Consent 1.B.
Regular City Council Meeting
- Meeting Date:
- 04/23/2012
- TITLE
- Revised Agreement with Jon Dehler for Ballpark Contributions
- PRESENTED BY:
- Tina Volek
- Department:
- City Hall Administration
Presentation:
Information
PROBLEM/ISSUE STATEMENT
In 2007, the $12.5 million cost of issuing bonds to construct Dehler Park was offset by pledges totaling $2.2 million from several individuals and businesses in town. The largest contribution was $1 million from Jon Dehler in exchange for naming rights for the park for a period of 20 years. The construction bonds were split into Series 2007A Baseball Field and Stadium Fund accounts totaling $10.7 million to be repaid from tax collections, and Series 2007B Baseball Field and Stadium Fund accounts to be paid from the donations. The difference between the $2.2 million pledged and the $1.8 million bonded in Series 2007B was used for interest.
In December 2007, Mr. Dehler sent the City the first $400,000 of his $1 million donation. However, he did not sign the Donation Agreement approved by the City Council in March 2008, instead offering amendments to the contract. City staff continued periodically negotiating with one of Mr. Dehler's staff, until that individual left the company, and then with Mr. Dehler, who has an international travel schedule.
In March 2012, Mr. Dehler signed the agreement that is now before the Council for approval. He made an additional $50,000 payment, and asked that the City invoice him for future payments.
The chief difference between the version of the agreement approved by Council in 2008 and the document before Council now is the term over which payments are made. The original agreement called for additional payments of $150,000 annually from 2008 through 2011. The new version calls for additional payments of $100,000 annually from 2012 through 2017.
In December 2007, Mr. Dehler sent the City the first $400,000 of his $1 million donation. However, he did not sign the Donation Agreement approved by the City Council in March 2008, instead offering amendments to the contract. City staff continued periodically negotiating with one of Mr. Dehler's staff, until that individual left the company, and then with Mr. Dehler, who has an international travel schedule.
In March 2012, Mr. Dehler signed the agreement that is now before the Council for approval. He made an additional $50,000 payment, and asked that the City invoice him for future payments.
The chief difference between the version of the agreement approved by Council in 2008 and the document before Council now is the term over which payments are made. The original agreement called for additional payments of $150,000 annually from 2008 through 2011. The new version calls for additional payments of $100,000 annually from 2012 through 2017.
ALTERNATIVES ANALYZED
The Council may:
- Approve the agreement, granting Mr. Dehler the 20-year naming rights retroactive to 2008, and ensuring property owners will not be taxed for that portion of the bonds; or
- Not approve the agreement, and find a new donor or tax residents for that portion of the bond payment.
FINANCIAL IMPACT
Mr. Dehler's original contribution covered the first three of the 10 years of his portion of the Series 2007B bonds. Last year, without an agreement in place, the City taxed property owners for that portion. Since the agreement is now in place, and will extend past the life of the Series B bonds, the funds donated by Mr. Dehler in 2017 will be used to pay part of the money that otherwise would have been taxed to property owners, reducing the rate to them.
RECOMMENDATION
Staff recommends approval.