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HomeMy WebLinkAboutMinutes 06/05/2002 LODGING TAX ADVISORY COMMITTEE AND DOWNTOWN FORWARD EXECUTIVE COMMITTEE Port Angeles, Washington JUDe 5, 2002 Councilman Williams called the meeting of the Downtown Forward Executive Committee to order at 7:30 a.rn. Councilman Campbell called the meeting of the Lodging Tax Advisory Committee to order also at 7:30 a.m. CALL TO ORDER: ROLL CALL: Lodging Tax Members Present: Lodging Tax Members Absent: Downtown Forward Members Present: Downtown Forward Members Absent: Staff Present: Others Present: Councilman Campbell, CounciJmember Rogers, John Brewer, Carol Griffith, Jim Haguewood, Bob Harbick, Jack Harmon, Steve Oliver, and Bill Rinehart. Zoe Bay ton and Patty Hannah. Councilman Williams, Leonard Beil, Mike Chapman, Dan DiGuilio, Valerie Fox, Jim Haguewood, Eileen Knight, Karen McCormick, John McCullough, Joe Melton, Councilmember Rogers, Vieci Rudin. Don Corson. Manager Quinn, Economic Development Director Smith, Clerk Upton, and Exec. Administrative Assistant Martin. Renee Rux, John Platt, Mike Leuhers, Tony Griffith, Arla Holzschuh, Dennis Sullivan, Frances Charles, Russ Veenema, Brian Gawley, Mary & Dave Sharman, and others who were unidentified. Conference Center Review Team Recommendations: Following introductions of committee members present, Tim Smith opened the meeting by summarizing the chronology and background of seeking RFPs for a conference center. Ofthe proposals subrnitted, the Ehm proposal was deemed to be the preferred, and it has been determined to be substantially complete. Mr. Ehm has expressed the need for more clarification concerning the City's intent to commit funding in the form of$1 00,000 per year, as it directly relates to his ability to obtain a firm commitment from his team in terms of marketing and financing. Mr. Smith emphasized this would not be a commitment to spend the money at this time, nor is it a final decision on the project. Conference Center Review Team Recommendations Councilman Campbell reported on behalf of the Conference Center Review Team, noting that the group had reviewed the progress made thus far and had identified a number of items that were additive to the process. The group concluded that progress had been made and felt the following to be notable: . The addition of the Allied Hospitality Group as the preferred operations -1- LODGING TAX ADVISORY COMMITTEE DOWNTOWN FORWARD EXECUTIVE COMMITTEE June 5, 2002 Conference Center Review Team Recommendations (Cont'd) management cornpany is extremely helpful, particularly with the strong ties to Marriott, who has expressed keen interest in the project. . A construction financing matrix for equity partners has been identified. . Four potential options for hotel management have been identified, with Allied being the preferred. . The Conference Center Review Team unanimously recommends: ./ The acceptance of the Ehm Architecture Due Diligence Response as "substantially complete". ,/ Authorize staff to sign a Letter of Intent to commit the subject City Lodging Tax resources toward the project. ,/ Authorize staff to negotiate an agreement, subject to the City Council's fmal approval, to commit the subject Lodging Tax revenues to the project, pending receipt and final approval of the project's Marketing Plan, Marketing Budget and Implementation Schedule. Councilman Campbell continued that, in an effort to facilitate movement on the project, one option could be for the City to place $200,000 in an interest bearing account to be available to Randal Ehm upon completion and issuance ofa Certificate of Occupancy. The Conference Center Review Team considered the parking issue in some detail and, pending further input from the Downtown Forward Ad Hoc Parking Advisory Committee, the Review Team believes there would be substantial benefit to a joint multi-story parking facility in the City Light parking lot that would meet multiple downtown parking needs. Such a facility could accommodate the conference center, the Gateway project, as well as current parking that would be displaced. Also, the facility could include retail space to generate additional revenues and could eliminate any waterfront parking at the conference center site. The Review Team also considered the possibility of a sky bridge from the parking facility to the conference center as proposed by Ehm. Tim Srnith advised the group that Downtown Forward is presently looking at long-term parking solutions, and a report should be forthcoming later this month. A question and answer session followed, and the matter of fmancing for the parking facility was questioned. Tim Smith indicated there may be three sources of financing: the first would be provided through the Gateway project in the form of revenues derived from the sale of City-owned property; the second portion of revenue would be derived from those using the facility, and the final source of fmancing would come from the Oak Street development in the form of a partnership in the parking facility. Lengthy discussion followed regarding the need for a more firm commitment in terms of financing for the project. It was emphasized, however, that Mr. Ehm would be unable to obtain firm commitments absent a commitment from the City. Also, the question was raised as to when the Lodging Tax funds would be paid to Mr. Ehm. Councilinan Carnpbell indicated the first $200,000 could be placed in some type of escrow account, and Tim Smith added that, assuming negotiations are successful and the project proceeds, it is intended the City would payout $300,000 by the close of the first full year of operation. Additional consideration was given to the proposed parking garage, and Manager Quinn - 2- LODGING TAX ADVISORY COMMITTEE DOWNTOWN FORWARD EXECUTIVE COMMITTEE June 5, 2002 Conference Center Review Team Recommendations (Cont'd) responded to a question as to the timing of construction for the garage. He indicated it would not be advisable to stretch out the construction on the conference center, the parking garage, or the Gateway project. There is a commitment on the part of the City to work on these projects in the 2003-2004 time frame, as opposed to a long-term construction process. Responding to an inquiry as to the status of the DNRJPort lease and land swap, Steve Oliver indicated the matter of the DNR land will go before the Board of Natural Resources in mid-July. He added that the general view of the City and the Port is that the land swap would be in the best interest of all concerned. Discussion ensued, with Mr. Oliver answering a question in that the Board of Resources is less inclined to support a project that is non-specific as opposed to this project that is a specific package for economic development. Discussion also ensued on the matter of Mr. Ehm's percentage of ownership, whether there will be a construction bond, and whether the City's money could go toward a project that is never completed. It was pointed out that the City funding will not be paid out until a Certificate of Occupancy is issued, something that cannot occur until project completion. Councilman Campbell noted that the negotiations for financing of the project have been left to Mr. Ehm, and no limit has been set on equity. Manager Quinn clarified that Mr. Ehm has planned on bonding the project throughout these discussions. Additionally, Steve Oliver emphasized that it is important to keep in mind that this is a private project and there will be no public funds involved until the facility is complete. Also raised as an issue was the fact that Mr. Ehm has not made the marketing plan public, and Tim Smith assured the group that Mr. Ehm understands he needs to provide a more fully developed marketing plan that will be made public. Dan DiGuilio felt the role of these two groups is to consider the commitment of the Lodging Tax funds, to assure there is no gift of public funds and that something of value is received. Mr. Dale Cook, present in the audience, raised a question as to the developer's level of involvement in the parking garage, and Tim Smith indicated this involvement is something that will need to be added to Mr. Ehm's financial pro forma. Further, Mr. Ehm is very much aware of the parking requirements associated with the project. Jack Harmon directed attention to the report submitted by the Chambers Group, expressing concern that some of Chambers' commentaries were not being addressed. Tim Smith indicated that, as the agreement is being finalized, the Chambers Group will again be consulted for input. Lengthy discussion followed on the matter ofMr. Ehm's fmancing, and it was reiterated that he would not be able to obtain secure financing until the time the City issues a letter of intent. At this time, Councilman Williams asked the members of the Lodging Tax Advisory Conunittee and the Downtown Forward Executive Conunittee to consider the recommendation forwarded by the Conference Center Review Tearn. The issue was first placed before the Lodging Tax Advisory Committee, at which time Steve Oliver moved to concur with the Conference Center Review Team, to accept the Ehm Architecture Due Diligence Response as "substantially complete", to authorize staff to sign a Letter of Intent to commit the subject City Lodging Tax resources toward the project, to authorize staffto negotiate an agreement, subject to the City Council's final approval, and to commit the subject Lodging Tax revenues to the project, pending receipt and approval ofthe project's Marketing Plan, Marketing Budget and Implementation Schedule. The motion was seconded by Jim Haguewood and carried by a majority vote, with Carol Griffith voting in opposition. - 3- LODGING TAX ADVISORY COMMITTEE DOWNTOWN FORWARD EXECUTIVE COMMITTEE June 5, 2002 Conference Center Review Team Recommendations (Cont'd) The Downtown Forward Executive Committee then considered the recommendation, and Vicc\ Ruddin moved to accept the Ehm Architecture Due Diligence Response as "substantially complete", to authorize staff to sign a Letter ofIntent to commit the snbject City Lodging Tax resources toward the project, to authorize staff to negotiate an agreement, subject to the City Council's final approval, and to commit the subject Lodging Tax revenues to the project, pending receipt and approval of the project's Marketing Plan, Marketing Budget and Implementation Schedule. The motion was seconded hy Joe Melton. Upon request, Sam Martin conducted a roll call vote, and the motion carried unanimously. Brief discussion followed, and Tim Smith expressed the hope that a fmal agreement can be reached in 60 - 90 days. The question was raised as to the role of these two groups from this point on, and Tirn Smith responded that the negotiations will now involve the City Manager and the City Attorney. The matter of the parking structure will come to these groups, and the agreements will return to the two groups for review as well. The marketing plan will ultimately be subjectto City Council approval; however, input from the Chambers Group will be sought before that time. Representing the area hotels and motels, Tony Griffith advised those present that the operators are not supportive of this project, as they are concerned Mr. Ehm will take business away from their facilities. Mr. Cook again addressed the group, noting his disapproval of using tax money for a conference center. He suggested other existing locations that could be used for a conference facility. Adjournment Adjournment: The meeting adjourned at 8:50 a.rn. Apt1~. ,~hY7i^-_ Becky 1. Up, Clerk' - 4-