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HomeMy WebLinkAbout1987 12-10 EBFAA M & C No. 87-20 December 10, 1987 FROM THE OFFICE OF THE CITY MANAGER Subject: Earle Brown Farm Recommendation To the Honorable Mayor and City Council: ' As the EDA considers the recommended uses of the buildings on the Earle Brown Farm, the staff would like to again express our concerns with the ongoing costs associated with the operation and maintenance of the facilities. At this time, we would like to make clear the fact that the costs of operating ' the farm facilities ultimately rests with the general levy of the EDA. Any shortfalls in income generated from the buildings would be the responsibility of the EDA. ' As you will recall, Maxfield Associates was retained to do a market analysis of the proposed uses for the hippodrome. At that time, consideration was ' being given to a conference center, banquet facility, and/or trade show center. The results of the study suggested that there was a great deal of business available for the trade show/banquet facility uses although previous staff revenue projections tended to be somewhat high. We had estimated income from the hippodrome at $195,000, and as a result of the Maxfield report, we now estimate revenue at $155,000. An annual operation budget of $455,000 (see attached memo) would require all of the remaining farm buildings to generate approximately $11 per foot to break even. To the extent that space is allocated to nonincome generating uses, the likelihood of using the EDA general levy to support the operation of ' the farm proportionately increases. We generally agree with the recommendation of the Earle Brown Farm Committee for the farm. However, we do have some concerns about a senior drop-in center and setting space aside for the Brooklyn Historical Society. While we agree that these are good uses, we feel that the economics of the development should take priority. We believe that most of the desires of the Brooklyn Historical ' Society can be accommodated by the architect in the design of the facility. Relative to buildings being allocated solely to senior uses; we have some reservations as to their financial impact for both the operational costs and ' the development cost. Additional management and construction costs will be mandated. ' As we proceed with the development of the farm, we want to caution you that the EDA is the developer. As the developer, the EDA assumes the risks of the project as well as the benefits of which we admittedly have not addressed along with our concerns. ResppqtAuy submitted, /~~Vl.~P~lihter GCger I f MEMORANDUM TO: Earle Brown Farm Committee ' FROM: Brad Hoffman, HRA Coordinator ' DATE: October 15, 1987 SUBJECT: Operation Cost Analysis I have asked the Heskin Resource Group, Inc. to provide an estimate of the annual operating costs for the Earle Brown Farm. They have provided a preliminary operational budget (enclosed) with the qualification that they represent a very rough estimate only and that as the development progresses, they will be in a better position to provide more accurate assessments. ' I have provided an estimate for those areas not included in Heskin's costs. A total annual operations budget for the farm will be an estimated $460,000. Based upon an annual income of ' $155,000 per year from the hippodrome, the rest of the farm will need to generate $305,000 to break even. The break even point is approximately $11.50 per square foot for all of the remaining ' farm space. There are a number of alternatives available to us and we will be discussing them Wednesday. 1 1 1 1 1 1 1 1 1 1 1 Other Expenses (Operatina) for Earle Brown Farm Tax ($2.50 per sq. ft. X 26,500) Budget Reserve Management Fees Water/Sewer Promotional Subtotal Operational Budget Annual Operation Budget Total Income Sources Hippodrome Events Catering (400,000 X 10%) Subtotal $66,250 25,000 40,000 6,000 100.000 $237,250 218.449 $455,699 $155,000* 40.000 $195,000** * 155 event days at $1,000 To offset the annual operating costs, the rest of the Farm must generate between $10 and $12 per square foot. October 12, 1987 Preliminary Operational Budget Earl Brown Farm For purposes of this preliminary budget, no rental income was projected to offset the operating expenses. Typically, many of these expenses are a direct pass through to tenants. Operational costs associated with comparable office projects were used as a basis for this preliminary report. Projected expenses were based on approximately 21,500 sq. ft. of general use office space and 24,500 sq. ft. of Hippodrome/Meeting space. No costs associated with the use of the Hippodrome as a meeting center were considered, at this time. The Property Manager detailed assume the onsite function of events and meetings, in addit of the office tenants. Supply services and general decision handled by this person. in the preliminary budget would coordinator and scheduler of all ion to handling the day to day needs ordering, supervision of contract` making functions would also be The Maintenance Supervisor would be responsible for preventive ' maintenance and repairs, continuous maintenance, minor HVAC work, boiler maintenance, relamping, sidewalk snow removal, etc. ' In addition to the preliminary operational budget, a reserve budget needs to be determined for such items as: ' Maintenance Equipment Landscape Replacement Lot Resurfacing/Sealcoating Painting ' Roof Repair HVAC Repair Exterior Building Repair ' Plumbing Repair HIPPODROME MEETING/EVENTS CENTER MARKETING/PROMOTIONS/BUDGET CATEGORIES ADMINISTRATIVE EXPENSE Dues & Membership Fees $ (International Association of Convention & Visitors Bureau; State & Local Trade Center Associations) Miscellaneous Expenses $ SALARIES Promotions Manager $ PROFESS I OVAL CONSULTANTS Advertising Labor $ Public Relations $ Marketing Management Fee $ INFORMATION BROCHURES $ HISTORIC LEAFLETS $ POSTERS $ YELLOW PAGES LISTING $ HISTORIC TOURS $ ADVERTISING (Print/Radio) $ DIRECT MAIL $ BILLBOARDS $ EVENTS/PROMOTIONS $ CONTINGENCY $ TOTAL $ All of the above is dependent upon: o Revenue Subsidy Projections from the Other Buildings On Site o Finalizing Expense Projections o Determining Optimum Usage of the Center o Marketing Strategy to Generate Usage aarawwaaawraawwarwrrrwrrrrrrwrrrw rarra rwwrrrrwrrrrrrrwwwrrrrrrww rrrwwr~awrw PRELIMINARY BUDGET PROPOSAL ANNUAL SUB EARL BROWN FARM - = EXPENSES TOTALS - ADMINISTRATIVE EXPENSE ' DUES & MEMBERSHIP FEES 200.00 MISC. EXPENSES 300.00 PAPER SUPPLIES 1000.00 TELEPHONE 2689.00 POSTAGE 400.00 COPIER - LEASE & SUPPLIES 1200.00 ELECTRIC 960.00 6749.09 MANAGEMENT SALARIES PROPERTY MANAGER 26000.00 PART TIME OFFICE HELP 8000.00 34000.00 ELECTRIC INTERIOR 15009.00 EXTERIOR 6000.00 21000.00 JANITORIAL SERVICE CONTRACT 24000.00 WINDOW WASHING 1009.00 CARPET CLEANING 1000.00 26000.00 MAINTENANCE EQUIPMENT/SUPPLIES PAPER SUPPLIES 2000.00 - TRASH BAGS/HAND SOAP,ETC 900.00 - TRASH CONTAINERS 300.00 LIGHT BULBS 1600.00 ' HVAC FILTERS PLANT RENTAL 1100.00 1000.00 EXTERMINATING 1800.00 TRASH REMOVAL 4000.00 INITIAL EQUIPMENT PURCHASE 3000.00 15700.00 ' MAINTENANCE PAYROLL WORKING SUPERVISOR 26600.00 PART TIME ASSISTANT 8600.00 35200.00 MAINTENANCE REPAIR ALARM SYSTEMS 600.00 ELECTRICAL REPAIR 2000.00 PLUMBING REPAIR 1000.00 SEWER CLEANOUT 500.00 HVAC REPAIR/BOILER SERVICE 1090.00 - GLASS REPAIR 1000.00 MISCELLANEOUS 1000.00 7100.00 EXTERIOR MAINTENANCE SNOW PLOWING 8700.00 LOT SWEEPING 450.00 SPRINKLER SERVICE 400.00 ' SIGNAGE LOT STRIPING 290.00 350.00 LAWN SERVICE 4200.00 LANDSCAPE REPLACEMENT 590.00 14800.00 FUEL SERVICES 34900.00 34900.00 INSURANCE 23000.00 23000.00 - 218449.00 218449.00 UNBUDGETED ITEMS WATER/SEWER SERVICE MANAGEMENT FEES REAL ESTATE TAXES r MEMORANDUM TO: Gerald G. Splinter, City Manager FROM: Brad Hoffman, HRA Coordinator DATE: December 9, 1987 ' SUBJECT: Earle Brown Farm Recommendation At the December 14, 1987, meeting of the Brooklyn Center EDA, we (staff) will ' make a formal presentation of a proposed program for the Earle Brown Farm. The Earle Brown Farm Committee with staff concurrence has finalized its recommendation. The hippodrome will be developed as a multipurpose facility. We envision using this facility for banquets, seating as many as 1200 if possible, to a ' trade show arena. I would approximately 100 booths. Other estimate the facility activities contemplated would accommodate for the hippodrome would include weddings, dances, musical entertainment, perhaps like the Carlton, exercise classes, and s o forth. Design of the hippodrome should ' anticipate dividing the room up to accommodate several smaller groups on a given occasion. ' The stable, which is physically connected to the hippodrome, would encompass kitchen facilities for banquets and quite possibly a restaurant in the main entryway to the stable. The northern most wing would most likely be office space. Most likely, we will have only one tenant for the office space in the ' stable. The loft areas of the stable would function as storage space for the hippodrome. ' The G and H barns located to the north end of the project would be office space. We anticipate the design would connect the two buildings, but that would be subject to tenant needs and the architects review and suggestions. The housing complex which includes the main house, the farm house, and the guest house will be developed as a "bed and breakfast" facility. Special attention to this will be of primary concern to the Brooklyn Historical ' Society. Consideration should be given to incorporation historical artifacts and possibly the restoration of a room to be roped off from the public. Note, the design of the "bed and breakfast" must take priority, however. The D barn will function as an office building dependent upon certain budget considerations. The blacksmith's shop, located outside of the property, would be moved onto the site and used as a senior drop-in center, budget allowing. ' If not, the D barn would function as an artist's loft and senior drop-in center. The bunk house will be used in conjunction with the "bed and breakfast" or the senior drop-in center. Along with the cooks shed and the pump house, uses of the buildings should be supportive of the other uses. For example, the cook's shed could provide storage space etc. I have presented you with a broad outline of intended uses for the buildings on the farm. Obviously, as we start the design process and tenants are ' identified some modifications can be anticipated; however, I do not foresee any significant changes in this program. It would be our preference to complete this project in a single phase. r WATER a"Nx '0.1 HpuSE - r.... HOClSE Hp~SE D BAS MAIN HOUSE GE - r - t lJ RIPpODRO~' 4.~+ STABLE 1. COOK.' S SOD . p9 i t r- ,sm SHOP 0 i i EARLE BROWN FARM DEVELOPMENT 1 1 1 1 1 1 1 1 1 1 1 1 1 I, PROBLEMS TO BE SOLVED A, BOND ISSUE 1, WAIT 2. PARTIAL 3, TOTAL WITH RECALL B, TRAFFIC GENERATION 1, PROBABLE CASE A, FARM - 843 TRIPS 1, FARM PROPERTY - 229 2, RYAN - 365 3. RESIDENTIAL - 249 B. SUMMIT/SHINGLE CREEK IMPACT 2. MAXIMUM CASE A. FARM - 1,391 TRIPS 1, FARM PROPERTY - 924 2. RYAN - 365 3. TEXAS AIR - 183 B, SUMMIT/SHINGLE CREEK IMPACT C. LAND CONTROL (WITHIN EARLE BROWN DRIVE & SUMMIT) 1. TEXAS AIR A. DEVELOP WITHOUT B. PARTIAL ACQUISITION C, TOTAL ACQUISITION 2. RYAN DEVELOPMENT D. ZONING 1, P,U,D. 2. REZONE 3. TAX INCREMENT PLAN AMENDMENT E, UTILITY EASEMENT II, POSSIBLE DEVELOPMENT A. TOTAL ACQUISITION OF TEXAS AIR 1, LOMBARD RESIDENTIAL - 269 UNITS 2. RYAN OFFICE - 170,000 SQUARE FEET 3. FARM - 229 TRIPS B. PARTIAL ACQUISITION OF TEXAS AIR 1, LOMBARD RESIDENTIAL - 269 UNITS 2. RYAN OFFICE - 130,000 SQUARE FEET 3. TEXAS AIR PER ZONING - 100 TRIPS 4, FARM - 232 TRIPS C. NO ACQUISITION OF TEXAS AIR 1, LOMBARD RESIDENTIAL - 269 UNITS 2, RYAN OFFICE - 130,000 SQUARE FEET 3, TEXAS AIR PER ZONING - 113 TRIPS 4. FARM - 229 TRIPS III, SUBSIDY TO DEVELOPERS A. LOMBARD 1, SELL NECESSARY LAND AT $2,500 PER UNIT OR $672,500 2. MULTI FAMILY HOUSING BONDS 3. IF HRA ACQUIRES TEXAS AIR - SELL OFFICE BUILDING $150,000 TO $200,000 4. HRA RETURN B, RYAN 1. INDUSTRIAL DEVELOPMENT BOND ($8,9 MILLION) 2. PAY 1% APPLICATION FEE FOR IDB OR $90,000 3. HRA RETURN a3 td" 5 a j j 5:3`"'~►., 552. ' 567 °14'39606- ~~-rt7.9i•.. ,:~3~99 Q t ! ~ro__.~(3Ft 445.6► " tai.41 jpl~ v,. 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