135-97 OrdinanceRECORD OF ORDINANCES
Dayton Legal Blank Co. Form No. 30043
135-97
Ordinance No_________________________
Passed _ _19______.
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO
EXECUTE A LETTER OF INTENT WITH THE HUNT SPORTS
GROUP FOR THE PROPOSED EXPANSION OF COSGRAY PARK
AND STADIUM PROJECT
WI~REAS, Mr. Lamaz Hunt, on behalf of Hunt Sports Group, has executed a Letter of
Intent to develop and operate a soccer specific stadium complex, including parking
facilities and related appurtenances, to be located on approximately 180 acres adjacent to
Cosgray Park; and
WHEREAS, Dublin City Council has reviewed the proposal as outlined in the Letter of
Intent (attached hereto as Exhibit "A") and held a public discussion regarding the parkland
expansion and stadium project on Monday, September 29, 1997; and
WHEREAS, Council has determined that the project as proposed will further the City's
public purposes of enhancing the economic welfare by creating jobs and employment
opportunities, by providing increased opportunities for pazks and recreation programs and
by providing a venue for community and cultural events.
NOW, THEREFORE BE IT ORDAINED by the Council of the City of Dublin, State
of Ohio, ~ of the elected members concurring:
Section 1. That the City Manager is hereby authorized to execute the Letter of Intent
attached hereto as Exhibit "A".
Section 2. That this ordinance shall be effective at the earliest date permitted by law.
Passed this rl ~~~ day of ~ ~~D /, ~~ , 1997.
Mayor -Presiding Officer
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LETTER OF INTENT
September 17, 1997
Mr. Tim Hansley
City Manager -City of Dublin
5200 Emerald Parkway
Dublin, Ohio 43017-1006
Dear Mr. Hansley:
Thank you for your attention to our various conversations over the last several months. This
letter is intended to summarize those discussions and describe the basic responsibilities of the
parties under the proposed venture.
Acceptance of all terms and conditions ,outlined in this letter are subject to the review and
approval of the Dublin City Council ("Council"). Hunt Sports Group ("Hunt") understands that
any City obligations to negotiate appropriate agreements pursuant to this letter are null and void
if the Council does not approve and authorize the execution of this letter on behalf of the City.
Further, any agreements negotiated pursuant to this letter of commitment will not be binding
upon the City until the Council approves those agreements.
This letter is being written to confirm the mutual understanding of the City of Dublin, Ohio
("City") and Hunt regarding the development and operation of a soccer specific stadium
~• complex, including parking facilities and other related appurtenances (collectively, the
"Stadium") to be located in the City, all consistent with afifty-year vision. If the general terms
~,,,. outlined in this letter are acceptable, we would propose that this letter serve as a letter of intent
for a plan of development for the Stadium.
Furtherance of Public Purposes
Hunt acknowledges that any City participation facilitating the development of the Stadium as
outlined in this letter will be in furtherance of the City's public purposes of (i) providing parks
and recreation, community and cultural programs and services, and (ii) creating jobs and
employment opportunities, and improving the economic welfare of the people of the City, all
as authorized in Section 13 of Article VIII, and Section 3 of Article XVIII of the Ohio
Constitution, the laws of Ohio and the Charter and ordinances of the City.
D A L L A S K A N S A S C I T Y
Commerce Bank Building 1000 Walnut S[reet Suite 1520 Kansas City, Missouri 64105
Telephone 816 4721501 Fax 816 4721186
Hunt Sports Group
Letter of Intent for City of Dublin Soccer Specific Stadium
September 17, 1997
Page 2
Stadium Site
,,,,,, Hunt understands that in exchange for its commitment to cause the Stadium to be designed and
built, the City will acquire, or cause to be acquired, a site for the proposed Stadium which
consists of three different parcels of land aggregatirig approximately 180 acres all as more fully
described in Exhibit A ("Site"). If the City has not obtained an option to buy the Site prior to
the time Council approves the execution of this letter, the Council will at the time of its approval
of this letter authorize the City to commence eminent domain proceedings with respect to the
Site. The City will acquire the Site by purchase or by settlement of an eminent domain action
at a price which is satisfactory to the City or by court order pursuant to an eminent domain
action. Following acquisition, the City will annex the Site into its corporate jurisdiction. If the
City commences an eminent domain action to acquire the Site, the City will agree to take any
steps reasonably necessary and practicable to allow Hunt or any designee of Hunt (collectively
"Designee") approved by the City to cause construction of the Stadium to commence in
accordance with the milestone schedule attached as Exhibit B. Hunt expects to offer ownership
interests in and to require financial guarantees of the debt of the Designee to the owners of the
Columbus Crew ("Crew") on a pro rata basis reflective of the ownership structure of the Crew.
Hunt understands the City will ground lease the Site to anot-for-profit stadium development
corporation ("SDC") to be created under the laws of the State of Ohio. The SDC is expected
to have a Board of Trustees of three members, one of whom will be nominated by Designee.
Any membership interests in SDC will be subject to rights of first refusal and other customary
transfer restrictions. The SDC will lease the Site from the City for nominal rent pursuant to an
approximately 25-year ground lease with a 25-year renewal option with terms to be agreed upon.
SDC will, in turn, sub-lease the Site to Designee for nominal rent for an equal period. Hunt
understands that, in furtherance of the City's public parks and recreation and community and
cultural programs purposes, including but not limited to providing parking for expanded
activities at adjacent Cosgray Park, the City will retain certain rights to the Site under its ground
lease to SDC, which rights will not be in conflict with the design, construction and operation
of the Stadium on the Site by Designee.
Stadium
Designee will design, or cause to be designed, the Stadium which will be used primarily for
outdoor professional soccer, but will also provide for the exhibition of a multitude of other
entertainment, community and sporting events. The Stadium will initially be designed, subject
to the budget and financing objectives, for a preliminary capacity of approximately 30,000 -
35,000 seats (25,000 - 30,000 permanent seats and 5,000 temporary seats) with the ability for
future expansion in various stages to approximately 60,000 seats. Any future expansion and
financing therefore will be by mutual agreement.
~"'"
Hunt Sports Group
Letter of Intent for City of Dublin Soccer Specific Stadium
September 17, 1997
Page 3
The Stadium design and construction will be subject to customary City planning and zoning
approvals.
Stadium Financing.Options
Designee will assume ultimate responsibility for all costs (including costs of financing) the
design and construction of the Stadium. Regardless of the method of financing which method
and terms Designee and Hunt must approve, Hunt agrees to guarantee the payment of debt
service on that financing. To protect the City's public interest in the Stadium project and
investment in the Site, the City will have an option (but no obligation) to cure any financial
defaults related to Stadium financing. At the end of the initia125-year ground lease term (or 50-
year ground lease term if the renewal option has been exercised), the Stadium will be transferred
to the City with that transfer coupled, at Designee's option, with a mutually agreed upon lease
or use agreement of the Stadium to Designee.
As an alternative to traditional bank financing, Designee may request the SDC to facilitate a
taxable public bond offering ("Bonds") to finance the Stadium. In this case, the SDC would
lease the Stadium to Designee, under a financing lease/management agreement, and Designee
will guarantee the payment of the lease rentals to cover all debt service payments on the SDC
bonds. It is expected that the financing lease and the initial ground lease will have the same
term. Further, any interest earnings on the Bond proceeds will be within the control of
Designee. Upon final payment of the Bonds, the City and Designee shall renegotiate any
underlying financing/ground lease upon terms which are mutually acceptable to each party.
Designee acknowledges that the SDC bonds will be payable from the lease rentals received in
connection with the lease of the Stadium from the SDC to Designee, and the SDC Bonds will
not constitute a general obligation or indebtedness of the SDC or the City and neither the faith
and credit nor the taxing power of the SDC or the City shall be pledged to the payment of the
SDC Bonds.
In connection with the issuance of the SDC Bonds, Designee will take those steps reasonably
necessary to secure such credit enhancement (i.e. a bank letter of credit or other acceptable
enhancement) as may be necessary, in the mutual judgment of Designee and the SDC, to market
the SDC bonds on the most advantageous terms within the budget and financing objectives which
we have presented to you.
Regardless of the financing option chosen by Designee, Designee understands that, if necessary,
SDC will mortgage its leasehold interest in the Site (excluding the City's land). The City's
retained rights as described above will in no way be impaired by any SDC mortgage.
Hunt Sports Group
Letter of Intent for City of Dublin Soccer Specific Stadium
September 17, 1997
Page 4
Infrastructure Financing
'r Hunt understands that the City will commit to the public construction and financing of a
mutually agreed upon program of public infrastructure improvements related to Stadium
development and support, including extending at City cost sewer and water service to the Site,
and undertaking, on a mutually agreeable schedule, road improvements to accommodate Stadium
event traffic.
Under Ohio law, the Stadium improvements will be subject to real property taxation. The City
therefore agrees to impose tax increment financing on the Stadium to the maximum extent
permitted by law so property taxes will be used, together with other resources, to support the
mutually agreed upon public improvements. Any bonds issued by the City to finance the public
improvements shall be general obligation bonds of the City supported by the full faith and credit
of the City including any revenues received from the imposition of the tax increment on the
Stadium.
Ouerating Commitment
Designee will have responsibility for the operation and management of the Stadium. At this
time, Hunt expects that the Major League Soccer team known as the Crew will be the prime
tenant of the Stadium. Designee would pledge to establish a continuing scheduling agreement
which would recognize the needs of its prime tenant of the Stadium to have certain priority
scheduling rights.
The City will provide the option for the future use of an adjacent practice soccer field in
Cosgray Park by the Crew and/or visiting teams, together with an option for the Crew to use
the soccer fields of Cosgray Park to conduct related game day events. The City will also
provide for ingress and egress roads through Cosgray Park to facilitate automobile access to the
parking lots at the Stadium.
As part of its operating commitment, Designee will agree to maintain the Stadium and Site as
a first class performance, sporting and assembly facility and in as near original condition as is
possible through normal operation and maintenance of such facilities, and that commitment will
be memorialized in an operating agreement; provided, however, that Designee will not be
responsible for any damages caused by any force majeure (i.e. act of war, natural disaster, etc.)
event.
Designee will be fully responsible for generating revenue for the Stadium by securing long-term
tenants as well as the standard array of concerts, sports events, conventions, family shows, and
any secondary tenants that scheduling permits and for paying all operating costs, including but
not limited to lease fees in support of debt service, of the Stadium without risk to the City or
Hunt Sports Group
Letter of Intent for City of Dublin Soccer Specific Stadium
September 17, 1997
Page 5
the SDC, if any, for any shortfalls. The City and SDC will not be responsible for any operating
deficits.
City's Use of the Stadium
In furtherance of its public parks and recreation purposes, the City will commit to purchase
under a long term agreement and in furtherance of its parks and recreation and community and
cultural programs, a mutually agreed upon number of annual public dates at the Stadium with
mutually agreed upon terms. The City's use of the Stadium will not be competitive with
professional soccer, and will not resemble traditional "for-profit" events. The scheduling of
such events will be around the dates for professional soccer, and without prior consent of the
Stadium operator, any event that involves the use of the playing surface will cease 72 hours
before the commencement of a professional soccer event.
City Service Support
The City will agree to provide or arrange for the provision, at City cost, of the additional, off-
site police and traffic control services required for not more than (20) events per year at the
Stadium consisting of Crew games and other professional soccer games and related events (i.e.
exhibition soccer games, MLS All Star Game, MLS League Championship game and men's or
women's National Team games). The City will agree to discuss the provision of such services
for additional soccer related events and for any other events hosted by the Stadium.
Other Conditions
It is understood that the final agreement will be contingent on the City being satisfied with the
financial strength of the operator of the Stadium and guarantor of any Stadium financing.
Except for the legal fees of Designee's counsel, the City will be responsible for all costs and
expenses associated with the performance of the City's obligations described herein.
Designee and the City mutually pledge to use every effort to reach agreement on all of the legal
terms and provisions which either of them requires in the definitive agreements, consistent with
the above provisions, in order to reach a complete, binding agreement. Except for the foregoing
sentence, neither party will be legally bound until such complete, definitive agreements are
signed and with respect to the City's obligations, approved by Council.
Upon Council's approval, please indicate your agreement to these terms on behalf of the City
by signing this letter where indicated below. We look forward to working together to develop
a plan that will provide the venues needed for public sports, recreational, and entertainment
events in the City. Please let me know if you have questions or would like additional
information.
~,"'"
Hunt Sports Group
Letter of Intent for City of Dublin Soccer Specific Stadium
September 17, 1997
Page 6
Sincerely,
Hunt Sports Group
f.. .._..., ~' ~,-tJ
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Lamar Hunt
Authorized Agent
Accepted By:
~' .~
Tim Hansley
City Manager, at the direction and
on behalf of the Dublin City Council
Date: ~' ~ S 1997
Approved as to form:
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~~~
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Director of Law
cc: Rick Helwig
Marsha Grigsby
Stephen Smith
~."'
EXHIBIT A
DESCRIPTION OF SITE
EXHIBIT B
1. Final SDC corporation documents and the final versions of any lease and sublease and
related documents shall have been agreed upon by the parties by January 15, 1998, with work
to commence first on the corporate, lease and sublease documents with the mutual goal of those
documents being in nearly final form by November 15, 1997.
2. Groundbreaking : As soon as possible, but in no event later than March 15, 1998, when
'~""' excavation can be commenced on the site in order to accommodate a construction schedule that
allows the Stadium to be opened by April 1, 1999.
~""
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ADDENDUM TO
LETTER OF INTENT
DATED SEPTEMBER 17, 1997
Following the public hearing hosted by the Dublin City Council on Monday, September 29, 1997,
and the City Council meeting held Monday, October 6, 1997, the parties have identified several
common concerns which need to be mutually agreed upon in the negotiations held subsequent to
executing the Letter of Intent for the soccer specific stadium proposed to be built with the
assistance of the City of Dublin. The purpose of this Addendum is to convey the intent of the
parties to make a good faith effort to reach a mutually acceptable resolution of the issues
identified. The parties again acknowledge that any agreements negotiated regarding the issues
contained in this Addendum will not be binding upon the parties until the parties approve those
agreements.
Issues which have been mutually identified and for which mutual agreement will be pursued
Stormwater drainage is a concern in the unincorporated area where the stadium is
proposed to be located. The impact of the proposed stadium development on stormwater
drainage will be jointly analyzed and solutions which benefit the project and the
surrounding area will be sought.
2. The impact of the project on land uses surrounding the proposed stadium needs to be
jointly analyzed and addressed in a proactive manner by the parties.
3. Already mentioned in the Letter of Intent is the need to mutually agree upon a program
and timetable of road improvements and game-day traffic management programs to
accommodate stadium event traffic. This issue is repeated for the sake of added emphasis.
The road improvement program and timetable cannot alter the City Council adopted
1998-2002 Capital Improvement Program.
4. A policy regarding alcohol use at the stadium site shall be developed.
5. The type and maximum number ofnon-athletic events (such as concerts and large group
gatherings) and related noise levels permitted need to be determined. A process for local
control and approval needs to be established.
6. The feasibility of an entertainment/admissions tax.
7. The use of "Dublin" in the stadium name, possibly in conjunction with a corporate
identification, needs to be explored.
Applicable City of Dublin codes and regulations (e.g. building, landscaping, parking, site
layout, lighting, etc.) shall be complied with. Above ground structure shall be masonry or
shall meet the architectural requirements of Planning & Zoning. Stadium seats shall be
armchair type.
Addendum to
Letter of Intent
Page 2
9. Parking fees for City-sponsored events.
10. In the unlikely event that professional soccer would cease to be the primary tenant in the
stadium, the parties would jointly seek another tenant(s) to ensure that the facility would
always remain primarily an athletic venue.
11. Permanent seat licensing shall be discussed.
Notwithstanding the terms of this letter or the amendment, if during the course of further
negotiations the City acquires additional information, reports, or other data which would indicate
that it would not be in the best interest of the City to enter into an agreement containing language
evidencing the said term or terms, it shall not be considered bad faith to object to the inclusion of
the term or terms. Further, each party hereby expressly waives any and all potential claims
whatsoever should they fail to mutually agree.
r
!'+l'i
Lamar Hunt
Hunt Sport Group
~~~ ~~~~
Tim Hansley
City Manager
City of Dublin
October ~, 1997
cc: Rick Helwig
Marsha Grigsby
Stephen Smith