Economic Development Authority - Erik Thorvig, Community Development Director
Title
Title
Approving a Letter of Intent and Purchase Agreement with the Minnesota Amateur Sports Commission (MASC)
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Executive Summary
Staff is requesting the Economic Development Authority (EDA) authorize a letter of intent and purchase agreement to assist in funding the purchase and installation of two multi-purpose turf fields at the National Sports Center (NSC) in exchange for property and other land rights.
Background
During discussions earlier in 2022, the City Council identified up to $3.93 million of assistance to the NSC for the development of 262,800 square feet of artificial turf, three recreational sized fields or two professional sized fields, LED lights, lines, and the City of Blaine logo/NSC logo. The plan includes $2.5 million of funding from the American Rescue Plan (ARP) proceeds. In exchange for this financial assistance for the construction of turf fields, the Minnesota Amateur Sports Commission (MASC) would provide the City with rights to construct, operate and maintain the primary lake feature of the 105th Avenue redevelopment plan on MASC-owned property at 10610 Nassau Street, and deed this property to the Blaine EDA as part of the redevelopment area.
The primary funding source for such capital improvements at the NSC is typically through the Minnesota State Legislature, which is problematic as the NSC is constantly competing with projects throughout the entire State of Minnesota.
Turf fields are becoming increasingly important to the NSC as it allows them to compete for larger tournaments as turf fields have more playability than grass fields that are stressed during high activity. Turf fields can be utilized earlier and later in the season and do not require “rest” like typical grass fields. Lighting of the fields also allows for use in the evening.
The viability of the NSC is extremely important to the local Blaine economy and assisting in the construction of infrastructure that assists the NSC to be more successful is important for the long-term viability of the facility and local Blaine economy.
Staff has been working with NSC staff to finalize the overall financing and land exchange package per the letter of intent that was approved by the EDA in July. The general perimeters of this transaction would have the EDA provide funding for turf fields in exchange for property at 10610 Nassau Street and rights to the certain MASC property for the park/water feature.
NSC staff and legal counsel have been working with city staff and attorney to determine the appropriate path forward to finalize the transaction. One issue that has arisen is the mechanics for the sale of 10610 Nassau Street. The property is owned by the MASC, which is the parent entity to the NSC Foundation. Because of how the MASC acquired the property, any funds from the sale would go to the state general fund and not the MASC or NSC foundation. This is problematic as sale proceeds need to go to MASC/NSC to fund the turf fields. Sale price is determined through an appraisal, and MASC doesn’t have the ability to sell the land for $1 which would have eliminated the issue.
Sale proceeds can be provided to the MASC/NSC upon approval by the Minnesota Management and Budget (MBB). For discussion to occur with MBB, a purchase agreement for the property must be executed. A draft purchase agreement has been drafted by the city attorney outlining a process where the EDA would purchase the land from MASC, contingent upon sale proceeds going to MASC.
The attached letter of intent further outlines how the remaining funds of the $3.93MM commitment would be provided. The following is language from the letter of intent.
1. Contribution by EDA. The EDA agrees to make a contribution to MASC upon transfer of the Property to the EDA in the amount of One Million Nine Hundred Thousand and 00/100 Dollars ($1,900,000.00) less the Purchase Price of the Property. For example, if the Purchase Price of the Property is One Million Dollars ($1,000,000.00), upon purchase the EDA will make a contribution to MASC in the amount of Nine Hundred Thousand Dollars ($900,000.00). The EDA’s contribution to MASC is to assist MASC in the development of new artificial turf fields at the National Sports Center. The development of these fields at the National Sports Center will enhance economic development in the City of Blaine by providing the National Sports Center with the opportunity to host additional amateur sports events and competitions. The EDA and MASC strongly believe the addition of new artificial turf fields at the National Sports Center is critical to the continued success of the National Sports Center and will enhance the ability of the National Sports Center and the City of Blaine to be a destination for regional, national, and international amateur sports competitions.
2. Collateral loan agreement. EDA will provide a Two Million and 00/100 Dollars ($2,000,000.00) forgivable, interest-free loan (the “Loan”) to the NSCF, to facility the development of new artificial turf fields at the National Sports Center. The terms of the Loan shall be negotiated separately by the EDA and the NSCF. The Parties strongly believe the Loan will enhance the National Sports Center and economic development in the City of Blaine by providing the National Sports Center with the opportunity to host additional events and competition. The Loan will be forgiven by the EDA upon transfer of the Property by MASC to the EDA.
NSC and city staff are working through alternative options which may expedite and/or remove hurdles to the process, however the proposed process identified in the LOI, and purchase agreement is the path the EDA and NSC will currently pursue.
Strategic Plan Relationship
Successful redevelopment of the 105th Avenue corridor has been identified as a desired outcome in the Growth Management section of the strategic plan. This package advances the desired outcome.
Financial Impact
Per prior discussions, the commitment of $3.93 million exists. The approval of a LOI and purchase agreement are more critical to the MASC/NSC to help them advance discussions with various state agencies on how proceeds can be utilized.
Staff Recommendation
Adopt the attached resolution.
Attachment List
Letter of Intent
Purchase Agreement
Body
WHEREAS, the Blaine Economic Development Authority and National Sports Center have been working on an agreement to fund new turf fields at the NSC in exchange for land by sale and other agreement at the National Sports Center; and
WHEREAS, a letter of intent and purchase agreement have been prepared outlining the terms of how funds are provided and purchase of 10610 Nassau Street.
NOW THEREFORE, BE IT RESOLVED, that the Blaine Economic Development Authority hereby approves a letter of intent and purchase agreement for 10610 Nassau Street and hereby directs the president, executive director, and city attorney to prepare and execute any necessary documents.
PASSED by the Blaine Economic Development Authority this 17th day of October, 2022.