HomeMy WebLinkAboutItem A: Civic Stadium
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Work Session: Civic Stadium
Meeting Date: May 9, 2011 Agenda Item Number: A
Department: Central Services Staff Contact: Sarah Medary
www.eugene-or.gov Contact Telephone Number: 541-682-6877
Staff Contact: Glenn Klein
Contact Telephone Number: 541-682-8447
ISSUE STATEMENT
The council agreed to have a conversation about Civic Stadium. This work session is a follow-up to the
council’s initial work session on April 13 so that the council can decide whether it wants to join with
Save Civic Stadium (SCS) in its proposal to 4J, and, if so, what City financial resources the council will
commit that SCS can use to bolster its proposal.
BACKGROUND
On March 16, 2011, the council adopted a motion to explore providing input to the Eugene 4J School
District on disposition of the Civic Stadium property. On April 8, an ad hoc committee of elected
officials and representatives of the three groups that had submitted proposals to 4J met. On April 13, the
council held a work session at which Councilors Alan Zelenka and George Brown presented more
detailed information about the proposal from the Save Civic Stadium group. In a nutshell, SCS’s current
proposal for acquisition (i.e., the financial component from 4J’s perspective) is to lease the site from 4J
for $70,000 per year, plus 15 percent of net excess revenue. At the conclusion of the April 13 work
session, the council agreed to invite public comment and to schedule another work session. On April 25,
the council held a public hearing, during which more than 30 people spoke.
As part of its prior discussions this year on Civic Stadium, the council agreed that it would not ask 4J to
change its process, criteria or timeline for selling or leasing Civic Stadium. 4J has indicated that all
three proposers will make their final presentation to the 4J Board on May 16, and that the board would
consider any changes to a proposal offered at the May 16 meeting. Whatever proposal is presented at
the 4J Board’s May 16 meeting will be considered by 4J as the final (and best) offer from that proposer.
If SCS is to bolster its proposal with financial resources from the City, SCS will need to know that on
May 9 so that SCS can update its proposal and be ready to present that to 4J on May 16.
City staff undertook an initial review of SCS’ proposal, including its pro forma. There has not been time
to contract with experts who could perform a feasibility study or marketing analysis, or independently
evaluate the assumptions related to expenses or revenues. Staff’s review has identified some factors for
council’s consideration, as well as some questions that the council should discuss if it decides that it
might want to partner with SCS in its proposal to 4J.
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110509\S110509A.doc
The pro forma assumes that SCS will lease the site from 4J for the first two years for $70,000 per
year. After two years, the pro forma assumes the net cost of the lease will be $30,000 ($70,000
payment to 4J, less $40,000 rent from another entity subleasing the northern portion of the site).
Those expenses, plus the other expenses and revenues, SCS believes, will produce net operating
income of $527,000 (first year of full operation). The pro forma does not include any funds to
pay the $22 million that SCS estimates it will cost to construct the improvements at Civic
Stadium, or for debt service on that amount. The proposal assumes that the development costs
will be paid for by donations, grants, possibly loans, or maybe a City-issued GO bond. For a
point of reference, a $10 million bond or loan at five percent interest, repaid over 20 years,
would cost approximately $800,000 per year.
The estimated $22 million development cost excludes any funds to address parking or traffic
issues.
The pro forma estimates that the expenses during the first two years – before there are any
revenues from a soccer team or other use of the site – total approximately $1.2 million. The pro
forma assumes that those costs will be paid for by donations and possibly grant funds.
The pro forma assumes that $325,000 will be raised each year through the sale of approximately
215 Club Memberships at $1,500 each.
The pro forma makes assumptions about the number of concerts and other non-soccer related
events that would bring in revenue. Absent a feasibility and marketing study, staff cannot
evaluate whether those assumptions are reasonable. Absent such a study, it also is difficult to
evaluate the extent to which SCS’ proposal would compete with City-owned venues, such as
Cuthbert or the Hult Center, and what effect that might have on the City’s budget.
During this work session, the council should answer the following questions:
Should the City join with SCS and commit financial resources to make the SCS proposal more
competitive?
If so:
What is the dollar limit on what the council will commit?
o
Where will those funds come from? During the last Budget Committee meeting, the City
o
Manager and finance staff explained about the current and on-going projected gap in the
general fund. Any funds for Civic will need to come from an as-yet-unidentified, new
revenue source, or the council will need to identify services that are currently provided
that would be reduced or eliminated.
RELATED CITY POLICIES
Growth Management Policies
Effective Accountable Municipal Government: A government that works openly,
collaboratively and fairly with the community to achieve measurable and positive outcomes and
provide effective, efficient services
COUNCIL OPTIONS
The April 13 PowerPoint on Civic Stadium suggested a possible revised 4J proposal as follows:
City joins with Save Civic Stadium
Two-year lease with automatic long-term extension if development milestones are met
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110509\S110509A.doc
City acts as a financial back-stop/guarantor
Competitive lease payment
Plan B: Possible purchase using park bonds money
CITY MANAGER’S RECOMMENDATION
None.
SUGGESTED MOTION
None.
ATTACHMENTS
th
Copy of materials from April 13 work session, including:
A. PowerPoint Presentation
B. SCS Draft Business Plan
C. SCS Draft Funding Plan
FOR MORE INFORMATION
Staff Contact: Sarah Medary
Telephone: 541-682-6877
Staff E-Mail: sarah.j.medary@ci.eugene.or.us
Staff Contact: Glenn Klein
Telephone: 541-682-8447
Staff E-Mail: glenn.klein@ci.eugene.or.us
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110509\S110509A.doc