject to the same terms and conditions indicated within the existing lease agreement, and may be subject to rate adjustment. B. New Leases - All rental rates and charges applicable to a non-aeronautical or aeronautical property (i.e., unimproved land, paved ramp/apron, buildings, hangars, etc.) at the Airport shall be determined by appraisal or market rent analysis to obtain fair market value/fair market rent. In new leases, whereby all or part of the capital improvements are constructed at City's expense, the City reserves the right to amortize all or part of the construction costs of the capital improvements, plus a reasonable rate of return, during the term of the lease granted to the Lessee. The City may further determine due to the location of the property being leased or the total size of the leasehold that a variance in airport property lease rate is applicable. C. Fuel Flowage Fees, Access Fees, Tiedown Fees - All rates and fees applicable to fuel fiowage fees, access fees, tiedown fees, shall be determined through an analysis of similar activities, rates, and charges at comparable non-City owned airports with consideration to ensure rates are fair and reasonable and to meet the requirement for the Airport to be self-sustaining. All fees will be reviewed and may be modified on an annual basis. Rates and Charges Policy 10 Iowa City Airport D. Special Use Agreements - All rental rates and charges applicable to special use agreements (FAA, agriculture spraying, recreational parks, weather equipment sites, etc.) shall be determined through an analysis of similar activities, rates, and charges at comparable airports in addition to consideration of overall benefit to the public, community, and City. E. Negotiated Fees - The City has established an equitable rates and charges schedule for aeronautical activities conducted at the Airport. However, unusual circumstances may arise, and the City must retain sufficient flexibility in rate and fee negotiation to address such circumstances. Since the primary mission of the Airport is to develop and promote aeronautics, the City reserves the right to negotiate a specific rate or fee to accomplish such mission. F. WaivedFees - The City may waive certain fees for government aircraft to comply with Federal airport improvement grant assurances. The City may also waive certain fees from an organization or person engaged in a non-profit aeronautical program or activity that benefits a charitable organization or community. Examples of persons or organizations potentially eligible to receive such non-profit fee waiver are those conducting aviation safety programs, fly-ins, or air shows. G. Other Fees - The City currently provides for certain administrative fees and charges to be charged to tenants at the Airport. Said fees and charges shall be in accordance with the prevailing fee schedule on file at the Airport. Rates and Charges Policy 11 Iowa City Airport Section 4 Types of Rates and Charges The obligation to make the Airport available to the public does not preclude the City from recovering the costs of operating and maintaining the Airport through fair and reasonable rates, charges, and fees. Each tenant of the Airport shall be subject to one or more of the following types of rates, charges, and fees for the use of the premises and the rights granted by the City: A. Unimproved Land (Ground) Rent Tenants leasing unimproved land (ground space) for private and commercial building sites or aeronautical-related structures shall be assessed an annual rental rate per square foot of leased area. Tenants shall also pay any applicable real property taxes assessed for the unimproved land lease. Rent shall be payable to the City and shall be based upon the appropriate annual rental amount paid in equal monthly installments, or in accordance with a payment scheduled detailed in tenant lease. All payments are required in advance. B. Improved Land (Ramp) Rent Tenants who lease improved land (paved ramp or apron) for private use, non-aeronautical commercial activities, or aeronautical-related activities, shall be assessed an annual rental rate per square foot of leased area. Rent shall be payable to the City and shall be based upon the appropriate annual rental amount paid in equal monthly installments, or in accordance with a payment scheduled detailed in tenant lease. All rent payments are required in advance. C. Facility (Building and Hanga0 Rent ~03 SEP -h ~ 9: [ 0 Tenants who lease s=c res for private commercial activities, or aeronautical-related activities shall be assessed an annual rental rate per square foot of leased building area. Rent shall be payable to the City and shall be based upon the appropriate annual rental amount paid in equal monthly installments, or in accordance with a payment scheduled detailed in tenant lease. Ail rent payments are required in advance. D. Percentage Rent The City retains the right to enter into an agreement or lease that requires a commercial aeronautical operator to pay to the City the greater of either a fixed base rent (including unimproved land, improved land, and/or facility rent), or a specified percentage of gross receipts, for the right and privilege of doing business on the Airport. In addition, the City retains the right to enter into an agreement that requires the payment of a specified percentage of gross receipts, in addition to a fixed base rent. Gross receipts shall be determined in accordance with the definition stated in the operator's lease agreement. E. Fuel Flowage Fees A fuel flowage fee shall be assessed on a "per gallon" basis for all types of aviation fuel delivered, used, or transferred into aircraft at the Airport. Each FBO, self~fueler, or self-service fueling operation shall be subject to payment of fuel flowage fees to the City to support the financial self-sustainability of the Airport. At the discretion of the City, the fuel supplier may pay the fuel flowage fee. 1. FixedBase Operators (FBOs) - Each FBO shall submit quarterly fuel flowage delivery reports to the City for each type of aviation fuel delivered during the quarter, accompanied by fuel delivery receipts from the fuel supplier(s) for the same period. Based upon the quarterly fuel flowage delivery report, each FBO/Supplier shall submit to the City the current fuel flowage fee payment (gallons delivered multiplied by the prevalent fuel flowage fee) in full by the last day of the reporting period. Failure to provide required documentation may be considered a lease default. Rates and Charges Policy 13 Iowa City Airport 2. Self-Fueling Operators Each self-fueling operator shall submit quarterly fuel flowage delivery reports to the City for each type of aviation fuel delivered reporting period accompanied with fuel delivery receipts from the fuel supplier(s) for the same period. Based upon the quarterly fuel flowage report, each self-fueling operator shall pay the City the current fuel flowage fee payment (gallons delivered multiplied by the prevalent fuel flowage fee) in full by the last day of the reporting period. The fuel flowage fee for self-fueling operators shall be equivalent to the fuel flowage fee being paid by the FBO(s) at the same Airport. Failure to provide required documentation may be considered a lease default. 3. Self-Service Fueling Operator/Owner - Each self-service fueling operator/owner shall submit quarterly fuel flowage delivery reports to the City for each type of aviation fuel delivered the reporting period accompanied with fuel delivery receipts from the fuel supplier(s) for the same period. Based upon the quarterly fuel flowage report, each self-service operator/owner shall pay the City the current fuel flowage fee payment (gallons delivered multiplied by the prevalent fuel flowage fee) in full by the last day of the monthly reporting period. However, the fuel flowage fee applicable to self-service fueling operator/owner shall be $0.02 per gallon greater than the prevalent fuel flowage fee being paid by the FBOs and self-fueling operators on the same Airport. Failure to provide required documentation may be considered a lease default. For auditing purposes, the City reserves the right to inspect the fuel storage and delivery equipment, business records, and/or fuel supplier invoices of any FBO, self-fueler, or self-service fueling operator. The City retains the right to hire an independent auditor to conduct a fuel flowage report audit during normal business hours by providing 24-hour notice to the FBO, self-fueler or self-service operator. If as a result of such audit, a deficiency of 5 percent or more is discovered in the fuel flowage reports or payments, the cost of such audit shall be borne by the tenant. The tenant shall remit payment to the City for any amounts under-reported, plus penalty fees described in Section 8 of this policy. Iowa City Airport F. Access (Ingress/Egress) Fees CiTY CLERK Each non-commercial and commercial aeronautical operator}~,~ed[4h~e¥t'i~C'Jfl~d~ ~'-' ' -~'~-- privilege to access or ingress/egress the Airport property shall be assessed an airport access fee for such right and privilege. 1. Commercial Aeronautical Operators - Monthly access fees shall apply to the Airport commercial aeronautical operator that maintains an Airport access agreement. The monthly commercial access fee shall be a percentage of gross revenue, as defined in the operator's lease, or a flat fee, whichever is greater, or a combination of both rates. The access agreement grants the commercial operator unlimited Airport access. Each commercial operator with a City access agreement shall submit a standardized quarterly report stating the commercial operator's gross revenue and applicable percentage access fee for the previous month. Commercial access fee reports and payments are due and payable in full by the last day of the reporting period. 2. Non-Commercial Aeronautical Operators - Annual access fees shall apply to each non- commercial aeronautical operator that maintains an Airport access agreement. The annual access fee shall be a flat fee, based solely upon the current access fee set forth for the Airport by the City. The access agreement grants the non-commercial operator unlimited Airport access. The non- commercial access fee shall be payable to City in full, annually at the lease commencement and on each anniversary date of the lease agreement. G. Tiedown Rent The City offers Tiedown facilities to based and transient aircraft at the Airport. Based aircraft operators can rent an available paved Tiedown from the City. Tenants renting a tiedown on an annual (12 month) basis shall be assessed a monthly rate per tiedown, payable in full to the City bi-annually at the lease commencement and on each six month anniversary date of the lease agreement. Transient aircraft operators shall be assessed a daily Airport user/tiedown fee, payable to the City through the Airport Management Office. Rates and Charges Policy 15 Iowa City Airport H. Special Use Agreements Special and unusual airport property leasing agreements require the City to retain sufficient flexibility in rate and fee negotiations to address such circumstances. The Airport Commission reserves the right to negotiate a special use agreement rent or fee to benefit the public, community, or City. Examples of special use agreements include, but are not limited to: Air Traffic Control Towers, fire protection facilities, sports complexes, farming rights, weather equipment site leases, and concession storage areas. The rent shall be payable in full to the City annually at the lease commencement and on each anniversary date of the lease agreement. Rates and Charges Policy 16 Iowa City Airport Section 5 Adjustments of Fuel Flowage, Access, Tiedown, and Special Use Fees All fuel flowage, access, tiedown, and special use fees imposed through new and renewal agreements shall be subject to periodic adjustment during the base term of the agreement and during all extension periods. A. The City reserves the right to review and adjust such fees bi-annually during the base term of the lease, as well as at the commencement of any extension option exercised by the Lessee and approved by the City. B. Through either internal analysis or an independent contract services agreement, the City shall review the rate and fee schedule of the Airport and comparable airports to determine those fee adjustments that should be made to ensure equity among all revenue sources and maintain the Airport's financial self-sufficiency. The adjustment factor shall then be applied to the armual fee for the preceding year, to determine the new annual fee amount. Rates and Charges Policy 17 Iowa City Airport Section 6 Adjustments of Unimproved Land, Improved Land, and Facility Rents All unimproved land (ground), improved land (ramp), and facility (building or hangar) rents, to include new leases and lease renewals, shall be subject to periodic adjustment during the base term of the lease and during all extension periods. A. The City reserves the right to review and adjust such rents annually during the base term of the ' lease, as well as at the commencement of any extension option exercised by the Lessee and approved by the City. B. Rent adjustments shall be determined using the Consumer Price Index for "All Urban Consumers" for the State of Iowa. Adjustments shall be determined by dividing the index prevalent at the date of adjustment with the index corresponding with the date of lease commencement or date of the most recent lease adjustment. The adjustment factor shall then be applied to the annual rent for the preceding year, to determine the new annual rent level. The rent adjustment shall not exceed 3 percent of the previous year at any given adjustment interval. C. At the end of each 5-year period of the lease, the City retains the option to hire a qualified and experienced appraiser or aviation consultant to conduct a new appraisal or market rent analysis to determine the current fair market value and/or market rent for the leasehold. 1. The appraisal or market rent analysis shall consider only those improvements which were in place at commencement of the base term of the lease, unless specified by the lease, or both parties have agreed to prior reversion of any or all of the improvements. 2. The City shall be responsible for the engagement of an appraiser or aviation consultant. All costs (to include fees and expenses) for the appraisal or market rent analysis shall be divided equally between the City and Lessee. __ ~-o Rates and Charges Policy 18 Iowa City Airport D. At the time of the engagement of the appraiser/aviation consultant, upon mutual agreement, the City and Lessee shall have the right (to the full extent allowed by applicable law) to render the conclusions of the appraiser/aviation consultant as legally binding. 1. In the event that the conclusions of the appraiser/aviation consultant are not rendered legally binding, or if upon completion of the appraisal or market rent analysis either party disagrees with the conclusions of the appraiser/aviation consultant, then the disagreeing party shall have the right to obtain a second appraisal or market rent analysis, which shall be conducted by an unbiased, objective third party appraiser or aviation consultant, subject to the same qualification standards set forth herein. 2. All costs relating to the engagement of this second appraiser or aviation consultant shall be the responsibility of the party requesting said appraisal or market rent analysis. 3. If the conclusions of the two appraisals/analyses reflect a variance of 10 percent or less, then the conclusions of the appraisals/analyses shall be averaged to determine the new market value/rental rate. 4. If the variance exceeds 10 percent, then the City and Lessee shall mutually select a third appraiser/or aviation consultant (subject to the same qualification standards) who shall serve as an Arbitrator. a. The Arbitrator shall review both appraisals or market rent analyses and have the discretion to request a hearing at which both appraisers/aviation consultants shall be available to provide additional information and/or clarification to the Arbitrator. b. The Arbitrator shall derive a conclusion based upon data contained within each appraisal or market rent analysis or each appraiser's/aviation consultant's files. However, the Arbitrator shall have the right to gather, analyze and consider additional data not provided by either appraiser/aviation consultant. (D ceo Rates and Charges Policy 19 Iowa City Airport c. The expense related to contracting an Arbitrator, to include fees and expenses, shall be divided equally between the City and the Lessee. d. All decisions rendered by the Arbitrator shall be legally binding to the full extent allowed by applicable law. 5. Prior to the time of any scheduled rent adjustment, if either party determines that significant changes have occurred at the Airport or within the local area, either party shall have the right to commission a new appraisal/market rent analysis on the property. Significant changes include, but are not limited to, the reversion of improvements prior to lease expiration, leasehold expansion or reduction with regard to land and/or facility areas, and significant changes within the marketplace (either physical or economic). Costs associated with a new appraisal or market rent analysis shall be the responsibility of the party requesting said evaluation. Rates and Charges Policy 20 Iowa City Airport FILED Section 7 Appraisal/Market Rent Analysis Standards ~00) SIP -[~ AM 9: I [ CITY CLERK A. Appraisal/Market Rent Analysis Requirements: Any apprais[~)[~t/~ef~ic~/~10erty for the pu~ose of sale, exchange or lease shall be perfo~ed by a Member Appraisal Institute (MAI) appraiser or equally qualified and experienced appraiser who is ce~ified by a recognized appraisal org~ization. 1. Any appraiser selected to perform appraisals on aeronautical land or improvements shall have working knowledge of the general aviation industry (to include both fixed base operations and other aeronautical uses) and demonstrate familiarity, to the satisfaction of the City, with FAA rules, regulations, and policies affecting airport properties. 2. The appraiser shall have completed a minimum of five (5) appraisals of aeronautical property within the past three (3) years and, upon request, shall provide a list to the City that identifies the location and type of appraisal conducted. Appraisals performed on real property not located within the AOA of an Airport, or not being used for aeronautical purposes, shall not satisfy these requirements. 3. In circumstances wherein the City determines that an appraisal is not required, the City retains the right to utilize a qualified and experienced aviation consultant to complete a Market Rent Analysis. Consultants other than appraisers who are contracted by the City to establish market rents and fees other than for the sale or exchange of Airport property, must possess qualifications and experience commensurate to the assigned task, demonstrate the education, skill, learning, and experience necessary for such task; be independent; and execute a statement that he or she does not have a conflict of interest with the City or any existing/prospective tenant. Qualifications and experience determinations shall be at the sole discretion of the City, but shall be generally consistent with those required for a qualified and experienced appraiser. B. Appraisal/Market Rent Analysis Methodology: Appraisals and market rent analyses performed on all aeronautical properties, to include land only or land and improvements, shall meet the following minimum requ/rements: Rates and Charges Policy 21 Iowa City Airport 1. An income analysis must be employed through the evaluation of rental rates, fees, and~harges of similar aeronautical land and improvements at comparable airports. ~ 2. All appraisals and analyses shall utilize current methods, which are appropria~he ~r~uation of aeronautical properties and facilities. ?3 -~- ~ [~ 3. Survey data compiled by recognized aviation organizations may by utilized as ancillary~pport for rental rates and fees used in the process. However, all survey data utilized in the analysis shall be obtained from and confirmed by the Lessor or Lessee in the transaction. 4. Rates of return utilized in the income analysis shall be obtained through reasonable and acceptable methods and must be adequately discussed within the report, where appropriate. C. Highest and Best Use: It shall be the primary goal of the appraisal or market rent analysis to derive an estimate of the market value and/or market rent of a property assuming that the highest and best use of the property is for some type of aviation-related use. Consequently, it should be assumed that the property under analysis will continue to be part of an operating airport and that access to the infrastructure and amenities of the airport will continue to be available. D. Rate of Return: 1. Unimproved Land: If the appraisal is for the purpose of determining the value of unimproved land only, then the value conclusion shall be subject to a "target" rate of return of not less than 10 percent to yield the appropriate annual ground rental rate. The rate of return utilized shall be commensurate with the term of the lease and capital improvements to be completed on the property. 2. Improved Property: If there are any improvements situated on the property which would include, but not be limited to, paved ramp/apron, office facilities, hangars, and terminal buildings, the value conclusion shall be subject to a "target" rate of return of not less than 10 percent to arrive at the appropriate annual rental rate. The rate of return utilized shall be commensurate with the term of the lease and capital improvements to be completed on the property. Rates and Charges Policy 22 Iowa City Airport 3. If an appraisal is performed, the appropriate rental rate shall be derived by multiplying the rate of return by the final value conclusion. Rates and Charges Policy 23 Iowa City Airport FI[_ED 2fl~3 SEP-h ,~ 9: Il Section 8 Penalties Ol'l'? ~[_LRI{ IOWA ~'~*'~ ~,~ ~ IOWA A. Late Fee Penalties For any charges or fees due to the City, a Tenant shall pay a penalty for late or delinquent payments of not less than 1.5 percent per month on any past due balance calculated from the date the amount is due until the close of the business, day upon which the delinquent payment is received by the city. B. Returned Check Fee Whenever a bank-issued check is presented for payment of any Airport fee, and said check is returned because of insufficient funds, closed account, or other similar reason, the City shall charge to the person presenting such check an additional fee of $50.00, plus any and all collection fees. If the initial charges and returned check fees are not paid after notification to the person, the City has the option to suspend, revoke, or place in default all of the person's permits, agreements, or leases in force at that time, according to the terms specified in such contract. Rates and Charges Policy 24 Iowa City Airport Section 9 Revenue Diversion All revenue generated from City-owned Airport activities and services shall be expended only for Iowa City Airport operations, maintenance, and capital improvements. The City shall keep a current and accurate account of all revenues and expenses, including any revenue surplus, for the Airport. FILED 2003 SEP-q AM 9:11 CITY CLERK IOWA CITY,,, IOWA lowa City Airport Leasing Policy Presented to Iowa City, Iowa Date: September, 2003 Leasing Policy Iowa City Airport TABLE OF CONTENTS SECTION I: INTRODUCTION ......................................................................................3 SECTION Il: LEASING POLICY ...................................................................................4 SECTION Ill: MISSION STATEMENT ........................................................................... 5 SECTION IV: DEFINITIONS ....................................................................................... 6 SECTION V: APPLICATION ...................................................................................... 12 SECTION VI: GROUNDS FOR DENIAL OF APPLICATION ............................................. 15 SECTION VII: GENERAL LEASE PROVISIONS ............................................................. 17 SECTON VIII: COMPETITIVE REQUEST FOR PROPOSAL ........................................... 22 SECTION IX: APPLICABLE DOCUMENTS .................................................................. 23 Leasing Policy Iowa City Airport SECTION I - INTRODUCTION Iowa City, Iowa (City) owns and operates the Iowa City Municipal Airport (FAA Identifier IOW). As set forth by the Federal Aviation Administration (FAA) by way of its Airport Sponsor Assurances, any airport developed with Federal grant assistance is required to operate for the use and benefit of the public and is to be made available to all types, kinds, and classes of aeronautical activity on fair and reasonable terms and without unjust discrimination. As the Airports' sponsor, the City receives Federal airport development funding. This Leasing Policy will assist the City in maintaining compliance with the Airport Sponsor Assurances, as not to jeopardize their ability to obtain future Federal airport development funding, as well as to provide for the fair and equitable treatment of all Airport tenants and users. This Policy has further been developed to assist the City in competing fairly with other airports and to maintain fiscal responsibility of the Airport assets entrusted to the City. The purpose of this document is to set forth a standardized system for the leasing and rental of Airport properties, which will be utilized for all future tenants of the Airport, and to assist the City in maintaining compliance with the Federal Aviation Administration Policies, Regulations, guidance documents and Advisory Circulars. 3 Leasing Policy Iowa City Airport SECTION II - LEASING POLICY This Leasing document is intended to provide potential and current tenants an understanding of the policies and processes used by the City when leasing property or providing access to the Iowa City Airport. This document sets forth the parameters for leasing Airport land, or accessing Airport property, and has established the following purposes: · Maintain City's public-use Airport in a safe manner to ensure that the Airport can fulfill the role as required in a emergency response system · Preserve investments in the Airport · Facilitate orderly management of the Airport · Ensure provisions of high-quality leasing procedures, City services, and consistent quality of facilities · Provide equitable and uniform treatment of all tenants and users · Advance qualified aviation-related services on the Airport · To assist the City in the orderly development of the Airport · To ensure compliance with applicable laws, regulations, executive orders, policies, guidelines, and requirements as they relate to the application and acceptance of Federal Funds · Facilitate and foster good relations with all local airport communities and their residents · Enable conformity with the approved Airport Master Plan · To make the Airport available for public use on reasonable terms without undue discrimination · Assist the City in maintaining a fee and rental structure with the goal of financial self- sustainability · Ensuring economic growth by providing access to State, regional, local and national markets 4 Leasing Policy Iowa Cit~ Airport SECTION III - MISSION STATEMENT The Airport is an important component of the State's overall transportation network, generating economic growth and enhancing livability throughout the area. The City has established this Iowa Cit~ Airport Leasing Policy to foster safe, efficient, and high quality services offered and facilities to Airport users and tenants. The City' goals include developing aviation as an integral part of the local transportation network; creating and implementing strategies to protect and improve the areas transportation system; encouraging aviation-related economic development; supporting aviation safety and education; and enhancing airport development and general aviation services in the area. Additionally, one of the City's primary goals is to ensure the existing and future airport system will be adequate to meet the needs of the citizens and businesses relative to air mobility. Leasing Policy ,owaCi ^i.o, FILE[) SECTION IV - DEFINITIONS2003 SEP-t~ CI I'Y ~LEFX A. nircr.ft IOWA Cf?( IOWA (1) ~ir~ - a~y d~ic~ ~s~d o~ d~si~d for ~a~i~atio~ o~ fli~kt i~ the ai~ i~cludi~, b~t ~ot limited to, an (2) Jirct~ ?~so~(s) o~ ~o~e~ fo~ ~i~e by eitke~ o~ a c~a~e~ basis o~ as an ak taxi o?emto~. (3) Aircraft Fuel - all flammable liquids composed of a mixture of selected hydrocarbons expressly manufactured and blended for the purpose of effectively and efficiently operating an internal combustion, jet, or turbine engine. (4) Aircraft Operation - an aircraft arrival at, or departure from, the airport. (5) Aircraft Owner - a person or entity holding legal title to an aircraft, or any person having exclusive possession of an aircraft. (6) Aircraft Parking and Storage Areas - those hangar and apron locations of the Airport designated by the City Airport Manager for the parking and storage of aircraft. (7) Aircraft Rental - the commercial operation of renting or leasing aircraft to the public for compensation. (8) Aircraft Sales - the sale of new or used aircraft through brokerage, ownership, franchise, distributorship, or licensed dealership. (9) Based Aircraft - an aircraft which the owner physically locates at the Airport for an undetermined period and whenever absent from the Airport, its owner intends to return the aircraft to the airport for long-term storage. Le ,.gPo,,c, FILED Iowa City Airport B. General Z0~}3 8~'P-[4 AM 9:~1 CITY CLERK (1) J¢r¢~ti~l Jrti~i~- any actMty or s~ic~ co~& a[~¢(Al~kat involves, ~akes ?ossthl¢, or is r~uimd ~o~ a~ o~mtio~ of aircraft, or w~ic~ co~ibut~s to or is required for the saf~ of suck o?¢ratio~s. Tk~s~ activities i~clud¢, but ~e ~ot limited to, air taxi and c~a~er o?~ratio~s, aircra~ ~¢li~, aircra~ storage, flight tmi~i~, ~rou~d school, aircra~ ~mal, aircraft sal~s, akcra~ repair and maintanaace, aad ~y other activities, w~ck because of th~i~ r~latio~s~i? to the o~ratio~ of a~rcra~ ca~ a?~mpriat¢ly be resarded as an "ae~oaautical activ~." (2) Airframe and Power Plant Maintenance - the commercial operation of providing airframe and power plant services, which includes the repair, maintenance, inspection, constructing, and making of modifications and alterations to aircraft, aircraft engines, propellers and appliances including the removal of engines for major overhaul. This category of service also includes the sale of aircraft parts and accessories. (3) Airport - All of the City-owned or leased real or personal property, buildings, facilities and improvements within the boundaries of the Airport, as it presently exists or as it may exist when it is hereafter modified, expanded, or developed. "Airport" includes all of its facilities as shown on the most current Airport Layout Plan. (4) ALP - the current Airport Layout Plan or drawing available for the Airport. (5) Commercial Aeronautical Activity - the conduct of any aspect of a business, concession, operation, or agency in order to provide goods or services to any person for compensation or hire. An activity is considered a commercial activity regardless of whether the business is nonprofit, charitable, or tax-exempt. A commercial business activity that involves makes possible or is required for the operation aircraft, or which contributes to or is required for the safety of aeronautical operations. (6) Commercial Operator (Operator) - a person, firm, corporation, or other entity conducting commercial aeronautical services or activities at the Airport for compensation or hire. Leasing Policy Iowa City Airport (7) Non-aeronautical commercial business - A business located on the airport, which does not provide goods or services for aviation activities or operations. (This classification may include, but is not limited to, customs, border patrol, police and fire stations, etc.) (8 Exclusive Right - a power, privilege, or other right excluding or debarring another from enjoying or exercising a like power, privilege, or right. An exclusive right can be conferred either by express agreement, by the imposition of unreasonable standards or requirements, or by any other means. (9) General Aviation - all phases of aviation other than aircraft manufacturing, military aviation, and scheduled or non-scheduled commercial air carrier operations. (10) Hazardous Material - any substance, waste, or material which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous, and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, the City, or any political subdivision thereof, and including the presence of which requires investigation, removal and/or remediation. (ID Minimum Standards - the qualifications or criteria, which may be established by the Airport owner as the minimum requirements that shall be met by businesses offering commercial aeronautical activities for the right to conduct those activities. C. Governmental (1) Airport Manager - The designated individual or duly authorized individual appointed by the Airport Commission to administer and manage all operations of the Airport and Airport fa~ities. (2) FAA - the Federal Aviation Administration. --v "T'I (3) FAR - the Federal Aviation Regulations as published by the FAA. 8 Leasing Policy Iowa City Airport D. Fueling (1) Fueling or Fuel Handling - the transportation, sale, delivery, dispensing,rUg'Gl~ainigg or fuel waste products to or from aircraft. -- (2) Fuel Storage Area - any portion of the Airport designated temporarily or permanerrtly by the Manager as an area in which gasoline or any other type of fuel may be stored or loaded. (3) Self-Fueling - The commercial operation of an unmanned stationary fuel tank and dispensing equipment for general use via card reader. This includes the operation of Persons utilizing this type of equipment to provide fuel for sale or reuse. (4) Self-Service - An aircraft owner, who may adjust, repair, refuel, clean, and otherwise service his/her own aircraft, provided the service is performed by the aircraft owner or his/her direct employees with resources supplied by the owner. The services must be conducted in accordance with roles and standards established by the City. E. Lease and Agreements (1) Lease - the written contract between the City and an Operator (Lessee) specifying the terms and conditions under which an Operator may occupy and operate from certain Airport facilities and/or property. (2) Sublease - the written agreement stating the terms and conditions under which a third party Operator leases space from a Lessee and has been approved by the City. (3) Agreement - the written agreement between the City and an Operator specifying the terms and conditions under which the Operator may conduct commercial aviation activities or access Airport property "through-the -fence". Leasing Policy Iowa City Airport (4) Permit - administrative approval issued by the City to a person or company to conduct a commercial aeronautical activity, and provide such services, to based and transient aircraft, only from facilities and locations where such services are authorized. ($) Person - an individual, corporation, firm, partnership, association, organization, and any other group acting as an entity, to conduct business on the Airport. Person includes ai~ustee, rr~eiver, assignee or similar representative. .~C') ~o F. Commercial Aeronautical Activities ~--, ~ (1) Avionics Sales and Maintenance - the commercial operation of providing.-fi~r the r~pair and service of aircraft radios, instruments and accessories. Such operation may include the sale of new or used aircraft radios, instruments and accessories. (2) Fixed Base Operator (FBO) - a full service commercial operator who engages in the primary activity of aircraft refueling, and additionally has the option to conduct any of the approved secondary activities: airframe and power plant maintenance, flight training, aircraft rental, avionics maintenance and sales, air charter or taxi, and aircraft storage/hangars. (3) Flight Training - the commercial operation of instructing pilots in dual and solo flight, in an aircraft, and related ground school instruction as necessary to complete a FAA written pilot's examination and flight check ride for various categories of pilots licenses and ratings. (4) Flying Club - a non-commercial and nonprofit entity organized for the purpose of providing its members with any number of aircraft for their personal use and enjoyment. Aircraft must be vested in the name of the flying club owners on a pro-rata share, and the club may not derive greater revenue from the use of the aircraft than the cost to operate, maintain, and replace the aircraft. ($) Preventive Aircraft Maintenance - maintenance that is not considered a major aircraft alteration or repair and does not involve complex assembly operations as listed in FAR Part 43, 10 Leasing Policy Iowa City Airport except for Item 22 in the Regulation. Item 22 involves the replacement of prefabricated fuel lines, and shall, for purposes of these regulations, be considered a major aircraft repair. (6) Specialized Aviation Service Operation (SASO) - an aeronautical business that offers a single or limited service according to established Minimum Standards. Examples of a SASO include, but are not limited to: flight training, aircraft maintenance, air charter or taxi, aircraft sales, avionics maintenance and sales, and aircraft storage. G. Infrastructure (1) Airport Operations Area or AOA - the area of the Airport used for aircraft landing, takeoff, or surface maneuvering including the hangars, navigation, and communication facilities. (2) Airpark a development or area not located on, but lying adjacent to, and with access to the AOA. Said area may include permanent residences, structures, and taxilanes. (3) Roadway - any street or road whether improved or unimproved, within the boundaries of the Airport and designated for use by ground vehicles. (4) Taxilane - the portion of the Airport apron area, or any other area, used for access between taxiways and aircraft parking or storage areas. (5) Taxiway - a defined path established for the taxiing of aircraft from one part of the Airport to another. (6) UNICOM - a two-way communication system that provides airport advisory information. (7) Vehicle Parking Area - any portion of the Airport designated and made available temgporarily or permanently by the City for the parking of vehicles. ~C) co il " Leasing Policy FILED Iowa City Airport SECTION V - APPLICATION 200~ SIP - It AM 9:1 9 CFY CLERK 5.1 Application IOWA CITY,,, IOWA Each corporation, person, or business desirous of becoming a tenant at the Airport must complete and submit an application form for review and consideration. Additionally, if an existing tenant experiences a change in ownership of 51 percent or more, or the leasehold is altered or modified, the City has the option to request that thc tenant resubmit an application for tenancy. At the time of, and as part of its application, the City reserves the right to request from a prospective tenant in written form the following information, and thereafter such additional information as may be required or requested by the City. Said request may be applied to either new tenants or existing tenants requesting a lease renewal or extension. As a prerequisite to occupancy on and the granting of commercial operating privileges at the Airport, the prospective Operator must submit a specific, detailed description of the scope of the intended commercial aeronautical activities, and the means and methods to be employed to accomplish the contemplated activities. Required information for commercial aeronautical activities shall include but not be limited to: (A)The legal name of the entity filing the Application and its business name (if different). (B) The name, address, and telephone number of the entity and primary contact person. (C) The names, addresses, and phone numbers of all owners of 5 percent or more equity interest, management control, or debt in the entity. (D)The proposed date for commencement of the intended activities and proposed term for conducting same. (E) A comprehensive listing of all activities propose to be offered, along with copies of all applicable Federal, State, or local operating certificates and licenses held. 12 Leasing Policy Iowa City Airport (F) For proposed agreements to lease (or requests for assignment) existing structures or improvements, a description of the size, location, and proposed utilization of office, hangar, tiedowns, and vehicle parking areas to be utilized. (G) For proposed agreements for lease (or requests for assignment) of unimproved Airport areas, a layout (to scale) of the size, configuration, and location of the property desired to be occupied and a preliminary drawing of the buildings and improvements to be constructed, together with identification of vehicle parking areas. Drawings should be legible and reproducible with clearly defined dimensions. Each drawing should be on an 8.5 inch x 11 inch paper as a minimum and be drawn in ink. City retains the fight to request a metes and bounds legal description of lease property boundaries. (H)The number of persons to be employed, including the names and qualifications of each management/supervisory person, and specifications as to whether the employees will be full- time, pan-time, or seasonal. (I) The number of aircraft to be utilized in connection with the proposed activities and the make, model, passenger seating capacity, cargo capacity, aircraft registration number, and copies of applicable operating certificates for each aircraft. (J) The tools, equipment, vehicles, and inventory proposed to be utilized in connection with the intended activities. (K)A written business plan, including a market analysis, to include a written statement addressing each of the following areas: a. Definition of target markets .-.~ C) co bm Intended market share c. Promotional marketing techniques d. Description of existing competitors ~ ~, .m. e. Percent of intended sales related to aircraft based on the Airp~ fi Evidence of support from potential customers, such as surveys, testimonials, and/or related documents g. List of products to be sold or distributed (if any) and a list of manufacturer's or distributor's requirements for obtaining dealership (if applicable) 13 Leasing Policy Iowa City Airport h. List of suppliers, subcontractors, and associates i. List of any proposed subtenants i. Business plan shall include process for ensuring all tenants/pilots subtenants and aircraft are registered with the State and procedures-for mail!gtining these records. 5.2 Financial Responsibility As evidence of the applying Commercial Operator's financial capability, the prospective operator shall provide a statement from a bank or similar financial institution or from such other source as may be acceptable to the City and readily verified through normal banking channels. The prospective operator must also demonstrate thc financial capability to initiate the activities, construct proposed improvements, and provide working capital to perform proposed activities. The demonstration of financial capabilities shall also include cash flow and profit and loss calculations for the first five-years of' the proposed operation, a three-year historical profit and loss statement (if applicable), and a current (within 90 days) balance sheet. 5.3 Experience The prospective commercial operator shall furnish the City a statement of its past experience in providing the specified commercial aeronautical service for which the application is being made, including resumes of management individuals who will be directly responsible for the proposed operation, together with, business, financial and managerial references. This information must be presented in a form acceptable to the City. 5.4 Bonding and Insuring The prospective commercial operator shall provide evidence in a form acceptable to the City, of its ability to supply: 14 Leasing Policy Iowa City Airport (A) A performance bond in an amount equal to 100 percent of one year's rent and/or fees established and agreed to for conducting the activities and entering into the agreement sought (cash may be used in-lieu of a performance bond). (B) A performance bond in the amount equal to the cost for constructing the proposed improvements in a form submitted to the City for approval (C) All required insurance coverage's as specified and applicable to the Airport where the proposed improvements are to be constructed 15 Leasing Policy Iowa City Airport SECTION VI - GROUNDS FOR DENIAL OF APPLICATION City may deny any commercial application for any one or more of the following re4~r.~n~n. :~ I-F1 (A)The Applicant's proposed activities, operation, and/or construction would create a ~s~:fety hazard at the Airport and/or surrounding community. (B)The Applicant, for any reason, does not fully meet the qualifications, standards, and requirements of the City. The burden-of-proof shall be on the prospective operator and the standard-of-proof shall be by clear convincing evidence. (C) The granting of the application will require the City to expend funds, or supply labor or materials, in connection with the proposed activity and/or construction that the City is unwilling to spend, or the proposed activity and/or construction will result in a financial loss (or hardship or liability) to the Airport. (D) No appropriate, adequate, or available space or buildings exist at the requested Airport, which would accommodate the operation of the Applicant at the time of the application, nor is such contemplated within a reasonable time frame. (E) The proposed operation, development, and/or construction does not comply with the Master Plan of the Airport (and/or ALP) in effect at that time, or anticipated to be in effect within the time frame proposed by the Applicant. (F) The development or use of the area requested by the Applicant will result in congestion of aircraft or buildings, or will unduly interfere with operations or activities of any present operator on the Airport and/or prevent adequate access to the assigned lease area of any present lessee and/or operator. (G)The Applicant has either intentionally or unintentionally misrepresented or omitted material facts in the application or in supporting documents. (H) The Applicant has failed to make full disclosure in the application or in supporting documents. 16 Leasing Policy Iowa City Airport (I) The Applicant or an officer, director, agent, representative, shareholder, or employee of the Applicant, has a record of violating the roles, regulations, statues, ordinances, laws, or orders of any other Airport, civil air regulation, FAA regulations, or any other roles, regulations, statues, ordinances, laws, or orders applicable to the Airport. (J) The Applicant or an officer, director, agent, representative, shareholder, or employee of applicant has defaulted in the performance of any other agreement. (K) On the basis of current financial information, the Applicant does not, in the sole discretion of the City, exhibit adequate financial responsibility or capability to undertake the proposed operation and activities. (L) The Applicant cannot or will not provide a performance bond or applicable insurance in the amounts and type required for the proposed activity. (M) The Applicant or an officer, director, agent, representative, shareholder or employee of applicant has been convicted of any felony or of a misdemeanor involving moral turpitude. (N) Applicant's activities or operations could be detrimental to the Airport. (O) For any other reason deemed as not being in the best interest of the Airport, as determined by the Manager. 17 Leasing Policy lowa City Airport C) SECTION VII - GENERAL LEASE PROVISIONS '~ --~ -o --T'l 7.1 Property Lease ~ .~ ::~ Q--~ Once the City has approved the lease application and the Applicant has read the Minilnl~m Standards, Airport Rules and Regulations, Rates and Charges Policy, and Leasing Policy, the Applicant shall be provided a Draft Lease for review. This Draft Lease will include, but not be limited to the following details: 1. Description of leasehold (City retains the fight to request a metes and bounds legal description) 2. Term of lease 3. All fees and charges associated with occupying and operating on the premises 4. Payment procedures relating to all fees and charges 5. Approved activities 6. Prohibited activities 7. Subleasing requirements and restrictions 8. Lease assignment provisions 9. Maintenance requirements 10. Restrictions on hazardous substances 11. Default and penalty provisions 12. Remedies on default 13. Vacating the premises procedures 14. Insurance amounts required 15. Names and addresses of responsible parties 16. Reversionary clauses 17. Information on all taxes, liens and utilities 18. Compliance with FAA regulations 19. Aircraft registration requirements/pilot registration 20. Construction or alteration procedures 18 Leasing Policy Iowa City Airport 21. Landscaping ~=' 22. Fire Prevention 23. City entry onto premises CD~ -':~?, .r-~ ['-- .... 24. Compliance with laws 25. Termination for Airport development _ 26. Transfer of Airport ownership ~ . 27. Bankruptcy 28. Ingress and Egress to Property 29. Sale of Improvements 30. Lease Renewal Options 7.2 Lease Term At the City's discretion, initial lease terms for FBO and/or SASO leases may be up to a term of twenty (20) years (identified as the Base Term), with two (2) consecutive five-year (5) options. The City, at its sole discretion, may grant longer or shorter terms based upon the proposed capital investment in the property by the tenant. At the expiration of each lease, the City maintains the option of retaining ownership of all leasehold improvements, or requiring the tenant to remove any and/or all structures and returning the site to its original unimproved state, at the tenant's sole cost. 7.2.1 Lease Renewal Options In accordance with Section 7.2 - Lease Term above, Lessee shall have the option to request an extension of the lease beyond the Base Term, ~ject to the satisfaction of all of the following conditions. (A) The existing Lease must not be in default (B) Any improvements on the Premises must be structurally sound and capable of safe and legal occupancy for the remaining term of the option periods. Lessee will be required to obtain an inspection by a certified structural engineer on building code compliance to verify the condition of the strncmres. All inspectors must be approved by the City in advance. 19 Leasing Policy iowa City Airport (C) File a written notice with the City that the Lessee has complied with (A) and (B) above, and that the Lessee intends to exercise the option at least 90 days prior to the expiration of the preceding lease term. (D) The City may refuse the options if any of the stated conditions are not met, or in the event the City makes a determination that the Premises are required for Airport development. In the event of Airport development, the City may, providing other suitable land is available, submit an alternative site to Lessee for consideration and the parties shall make good faith effort to negotiate a new lease. Any renewal options related to a lease shall be subject to the same conditions as set forth during the Base Term. However, the City maintains the right to adjust any and all rates fees and charges, as detailed in the City's Rates and Charges Policy in effect at the time commencement of the option. 7.2.2 Rates and Charges It is the intent of the Rates and Charges Policy to benefit the public by the establishment of a standardized system of rates and charges procedures, which is based on the following City obligations: (A) Ensure compliance with applicable legal requirements regarding Airport rates and charges through local communications, negotiations, and resolution. (B) Ensure the rates, charges, and fees imposed on the aeronautical users of the Airport are fair and reasonable. (C) Make the Airport available for public use on fair and reasonable terms without unjust discrimination. Ensure that any airport tenant is subject to the same rates, fees and charges as are uniformly applicable to other tenants offering similar services or utilizing the similar facilities at an Airport. (D) Maintain a rate and fee schedule that guides the Airport towards financial self- sustainability. (E) Expend revenue generated from Airport activities and services only for aeronautical purposes (no revenue diversion). 20 ~/x .~. Leasing Policy C) Iowa City Airport 7.3 Insurance Requirements ._~ Each tenant shall maintain the types and amounts of insurance as specified ~i~ he l~.~e or agreement to adequately cover the respective categories of commercial aeronautical services provided and to meet all City insurance requirements. Each commercial tenant shall at all times maintain the following applicable levels of commercial general liability, personal injury, contractual liability, automotive liability, aircraft liability, hangarkeeper's liability, products-completed operations liability, and environmental clean-up liability insurance. Each tenant shall maintain at all times fire and extended property coverage for all improvements and fixtures on premises in an amount not less than the full replacement cost of same improvements and fixtures. In addition, each tenant, if applicable, shall maintain at all times Worker's Compensation insurance as required by Iowa State law. Each tenant shall provide the City with a proof of insurance certificate annually. All insurance policies shall contain indemnification and hold harmless language that covers the City and its employees, Council members, Airport Commission, and officers (individually or collectively) as additional insured with respect to liability arising from activities performed. 7.4 Minimum Standards and Exclusive Rights The City owns and operates the Iowa City Municipal Airport, and receives Federal airport development assistance. As such, the City assumes contractual grant obligations including compliance with Federal Aviation Administration Advisory Circular 150/2190-5 Exclusive Rights and Minimum Standards for Commercial Aeronautical Activities, which is subject to updating from time to time. Minimum Standards are developed to provide the threshold entry requirements for those persons desiring to provide commercial aeronautical services to the public at the Airport. The Minimum Standards are established based upon the conditions at the individual airport or class of airport, the existing and planned facilities at the airport, and the current and future aviation role of the airport. The prospective commercial aeronautical operator shall agree to offer the described minimum level of services 21 Leasing Policy Iowa City Airport in order to obtain an agreement, permit, or lease to operate on the Airport. In summary, each Airport's Minimum Standards will establish the minimum requirements to be met by individuals and companies for the privilege of providing commercial aeronautical services at the selected Airport. All operators are encouraged to exceed the "minimum" in terms of quality of facilities and/or services. The City may establish separate Minimum Standards for the Iowa City Airport to assist in providing not unjustly discriminatory and effective management. The FAA policy on exclusive rights prohibits the creation or continuance of agreements at the Airport granting exclusive rights to a single commercial operator or service provider. The FAA concludes that the existence of an "exclusive right" aeronautical activity or a local monopoly at an airport restricts the public use of the airport through the absence of competitive enterprise. The City is prohibited from granting an exclusive right to a single operator at the Airport, with a few exceptions. However, it should be noted that an Airport with a single commercial operator does not represent the granting of an "exclusive right" or monopoly to that operator by the City. 22 Leasing Policy Iowa City Airport SECTION VIII - COMPETITIVE REQUEST FOR PROPOSAL PROCESS In order for the City to determine the level of market demand, the City maintains the right to seek competitive proposals at their discretion for commercial property leases at the City-owned Airport. The proposal process will include public notices and information and availability of proposal documents on the City web site. All Requests for Proposals will be consistent with any and all applicable City policies, and a fair and objective evaluation process will be utilized to select the proposals that best meets the interests of the City criteria as defined within the proposal documents. 8.1 No Exclusions of Existing Qualified Operators Current tenants will not be excluded from submitting competitive proposal at the Airport. 8.2 Proposal Evaluations Each Request for Proposal will contain specific information regarding the Airport property currently being considered, and all proposals will include requirements for detailed information from the respondents regarding: · Qualifications · Capital investment proposed · Experience in services being offered · Experience of management personnel · Proposed services and products · Financial ability r.~) ~' i .. 23 Leasing Policy Iowa City Airport SECTION IX - APPLICABLE CITY DOCUMENTS All tenants and prospective tenants are encouraged to inquire about tenancy at the Iowa City Airport, and to review all applicable documents. These documents can be obtained by contacting the Airport Commission. The following lists of documents are recommended; however, please contact the City for information on other pertinent policies regarding your proposed tenancy and operations. · Leasing Policy · Minimum Standards · Rules and Regulations · Rates and Charges Policy .-< r- ITl 24