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HomeMy WebLinkAboutMay 17, 2005 Work Session 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Ollr Website at: www.d.colll/llbia-heights./Iln.lls Mavor GalY L. Peterson Councilmembers Robert A. Williams Bruce Nawrocki Tammera Ericson Die/ulI Bruce Kelzenbe/'g City Manaaer Walt Fehst CITY OF COLUMBIA HEIGHTS ADMINISTRA T/ON NOTICE OF CITY COUNCIL MEETING ************ to be held in the CITY OF COLUMBIA HEIGHTS as follows: Meeting of: Date of Meeting: Time of Meeting: Location of Meeting: Purpose of Meeting: COLUMBIA HEIGHTS CITY COUNCIL TUESDAY, MAY 17, 2005 7:00 P.M. CITY COUNCIL CHAMBERS WORK SESSION AGENDA Discussion 1. Community Center 2. Duplex Rezoning Consent 1. Junk Vehicle and Landscaped Parking Ordinance (ability to tow after 96 hours from private or public areas). Informational Packet 1. City Attorney Contract Survey 2. Relocation of Liquor Store on Central Avenue (material to be distributed Tuesday evening) The City of Columbia Heights does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its services, programs, or activities. Upon request, accommodation will be proviced to allow individuals with disabilities to pmiicipate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for handcapped persons are available upon request when the request is made at least 96 hours in advance. Plea~ call the City Council Secretary at 706-3611, to make arrangements. (TDD/706-3692 for deaf or hearing impaired only) THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER CITY OF COLUMBIA HEIGHTS 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Our Website at: www.ci.columbia-heights.mn.us Mayor: Gary L. Peterson Councilmembers: Bobby Williams Tammera Ericson Bruce Kelzenberg Bruce Nawrocki City Manager: Walter R. Fehst COLUMBIA HEIGHTS COMMUNITY DEVELOPMENT DEPARTMENT DATE: May 17, 2005 TO: Columbia Heights City Council FROM: Patrick Smith, Senior Planner RE: Duplexes INTRODUCTION Due to recent events related to the construction of new duplexes in neighborhoods primarily comprised of single-family homes, the City Council and Planning Commission directed staff to review the zoning regulations governing duplexes. Specifically, the City Council and Planning Commission have expressed concerns over the following items: 1. Duplexes located in predominately single-family neighborhoods. 2. The scale or size of duplexes being constructed compared to the character of the surrounding neighborhood. 3. The design of the new duplexes being constructed. 4. The number of duplexes being rented. 5. Utility fees being charged to duplexes. This memorandum addresses the first three concerns. The other issues will be addressed by the Fire and Finance Departments. BACKGROUND Based on rental licenses, Columbia Heights has 354 duplexes. Of these: . 59% (209) are located on non-conforming lots, . 18% (63) have been converted from a single-family home into a duplex. . Of the 291 originally-built duplexes, 170 are located on nonconforming lots; whereas, 39 of the 63 converted single-family homes are located on nonconfonning lots. . 4,016 lots in the City are zoned R-2. Of these, 946 of are larger than 8,400 square feet, the minimum lot size for a duplex. . 53 originally built duplexes are not on the rental license list. Of these, 36 are located on non- conforming lots. Staff also compared Columbia Heights to 12 similarly developed cities. Columbia Heights has the highest percentage of dwelling units that are duplexes, 6.7%. The average percentage of duplex units is 2.3%. Columbia Heights has the second smallest minimum lot size for duplexes at 8,400 square feet. The average required lot size for a duplex in a R-2 zoning district is 12,130 square feet. THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER South St. Paul has made it a policy that duplexes that have let their rental license expire and do not meet the minimum lot size must be converted to a single-family residence. City # of Total # of %of Minimum Lot Size for Duplexes Housinl!: Units Duplexes Duplexes (square feet) Columbia Heights 8151 547 6.7% 8,400 South St. Paul 8314 489 5.8% 9,000 square feet, or 7,500 square feet for lots platted prior to 1967. Hastings 6749 272 4.0% 12,400 Hopkins 8404 334 3.9% 12,000 Anoka 7398 270 3.6% 10,500 West St. Paul 8779 242 2.7% 15,000 White Bear Lake 9855 160 1.6% 10,000 Crystal 9493 139 1.4% 15,000 Richfield 15357 185 1.2% 9,000, must be located on an arterial or collector street New Brighton 9155 105 1.1% 12,500 New Hope 8744 82 0.9% 12,000 Brooklyn Center 11599 97 0.8% 12,400 Shoreview 10289 64 0.6% 12,000 COMPREHENSIVE PLAN There are two pertinent housing goals stated in the City's Comprehensive Plan regarding duplexes and single-family neighborhoods. First, the City will "provide a variety of life-cycle housing opportunities within the community." Second, the City will "promote and preserve the single-family housing stock as the community's strongest asset." An implementation strategy for the second goal is that the City will identifY non-conforming uses within residential districts and take actions to bring them into compliance. NON-CONFORMING USES Non-conforming uses may continue indefinitely unless the nonconformity or occupancy is discontinued for a period of more than one year; or the nonconforming use is destroyed by fire or other peril to the extent of greater than 50% of its market value, and no building permit has been applied for within 180 days of when the property is damaged. In addition, current regulations do not allow non-confomIing uses, including duplexes, to be expanded. RECOMMENDATION Rezone originally constructed duplexes R-2B and the rest ofR-2 as R-2A. Duplexes should be permitted in both R-2B and R-2A as conditional uses. Minimum lot size for R-2A should be 12,000 square feet. Minimum lot size for R-2B should be 5,100 square feet for lots existing on January 1, 2005, or 12,000 square feet for lots established after January 1, 2005. The attached Zoning map shows the proposed R-2A and R-2B zoning districts. G: ICommunity DevelopmentlCity COllllcillMemoslduplexes.doc The following table indicates the number of non-conforming duplexes that would result from this recommendation. All originally-constructed duplexes would become conforming, while the number of non-conforming single-family residences that have been converted to duplexes would increase from 39 to 54. Current Zonin2 - 8,400 sf Proposed Ordinance - 12,000 sf Converted Duplexes 39 are non-conforming 54 would be non-conforming 24 are conforming 9 would be conforming Originally-constructed 170 are non-conforming All conforming Duplexes 121 are conforming Number of Properties that 946 lots 234 lots meet Minimum Lot Size The scale and design of duplexes may be controlled 'by pennitting new duplexes as conditional uses and requiring the following conditions: Section 9.408 of the Zoning Ordinance requires all conditional use permits meet 9 requirements. The pertinent conditions for duplexes include: o The use will be designed, constructed, operated and maintained in a manner that is compatible with the appearance of the existing or intended character of the surrounding area. o The use will not cause a negative cumulative effect, when considered in conjunction with the cumulative effect of other uses in the immediate vicinity. o The use will not impose hazards or disturbing influences on neighboring properties. Possible additional conditions for a new duplex include: 1. Street-facing garage doors must be recessed behind either the front fayade of the living area portion of the dwelling or a covered porch (measuring at least six feet by eight feet) by at least five feet. 2. Iflocated on a comer lot, each unit of the duplex shall have its address and entrance oriented to a separate street frontage. 3 . Vehicle access to a lot must be from an alley if the lot abuts an alley. 4. The length of the garage wall facing the street may be up to 50% of the length of the street- facing building fayade. G: ICommunity DevelopmentlCity CouncillMemoslduplexes.doc ORDINANCE NO. BEING AN ORDINANCE AMENDING ORDINANCE NO. 853, CITY CODE OF 1977, PERTAINING TO ZONING AND DEVELOPMENT ORDINANCE #1428 The City of Columbia Heights does ordain: Section 1: Section 9.701 Specific Development Standards Shall be amended to read as follows: 3) Specific Development Standards. The following uses are subject to specific development standards. Two-familv and Twinhome Dwellings a) Street-facing garage doors must be recessed behind either the front facade of the living area portion of the dwelling or a covered porch (measuring at least six feet by eight feet) by at least five feet. b) Iflocated on a comer lot. each unit of the duplex or twinhome shall have its address and entrance oriented to a separate street frontage. c) Vehicle access to a lot must be from an alley if the lot abuts an alley. d) The length of the garage wall facing the street may be up to 50% of the length of the street- facing building facade. Section 9.906 R-2, Two Family Residential District Shall be amended to read as follows: 9.906 R-2A and R-2B,~, Two Family Residential District. 1) Purpose. The purpose of the ~ R-2A and R-2B Two Family Residence District~ is to provide appropriately located areas for single-family dwellings, two family dwellings (duplexes) and directly related complementary uses. 2) Permitted Uses. Except as specifically limited herein, the following uses are pennitted within the ~ R-2A and R-2B, Two &flgle Family Residential District~: a) Single-family dwelling, detached. b) Two family dwelling. c) TV/inhome dV/elling. d) State licensed residential care facility serving 6 or fewer persons. e) Licensed day care facility serving 12 or fewer persons. f) Licensed group family day care facility serving 14 or fewer children. g) Public parks and playgrounds. 3) Conditional Uses. Except as specifically limited herein, the following uses may be allowed in the ~ R-2A and R-2B, Two Family Residential District, subject to the regulations set fOlih for conditional uses in Section 4, Administration and Enforcement, and the regulations for specific uses set forth in Section 7, Specific Development Standards: a) Two family dwelling b) Twinhome dwelling c) Religious facility/place of worship. d) Convent or monastery, when accessory to a religious facility. e) School, public or private, K-12. f) Government office. g) Government protective service facility. h) Golf course. i) Off-street parking for an adjacent conforming commercial or indusuial use, provided the lots are under common ownership, is not separated by a public right of way and front on the same public light-of-way. 4) Permitted Accessory Uses. Except as specifically limited herein, the following accessory uses shall be in the ~ R-2A and R-2B, Two Family Residential District: a) Private garages, carports and parking spaces. b) Accessory buildings. c) Home occupations. d) Boarding or renting of rooms to not more than two (2) persons. e) Private swimming pools, tennis courts and other recreational facilities operated for the sole use and convenience of the residents of the principal use and their guests. f) Decorative landscaping, Gardening and other horticultural uses. g) Temporary construction buildings. h) Signs as regulated by Section 6 of this Chapter. Section 9.903 Lot Dimension, Height, and Bulk Requirements Shall be amended to read as follows: R-l R-1, R-2A R-2B R-3 R-4 Minimum Lot Area Single Family Dwelling 8,400 sq. ft. e. <:,v, A 6,500 sq. ft. 6,500 sq. ft. 6,500 sq. ft. 6,500 sq. ft. , Two-Family and Twinhome g,100 sq. ft. Existing on 12,000 sq. ft. 8,400 sq. ft. 8,400 sq. ft. Dwelling 9,000 sq. ft. January 1, 2005- 5,100 sq. ft. Established after January 1, 2005- 12,000 sq. ft. Multiple Family Dwelling 10,000 sq. ft. 10,000 sq. ft. Non-residential Structure 8,400 sq. ft. e "'AA .n. 6,500 sq. ft. 6,500 sq. ft. 10,000 sq. ft. 10,000 sq. ft. , Lot Area Per Dwelling Unit Multiple Family Dwelling Efficiency ,- &:-AA .J:'L 1,200 sq. ft. 800 sq. ft. , One bedroom A""'" -A- 1,800 sq. ft. 1,000 sq. ft. , Two bedroom "''''' -A- 2,000 sq. ft. 1,200 sq. ft. , Three bedroom 2,500 sq. ft. 1,500 sq. ft. Additional bedroom 400 sq. ft. 200 sq. ft. Congregate Living Units 400 sq. ft. 400 sq. ft. Minimum Lot Width 70 feet eG-feei: 60 feet 60 feet 70 feet 70 ft. Minimum Lot Depth Residential Building Setbacks Front Yard 25 feet ~ 25 feet 25 feet 30 feet 15 feet Side Yard 7 feet* ~ 5 feet* 5 feet* 20 feet 10 feet Comer Side Yard 12 feet .UJ.-feet 10 feet 10 feet 30 feet 15 feet Rear Yard 20% of lot 20% oflot 20% of lot depth 20% of lot 30 feet 15 feet depth €lei*lT depth Non-residential Building Setbacks Front Yard 25 feet ~ 25 feet 25 feet 30 feet 15 feet Side Yard 40 feet J.G....feet 30 feet 30 feet 25 feet 10 feet Comer Side Yard 12 feet .UJ.-feet 10 feet 10 feet 30 feet 15 feet Rear Yard 40 feet J.G....feet 30 feet 30 feet 25 feet 10 feet Single & Two Family Parking Setbacks Front Yard (excluding drives/pads) 25 feet ~ 25 feet 25 feet 30 feet 30 feet Side Yard 3 feet ~ 3 feet 3 feet 3 feet 3 feet Comer Side Yard 3 feet ~ 3 feet 3 feet 3 feet 3 feet Rear Yard 3 feet ~ 3 feet 3 feet 3 feet 3 feet Multiple Family Parking Setbacks Front Yard 30 feet 30 feet Side Yard 10 feet 10 feet Comer Side Yard 30 feet 30 feet Rear Yard 10 feet 10 feet Non-residential Parking Setbacks Front Yard 25 feet ~ 25 feet 25 feet 30 feet 30 feet Side Yard 10 feet .UJ.-feet 10 feet 10 feet 10 feet 10 feet Comer Side Yard 25 feet ~ 25 feet 25 feet 30 feet 30 feet Rear Yard 10 feet .UJ.-feet 10 feet 10 feet 10 feet 10 feet Maximum Height Residential structures 28 feet :2.&-feet 28 feet 28 feet 35 feet 35 feet Non-residential structures 35 feet ~ 35 feet 35 feet 35 feet 35 feet Non-residential Floor Area Ratio 2.2 Section 2: This ordinance shall be in full force and effect from and after 30 days after its passage. First Reading: Second Reading: Date of Passage: ,2005 ,2005 Offered by: Seconded by: Roll Call: Mayor Gary L. Peterson Patricia Muscovitz, Deputy City Clerk CI~ CityoftCOLUMBIA HEIGHTS D. COMMUNITY DEVELOPMENT ZONING MAP LEGEND Zoning Designations: Rll~itkntiul: CJ R.I ~Singl~Flimnyrwsilllmt(lil D(~trict c:::J R.2A - One IIml Two Fllmily R.I:!li~kntilll Dhnril.1: ~ R.m - One: lUlU TWII Fumily R~il.knthl1 Dlhtril.:t ~ R.] . Multiple Fumily Rllsidllntlul Oilitdct IiIi1 Roo4. Multiple: Fum!!y RllJ'liullntlul District Cnmm<:n:illl: c:::::J LO - Limil~ Dtlsinlltul DistriLt _ (,110" Ctmt;".!1 DUlI(nt!.'s Disuict _ GD- GenllrlllI:kL~lnlll\.~ DisuiLt Mixt:d: _ MXD_Millc:l\Usl:Dimr;ct lndUStrilll: Acr~: ~1.l1fTntul: 512.58 21.1,"% liSH.2fl 27.85% (\(},24 ],117% IHO.f/(, 7,77'!>t 32.55 /'3(,% 25.92 I. I 2'\.jl 2fi.11 1.13% 84.95 3,51)% :!1.5S n,91% 111i-li2 S.1l2% 9.74 lI.42% 522.!)! 22.4Cl% N Pat~eJ Lines N City Limit, TOTALS: 23li3.25 100,00% (,1),32 2.911% I:=:2l p - P..irk'! CJWatetFlllllUfCS (jlJ,14 L,*"JOm:~'ll-'C!i D:.....lmm,or: T/l;tZ'>:lUWL'<."II/ill<lrll.f1.r,{imndllllfhtf/I/Uf'un'1l waplul.'<lr n!l'~f(!{Ui.'tiIXlI!frh~ t<I~H<'''L; "f'rhi' em' 'If'C"llvoolu Htrl.,.tfu Z",:ill/<0I'tnr..U11(.'lt, 77:1' t'ilIIU'" IIfthit IIIq> tf &,rigru:.!fi,r th~ 1'11t'/'Ofi.'.1 ll(t1!,IUW WIll tTll7"l't'li"n ,,11/ '111i!_U'''J/U (t)t/i;"~ rill;' 3minf< Mup"hmld bt ,1im.'l:f'Il /I' tilt' C.mUllllniry lks'/.ffll'wrnl /Jqloln111<.'1/t, f/.rtfWiIll../J"I.>: .1l1Jf11-lr I;!, 1~74 1I...'uilllll.l..w: N""'l"'I;.~,11111' 1I"""i'lIIlJa1~: :J~III/J. OIllIJlll.\1iC' l.l'lI'd"'''''''\'III''''~,rlnuU R~,'-~l\' 1I""'flllII /J.,w: :J~IIIII. J*'IliIlUVi:ln L\.jwlnl1ll/ /l~I.M;' 1I....i'rflllU1I~: .11:/1111 .,....,..P,ru:I{..IIW1l~:u II....";,,., /Jo'IlJ: -'11/1111. OIll.rnlUllj~' aw"'I"'""" v.v~1rlM..'II R~l"""" 1/aJ1~\I,~ IJ,,{u.' -'J::III/J. C-hnrnlllllil)' 1~t.J/"'l1lI/ 1Af"..tm...'11 &'/411<' !lI\Urte,: t:lrynfCnlullIblallclllhtl. C;nntnlur,!ty Ocvclllflmtnl Deflulm(ll! l!nglnminiDcplltlT1tlll (CI,I~'i. 01\'illnn1 S~'1IUtllfl'.' 300 150 0 300 600 I Feel 80 40 0 80 160 Melllf'll CITY OF fi ,..J (:I ~ ~ ~ o ~ u COLUMBIA HEIGHTS CITY COUNCIL LETTER Meeting of: May 17, 2005 AGENDA SECTION: ORIGINATING DEPARTMENT: CITY NO: Community Development MANAGER'S APPROVAL ITEM: BY: Robert Streetar BY: DATE: May 10, 2005 BACKGROUND The purpose of this memorandum is to provide the City Council with the latest information regarding the potential construction of a community center, and to request City Council direction regarding next steps in the decision making process. Maxfield Research, Inc. Demand Analysis Since April 2004, the City Council, School Board as well as many community members has discussed the construction of a community center, responding to the need for adequate gymnasium space as well an amenity to attract and retain residents. On September 7,2004, the City Council, the School Board and the Sports Boosters cooperated hiring Maxfield Research, Inc. to perform an analysis to determine the potential demand for a community center. The analysis confirmed a Qemand for a community center. The analysis considered population and household growth and income, other community centers, and private health clubs in the primary and secondary market area, as well as different amenities, and membership fees. Please find attached a copy of the final report. The executive summary is on pages 1 through 7. The recommended fee structure is on page 42. On September 9,2004 the City Council held a meeting to consider a bond referendum to build a community center. At that that meeting the City Council decided not to move ahead with a community center referendum in light of the upcoming School District referendum, but decided to seek additional information, get input from residents and continue to move ahead in the decision making process. On January 18, 2005, the City Councii reviewed the report by Maxfield Research, Inc. The Council indicated the importance of working with the School District on this project, as well as working with residents to determine a specific project. On February 7, 2005, the School Board reviewed the Maxfield report. The School Board signaled their support for a community center and asked that a swimming pool be part of the discussions. The Board also indicated working together with the City Council on a community center was a good idea. Lastly, the Board indicated that while the community center is important, their operating referendum in the fall of 2004 would be their top priority. Building Program Options To initiate and encourage community center discussions, Kraus Anderson and Parker Durrant Architects developed a building program based upon the recommendations from the Maxfield report. The building program amenities include: · 2 -gymnasiums with a walking track · A child play area similar to the Eagle's Nest at the New Brighton Community Center · Child daycare space · A senior center · A teen center · Racquetball courts · Aerobic and strength training space · Racquetball courts · Lap swimming pool · Play pool · Concessions space · Meeting rooms The estimated cost to provide all of these amenities is $9,300,000. This does not include architecture services, soft costs, or site preparation costs; subsequently the total cost would be higher. Please find attached a summary of the building program and the associated costs prepared free of charge by Colleen Nelson of Parker Durrant Architects, and Tom Sacket of Kraus Anderson Construction. Please note, these costs are only an estimate for discussion purposes only. Both Ms. Nelson and Mr. Sacket will be attending the meeting to provide a brief presentation of their building program and to answer questions. Location Options There have been two primary possible locations discussed for a potential community center. They are: · Huset Park · NEI As part of the decision making process it will be important to determine the site preparation costs attributable to each of these potential locations, as that cost is an important part of the capital budget. Please see attached map of potential locations. !:'lInninN ~nn !:'in~n,..inN nnfinn." . ..............I::J ....11"" . "IW"V.'.~ .......,..,.......,..~ Please find attached a memorandum identifying potential City funding resources. Specifically, there is approximately $3,397,681 that could be applied towards the construction of a community center. In addition, please find attached a memorandum from Kennedy and Graven attorney Steve Bubul briefly describing two alternative methods the City could use to finance a community center. These two methods entail using lease-purchase revenue bonds, or voter- approved obligation bonds. Next Steps A decision to build and operate a community center requires good quality information. To that end staff recommends the following next steps that if implemented will provide the Council with 2 the best information available to make a decision, and the residents the opportunity to participate in the planning and decision making process. Staff recommends the Council authorize two actions: 1. Undertake a public process. The purpose of the public process is to solicit resident input in the planning and decision making process. Staff recommends hiring Jill Schultz of JMS Communications to facilitate a 4 - 6 month process to solicit resident feedback regarding the need for a community center as well as building program options. Ms. Schultz has a good deal of experience in working with public agencies on these types of projects. She has typically worked with Ehlers, the City's financial consultant, on many public projects. Mark Ruff will be present at the meeting to answer questions regarding the public process. Generally, objectives of the process are to: II Communicate the question. (Why do we need a community center?) II Communicate the process (How will we decide?) II Communicate the options (What are the options?) II Communicate the selected option (What is the preferred option?) Proposal elements include: II Establishing a resident task force. The role of the taskforce is to oversee the public process, report back to the City Council, and provide a final recommendation to the City Council. II Facilitating three resident open houses to encourage residents in the decision- making process, and to solicit feedback and comments on the question and options for addressing the question. II Communicating the process via newsletters, press releases, cable TV, and the City's website. The City Council's role is to: II Support the public process to address the question, as opposed to a staking out a specific position or outcome. II To receive periodic reports from the advisory committee. II To make the final decision. The cost for the public process will be an amount not to exceed $25,890, and would be paid from Fund 881 - Contributed Projects. The proposal is attached for your review. 2. Undertake a pre-desiqn feasibilitv study The purpose of the pre-design feasibility process is to determine an accurate assessment of the costs of construction and operation of the recreation center. This pre- design process is the same process the City undertakes any time is does a road, water or sewer project. Generally, pre-design is performed to: II Define the building program options and priorities. II Analyze the site or sites for consideration. This includes evaluating the topography, soil condition, the presence of contamination, the availability of necessary public and 3 private utilities etc. · Determine a project budget. · Determine a project schedule. · Determine project financing. · Determine a construction delivery method. · Determine if the site is adequate in size. · Determine parking needs and traffic impacts. This process must be undertaken as the information generated is used in the preparation of the formal design and bidding documents. Kraus Anderson, and Parker Durrant Architects have assisted the City over the last year, and have submitted a proposal to provide the City with pre-design services. Please see the attached proposal. If the Council chooses to use the team of Kraus Anderson, and Parker Durrant Architects the cost would be $86,000 and would be paid from Fund 881 - Contributed Projects. The proposal is attached for your review. At the end of the 6-month process the City Council, and residents will have: 1. A building program that reflects the community needs. 2. A preferred site. 3. The capital and operating costs of this specific building program. 4. A financing plan. 5. A construction schedule. 1. Does the City Council want to undertake the public process to solicit resident input, and the pre-design feasibility study to determine the actual cost of a community center? COUNCIL ACTION: h :\Consent2002\CL consent2002\ 4 :I :!I :II :!II :!I 3 :I :I .- \I . I I I I I I I I I I I I , f \ \ otential Analysis for a d Recreation Center in bia Heights, Minnesota A Market .ommunity Col Prepared for: City of Columbia Heights Columbia Heights, Minnesota November 2004 I ... xfi e I d . Research Inc. 615 First Avenue NE Suite 400 Minneapolis, MN 55413 612.338.0012 www.maxfieldresearch.com ~ :!I 3 :fI 3 :3 :31 ::I ::I :I ::I :::I :3 ::I :I 31 :J1 ::I :I :I I I I I I I I I I I I I ia.. axfield Research Inc. ~ T November 23, 2004 Mr. Robert Streetar Community Development Director City of Columbia Heights 590 - 40th Avenue NE Columbia Heights, i\1N 55421 Dear Mr. Streetar: Attached is the study A Market Potential Analysis for a Community and Recreation Center in Columbia Heights, Minnesota. The study includes an analysis of the market conditions for a new community recreational facility in Columbia Heights and provides an analysis of existing private and publicly owned health clubs near Columbia Heights. Detailed fmdings and recommendations regarding a new facility in Columbia Heights can be found in the Conclusions and Recommendations section at the end of this report. We have enjoyed performing this study and are available if you need additional information. Sincerely, MAXFIELD RESEARCH INC. VJ1(ry t.VffL vtrlerYICft. fj'<<A1- Mary C. Bujold President Merrie A. Sjogren Research Analyst AL.<l.__L____.L f"\.lli:iI,;Ilillt::In (phone) 612.338.0012 (fax) 612.904.]9]9 615 First Avenue NE, Suite 400, Minneapolis, MN 55413 S :I :I :I !I !I Ii I I I I I I I I I I I I TABLE OF CONTENTS EXECUTIVE SUMMARY ............................................................................................... Study Impetus................................. ............. .......................... ........... ..... ..... .................... Draw Areas............................................................................................... ................. ...... Demographic Trends............................... .......................... ....... ............. .......................... Market Area Community Centers and Health Clubs ...................................................... Demand Summary and Recommendations................... .............. ...... .............................. PURPOSE AND SCOPE OF STUDy..... ............... ................... ....................................... Purpose and Scope of Study.............................. ................. ..... ...... ..................... ............. DEMOGRAPID C ANALySIS..... ..... ..... .,. ..... ..... ........... ..................................... ...... ....... Market Area Definition........ ........ ....... .... ..... .... ... ........... ......... .......... ...... ..... ..... ...... ........ Population and Household Growth...................... ................. ..................................... ..... Employment............................................................. ....................................................... Population Age Distribution.......................... ....................... ..... ............... ................. ..... School Enrollment Trends...................... .... ............................................ .............. .......... Household Type... .... ...... ..... ......... ................................... ............ ......... ... ...... ...... ... ......... Household Income....... .... ........ ................................... ........... ......... .... ............. ...... ......... Annual Expenditures on Club Membership Dues/Fees .................................................. CURRENT MARKET ANALYSIS. ...................................... .................. .................. ...... Introduction.................................................................................................................... . Public and Private Health and Fitness Clubs .................................................................. Selected Metro Area Community Centers .............. ............................... ........ .... ............. Membership Dues and Daily Admission Prices ....................~........................................ P",,..,d;,..,n r''''m''''''''''"u'h' r'c>"+o~n n_,..l Unnl...t..fl:;':~enn 01ULn .L....u LLL5 ,"-,v LLLHUJ. ") ""''"'11"'"'1;:' C1UU. .l 11;;C1H1JJ .l 1 Lll ::;::; \...,1 U::;................................................. Page 1 1 1 1 3 5 8 8 9 9 9 13 14 16 21 23 25 27 27 27 "'') :J_ 33 36 DEMAND ASSESSMENT AND CONCLUSIONS ........................................................ 38 Demand Assessment............... ........................................................................................ 38 Conclusions..................................................................................................................... 40 ~ ;3 ::I :- =- :!II :s :3 :I :I :I :I :I :I :I :I :I :I . I I I I I i I I I I I I I LIST OF TABLES Table Number and Title Pag:e 1. Population ahd Household Growth Trends and Projections, Columbia Heights Market Area, 1990 to 2015 ......................................................................................... 12 2. Employment Growth Trends and Projections, Columbia Heights Market Area, 1990 to 2015 ............................................................................................................... 14 3. Age Distribution, Columbia Heights Primary Market Area, 1990 to 2015................ 15 4. School Enrollment, Columbia Heights School District #13, 1990 to 2004................ 17 4A Non-Public School Enrollment, Columbia Heights School District #13, 1990 - 2005 18 5. School Enrollment by RacelEthnicity, Columbia Heights Area School Districts, 1990 - 2004 ....... ........... ....... ........................... ........... .............. ..................... ............... 20 6. Household Type, Columbia Heights Market Area, 1990 & 2000 .............................. 22 7. Household Income by Age of Householder, Columbia Heights Market Area, 2004. 24 8. Household Income by Age of Householder, Columbia Heights Market Area, 2009. 25 9. Annual Expenditures on Recreational Activities, Columbia Heights Primary and Secondary Market Area, 2004 & 2009 ....................................................................... 26 10. Features/Amenities Comparison, Competitive Health Clubs and Community Centers, Columbia Heights Market Area.... ............... ......... ..... ............... .................... 29 11. F eatures/ Amenities Comparison, Metro Area Community Centers, City of Columbia Heights ....................................................................................................... 32 12. Membership DuesIFee Comparison, Twin Cities Community Centers, City of Columbia Heights ............. ....................... ....... .... ...... ...... ............ ................. ............... 34 13. Projected Annual Memberships and Total Usage, Columbia Heights Community Center 2010 & 2015.................................................................................................... 39 14. Recommended Fees for Potential Community Center, City of Columbia Heights, November 2004 .............. ............................... ............................................................. 42 15. Projected Gym Usage, Columbia Heights Community Center, November 2004....... 45 EXECUTIVE SUMMARY ~ Study Impetus =- ;3 31 31 31 :31 :JI 31 :11 ]I . . I I I . I I I I I I I I Maxfield Research Inc. was engaged by the City of Columbia Heights to study the market feasibility of dev~loping a new community recreational facility in Columbia Heights, Minnesota. The scope of this study includes a review of demographic trends and characteristics of the local household base as well as the existing supply of public and private recreational centers in the Columbia Heights area. The analysis leads to conclusions about the potential market success of a new community center including recommendations for facilities and amenities, as well as recommended membership fees and target markets. This report draws on both primary and secondary data. Secondary data is credited to the source when used, and in most cases, is U.S. Census data. Data on existing recreational facilities was collected by Maxfield Research Inc. and is accurate to the best of our knowledge. Draw Areas A new community/recreational center in Columbia Heights can expect to draw the majority of its users from a primary draw area (Market Area) which includes the City of Columbia Heights, St. Anthony, Hilltop, and portions of Northeast Minneapolis (mainly north of Lowry Avenue), Fridley and New Brighton. We estimate that 75 percent of the demand for a community center in Columbia Heights will come from this Primary Market Area, while an additional 25 percent of the demand will come from outside of this area. We also delineated a Secondary Market Area, as there are few recreational facilities within the Primary Market Area. The Secondary Market Area includes a portion of Roseville, all of Fridley, Spring Lake Park, Mounds View, Arden Hills and New Brighton. A map of the Columbia Heights Primary and Secondary Market Areas is shown on the following page. Demographic Trends Population and liouseholds · The Columbia Heights Primary Market Area had an overall population of about 68,600 people in 2000, which was a loss of over 140 people from 1990 (-0.2 percent). The Primary Market Area is expected to reverse the declines of the 1990s by adding just over 4,000 people by 2010 (+5.9 percent). . Despite population losses, between 1990 and 2000, the Prllllarj Market Area added over 1,000 households (+3.4 percent). This decade, the Primary Market Area is expected to add about 2,200 households through 2010 (+7.3 percent). Population Age Distribution . The age distribution of the population relates to recreational needs in a given community. Health and fitness activities are becoming more popular, but especially in areas with a large base of young- to middle-age adults. M4XFTFT.O RF,FARrH TNr EXECUTIVE SUMMARY . The most significant population shift during the 1990s was seen in the 65 and over age cohort with an increase of 3,147 people (+ 19.8 percent). By 2000 there were over 19,000 over the age of 65 in the Primary Market Area. i :!I I :3 ::I :I ::I :I :I 3 ::I 31 31 :I ~ I I I I I I I I I · Also, the aging of the baby boom in the Primary Market Area is having a significant impact on the age distribution of the population. During the 1990s, as the 25 to 34 age cohort declined by 20 percent, the 35 to 44 age cohort increased by 7 percent and the 45 to 54 age cohort increased by 16 percent. . This decade the Primary Market Area is expected to see the biggest losses in the age 35 to 44 cohort (-3,146 people, - 15.0 percent), while the people age 55 and over increases by 17.1 percent (+5,500 people). · Based on the demographics of the PMA alone, a community recreation center in Columbia Heights should provide services and amenities that will appeal to the area's aging population. School Enrollment . Overall, student enrollment in Columbia Heights' public schools has mainly decreased by an average of -34 students per year (-1.0 percent) since the 1990s. The decline in student enrollment compared to household growth in the Primary Market Area reveals that most of the households being added are aging households, as well as some younger households without children. This trend is expected to continue this decade, as an increasing portion of baby boomers age into their 50s and 60s. · Analyzing school enrollment data by student race and ethnicity reveals that the student population is growing more diverse. While the White student population hFls decreased every year since the 1990-91 school years, the Non-White student population has increased every year except one. Household Type · People living alone was the fastest growing household group during the 1990s in the Total Market Area, increasing by 31.2 percent (+4,010 households). These households comprise 30% of the overail households in the Total Market Area and 35% of Columbia Heights' households in 2000. Household Income . Household income data helps ascertain the different types of households in an area. Generally, households with higher incomes tend to be target markets for health and community centers. According to IHRSA 20 percent of households that belong to a MA-XFIELD RESEARCH INC. 2 ~ ~ 31 :B ,. II . . . I I I I I I I I I I I I I I ---_~_.L _ ......ll::I~~-~~..",~~_ v.__~ EXECUTIVE SUMMARY health club earn an income of greater between $50,000 and $74,999, while 49 percent of households with memberships earn an income of $75,000 and over. · The median household, income in the Primary Market Area in 2004 is estimated to be about $44,700, while the Secondary Market Area has a 2004 estimated median income of about $57,500. According to the Department of Housing and Urban Development, the 2004 median income for a household of four in the Twin Cities Market is $76,400. Household Expenditure on Recreation Activities · In 2004, Primary Market Area residents are expected to spend $3.3 million on club membership dues or fees. This equates to an average of $530 per household annually or about $44 per month. In the Secondary Market Area in 2004, residents will spend about $3.7 million on membership fees or $700 per household annually ($58 per month). Market Area Community Centers and Health Clubs II Excluding six women-only facilities, there is only one privately-owned health club in the Primary Market Area that would be competitive with the proposed community center in Columbia Heights. This facility, Fitness Crossroad, opened in St. Anthony in 2001. . Other than Fitness Crossroad, there are two community centers in the Primary Market Area, the New Brighton Family Service Center and the St. Anthony Community Center. · The Family Service Center in New Brighton was built in 1995 and offers a fitness area, gymnasium and a children's play area called Eagle 's Nest. The gym is for member use only and is not rented out or contracted out to local schools or other groups. .. The YMCA has a community program site in Northeast Minneapolis. This site offers educational progra.'11S and meeting space for corr.u'.nunity groups, but does not have a fitness or recreation facility. This facility is affiliated with the YMCA in Coon Rapids, which is located outside of both the Primary and Secondary Market Areas. · There are four competitive privately-owned facilities in the Secondary Market Area. These facilities include a Bally's and Northwest in Fridley, a women-only Lifetime in Roseville and The Gym, Inc. in Fridley. The only community center in the Secondary Market Area is the Moundsview Community Center. We also included an analysis of the Shore view Community Center, as it is the nearest large community center. MAXFTFT,n RESEARCH TNC. ., , ::II ::II :11 :II :3 :2 :31 :2 :II :II 2 31 :ii . . . . . . . I I I II I I I EXECUTIVE SUMMARY Total Market Area Memberships · The following table summarizes the number of memberships in the PMA and SMA by club type. The Shoreview Community Center, with 2~200 memberships, is outside of the. .Market Area and is therefore, not included in the following table or in our demand calculations for additional memberships in the Market Area. Private Clubs Primary Secondary Market Market Area Area 1,000 11,200 750 0 1,375 1,250 3,125 12,450 Community Centers Curves/W omen's Only Clubs Total Memberships Membership Fees · We profiled five Metro Area community centers to determine amenities at fees that are typically offered. Membership fees among Metro Area community centers vary by each center. Overall, the average membership fee for resident adults is about $37 per month on a month to month payment plan or $315 per year annually ($26/per month). · On average, non-resident membership fees are 26 percent higher than resident membership fees. Typically youth and senior rates are the same at the centers that offer these rates. . ~r\n'1t:A r-,:a,..,t.::a'rC'l rln nnt f'harfTt=a ,:an,.n I1M"'l1o,..,t ~t:u:u:' ^ ,..o't"\?"ocron+#,)+;'1TCJI. ,,+ n 11"'lnn 1 1"""\'P"t""lm..,.,...~"r UVJ..LL"",, ""'''''''.....1,1,..........'''' \.I.V ..LVI.. \"IJ...1 6"'" ""'....u.V.1.llJ.J.\",r.al,. .J.""","",~. .L'l.. .1.\.It'.1.\..roJ"-' .1.&.ULJ. v,,", UL. U .1.V\..IaJ. \.IU1.1.lll. u.J.ilL.)' center indicated that enrollment fees are crucial for coveringupfront costs related to the administrative tasks involved in enrolling new members and suggested that all new community centers include them. · Memberships tend to be less expensive at the selected community centers compared to the privately owned health and fitness clubs, especially for resident families. Of the private health clubs, Northwest has the highest membership fees overall. · The median membership fee overall is between $34 and $45 per month for an adult, which is comparable to the community centers profiled, but lower than the YMCA and Northwest. Pending Centers · Maxfield Research Inc. interviewed a staff member from each of the cities in the Primary Market Area to determine if a community or recreation center is planned. The only MAXFIELD RESEARCH INC. 4 :!II 31 jI :II . . . . . . . . . . . I I I I EXECUTIVE SUMMARY pending project is the Salvation Army Kroc Center. Five cities in Minnesota have applied for $12 Million to fund the development ofa community, recreation, education and performing arts center. The five Minnesota cities are competing against communities in other states in the Midwest; there is no indication at this point that a Kroc Center will be built anywhere in Minnesota. Demand Summary and Recommendations The following table highlights th.e results of our demand analysis. We fmd sufficient demand to support the development of a new community and recreational facility in Columbia Heights. Our demand calculations were based on a facility with fitness areas and a gymnasium, excluding a pool. While a pool attracts some members, people not interested in using it, will not want to pay for it. DEMAND SUMMARY CITY OF COLUMBIA HEIGHTS PROPOSED COMMUNITY CENTER DECEMBER 2004 Year No. of Memberships No.ofVisits* 2005 375 - 500 61,500 - 73,000 2010 400 - 530 63,800 - 75,760 2015 410 - 550 71,920 - 84,760 *Includes walk-in visits Source: Maxfield Research, Inc. - . I I I ~ I I I I I I I Target Markets · We believe the main target markets for a new community facility are: older adults, younger immigrant families, young non:"immigrant families, and single adults or couples without children. Each of these target markets will desire different amenities at a new community center; most will be very price sensitive. Recommended Amenities We recommend incorporating the following amenities and features to attract local households to the new facility. · Gymnasium space: two full court gymnasiums that would provide additional court practice time for youth and adult basketball leagues, with additional availability for tournaments, special events. The space should be prioritized and scheduled so that sufficient time is allotted for open gym and family gym periods and not entirely 5 MAXFIELD RESEARCH INC. =- ::II :31 ::II =- 31 :II . . :I . . . I I I I I I I I I I EXECUTIVE SUMMARY programmed with league or team play. A running/walking track should also be included either as part of the gymnasium space or as a separate feature suspended above the gym floor. We present two options for the construction of the gymnasiums. Option 1 constructs two gymnasiums in different locations, one near the school and one at the community center. Option 2 would located both gymnasiums at the community center. . · Fitness Area: aerobic machines (step, jogging, elliptical), weight machines (Cybex or similar), free weights', stretching area and TV s. The fitness area could potentially be separated into two areas, one for aerobic machines and another for weight machines and free weights. · Aerobic studios: for group fitness classes. We suggest providing free classes for members, as well as allowing non-members to take classes for a fee. Classes targeted to different age groups: young adults (Le. kickboxing, pilates, yoga), older adults (i.e. dancing classes, aerobics), children and parents with children. Also, consider incorporating classes targeted to different ethnic groups. . Childcare play area: we suggest including an area that can be rented out for birthday parties and other events, similar to New Brighton's Eagle's Nest. We recommend offering child day care on site as a separate business. There should also be a child care service as part of the center with weekend hours and some limited evening hours to accommodate working families. A discount may be offered to members who want to utilize full-time child care during the day although depending on the demand, this may not be necessary. . Senior Center: a roorn/area for activities and meals for senior groups, members and non-members. · Teen Center: small activity room with a pool table, or foosball, air hockey or other amenities that will appeal to teenagers. · Concessions area: offering snacks and beverages to members and guests and for special events and tournaments. The concessions area should also serve the meeting room space for basic refreshments. Other Recommendations · Most of the health clubs and community centers profiled in this study have programs whereby they partner with health insurance providers to reimburse members a portion of their monthly membership fee if the member uses the club a certain number of times per month. This reimbursement can often be up to half of the membership fee making it an attractive incentive for members. We recommend offering this as an incentive for members, as many potential members will be attracted to join a health club with a health insurance reimbursement. MAXFIELD RESEARCH INC. 6 :31 :!I =- ~ :8 . . . . . . I . I . I I I I !!IIIII EXECUTIVE SUMlVIARY . I I I I ~ I I I . Throughout our interviews with representatives of local community centers we found that all Metro Area community centers had a budget shortfall that was covered by a variety of funding mechanisms, for example: antenna fees, electric fund or other non- operatmg revenues, building fund, or the general fund. Anywhere from 2 percent to 41 percent of the community center's operating budget was not covered by membership fees, while the average budget shortfall was 19 percent. . Our analysis found sUfficient demand to develop a new community and recreational facility in Columbia Heights. While we suggest that facility offerings focus on the needs of the existing aging population in the Primary Market Area, we also recognize that the area is becoming more diverse. Therefore, the facility should be designed to meet the needs of a wide variety of users, including new households who will be attracted to the redevelopment sites in Columbia Heights and 81. Anthony. A new facility will be supported by existing households, but should also serve as a community amenity that will attract new households into Columbia Heights. A community and recreational facility often serves as a marketing tool to attract new households, as well as reinvestment in a community. The facility should be designed for future flexibility and should allow for future expansion as the community center space needs will change in the future. 7 MAXFIELD RESEARCH INC. - PURPOSE AND SCOPE OF STUDY Purpose and Scope of Study Maxfield Research Inc. was retained by the City af Calumbia Heights to. pravide research and cansulting services far the purpase af assessing demand (utilizatian patential) far a cammunity and recreatian center lacated an a propased site at the intersectian af Central and 41 st Avenues in Calumbia Heights, Minnesata. The scape afthis study includes a demagraphic review af grawth trends and characteristics af the papulatian and hausehald base in an area determined to. be the primary draw ar Market Area for a new cammunity and recreatian center in Calumbia Heights. We inventaried campetitive health and fitness clubs in the Market Area and ather cammunity centers in the Twin Cities Metra Area. Our conclusians and recammendations facus an prajecting usage (memberships and annual admissions) for the facility and analyzing its market pasitioning relative to. its direct campetitian and ather cammunity centers in the Metra Area. :31 :11 :::II :11 ~ :JI :JI 31 31 II II :II . . . . I I I I I This report includes bath primary and secondary research. Primary research includes interviews with City staff and staff af lacal cammunity centers. Secondary research is credited to. the saurce when used, and is usually data fram the U.S. Census. Secandary research is always used as a basis far analysis, and is carefully reviewed in light of ather local factars. All afthe information an existing and pending competitive projects was gathered by Maxfield Research Inc. and is accurate to. the best af aur knawledge. MA,XFIELD RESEARCH INC. 8 . II :!1 :I :I :II :I ~ !II ::I :I :II 31 :I :I :I . I I I I I I I I II I I I I I I I M _.~~~~Aratiii'1IL~ DEMOGRAPHIC ANALYSIS Market Area Definition A new community/recreational center in Columbia Heights could expect to draw the majority of its users from a primary draw area (Market Area) which includes the City of Columbia Heights, St. Anthony, Hilltop, and portions of Northeast Minneapolis (mainly north of Lowry Avenue), Fridley and New Brighton. This Market Area was determined based on geographic and man- made boundaries, traffic patterns, and the location of health and fitness centers that would be competitive with the subject community center. We estimate that 75 percent of the demand for a community center in Columbia Heights will come from this Primary Market Area, while an additional 25 percent of the demand will come from outside of this area. We also delineated a Secondary Market Area, as there are few recreational facilities within the Primary Market Area. The Secondary Market Area includes a portion of Roseville, all of Fridley, Spring Lake Park, Mounds View, Arden Hills and New Brighton. A map of the Columbia Heights Primary and Secondary Market Areas is shown on the following page. Population and Household Growth Population and household growth are the primary generators of demand for additional fitness center space in an area, since some new residents who participate in fitness activities will choose either a private health club or community center to p~icipate in fitness and/or sports activities. Employment growth is another indicator of demand, since job growth typically results in ,population and household growth. In addition, some users will also choose to use a facility that is close to their place of employment. When considering the potential demand for fitness centers, it is also important to assess data on the age distribution of the population, since the propensity to participate in fitness activities is different among various age cohorts, as well as data on average annual expenditures for club membership dues/fees. The following paragraphs review each of these demographic indicators for the Columbia Heights Primary Market Area and the implications on market demand. Table 1 presents population and household growth trends and projections for the Market Areas from 1990 to 2015. The 1990 and 2000 population and household figures were obtained from the U.S. Census Bureau, while the 2010 and 2015 projections are based on data from the Metropolitan Council. Population · During the 1990s, the population base in Columbia Heights declined by 2.1 percent (- 390 people). During the same time period, the Remainder of the Primary Market Area (PMA) added 249 people for a 0.5 percent increase. 1\11;' V"[;"T1:"T n 01:"1::1:" ,I. or]::f TNr q =- ::I ::JI :::I 3 :::I :JI :II 31 :31 ... - 31 21 . . . . I I I I I III DEMOGRAPHIC ANALYSIS COLUNfBIA HEIGHTS COJ\lllv1UNITY CENTER MARKET AREA , ~ J J , \> ( I ~ 't1 -r:-, \, ....t.___'~ ". '" , / ..... J'"'7'... , -,/ / I'r' ........./ , L/ / dJ.k ~r U PRIMARY MARKET AREA tJR~1 SECONDARY MARKET AREA Mtc:field Re.earcb, Inc. II In total, the PMA lost -141 people between 1990 and 2000, decreasing its population base by -0.2 percent. At the same time, Minneapolis and the Metro Area added population. Minneapolis saw a 3.9 percent increase (+14,235 people), while the Metro Area added over 350,000 new residents (+ 15.4 percent). MAXFIELD RESEARCH INC. 10 ~V!5t'~..-==-- L pi ~ " ~ t !!I :!I :JI ::II :31 ]I ::I :I 31 JI . :I I I I I I III . I I I I I l ~ -0;. - - _._._---..................~ DEMOGRAPHIC ANALYSIS · While the PMA lost population, the Secondary Market Area (SMA) added 284 new residents between 1990 and 2000 (+0.4 percent). · This decade the PMA is expected to reverse the population declines of the 1990s. Columbia Heights is projected to add 1,880 new residents by 2010 (+ 10.2 percent), as two significant redevelopment projects are pending in the City. The Remainder of the Primary Market Area is expected to increase its population base by about 2,190 people (+4.4 percent). · The SMA is also expected to add population this decade with about 800 new residents (+ 1.2 percent). In total, the Columbia Heights Market Area is expected to add over 4,800 people between 2000 and 2010 (+3.6 percent). · Minneapolis is also projected to add more people this decade than during the 1990s with a 5.1 percent increase (+ 19,3 82 people), while the Seven County Metro Area is projected to add over 363,000 people this decade (+13,7 percent). · Between 2010 and 2015, Columbia Heights and the Remainder of the Market Area communities will continue to experience population growth. By 2015, Columbia Heights is expected to have 20,900 residents (+500 people, +2.5 percent), while the Remainder of the PMA is projected to add 1,000 residents (+ 1.9 percent) and the SMA is projected to add 1,300 people (+1.9 percent). Households Table 1 also shows the number of households in the Columbia Heights Market Area communities from 1990 through 2015. · Despite population declines, Columbia Heights increased its household base during the 1990s, adding about 270 new households (+3.4 percent) for a total of 8,033 households in 2000. The Remainder of the Primary Market Area communities added about 730 new households during the 1990s, an increase of 3.4 percent. During this same time period, the Secondary Market Area added about 1,660 new households between 1990 and 2000 (+7.0 percent). · By 2010, Columbia Heights is projected to have 8,900 households, an increase of 10.8 percent from 2000 (+867 households). Household growth in Columbia Heights and the Remainder of the Market Areas during this period will be a result of infill and redevelopment projects. 1\Jf A VI;TI:'T n Dr!;:r A DrJ.J TNr 11 .".. JIIIIIII .. ........... III W w w w w ~ ~ ~-~ ~ ~ ~ ~ ~ ~ · . . - DEMOGRAPHIC ANALYSIS TABLE 1 POPULATION AND HOUSEHOLD GROWTH TRENDS AND PROJECTIONS COLUMBIA HEIGHTS MARKET AREA 1990 to 2015 ,:,;l,r"fijl"i' U. S. CENSUSi':SY":'" 1990 2000 l)rimary Market Area Columbia Heights Remainder of Market Area Tolal Primary Market Area Secondary Market Area \8,910 49,857 68,767 66,2\9 :'1\;;;::, 134.986 ):: 20,400 :LU,~UU -390 -2.\% \,880 10.2% 52,300 53,300 249 0.5% 2,194 4.4% 72,700 74,200 -14\ -0.2% 4,074 5.9% 67,300 68,600 284 0.4% 797 \.2% ii~,;};140,OOO \U ,::.,: 142,800 --:if::~ 143\:' 0.1% ' ;jf,i,\~4,871;:~b~ ,'3.6%1 3.9% 1 Q 1R? 5.1% Total Market Area~.j'{IHi:\,jl\;\i'\l~:;:\ Minneapolis Primary Market Area Columbia Heights Remainder of Market Area Total Primary Market Area Secondary Market Area Total Market Area~C\?1%it~j:~F,l!Hf.\ Minneapolis 9,200 24,000 33,200 28,200 61,400 \76,500 1,279,700 ... 2.29 2.27 2.25 2.23 2.35 2.33 2.35 2.33 2.34 2.34 2.51 2.48 7,766 21,347 29, \ \3 23,860 8,033 22,081 ~O, \ \ 4 25,522 8,500 22,700 3\,200 26,400 - j'H 57,600 Columbia Ilcights LID .L.....,I.. 2.29 Primary Market Area 2.36 2.28 2.27 Secondary Market Area 2.55 2.43 2.39 Total Market Area 2.55 2.43 2.39 Minneapolis 2.29 2.36 2.35 Metro Area 2.6\ 2.59 2.55 Sources: \l.S. Census, Metronolilan Council; Maxfield Research Ine; Clarilas, Inc. 267 3.4% 867 \0.8% 734 3.4% 1,319 6.0% \,001 3.4% 2,\86 7.3%1 \,662 7.0% 1,678 6.6%1 :;'i,' 2.663 ,.i1\lHi 5.0% ~p.~\:;:3,864 ~!,1:;?~ 6.90/;i \,670 \.0% 9,648 5.9% \45,950 \6.7% \76,\26 \7.2% MAXFlELU RESEARCII1NC. 12 ~ ~ ! ::I ::I :!I 3 :!I :JI :11 :11 31 :JI :I :I :I . :I . :I I I I I III! II I I I ( , l l - ...mu - ..--- --- ;R_"_~~~~B... DEMOGRAPHIC ANALYSIS . The largest redevelopment project in Columbia Heights is three blocks south of the proposed site (at Central and 41st Street) for the community center. This project, by Schafer Richardson proposes to redevelop an existing industrial park into 560 for-sale and senior housing units. According to the developer, this project is expected to be completed by 2010. The second project is the redevelopment of the K-Mart five blocks north of the proposed site. This project by Bruce Nedegaard is currently under construction with 231 housing units called Grand Central Lofts. The largest redevelopment proje'?t in the Remainder of the PMA is in St. Anthony with the redevelopment of the Apache Plaza. This project, by Pratt-Ordway, is eight blocks east of the proposed site and has about 700 pending housing units, including rental and for-sale product. · The Remainder of the Primary Market Area is projected to add about 1,300 new households between 2000 and 2010, a growth rate of 6.0 percent. In total, the PMA is projected to have about 2,200 new households by 2010 (+7.3 percent). · The Secondary Market Area is projected to add the about same number of households this decade as it did during the 1990s, with an additional 1,678 households (+6.6 percent). This compares to about 9,600 new households in Minneapolis (+5.9 percent). . While several significant redevelopment projects are pending in the Market Area, growth continues to push outward into third-tier and outlying communities in and beyond the Seven County Metropolitan Area, as developable land within the Metropolitan Area's Urban Service Area becomes scarcer. The Metro Area is projected to add more households this decade than during the 1990s, with an additional 176,126 households (+ 17.2 percent). · Household growth is expected to continue to be strong after 2010. Columbia Heights is projected to add 200 new households between 2010 and 2015 (+2.3 percent), while the Remainder of the Primary Market Area is projected to add 600 households during the same time period (+2.6 percent) and the Secondary Market Area is expected to 1,000 households by 2015 (+3.7 percent). Employment Employment trends can also give an indication of recreational needs for a community, as typically, households will use recreational facilities near home or work for convenience. Table 2 presents total employment growth trends and projections in the Columbia Heights Market Area from 1990 to 2015. Maxfield Research compiled the figures, based on data from the Metropolitan Council. The following are key points concerning employment growth in the Market Area. DEMOGRAPHIC ANALYSIS . Columbia Heights added over 1,800 jobs in the 1990s for a 41.5 percent increase. During the same time period, the Remainder of the Primary Market Area added 1,640 jobs (+5.3 percent) between 1990 and 2000. The Secondary Market Area added over 7,000 jobs during the 1990s for a 15.4 percent increase. . From 2000 to 2010, the PMA is forecast to add just over 3,000 jobs (7.8 percent). Of the projected growth of jobs in the PMA during this decade, 2,850 of the new jobs (94 percent) are projected to be located outside of Columbia Heights. TABLE 2 EMPLOYMENT GROWTH TRENDS AND PROJECTIONS COLUMBIA HEIGHTS MARKET AREA 1990 to 2015 METCOUNCIL ESTIMATES 2010 2015 CHANGE:O'i.,..-c,." " 1990-2000 2000-2010 No. Pet. No. Pet. ::I :I ::I ~ :tI :I :II :II ~ JI II . I I . I I I I Primary Market Area Columbia Heights 4,536 6,419 6,600 6,675 1,883 41.5% 181 2.8% Remainder of Market Area 30,760 32.400 35.250 37,900 1,640 5.3% 2,850 8.8% Total Prima Market Area 35,296 38,819 41,850 44,575 3.523 10.0% 3,031 7.8% Secondary Market Area 46,006 53,103 63,850 65,925 7,097 15.4% 10,747 20.2% Total Market Area"'/2',;'~ 81,302.. :, 91,922 105,700 110,500 10,620 .. ,: 13.1%' 13,778 '<;;:;:'15.0% Minneapolis 278,438 301,826 317,000 324,750 23,388 8.4% 15,174 5.0% Metro Area 1,272,773 1.563.245 1,815.715 1,903,100 290.472 22.8% 252,4 70 16.2% Sources: U.S. Census. Metro olitan Council; Maxfield Research Inc; Claritas. Inc. . The SMA is projected to add even more jobs this decade than during the 1990s with a 20.2 percent increase in its employment base (+ 10,747 jobs). . Minneapolis and the Metro Area as a whole are also expected to continue to add jobs this decade. Between 2000 and 2010, Minneapolis is expected to add just over 15,100 jobs (+5.0 percent), while the Metro Area will add about 250,000 new jobs (+ 16.2 percent). Population Age Distribution The age distribution of the population relates to recreational needs in a given community. Health and fitness activities are becoming more popular, but especially in areas with a large base of young- to middle-age adults. According to the 1990 International Health, Racquet and Sports Club Association (IHRSA)/American Sports Data "Health Club Trend Report," 41 percent of club members are between ages 18 and 34, while 38 percent are between ages 35 and 54. The same report states that the average age of members is projected to increase in the coming decade, due, in part, to the aging of the large baby boom generation, combined with the increasing 14 MAXFIELD RESEARCH INC. 3 :!I :I :I ::tI 31 31 :I 31 :II :I :I :I . I I I I I DEMOGRAPHIC ANALYSIS popularity of fitness among persons age 55 or older. This is expected to result in higher usage rates at health/fitness clubs, since older adult members of health clubs typically visit their club more frequently than younger members. Table 3 presents the age distribution of the Columbia Heights Primary Market Area population from the 1990 and 2000 Censuses, and projected to 2015 by Maxfield Research, based on county projections by the State Demographer. The table shows the number of people and the percent of the population in seven age categories. . In 1990, people ages 20 to 34 comprised about 27 percent of the total PMA's adult population, with about 37,000 people. This age group saw a decline during the 1990s, as the youngest of the baby-boom generation began moving out of this age group during the decade (-5,953 people, -16.2 percent). . Older baby-boomers (those ages 35 to 44 in 1990) aged into their mid 40s to early 50s during the 1990s, increasing the population of 45 to 54 year olds by 16.1 percent in the PMA. During the coming decade and beyond, a large portion of the baby-boom generation will age into their 50s and 60s. Between 2000 and 2010, the 55 to 64-age cohort is expected to increase by about 22 percent to an estimated total of 15,700 people in 2000 (+2,808 people). .. .. TABLE 3 AGE DISTRIBUTION COLUMBIA HEIGHTS PRIMARY MARKET AREA 1990 to 2015 <:<"U'S'~j MAXFIELD . ., ., CHANGE ....... .. .' . "u "'CENSUS J: ':;--'ESTIMATE;':: 1990-2000 2000-2010 2010-2015 Age 1990 2000 2010 2015 No. Pet. No. Pet. No. Pet. - Under 20 34,211 33,181 33,000 33,050 -1,030 -3.0 -181 -0.5 50 0.2 20 to 24 11,762 10,834 11,200 10,900 -928 -7.9 366 3.4 -300 -2.7 25 to 34 25,035 20,010 20,800 21,200 -5,025 -20.1 790 3.9 400 1.9 35 to 44 19,535 20,946 17,800 17,250 1,411 7.2 -3,146 -15.0 -550 -3.1 45 to 54 15,693 18,227 19,800 18,700 2,534 16.1 1,573 8.6 -1,100 -5.6 55 to 64 12,858 12,892 15,700 17,000 34 0.3 2,808 21.8 1,300 8.3 65 and over 15,892 19,039 21,700 24,700 3,147 19.8 2,661 14.0 3,000 13.8 Total . """"i'C~:' 134,986 ',.:135,129 ,: ~140,000 '142,800 ":':;"i,143 ''';-1:',0.1 . 'r-'!"A,87hi1~,"'" 3.6 ':,..2,800"" h 2.0 20 to 54 72,025 70,017 69,600 68,050 -2,008 '-2.8 -417 -0.6 -1,550 -2.2 55 and over 28,750 31.931 37,400 41,700 3,181 11.1 5.469 17.1 4,300 11.5 Sources: Bureau of the Census: U.S. Census of Population and Housing (1990, 2000) MN Department of Administration Maxfield Research Inc. I I I I I I I l L l l · The PMA had about 34,000 people under age 20 in 1990, or about 25 percent of the population. This group is known as the echo-boom, the children of baby-boomers. The first echo-boomers started aging into their early 20s and forming their own 15 MAXFIELD RESEARCH INC. =- :II :JI =- :Il :a: s 31 . :II 21 I( ~ Il l L DEMOGRAPHIC ANALYSIS households during the late-1990s. Between 2000 and 2010, the 20 to 24-age cohort is projected to increase to a total of 11,200 people (+366 people, +3.4 percent). · The International Health, Racquet, and Sports Club Association indicates that while older adults are the fastest growing segment of the health/fitness club industry, the core group of users will continue to be young- to middle-age adults. The population in the Columbia Heights PMA is aging in place. While the 20 to 54-age cohort will see significant decreases over time, the number of people age 55 and over will increase by 31 percent between 2000 and 2015 (+9,769 people). · Based on the demographics of the PMA alone, a community recreation center in Columbia Heights should provide services and amenities that will appeal to the area's aging population. School Enrollment Trends Maxfield Research reviewed recent trends in the public school enrollment in the Columbia Heights school district over the past decade. The Columbia Heights school district contains the Cities of Columbia Heights, Hilltop and the southern one-third of Fridley. The enrollment data, in Table 4, is from the Minnesota Department of Education and was verified with the Columbia Heights School District. Enrollment trends are useful in that they can serve as an indicator of potential need for various types of community services. Key trends identified from our review of school enrollment growth in the Columbia Heights School District are: · Overall, enrollment in Columbia Heights' public schools has mainly decreased by an average of -30 students per year (-1.0 percent) during the 1990s. The 1990-91 school year had the highest student enrollment of3,323 students. We note that enrollment increased this fall in ' 04 as there was an increase in Pre- K/Kindergarten students as well as an increase at the secondary level, 7-12. Overall, enrollment increased by 24 students this year. · The overall decline in student enrollment compared to the household growth in the Market Area indicates that most of the households being added are aging households as well as some younger households without children. This trend is expected to continue this decade, as an increasing portion of baby boomers age into their 50s and 60s. MA.,'(FIELD RESEARCH INC. 16 ;SI ;31 3 :I ::II 3 31 ]I :II :JI :JI ~ ~ . . . . . I I I I I I I l ( I l L l DEMOGRAPHIC ANALYSIS TABLE 4 SCHOOL ENROLLMENT COLUMBIA HEIGHTS SCHOOL DISTRICT #13 1990-2005 Pre-K Elementary Secondary ANNUAL CHANGE Year Kindergarten 1-6 7-12 TOTAL No. Pet. 90-91 296 1,605 1,422 3,323 91-92 280 1,581 1,429 3,290 -33 -1.0% 92-93 307 1,539 1,398 3,244 -46 -1.4% 93-94 273 1',454 1,332 3,059 -185 -5.7% 94-95 263 1,384 1,357 3,004 -55 -1.8% 95-96 266 1,407 1,343 3,016 12 0.4% 96-97 290 1,348 1,395 3,033 17 0.6% 97-98 269 1,358 1,375 3,002 -31 -1.0% 98-99 311 1,366 1,390 3,067 65 2.2% 99-00 242 1,373 1,401 3,016 -51 -1.7% 00-01 276 1,366 1,376 3,018 2 0.1% 01-02 279 1,364 1,517 3,160 142 4.7% 02-03 268 1,347 1,415 3,030 -130 -4.1% 03-04 261 1,332 1,378 2,971 -59 -1.9% 04-05 278 1,302 1,415 2,995 24 0.8% Change . No. Pet. No. Pet. No. Pet. No. Pet. 1990-2000 -20 -6.8% -239 -14.9% -46 -3.2% -305 -9.2% 2000-2005 2 0.7% -64 -4.7% 39 2.8% -23 -0.8% Source: :MN De t. of Education Non-Public School Enrollment Table 4A also shows data on non-public school enrollment in the Columbia Heights School District. There are two non-public schools within the District, Immaculate Conception and Little . V oyageurs Montessori. We have combined information for these institutions on one table by year. Our conversation with the Montessori School indicates that their growth has recently been constrained by space limitations. Although they have been looking for a new larger space, they have not found a space suitable as yet. Public School Enrollment by Race and Ethnicity Analyzing school enrollment data by student race and ethnicity reveals that the student population is growing more diverse. Table 5, on the following page, shows student enrollment by race and ethnicity. This data is from the Minnesota Department of Education. MAXFIELD RESEARCH INC. 17 :a :3 :]I :JI :J( :1( s :a :a a :I: . & I l I DEMOGRAPIDC ANALYSIS Columbia Heights School District . While the White student population has decreased every year since the 1990-91 school year, the Non-White student population has increased every year except one. . Overall between the 1990-91 and 2000-01 school years, the White student population decreased by 25 percent (-740 students), while the Non-White student population increased by 144 per~ent (+435 students). TABLE4A NON-PUBLIC SCHOOL ENROLLMENT COLUMBIA HEIGHTS SCHOOL DISTRICT #13 1990-2004 ..... ANNUAL CHANGE' No. Pet. Year TOTAL 312 324 332 324 324 352 324 329 323 288 269 268 277 269 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 12 8 -8 o 28 -28 5 -6 -35 -19 -1 9 -8 3.8% 2.5% -2.4% 0.0% 8.6% -8.0% 1.5% -1.8% -10.8% -6.6% -0.4% 3.4% -2.9% Change 1990-2000 2000-2004 No. -43 o Pet. -13.8% 0.0% Source: MN De t. of Education · Hispanic students are the fastest growing studenfpopulation in the Columbia Heights school district, accounting for 18 percent of the overall student population by the 2003-04 school year. · These school enrollment trends reveal that the population of Columbia Heights is also growing more diverse, indicating that the facilities at a new community/recreation must appeal to a wide variety of users to be successful. MAXFIELD RESEARCH INC. 18 p- ;31 ;31 :I :I ::II :II 3 =- :II :II :II 31 3r . . . . I: I: I: I [ [ I' iU II II [ l I' .l. .t. .....- ------ ... ,,~, .~- ., -- -~ DEMOGRAPHIC ANALYSIS Neighboring School Districts · The three neighboring school districts contained in Table 5, like Columbia Heights, have also grown more diverse. · Moundsview, the largest school district analyzed, added about 370 students during the 1990s (+3 percent), and yet has lost almost 1,000 students since 2000 (-8 percent). · 81. Anthony's school district is the only one to have added students during the 1990s and so far this year. 1\;1" 4. VT:"'TT"lT T'\ nT::'cr A nru T1\Jr 10 =- :2 3- :I: =- 2 S :I I. I. I I I I l DEMOGRAPHIC ANALYSIS TABLES SCHOOL ENROLLMENT BY RACElETHNICITY COLUMBIA HEIGHTS AREA SCHOOL DISTRICTS 1990-2004 Year ;~:Amei:!~DjL '$;:' Indisn'[@i}: . .:~'t!;:i:' ,';. .:...:.:._-.iE.:~N~~o}n'"'_~W~h: 'i'~~.:.:.:.f.c:'...:.. .~:f':ms~ini~:;:*r - lC - i\~ri:tI~i~ . COLUMBIA HEIGHTS #]3 90-91 50 2% 112 3% 104 3% 37 1% 303 9% 3,020 91% 3,323 91-92 58 2% 114 3% 116 4% 45 1% 333 10% 2,957 90% 3,290 92-93 66 2% 111 3% 130 4% 55 2% 362 11% 2,882 89% 3,244 93-94 89 3% 114 4% 133 4% 79 3% 415 14% 2,644 86% 3,059 94-95 99 3% 118 4% 128 4% 76 3% 421 14% 2,583 86% 3,004 95-96 91 3% 103 3% 158 5% 103 3% 455 15% 2,561 85% 3,016 96-97 90 3% 135 4% 195 6% 105 3% 525 17% 2,508 83% 3,033 97-98 82 3% 128 4% 217 7% 77 3% 504 17% 2,498 83% 3,002 98-99 95 3% 146 5% 262 9% 75 2% 578 19% 2,489 81% 3,067 99-00 106 4% 157 5% 268 9% 105 3% 636 21% 2,380 79% 3,016 00-01 115 4% 176 6% 301 10% 146 5% 738 24% 2,280 76% 3,018 01-02 113 4% 190 6% 409 13% 177 6% 889 28% 2,271 72% 3,160 02-03 111 4% 188 6% 470 16% 227 7% 996 33% 2,034 67% 3,030 03-04 98 3% 207 7% 526 18% 300 10% 1,131 38% 1,840 62% 2,971 FRIDLEY #14 90-91 32 1% 85 3% 35 1% 59 2% 211 8% 2,353 92% 2,564 00-01 58 2% 109 4% 178 7% 57 2% 402 16% 2,152 84% 2,554 03-04 69 3% 191 7% 347 13% 83 3% 690 27% 1,891 73% 2,581 J\IOLT]\'DS\'IEW #621 90-91 88 1% 493 4% 138 1% 104 1% 823 7% 10,544 93% 11,367 00-01 132 1% 718 6% 459 4% 250 2% 1,559 13% 10,177 87% 11,736 03-04 106 1% 765 7% 547 5% 292 3% 1,710 16% 9,054 84% 10,764 ST~A~THO~Y~ NEW BRIGHTON #282' - - - -~~--~ - ----- - ~ ~ ~ - -- - --~,-- - ~ - ~ - ~ ~ - . 90-91 5 1% 43 4% 17 2% 15 2% 80 8% 912 92% 992 00-01 27 2% 111 7% 70 5% 25 2% 233 15% 1,309 85% 1,542 03-04 19 1% 131 8% 81 5% 50 3% 281 17% 1,364 83% 1,645 CHANGE::~:;::;~i~:;~:;'d-~i::::2~WHHf;~~~~j~t~ni!~~ti~j~t~::!;t1~t~~:~~~f~;~f;~~':'l ::!~ COLUMBIA HEIGHTS #13 90-00 No. 65 -17 No. Pet. 109 295% 154 105% Pet. -9% -2% No. 435 393 No. -740 -440 No. 64 31 Pet. 57% 18% No. 197 225 Pet. 189% 75% Pet. 144% 53% Pet. -25% -19% No. -305 -47 00-04 Pet. 130% -15% FRIDLEY #14 90-00 No. 26 11 No. 24 82 No. Pet. -2 -3% 26 46% Pet. 91% 72% No. ~91 288 No. -201 -261 Pet. -9% -12% No. -10 27 Pet. 0% 1% Pet. 28% 75% No. 143 169 Pet. 409% 95% 00-04 Pet. 81% 19% . _ ,_ __..: _ __ ._.. _ _._ .___ _Xllll'NDS.\J.E"'-#621- -' .-- - .-- ---.---. --- - ... .... - --- --- - 90-00 No. 44 -26 No. 225 47 Pet. 46% 7% No. 736 151 Pet. 3% -8% Pet. No. 89% -367 10% -1,123' Pet. -3% -11% No. 369 -972 No. 321 88 No. Pet. 146 140% 42 17% Pet. 233% 19% 00-04 Pet. 50% -20% . ST. ANTHONY - NEW BRIGHTON #282 90-00 No. Pet. No. Pet. No. Pet. No. Pet. No. Pet. No. Pet. No. Pet. 22 440% 68 158% 53 312% 10 67% 153 191% 397 44% 550 55% 00-04 -8 -30% 20 18% 11 16% 25 100% 48 21% 55 4% 103 7% Source: MN De t. of Education MAXFIELD RESEARCH INC. 20 ~ pr i:::tI ~ :JI :Jf ::B :II :II :a :I' ]I X . . .. I I. [ [ [ I I~ I. [ L I DEMOGRAPHIC ANALYSIS Household Type As with age distribution, the trends in types of households have an impact on the demand for different community or recreational opportunities. Table 6 presents data on the types of households in the Columbia Heights Market Area in 1990 and 2000. Family households include married-couple families with children (so-called "traditional" families), married couples without children (mostly empty nesters, but also young married couples without children), and other- family households (single parents and unmarried couples with children). Non-family households include people living alone and "roommates (unrelated individuals living together, including unmarried couples without children). The following are key findings from the table: · In 2000, there were a total of about 34,000 family households in the Total Market Area, including 10,100 married couples with children, 15,634 married couples without children, and 8,280 other families. Married couples without children include empty nesters, who increasingly desire community and social programs, and younger couples without children, who are also a primary market for recreational services. · Married couples with children and other families, which include single parents and unmarried couples with children, are primary markets for programs targeted towards parents and children. Community centers with swimming pools often attract a large number of family users. · During the 1990s, the only growth among family households in the Total Market Area was among other families, which grew by 11.5 percent (+855 households), while married couples with children, declined by -17.9 percent (-2,206 households) and married couples without children declined by -711 households (-4.3 percent). · There were about 21,600 non-family households in the Total Market Area in 2000. This includes 16,855 people living alone and 4,767 roommate households. People living alone was the fastest growing household type during the 1990s, increasing by 31.2 percent (+4,010 households). These households comprise 30 percent of the overall households in the T ota! Market Area and 35 percent of Columbia Heights' households in 2000. · Of the total number of households living alone in Columbia Heights, 45 percent are over age 65 (1 ,225 households). This represents 51 percent of Columbia Heights' households 65 and over. Households 65 and over make up 30 percent of the total households in Columbia Heights, indicating that a new community center should provide programming targeted to older households who may be very price sensitive. · Roommate households consist of unrelated people living with each other to share housing costs and also unmarried couples without children, among others. These people also tend to be younger and are a target market for a recreational facility. As these households tend to be price sensitive, a membership program with cost savings should be targeted to students or roommates (like a dual membership), l\iI. V1:'Tl:'T n D1:'I;:1;' A Dru T1\.rr ....., , ;-- '- > r-! !III! :-! ~ . ~ JII1 .. lilt III W lit w III W W ' DEMOGRAPHIC ANALYSIS TABLE 6 HOlJSEHOLI> TYPE COl,lIMIUA HEIGHTS l\lARKKI' AREA 1990 & 20110 NON-I,'AMILY 1I0l1SlmOU)S TOTAl, 1111's Married wI Child Man.ied w/o Child Other I Livin Alone Hoommates1 1990 201111 19911 20110 1990 211110 19911 201111 1990 211110 19911 211110 Primary Market Area Columbia Ilcighls 7,766 8,033 1,577 1,254 2,492 2,213 1,146 1,266 2,131 2,735 420 565 Rem.ofMarkel Area 21,322 22,081 3,787 3,380 6,071 5,320 3,062 3,333 6,314 7,757 2,088 2,291 Primary Markel Mea Total 29,088 30,114 5,364 4,634 8,563 7,533 4,208 4,599 8,445 10,492 2,508 2,856 Secondary Market Area 23,885 25,522 6,942 5,466 7,782 8,101 3,217 3,681 4,400 6,363 1,544 1,911 Total MarkefArea'{'H~~D!I!migi!!A!' ~!'; 52 973 'o,!Ui(i:'c 55 636 " ,"',,' 12 06 'i:' ,,'I' 10 100 ' ii',:, 16 45 :;"';:, 15634 ii':.,: 7425 ,'<" ,,'i'i. 8280 '; L 12,845 8~\~iii4i16 855 " '''''.'4052 :'i'" ,4767 7-County Metro Area 875,504 /,02/,454 238,/26 256,655 233,38/ 263,626 1/2,393 /37,878 22i, 622 28/,086 68,982 82,209 Primary Market Area Columbia Heighls 100.0 100.0 20.3 15.6 32.1 27.5 14.8 15.8 27.4 34.0 5.4 7.0 Rem.ofMarket Area 100.0 100.0 17.8 15.3 28.5 24.1 14.4 15.1 29.6 35.1 9.8 10.4 Primary Markel Area Tolal 100.0 100,0 18.4 15.4 29.4 25.0 19.7 15.3 39.6 34.8 8.6 9.5 Secondary Market Area 100.0 100.0 29.1 2 \.4 32.6 3\.7 41.4 14.4 56.7 24.9 6.5 7.5 Total Market Areab'f,!i\j~fli!f4iU.+ ;;;Wilt'; 100.0 !~;1i:t;j;i!~!;\ji' 100.0 'L :::,;ii'!<" 23.2'::;:'",y!;; 18.2 IH'!;;:'30.9"i,::i:il; 28.1 ,:in: 95.6lii;,.' 'i'" 14.9 ' gj;iI65.4'iii@iin~~!if,'3 0.3 " ,;,;,n: 7.6 8.6 7-County Metro Area 100.0 /00.0 27.2 25.1 26.7 25.8 12.8 /3.5 25.4 27.5 7.9 8.0 Minnesota /00.0 100.0 28.4 28.5 28.8 25.2 11.4 /2.5 25./ 26.9 6.3 6.9 No. Pet. No. Pet. No. Pet. No. I'et. No. Pet. No. I'ct. - Primary Market Area Columbia Ileighls 267 3.4% -323 -20.5% -279 -11.2% 120 10.5% 604 28.3% 145 34.5% Rem.of Market Area 759 3.6% -407 -10.7% -751 -12.4% 271 8.9% 1,443 22.9% 203 9.7% Primary Markel Area Tolal 1,026 3.5% -730 -13.6% -1,030 -12.0% 391 9.3% 2,047 24.2% 348 13,9% Secondary Market Area 1,637 6.9% -1,476 -21.3% 319 4.1% 464 14.4% 1,963 44.6% 367 23.8% Total Market'Areai'.i\WI.~!f,l.~~ !~;ffi,'\!J'2 663 i:\~'!1;lh~bi!W 5.0% H 'i'.'i:!';;;'2 06::,ij;:i;i~11.9% ' ;~iltji;l\:i;'71N:u\Iw.!il'4.3% ::,!,,~ji:o!:'855!.'b: 11.5% i:M,1;~4,01 0'h';;i~iI?"'31.2% ,~ i~#:!}",,715:?i'J ,17.6% 7 -County Metro Area 145.950 /6.7% /8,529 7.8% 30,245 I3. 0% 25.485 22.7% 58,464 26.3% /3.227 /9.2% I Single-parenls and unmarried couples with children 1 Includes unmarried couples without children Source: U.S. Census Bureau MAXFIELD RESEARCH INC. 22 :s ;:!I :I :I :8 ,. :II ::w ::a :II :I ~ :a :w . I: I: I: I I- I: I~ I- I_ 1.- I. I. 1_- DEMOGRAPHIC ANALYSIS Household Income Household income data helps ascertain the different types of households in an area. Generally, households with higher incomes tend to be target markets for health and community centers. According to IHRSA 20 percent of households that belong to a health club earn an income of greater between $50,000 and $74,999, while 49 percent of households with memberships earn an income of$75,000 and over. Tables 7 and 8 show household income data for the Columbia Heights Market Area in 2004 and 2009, respectively. Household income data was compiled by Claritas, Inc. (a nationally recognized demographics firm) and adjusted by Maxfield Research Inc., based on local household projections. · The median household income in the Primary Market Area in 2004 is estimated to be about $44,700, while the Secondary Market Area has a 2004 estimated median income of about $57,500. According to the Department of Housing and Urban Development, the 2004 median income for a household of four in the Twin Cities Market Area is $76,400. · Households ages 35 to 44,45 to 54, and 55 to 64 have the highest estimated median incomes in each submarket. In the Primary Market Area in 2004, households age 35 to 44 have an income of about $52,000; households age 45 to 54 have an income of about $57,000, while households age 55 to 64 have a median income of about $53,000. · Younger senior households typically have a higher median income than older senior households, because a greater percentage of younger seniors are still working or are two- person households). Seniors in the Primary Market Area have a median income of $32,800 (age 65 to 74) and $24,500 (age 75 and over). Many of these households are on fixed incomes and are very price sensitive. Therefore entrance fees and membership fees should be discounted for area seniors. · The Primary Market .L1...rea's median household income is expected to increase to about $48,000 in 2009, while the Secondary Market Area's 2009 median household income is estimated to be $60,800. MAXFIELD RESEARCH INC. '/'" --' t3 ::::I 3 :::I ::II :11 ::I 3 :::I ::I :2 :3 :I :J :II :I :I I. I I .. I. I, I I DEMOGRAPHIC ANALYSIS TABLE 7 HOUSEHOLD INCOME BY AGE OF HOUSEHOLDER COLUMBIA HEIGHTS MARKET AREA (Number of Households) 2004 PRIMARY MARKET AREA ~~;:~i1f;;f;jl;~li~it~~JA e' of Hi)1iseholder~~~'$ili?;;.:m-ili:?';~';.'!~'~~0'", " Total 15-24 25-34 35-44 45-54 55-64 65-74 75+ Less than $15,000 3,400 356 341 458 354 427 501 963 $15,000 to $24,999 3,715 339 448 463 421 278 626 1,140 $25,000 to $34,999 4,738 335 939 917 663 542 661 681 $35,000 to $49,999 5,606 468 1,126 1,160 1,105 715 471 561 $50,000 to $74,999 6,248 278 1,365 1,519 1,174 943 506 463 $75,000 to $99,999 3,791 117 779 890 976 625 268 136 $100,000 or more 3.492 64 498 833 1,053 639 257 148 Total 30,990 1,957 5,496 6,240 5,746 4,169 3,290 4,092 Median Income $24,499 SECONDARY MARKET AREA Total 15-24 25-34 35-44 45-54 55-64 65-74 75+ Less than $15,000 1,938 153 283 268 263 184 272 515 S15,000 to $24,999 2,081 88 306 233 253 240 325 636 $25,000 to $34,999 2,863 288 456 444 386 383 464 442 $35,000 to $49,999 4,359 390 776 917 795 624 548 309 $50,000 to $74,999 6,211 361 1,151 1,417 1,332 1,043 611 296 $75,000 to $99,999 3,943 110 553 931 1,101 874 267 107 $100,000 or more 4,795 68 366 909 1,563 1,484 296 109 Total 26,190 1,458 3,891 5,119 5,693 4,832 2,783 2,414 Median Income $26,267 -~~-~~-~~-~-~~TOTALCMARKETAREX---~ Total 15-24 25-34 35-44 45-54 55-64 65-74 75+ Less than $15,000 5,338 509 624 726 617 611 773 1,478 $15,000 to $24,999 5,796 427 754 696 674 518 951 1,776 S25,000 to $34,999 7,601 623 1,395 1,361 1,049 925 1,125 1,123 $35,000 to $49,999 9,965 858 1,902 2,077 1,900 1,339 1,019 870 $50,000 to $74,999 12,459 639 2,516 2,936 2,506 1,986 1,117 759 $75,000 to $99,999 7,734 227 1,332 1,821 2,077 1,499 535 243 SIOO,OOO or more 8.287 132 864 1,742 2,616 2.123 553 257 Total 57,180 3,415 9,387 11,359 . 11,439 9,001 6,073 6,506 Median Income Ti!;~ $49,833lT": $37 ,5961 h~'~ $50,18411:':$56,9781T"i' $64,75911:::' $63,94111 '~;. $37, 76011'~ $24,993 Source: Claritas, Inc.: Maxfield Research, Inc. MAXFIELD RESEARCH INC. 24 lIlI I , ~ ~ r ~ p- ps r- 3 =- :I :31 :I ::I :]I ::I :JI :I. ~: I I I I I. I i I I L 1- - - ~"""........~...~:~.., DEMOGRAPHIC ANALYSIS TABLE 8 HOUSEHOLD INCOME BY AGE OF HOUSEHOLDER COLUMBIA HEIGHTS MARKET AREA (Number of Households) 2009 PRIMARY MARKET AREA '''t'ijig~~~!p'~;;q''i'~~#~r'ili,'!'f.~J;;.A e 'of HOuSehoIder't~fii~~~~tf~;~-iFit1iP,:;,-!f,t~lji;jjfj~";jj:: Less than $15,000 $15,000 to $24,999 $25,000 to $34,999 $35,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 or more Total Median Income 75+ 940 1,057 956 588 345 179 178 4,243 ..; $26,302 SECONDARY MARKET AREA Total 15-24 25-34 35-44 45-54 55-64 65-74 75+ Less than $15,000 1,806 147 239 234 243 185 253 505 $15,000 to $24,999 1,926 70 260 192 223 214 323 644 $25,000 to $34,999 2,601 211 335 374 315 426 383 557 $35,000 to $49,999 4,575 381 812 875 860 660 624 363 $50,000 to $74,999 6,039 391 1,047 1,268 1,286 1,049 648 350 $75,000 to $99,999 4,402 163 634 956 1,145 1,021 312 171 $100,000 or more 5.681 112 571 1.091 1,986 1,418 350 153 Total 27,030 1,475 3,898 4,990 6,058 4,973 2,893 2,743 Median Income . $28,994 55-64 75+ Less than $15,000 587 1,445 $15,000 to $24,999 435 1,701 $25,000 to $34,999 888 1,513 $35,000 to $49,999 1,600 951 $50,000 to $74,999 2,072 695 $75,000 to $99,999 1,861 350 $100,000 or more 2.297 331 Total 9,740 6,986 Median Income ':''lfS27,293 Source: Claritas. Inc.; Maxfield Research, Inc. Annual Expenditures on Club Membership Dues/Fees Table 9 shows the annual expenditures on club memberships and recreational activities in the Columbia Heights Market Area in 2004 and 2009. Claritas, Inc., a nationally recognized ::I ~ ~. :I :I ::I :I :I :I :I. I I I I I I I I DEMOGRAPHIC ANALYSIS demographics/statistics firm, collected this data. The following points highlight the findings from this data. It is estimated that a total of $8.4 million will be spent during 2004 on club membership dues/fees and recreational activities (excluding admissions to events) in the Primary Market Area. This translates to an average of $1 ,348 annually per household ($112 per month) or $595 per capita annually ($50 per month) in the Primary Market Area. . In the Secondary Market Area, it is estimated that $9.5 million will be spent during 2004 on memberships and recreational activities. This equates to an average of $1 ,809 per household annually ($151 per month) or $709 per capita annually ($59 per month). . TABLE 9 ANNUAL EXPENDITURES ON RECREATIONAL ACTIVITIES. COLUMBIA HEIGHTS PRIMARY AND SECONDARY MARKET AREA 2004 & 2009 Total , , Per Capita Avg. HH Total Per Capita Avg. HH Primary Market Area Club Membership DueslFees Fees for Participant Sports Fees for Recreation Lessons Subtotal Admission Fees to Sporting Events Total/Average !i["Y.-'tl?tJ.;.'j)::t;;::: ",~i~i:i:')~' ;~;. 'i.""~'~:: $3,285,000 $2,934,000 $2.137,000 $8,356,000 $4,040,000 .).~ $12,396,000 $234 $209 $152 $595 $288 $882.':", $530 $473 $345 $1,348 $652 $2,000 .. $4,598,000 $3,166,000 $2.829.000 $10,593,000 $5,035,000 . . $15,628,000 Secondary Market Area Club Membership DueslFees Fees for Participant Sports Fees for Recreation Lessons Subtotal Admission Fees to Sporting Events Total/Average. .,...;rt:f~i":~.:':,"",":":""':"> $3,668,000 $274 $3,018,000 $226 $2.790.000 $209 $9,476,000 $709 $4,330,000 $324 <"$13,806,000 e," $1,033 $700 $576 $533 $1,809 $827 L $2,635 $5,160,000 $3,305,000 $3.630.000 $12,095,000 $5,4 72,000 . $17,567,000 ... Ad'usted to include 20% of total households. Sources: Claritas. Inc.: Maxfield Research. Inc. $318 $717 $219 $493 $196 $441 $733 $1,651 $348 $785 ......$1,081 :"i~';;'$2,436 $386 $954 $247 $611 $272 $671 $905 $2,237 $409 $1,012 $1,314. 'Z.::. $3,249 · By 2009, the total expenditure on club membership dues/fees and recreational activities in the PMA is expected to increase to $10.6 million or an average of$I,651 per household and $733 per capita annually. In the SMA, it is estimated that a total of $12.1 million will be spent on memberships/activities for an average of $2,237 per household and $905 per capita annually. · In 2004, Primary Market Area residents are expected to spend $3.3 million on club membership dues or fees. This equates to an average of $530 per household annually or about $44 per month. In the Secondary Market Area in 2004, residents will spend about $3.7 million on membership fees or $700 per household annually ($58 per month). MAXFIELD RESEARCH INC. 26 :;! ::I ::I :I 3 :J :I :I :I :I :J J :I J I I I I I I I I I I I CURRENT MARKET ANALYSIS Introduction Maxfield Research Inc. analyzed the current market situation by surveying existing public and private health andfitness clubs in the Market Area and selected city-owned community centers in the Twin Cities. The purpose of the survey was to assess usage, membership dues and fees, and facilities and amenities at health and fitness clubs in the Market Area that would be competitive with the proposed community center in Columbia Heights. The following tables present information on Market Area health and fitness clubs as well as information on selected community centers throughout the Metro Area. The following discussion summarizes information from the tables and key points from our survey of these facilities. At the conclusion of this section, we discuss the potential impact of these competitive developments on the current market situation and a potential recreation center in Columbia Heights. Public and Private Health and Fitness Clubs There are six privately owned health and fitness clubs in the Primary Market Area. Of these, five are either a Curves for Women or a Ladies Workout Express. These clubs are marketed at 30-minute circuit training facilities that are only for women. Typically, the clubs locate in spaces ofless than 2,000 square feet and have fewer than 400 members. These clubs would not be directly competitive with a new community center in Columbia Heights, although their target market does overlap with that of a community-owned recreation center. There are also three Curves for Women in the Secondary Market Area, as well as an It Figures, another women-only circuit-training facility. These clubs are not contained in our Tables of competitive product, although we do account for them in our demand calculations in the following section. The following points highlight our analysis of the competitive facilities in the Primary and Secondary Market Areas. Private Clubs . Excluding the women-only facilities, there is only one health club in the Primary Market Area that would be competitive with the proposed community center in Columbia Heights. This facility, Fitness Crossroad, opened in 2001 and is privately owned by a St. Anthony resident. II The YMCA has a community program site in Northeast Minneapolis. This site offers educational programs and meeting space for community groups, but does not have a fitness or recreation facility. This facility is affiliated with the YMCA in Coon Rapids, which is located outside of the Secondary Market Area. . There are four competitive privately-owned facilities in the Secondary Market Area. These facilities include a Bally's and Northwest in Fridley, a women-only Lifetime in Roseville and The Gym, Inc. in Fridley. Members of Bally's, Northwest, Lifetime, YMCA and YWCA can access all of their respective facilities in the Twin Cities and Nationwide. . The following shows the number of health clubs in the Twin Cities Metro Area by chain: MAXFIELD RESEARCH INC. 27 ~ I ::I ::I r- ::3 :J :I :I ::I :I :I :I :I I I I I I I I I CURRENT MARKET ANALYSIS o Bally's: 8 o Lifetime: 14 o Northwest: 10 o YMCA: 19 (Including 2 in Hudson, River Falls, WI) o YWCA: 3 · Marketing coordinators at the clubs indicated that demand for fitness club memberships is strong in the Secondary Market Area. The larger clubs believe that they have a draw area of eight to ten miles for members. Also, the clubs with more than one location often draw members from other clubs for different reasons. For instance, Lifetime in Roseville draws women from clubs all over the Metro Area, as it is the sole women's only club in the chain in the Metro. · Annual membership dues (based on quoted monthly rates) for adults range from $300 to $720 per year. Family memberships average about $1,070 per year. Family memberships at Northwest and Lifetime vary depending on the number of people and can be more expensive (about $50 for each additional person). · Daily admission for walk-in users of competitive health and fitness clubs range from $5 to $30. Bally's and the YMCA's do not admit non-members unless they are with a club member. · Most of the clubs require at least a one-year contract, while the YMCA requires a 15-day notice on a month-to-month membership. · Three of the clubs have a pool. The Lifetime representative in Roseville indicated that most members are not interested in having a pool, and if they are, they can go to any other Metro Area club. II The Northwest hI Fridley and t.L1.e YlvfCA in Coon Rapids have the most amenities of all of the facilities in Table 10. The YMCA is the only facility to offer a climbing wall, while Northwest offers racquetball, tennis and squash courts. Other club representatives indicated that rock-climbing walls are becoming a popular amenity at clubs throughout the Twin Cities and many newer clubs are beginning to incorporate them. · Other popular club features include the availability of personal trainers for one-on-one instruction and assistance with fitness activities. Health education programs are also held periodically at most of the clubs. . · Lifetime, Northwest and the YMCA have partnerships with health insurance providers, where members who use the facility a certain number of times a month receive a reimbursement for a portion of their monthly membership fee. One representative of a local health club indicated that this program has helped to increase member's monthly attendance, as well as sell memberships, as potential members see this as a significant cost savings. MAXFIELD RESEARCH INC. 28 .- . -lIlil ~ ___.___~IOO\~7..l\'llr*",lrlt"!ir;r:_.G!~~~~ ~ ~ :3' =- ::I ;:I JI 31 ::I :I :I :II :II JI I I I I I I I I I I I CURRENT MARKET ANALYSIS TABLE 10 FEATURES/AMENITIES COMPARISON COMPETITIVE HEALTH CLUBS AND COMMUNITY CENTERS COLUMBIA HEIGHTS MARKET AREA CLUBS In the PMA In the SMA Not in the MA AQUATIC CENTER>.)!",:'..:;; -'';;;;l/':':;iit~:;r"::;;--,, ...... '.:' Com~~titio~a~Pool'"'~' ""-'-:[--- .-. -.. ~-~-.._,,' ''''''--:r'' Therapeutic Pool " Children's PooVSlides Divine: Area Whirlpool" " " SaunalSteamroom "" """ ~~~~~_~..""";;~._;;.. ",_.~L''-;':'''d:.-~"G,;,.;.j:t~'~':_:~.Q:~':i""~,,,,,-~;:..~L.~:'..,.....::.~;.'...:;';;.~'~., Free-Weights -v.y.y""" Cardiovascular """""" AerobicsIDance Area ".y ".y" WalkIRunning Track " " .y GrouD Exercise "" """ en ;>. """ ..J -< == Q -< enO en a:: [;oj en ;zen f-O _a:: c..U " u ~ C Q Q U [;oj ;z ~en U..l ...~ o!!:... ;;"o!!: -.J ~ ;;.. [;oJ ;z ~ - z .... ;;. ~ [;oJ en 0 ;;. Q t: 1"' [;oJ Z ;z ::::: ;;; ~S2 <: 9 0 ~:::: ~ ::e z= en on -.J -.J 'i ;;.. o [;oJ ~ f- [;oJ c.. ::::i f- en [;oJ ~ Q:: o z , <: '" u== ::e ;- ;;..::::: " " " " " " 'i~~" -.J ..-'.' ,...., ..,.: "',",".,.",,," '. '. o. ..:~..;.:..",.".;.:,,;..;.,J... ~,~~,,,,,:_:,,,,,,,';;.~:-""'''''''''''~~1..~..~;. " " " . . .. .. ... .." .___u. . ,. .... ,. ... ~'..-....-.. ._, -. -.... ..... -. .-.- _.'. ~:;;:;:~::..._....;2:..:.._i~:.:.:._;.;1::.~;-;.iii~:.,~;"::~...:.;.:..>~;.:~i. .y ..J -V " " " -V " " -V " " -V ~~:,~~~~cit~;;;;;>~dLC1;t'It"~t~~.~)ilicit~~i;;!.d.::::i,;,l!;,~ll~E~~~~;iij~tf:l;L~iJj;:;;:;;i~...::~~j....Y.i~L..tf~~;.;.~;;fif~,;L;;ji;~iIik V ollevball "".y"" Racquetball .y Tennis/Squash -V ~~:J~~;.~2'i~:::~L:iL~~liiE;:~;~:;J~ii:..t:';)~::.l'.<'S1;~....~;S.L~L_;;i.."-._~Dt,L..:.:".{,:_,. . ..... FeeslHr. $55 $30 $55-$85 Health/Community Educ. Tanning Massage Rock Climbing Wall Meeting Rooms Non-Member FeeslHr. Children'slYouth Program Child Care FeeslHr. Senior Center/Proe:rams Source: Maxfield Research, Inc. '.. .. ,.'. " .,:C,,,. ,'. -V -y " " 'i .~ " " .J " " $30 -V y y " $25 $25 Teen Center " " y " Blast -V $3.50-$4.00 Free -V " .y -V " y $20-$100 -V Eagle's All day " Nest Pre-school $4.75 $3.25tbr. -V " " " Free Market Area Community Centers A new community/recreation center in Columbia Heights would likely be most similar to existing community centers in the Market Area. These centers differ from most of the private clubs profiled in Table 10, in that, they have one location, are not privately owned and are typically run in conjunction with the community school or parks and recreation department. These centers are outlined below in the following points. . There are two community centers in the Primary Market Area, the New Brighton Family Service Center and the St. Anthony Community Center. The only community :]I ::JI ::JI :JI 3 3 31 ]I JI . . . I I I I I I I I I CURRENT MARKET ANALYSIS center in the Secondary Market Area is the Moundsview Community Center. We also included an analysis of the Shore view Community Center, as it is the nearest large community center. . The Family Service Center in New Brighton was built in 1995 and offers a fitness area, gymnasium and a children's play area called Eagle's Nest. The gym is only for use of members and is not rented out or contracted out to local schools. . The St. Anthony Community Center was built in about 1998/99 in conjunction with the new city hall. This facility offers a gymnasium, day care, meeting rooms and center for senior activities. The sports boosters offer games and sports activities, as well as adult leagues, yoga classes and community education. . The Moundsview facility was built in 1998. This facility does not offer memberships and is used during the day by school groups and other community groups. This facility offers a gym with two full courts and bleachers, locker rooms, small weight room with a few aerobic machines, a play area with a pool table and foosball. A private day care is operated next to the facility. · None of the centers in the Market Area offer pools. Outside of the Market Area, the Shoreview facility offers an indoor water park, Tropics. The Shoreview center was originally built in 1989; last May (2003), a fitness center, two aerobic rooms, additional banquet facilities and a boardroom were added. Up until that point, according to a manager, the center had about 1,500 members. After adding the fitness center, the memberships increased to about 2,200. The weekends are the busiest times, as the indoor water park draws users from all of the Metro. According to the manager, about 700 people use the facility every day during the week, and about 1,300 come on the weekends. Total Market Area Memberships The following table summarizes the number of memberships in the PMA and SMA by club type. The Shoreview Community Center, with 2,200 memberships, is outside of the Market Area and is therefore, not included in this table or in our demand calculations for additional memberships in the Market Area. Primary Secondary Market Market Area Area Private Clubs 1,000 11,200 Community Centers 750 0 CurvesfWomen's Only Clubs 1.375 1.250 Total Memberships 3,125 12,450 MAXFIELD RESEARCH INC. 30 - - - - - - - - - - - - - . - . . . . . CURRENT MARKET ANALYSIS RECREATIONAUCOl\tIl\tIUNITY FACILITIES COLUMBIA HEIGHTS l\1ARKET AREAS ~1 ~l 10 J .~ ) . , " " " " " ",." , .... , " ~ '. ',".'. '.~"t . .~._?t . "<', : ;:".::u~r~w~~i~;yr' o PRIMARY MARKET AREA _ SECONDARY MARKET AREA A CURVES FOR WOMENILADIES WORKOUT EXPRESS LOCATIONS * OTBER HEALTH CLUB/CQMMUNITY CENTER LOCATIONS Mali.ld R.. ..reb, Inc. 1=1" ;:2 L:2 I ::JI 3 =- :]( =- 2 =- ""If. - =- 2: :I! :Il :11 :& Ii Il rt I. l I CURRENT MARKET ANALYSIS Selected Metro Area Community Centers Maxfield Research Inc. also inventoried selected community centers in the Metro Area. These facilities were analyzed for comparison purposes only. Because they are located outside the geographic Market Area, they would not be competitive with a new facility in Columbia Heights. The information gathered on the selected community centers is meant to illustrate the range of facilities available in other commUnities, as well as typical membership fees. Table 11 contains information on five Twin Cities' community centers including Shoreview. The following points highlight our analysis of the selected community centers. · Of the five community centers, The Grove in Inver Grove Heights is the largest. It offers an indoor water park and full aquatic center, as well as an ice arena and a skate park. · The Eagan Community Center is the only facility without a pool. · The facilities in Chaska and Maplewood offer performing arts theaters. · All of the facilities offer gymnasium space, fitness areas and walking/running tracks. TABLE 11 FEATURES/AMENITIES COMPARISON METRO AREA COMMUNITY CENTERS CITY OF COLUMBIA HEIGHTS r.:l Q > 0 ~ 0 C::::rJ'1 0 rJil ~ - < OE- > :::e:: z c::::= r.:l r.:l rJ'1 < r.:lO ..:l c:::: < 0 ~ 0 - < >~ < = CLUBS ... ~= ~ U r.:l rJj Lap Pool .y " .y " Children's Pool/Slides ..j ..j ..j ..j Diving Area ..j Whirlpool ..j ..j ..j Sauna/Stearnroom ..j ..j ..j Fitness Area ..j ..j ..j ..j ..j Wal.k/Running Track ..j ..j ..j ..j ..j Group Fitness ..j ..j ..j ..j ~asium ..j' ..j ..j ..j ..j RaquetbaU ..j Ice Arena ..j ..j Skate Park ..j ..j Child Care ..j ..j ..j ..j ..j Theater ..j ..j Source: Maxfield Research. Inc. · The community centers shown in Table 11 tend to have an equal amount or sometimes more features and amenities compared to the private health and fitness clubs shown in MAXFIELD RESEARCH INC. 32 ~jJ' o (' a r pi ::I :I :I :I :I :I :3 :I :I ]I ]I :II II :I I I I I I I I I I I I [ l '"- l~ __..... CURRENT MARKET ANALYSIS Table 10. While the fitness and court areas are similar at the community centers and the health/fitness clubs, what differentiates the community centers from the private health/fitness clubs is their aquatic facilities. Community center pools tend to emphasize family swimming facilities and often include a variety of unique amenities such as waterslides, mushroom showers, and water-walks. · Other amenities at community centers that are not typically f~)Und at private health clubs include banquet and meeting spaces. Some of the private clubs have meeting rooms, but they are typically reserved only for members. · Maplewood and Chaska Community Centers also have performing arts theaters, where community events such as concerts and plays are held regularly throughout the year. · The Shoreview Community Center has an outdoor skateboard and inline skating park. Passes are $2.00 for a youth and $3.00 for an adult. · All of the facilities also offer childcare. According to a representative in Inver Grove Heights, their full-time day care facility has helped to attract members. Members receive a discount on childcare at the facility. The Shoreview facility only offers childcare for members while they are using the club. According to a representative, the childcare does not pay for itself, as they only charge members $3.00 per hour. Membership Dues and Daily Admission Prices Tables 12 show the annual membership dues and daily admission prices at the public and private health clubs, as well as the selected community centers. The following points highlight this analysis. · For the Family Service Center in New Brighton, the annual membership fees range from $130 for a resident youth to $435 for resident families. Non-resident membership dues range from approximately 20% to 60% more than resident dues. Memberships are not available at the Moundsview center. · Daily fees are about $5.00 per person at New Brighton and are the same for residents and non-residents. At Moundsview, residents pay either $1.00 (youth) or $2.00, while non- residents pay $3.00 and $5.00 per visit. · As shown in Table 12, membership fees among Metro Area community centers vary by each center. Overall, the average membership fee for resident adults is $37 per month on a month to month payment plan or $315 per year annually ($26/per month). · On average, non-resident membership fees are 26 percent higher than resident membership fees. '1\".i V'T"TT'"T T'\ DVC'T:" 4. nr"TT TJ\..rr t a- I ::I I t:I- I tI ~ i:2 , , 3 I , =- , 3: 3: :a. ::z :z - ..a ~ 2: :I: :I: E I: ~ I. I. L l .. CURRENT MARKET ANALYSIS TABLE 12 MEMBERSmp DUESIFEE COMPARISON TWIN CITIES COMMUNITY CENTERS CITY OF COLUMBIA HEIGHTS Monthly Membership Annual Membership Resident Non-Res. Resident Non-Res. Walk-in Admission Resident Non-Res. Enrollment Fee Resident Non-Res. Minimum Contract Adult $45 $540 $11.00 $150 - $175 None -----------_. Dual $75 $900 .._-- !:.~ly $90 $1,080 Senior $36 $432 $25 $303 $10.00 $130 $39 $468 Adult $35 $420 $20.00 up to $300 None --'~'----- Dual $85 $1,020 $15.00 w/member F~y______ add $50/person Youth Free up to 12 . . $60 $720 $25.00 $29 - Current 12 Months $1l5 $1,380 $15.00 w/member . . I . . . Adult $52 $624 $10.00 w/member $79 None Dual $80 $960 IS-day notice Family $89 $1,068 Youth $29 $348 Student $30 $360 Adult N/A NIA $2.00 $5.00 N/A NIA Youth N/A N/A $1.00 $3.00 N/A , . . , Adult NONE $215 - $345 $5.00 N/A 1 year Family NONE $345 - $435 NIA N/A Senior NONE $155 - $160 $4.75 N/A Y DUth NONE $130 - $155 $4.75 N/A Continued MAXFIELD RESEARCH INC. 34 1 :;:s- I ~. " ~ , ~ :s :I' ;I' 3' :I :I' :J :I :I . . . . . I I [ [ [ I l [ [ l l - - 1.4.... CURRENT MARKET ANALYSIS TABLE 12 MEMBERSIUP DUES/FEE COMPARISON TWIN CITIES COMMUNITY CENTERS CITY OF COLUMBIA HEIGHTS (Continued) Monthly Membership Annual Membership Resident Non-Res. Resident Non-Res. Walk-in Admission Resident Non-Res. Enrollment Fee Resident Non-Res. Minimum Contract Adult NONE $178 - $275 $4.50 - $6.50 NONE F!lIllilL____ NONE $299 - $426 $12.00 - $12.00 NONE Senior NONE $127 - $177 $3.75 - $5.50 NONE Youth NONE $127 - $177 $3.75 - $5.50 NONE 1 year EAGAN Adult $31 - $36 $372 - $432 ---.------------- Dual $57 - $72 $684 - $864 Family $83 - $108 $996 - $1,296 $10.00 $69.00 $79.00 $89.00 30-day Notice , IN\"ER GROVE HEIGHTS Adult $51 $385 - $495 ---_.- Dual $60 $720 - $720 FanEIJ___,___~~___u___,~~89 - $788 Senior $293 - $354 Youth $41 $293 - $354 $7.00 $14.00 $17.00 $7.00 $7.00 $79 - $89 $79 - $90 $79 - $90 $79 - $89 $79 - $89 3 mo., 1 yr. MAPLEWOOD Adult $33 - $45 $350 - $450 $7.00 - $9.00 $60 - $84 1 year Family $45 - $55 $500 - $600 $16.00 - $20.00 $75 - $110 Senior $20 . $25 $225 - $250 $5.00 - $7.00 $36 - $50 ------- Youth $20 - $25 $225 - $250 $5.00 - $7.00 $36 - $50 .. .. SHOREVIEW Adult $33 - $45 $290 - $385 $6.00 - $7.50 NONE 3 mo., 1 yr. Dual $50 - $67 $440 - $580 $12.00 - $15.00 NONE +------_.- Family $58 - $73 $495 - $650 $17.50 - $23.00 NONE Senior $25 - $33 $220 - $290 $5.00 - $6.50 NONE Youth $25 - $33 $220 - $290 $5.00 - $6.50 NONE ~IEDIAN Adult <~ji":"i,::::i~,';'" 534 '~""$45 '...r.;'~,.,': ..::;.;",,;:;,.$361' . S409 :~i;:~fR;;!~::~~!:: 57.00 -; . $7.00 .f'Ji,;,'~?:s;i1l~" 574::~ii'5 132 ;:;~~"w;:au;g;f~-!!!!i',;;:',{o{~ Dual ........... , :,;it;;';' 560 ~. $70 .. ....... .' $720 - 5720;t.r.:i.j;:~~i$':ii;, $13 .00 . : 51 5 .00 "~"~o:~~~p.,,*:~,1;i1~ 579 :,;"., 190': ~:.=t~1;~:~~Fi~$;;:~~~~f~~:1::~;; ::::~:::; ...... . Family:i."", ..-..... 573';;:'''58 r'''~:;::;';''.. .. ',::::..$595'. 5625''ji';:~k'::~;:E;:$16.50 ..,. S20.00 ',:.':;i'#..."::!,;li<!!i.-; 579:;;::. S100 ~;f:j.:::?~""i~r~~;.J!;;f'~:;hb~ Senior,,,,.,,.i. . .;71;:::':;" 525 ,..; .$29'-";':; .. .. .,.... $223 . $150 :~~::~~?~:i:~i~-*T~ 55.00 .. $6.5 0 ';;!;.;":oj;;ffif,~;q~;t;: $58 ~'''$70 ~ft~~~~~~~tf!r:.:i!@:tf.~::~~[~::~~~,;, Youth.",:"",:: :,;,k'..':".S23 - ',$25,,'[:... :"":.0: $175 - $114 :;:;.,;. :..':'"..;;"';~~ ;... ,.:..:H:~':' 54.88 . $6.00 <'.'.. ~'-';;:J''.~';;,~;:i~i~. 53 6, ;}'$50 ;jf..!:1-:;;ci;~iijf~~,f:~ ~;::\~!~;':- f-f.T~1.;: '.~;~a:::r_"'':' -;:!"=' .1::%:: ... . . Source: Maxfield Research, Inc. ~" iZ3 ;.' ;;! .I :=:1- ~ 3::1" .. ! a- .. I a 1 !3 I t:I I ~ ~ ::I ::I ::I' =- 3: 31: ~ :JI . . I: ;[ I I I ( I I l l CURRENT MARKET ANALYSIS II Membership dues and walk-in admissions at the Chaska Community Center are substantially less expensive compared to the other community centers shown. The Grove at Inver Grove Heights has the highest membership fees, while Maplewood tends to have the highest walk-in admissions among the centers. II Typically youth and senior rates are the same at the centers that offer these rates. II Chaska and Shoreview do not charge enrollment fees. A representative at a local community center indicated that enrollment fees are crucial for covering upfront costs related to the administrative tasks involved in enrolling new members and suggested that all new community centers include them. II Memberships tend to be less expensive at the selected community centers compared to the privately owned health and fitness clubs, especially for resident families. Of the private health clubs, Northwest has the highest membership fees overall. II The median membership fee overall is between $34 and $45 per month for an adult, which is comparable to the community centers profiled, but lower than the YMCA and Northwest. Pending Community Centers and Health/Fitness Clubs Maxfield Research Inc. interviewed a staff member from the cities in the Primary Market Area to determine if a community or recreation center is planned. The only pending project is the Salvation Army Kroc Center. Five cities in Minnesota have applied for $12 Million to fund the development of a community, recreation, education and performing arts center. The five Minnesota cities are competing against communities in other states in the Midwest; there is no indication at this point that a Kroc Center will be built anywhere in Minnesota. Components of a Salvation Anny/Kroc Center: II Family Service Center II Head Start/Child Development Center II Holiday Food/Toy Distribution Center II Recreation Field: Soccer, Flag Football, Lacrosse, Walking Track II Challenge Course: Higb/Low Rope Elements, 30-foot tall Climbing Tower II Gymnasium: Basketball, Volleyball, Badminton, Youth/Adult Sports Leagues II Fitness Area: Kickboxing, Personal Training, Weight Training, Aerobics, Pilates, Yoga Conditioning II Recreation Room: Air Hockey, Billiards, Table Tennis, Foosball, Board Games. II Ice Area: Public Skate, Youth/Adult Hockey Leagues, Skating Lessons, Freestyle Skating MAXFIELD RESEARCH INC. 36 ..- :J :j :! :1- ::I :1 :1 :I ::I :I :I :I ]I JI I I I I I I I I I I I I I I I I I 1IllIQlIJI- - -mllllI - _lIS IlI.llIiI:lB.I -.-~. ~.--..........",,,,,~~----- CURRENT MARKET ANALYSIS · Aquatics: 25-meter Competition Pool, Recreation Pool, Therapy Pool, Lap Swim, Swim Lessons, Aquatic Exercise, Adult Water Polo Leagues B Performing Arts Center: 600-seat Theater, V ocal/Instrumental Practice Rooms, Dance Studio, Visual Art Studio · Education Training Center: Internet-based Library, Fireside Reading Room, Computer Lab, Classrooms Minneapolis was among the five,cities that submitted an application for the project. According to the public relations firm who submitted the application on behalf of Minneapolis, potential sites for the center are in North and Northeast Minneapolis. A decision on the five applications from Minnesota is expected in April of2005. lfthe Kroc Center was built in Minneapolis, it would be directly competitive with a new community/recreation center in Columbia Heights. Other than the pending Salvation Army/Kroc Center, there are no pending or planned community or recreational facilities in the Columbia Heights Market Area. 'If.f.. V"T"TT:"T n nDCt:" ,4.. DroU T1\Jr ",7 ::1 ;:!! ;:!I ::I ;:1- :=I ~ ~ ::2 :I :I 3 :J :I ::JI 3J :I :I :I .- :II J :II J I I I J I I I I DEMAND ASSESSMENT AND CONCLUSIONS Demand Assessment In this section, we calculate demand for health/fitness club memberships in the Columbia Heights Primary Market Area and project membership and usage (including members and walk~ in users) for a potential new center in Columbia Heights. Table 13 shows our demand calculations for 2005,2010 and 2015, based on the estimated Market Area population, the propensity of people to join health/fitness clubs and average annual usage per member, derived from industry statistics compiled_ by the International Health and Racquet Sportsclub Association (IHRSA). The following points summarize our demand methodology shown in Table 13. . 2005 calculations would indicate existing or pent-up demand for a new community center in the area, while demand for 2010 and 2015 indicate future demand. The following discussion provides an analysis of the future demand, as a new community center is likely to be built after 2005. . In 2010, the Primary Market Area is estimated to have 72,700 residents. According to the IHRSAlAmerican Sports Data Health Club Trend Report, 12 percent of the Nation's population is members of health/fitness facilities. A local community center interviewed for ~s study indicated that they estimate that 13 percent of local residents join a health center. Applying 13 percent to the local resident base, there are an estimated 9,440 potential members in the Primary Market Area. . Next we subtract the number of members at the Curves and Ladies Workout Express clubs in the Primary Market Area (less 15 percent to account for transfer of memberships). This results in an estimated 8,300 potential members of health centers in the PMA in 2010. . Next, we adjust the estimated number of members to reflect memberships, since nearly all facilities offer family memberships. Based on the current membership base at selected community centers throughout the Metro _Area, we estimate an average of 2.3 members per membership. This results in about 3,600 potential memberships in the Primary Market Area. . Our research revealed a total membership base of 1,750 at competitive health/fitness clubs in the Primary Market Area. Subtracting these memberships (less 15 percent to account for transfer of memberships from competitive facilities) result in excess demand for about 2,100 memberships in the PMA in 2010. We'should note that this demand calculation may underestimate some potential members, as some people who are currently members of other facilities in the area (especially Columbia Heights residents) would choose to purchase memberships at a new facility in Columbia Heights for a variety of reasons -- it may be closer to their home or work, the facility would be newer and/or preferable to their current club, and/or the membership rates are less expensive. MAXFIELD RESEARCH INC. 1Q :p;,.Sli?" r:1 ,... :::1 ~ ;3 :I ::I ::I :J :I :I :I :I :3 :I :I :I I . I I I I I I I . I . I I I I DEMAND ASSESSMENT AND CONCLUSIONS TABLE 13 PROJECTED ANNUAL }IEMBERSHIPS A;>'1) TOTAL USAGE COLIDfBIA HEIGHTS COMMUNITY CENTER 2010 & 2015 Primary Market Area Population (times) Percent that join healthJfimess facilities @ 13% (equals) Estimated potential members in the PMA ~ 2005 " ~,2015' " ',,~ 2010 x 70,700 72,700 74,200 13% 13% 13% 9,191 9,451 9,646 1,169 1.169 1,169 8,022 8,282 8,477 2.3 2.3 2.3 3,488 3,601 3,686 1.488 1.488 1.488 2.000 2.113 2,198 25% 25% 25% 2,501 2,642 2,748 15% - 20% 15% - 20% 15% - 20% 375 - 500 400 - 530 . . 410 - 550 x (minus) Existing memberships at CurvesIL WE in PMA (equals) Estimated potential members in PMA (divided by) Estimated 2.3 members/membership at community center/health club ./' (equals) Estimated potential memberships for community center/health club (minus) Existing memberships at community center/health clubs in PMA (equals) Excess demand for memberships for community center/health club in PMA (Plus) Demand from Households outside of the PMA (equals) Demand for new health center in PMA + (times) Average number of member visits annually (equals) Estimated annual visits by members x 92 92 92 34,500 - 46,000 36,800 - 48,760 37,720 - 50,560 + 27. 000 27.000 34,200 , ~." ;.:;~:~.!,;;: . a 61 00 -73,000 ,63,800 - 75,760 . ~.71,920 ~ 84,760 Source: Maxfield Research, Inc. I!l We believe that a new facility in Columbia Heights (without a pool) could capture 15 to 20 percent of the demand for health/fitness club memberships in the PMA. This results in a projected annual membership at a new center in Columbia Heights of 400 to 530 memberships in 2010. . Following this same calculation for 2005 results in existing demand for 375 to 500, indicating that a new community center must be designed to meet the needs of existing PMA households. . Following this same calculation for 2015, results in demand for 410 to 550 memberships in Columbia Heights. . According to IHRSA statistics, health club members visit their facility an average of 92 days per year. In 2010, this corresponds with an estimated 36,800 to 48,760 annual visits by potential members in Columbia Heights. We add an estimated 27,000 walk-in users in year one, an average of75 per day, for a total projected usage of63,800 to 75,760 in 2010. . Applying the same methodology in 2015 results in 37,720 to 50,560 visits by members and 34,200 walk-in users, for a total projected usage of71,920 to 84,760 visits in 2015. For '2015, we have estimated an average of95 walk-in users per day, compared to 75 per day in M A XFTt"T.n RFSF A RrH TNC ~n ::! ;:s =:I ::I ::I ~ :1 :J :3 :I ::J :.1 :J :I :I :I 11 :I . II I I I I I I I I I I I DEMAND ASSESSMENT AND CONCLUSIONS 2010. We believe an increase in usage by walk-in users will occur as the facility has marketed for a longer period of time. Conclusions Based on our demand calculation, we believe that sufficient demand exists to support a new community/recreational facility in Columbia Heights. Because there is a significant supply of privately owned health clubs in the Secondary Market Area, we recommend developing a community center concept that is targeted to local households' needs. Demographic Indicators Some notable demographic shifts are occurring in Columbia Heights and the surrounding area. First, the majority of the population is aging in place. This is happening in most inner-ring communities in the Metro Area. Communities like Columbia Heights want to continue to attract younger families and see reinvestment in their existing housing stock. As shown in the school enrollment data, the area is attracting a diverse younger population, which illustrates the second demographic shift. These shifts are creating an opportunity for a new community and recreational facility to provide programs and amenities that will appeal to a wide variety of community users such as: . Older adults: will be price sensitive and desire a friendly environment exercise in. · Younger immigrant families: Different ethnic groups value exercise differently. Some groups do not allow women to exercise in the same facility/room as men, while others do not hold exercise as an important activity. ii Young non-immigrant families: As housing options become available for older households, their existing single-family homes can become available for young families, who are either buying an entry-level home or moving up into something larger as their housing needs change. These families are price sensitive and will be attracted to the relatively affordable home values in Columbia Heights. . Single adults or couples without children: These people will be attracted to the new housing product that is pending in Columbia Heights, as well as the Apache Plaza site in S1. Anthony. This group win also be price sensitive regarding membership fees, but will primarily value the convenience of a health club nearby. MAXFIELD RESEARCH INC. 40 1If" ~--""""';;;r~'" --~, " ~ - ~- ---- DEMAND ASSESSMENT AND CONCLUSIONS ~ - Recommended Amenities ::l :I ~ :J ::I :J j :I I I I I I I I I I I I I I l I We recommend incorporating the following amenities and features to attract local households to the new facility. II Gymnasium space: two full court gymnasiums that will be used for youth and adult league basketball, in addition to other groups; A walking/running track should be included either level with the gymnasium area or we recommend that an elevated track be built above the gym floor. II Fitness Area: including aerobic machines Gogging, steps or elliptical), weight machines, free weights, stretching area and TV s. II Aerobic studios: for group fitness classes. We suggest providing free classes for members, as well as allowing non-members to take classes for a fee. Classes targeted to different age groups: young adults (i.e. kickboxing, pilates, yoga), older adults (i.e. dancing classes, games), children and parents with children. Also, consider incorporating classes targeted to different ethnic groups. II Childcare play area: we suggest including an area that can be rented out for birthday parties and other events, similar to New Brighton's Eagle's Nest. Ifpossible, also include full day care on the Site, either as part of the center or separate and offer a discount for members. II Senior Center: a room/area for activities and meals for senior groups, members and non-members. II Teen Center: small activity room with a pool table, or foosball, air hockey or other amenities that will appeal to teenagers. II Concessions area: We recommend a centrally located concessions area that would be available to members and to guests attending special events. The concessions area could serve snacks and beverages, but would not serve meals unless pre-prepared. Concessions would also service small meetings at the community center with limited refreshments-. Some examples of unique amenities included in facilities throughout the country are: II A golf practice room or simulator; A police precinct; Arts and crafts area with kilns; and Performing arts stage. II II II 41 1\jf . VrTL'T n ore];' A RrU TNr DEMAND ASSESSMENT AND CONCLUSIONS We do not recommend including an aquatic center. Our demand calculations were based on a facility with fitness areas and gymnasium space, excluding a pool. While a pool attracts some members, people not interested in using it, will not want to pay for it. Therefore a facility without a pool and with a lower annual membership fee, will attract potential members who are price-sensitive. As the incomes in the Market Area tend to be lower than the incomes of people attracted to large facilities with a wider variety of amenities, we believe that the potential members in the Market Area will be concerned that they are getting the most value for their money at a new facility. I' .::1 :::I ;:I ::! ::I :I ::!I :I :3 ::I :I :iI :I :I :I :I I I I I I I I Health Care Partnership Most of the health clubs and community centers profiled in this study have partnered with health insurance providers to reimburse members a portion of their monthly membership fee if the member uses the club a certain number of times per month. This reimbursement can often be up to half of the membership fee making it an attractive incentive for members. One representative from a Metro Area community center indicated that the partnership helped to sell more memberships; while another pointed out that it increased member usage of the facility significantly. We recommend providing this incentive for members if possible, as many potential members will choose to join a health club with a health insurance reimbursement. Recommended Fee Structure Based on our recommended amenities and features, we have developed a recommended fee structure for the potential community center which is shown in Table 14 below. To attract members who may not be familiar with a health club, we recommend providing free one-week trial memberships so that potential members can become familiar with the facility before joining. TABLE 14 RECOMMENDED FEES FOR POTENTIAL COMMUNITY CENTER CITY OF COLUMBIA HEIGHTS NOVEMBER 2004 Monthly Fee for Annual Membership Annual Membership Enrollment Fee Walk-in Admission Resident Non Res. Resident Non Res. Resident Non Res. Resident Non Res. Adult $240 - $300 $20 - $25 $50 - $75 $6.00 - $8.00 Couple $375 - $425 $31 - $35 $60 - $85 $10.00 - $14.00 Family $425 - $475 $35 - $40 $75 - $100 $18.00 - $22.00 Senior $175 - $200 $15 - $17 $30 - $40 $5.00 - $6.00 Youth $175 - $200 $15 - $17 $30 - $40 $5.00 - $6.00 Source: Maxfield Research. Inc. Throughout our interviews with representatives of local community centers we found that all Metro Area community centers had a budget shortfall that was covered by a variety of funding mechanisms, for example: antenna fees, electric fund or other non-operating revenues, building fund, or the general fund. Anywhere from 2 percent to 41 percent of the community center's MAXFIELD RESEARCH I:'IC. 42 ;;I ;11 :Ii 31 31 :I 3 3 :I :I 11 :I :I ;I I I . I I . I DEMAND ASSESSMENT AND CONCLUSIONS operating budget was not covered by membership fees, while the average budget shortfall was 19 percent. We believe that there is sufficient demand to develop a new community and recreational facility in Columbia Heights. While we recommend that the facility be designed to meet the needs of the existing aging population in the Primary Market Area, we also recognize that the area is becoming more diverse. Therefore, the facility should be designed as such to meet the needs of a wide variety of users, including new households who will be attracted to the redevelopment sites in Columbia Heights and S1. Anthony. A new facility will be supported by existing households, but should also serve as a community amenity that will attract new households into Columbia Heights. A community and recreational facility often serves as a marketing t06l to attract new households, as well as reinvestment in a community. The facility should be designed for future flexibility and should allow for future expansion as the community center space needs will change in the future. Projected Gym Usage Table 15 shows an estimate of gym usage from school groups and other users, both recreational gym users and organized sports groups for Columbia Heights. The table was developed to reflect peak usage during the winter months. Usage during the summer months would be less. In discussions with staff from the High School and from the Columbia Heights Recreation Department, both concurred that there is no additional gym space currently available in the area and that many groups could be using more time if facilities were available. Elementary and Middle School gyms are being used where possible to provide some gym time for youth leagues and youth traveling teams although these facilities are small and often place the teams at a disadvantage when competing against teams that are able to have more hours of practice and at facilities where there are full courts available. -l II Option 1 allows for two gyms to be constructed, one at a location near the school and a second gym at the community center. The only benefit to this option is that they school would not have to bus students to utilize the gym space for school classes and school-related activities. If the facility is located away from the school, it is likely that school usage would be limited to only the late afternoon and evening hours, leaving a second gym space available for Open Gym for most of the daytime hours. I I I I ! The disadvantage of this option is that it limits the amount of tournament play that could be attracted to the facility (a potential revenue generator), because tournaments typically prefer to have more than one court. Constructing two separate facilities would also increase costs. With Option 1, we estimate an average usage rate of 85% to 90% for both facilities including school usage. Option 2 would combine the facilities into one location, at the proposed community center. We estimate that the average usage rate for both gyms combined would drop to 60% because we assume that the school would not use the gym during the day for class and sports overflow as it would be too difficult to bus students back and forth. However, we believe that the school would MAXFIELD RESEARCH INC. 4., ',j :s :I,j I ::ti I :a :r:I ::a :t1 :EI :EI :a :J ::I ::I ::I a :I :I :3 ::2 -I ... :I :I :I :I :I I I I I I I II DEMAND ASSESSMENT AND CONCLUSIONS utilize gym space at the community center if necessary during after school hours during the winter months when it reaches its capacity for practice space and meet space (games) among various sports groups. At this time, the Users that would generate revenue to the facility would be some special events, sports camps, and outside tournament play that would pay to use the facilities. These events would also generate additional revenue to the concessions area. Most of the usage planned for the gyms will come from school groups and from recreational sports users who will not be paying directly to use the facilities. Once these groups are in the facility, they will be using the facility, but not paying additional fees. This may be somewhat problematic for those who will be paying a membership fee yet may not be able to use the gym space when they want to. Note: We acknowledge that there will be a significant amount of usage of two gyms during the peak winter months. It will be necessary to develop and maintain a priority strategy so that both gyms do not become "over-programmed" during the peak hours of Spm to lOpm and during the daytime on weekends, thereby excluding a sufficient amount of usage from the general membership who are paying additional fees to use the facility. .\L~XFIELD RESEARCH INC. -+4 ~ tj Qj ~ :J :i j :] j :s ::I j :f :t ~ I ;a :I :I :t i I I I I I I I I I I DE~IAND ASSESSME:\'T AND CONCLUSIONS T.-\BLE15 PROJECTED GY:\I CSAGE COLDIBIA HEIGHTS CO~1.:\Il;..1TY CE:\TER .'\ovember 2004 Projected Peak Lsage - Winter Season (October through ~Iid-~1arch) Option 1 - Two Gyms (Two locations) Option 2 - Two Gyms (One Location) Gym 1 (Com Center) -'Iondav Tuesdav Wednesday Thursdav Fridav Saturday Sunday 7:00am Open Gym ODen Gvm Open Gvm Open Gvm Open G\m 8:00am 9:00am Senior Aer. Senior Aer. Senior Aer. Familv Open 1 0:00am Tiny Tots Tiny Tots Tiny Tots Tiny Tots Tiny Tots Gvm .. II :OOam '. Family Open 12:00am Open Gym ODen Gym Open G\m Open Gym Open Gym Gvm 1 :OOom Ooen Gym Ooen Gym Ooen G\m Ooen Gvm Ooen G\m . 2:00pm Open Gvm Ooen G\m Open G\m Open Gvm Ooen G\m .. . 3:00om , 4:00pm 5:00om ',' ..~, , . .' " 6:00om Girls/Bovs BB Girls/Boys BB Floor Hockey Girls/Bovs BB Concerts/ Men's BB 7:00pm GirlsIBoys BB Girls/Boys BB Men's Leag Girls/Bovs BB Games/ Volley Leag. 8:00om Men's League Adult Volley. Men's Leag Adult Volley Men's Leag. 9:00pm Men's League Adult Volley. Adult Volley 10:00pm Gvm 2 (By School) :Vlonday Tuesday Wednesday Thursday Friday Saturday Sunday 7:00am School Use School Use School Use School Use School Use 8:00am School Use School Use School Use School Use School Use 9:00am School Use School Use School Use School Use School Use 10:00am School Use School Use School Use School Use School Use 11 :OOam School Use School Use School Use School Use School Use 12:00am School Use School Use School Use School Use School Use 1:00pm School Use School Use School Use School Use School Use 2:00om School Use School Use School Use School Use School Use 3:00pm School Use School Use School Use School Use School Use 4:00pm Wrestling Wrestling Wrestling Wrestling 5 :OOpm Gymnastics Gymnastics Gymnastics Gvmnastics 6:00om Youth Leag Youth Leag Men's Leag Youth Leag Games! 7:00pm Youth Leag Youth Leag Men's Leag Youth Leag Band Cone. 8:00pm Youth Leag Youth Leag Men's Leag Youth Leag Play Cone. 9:00om Vollevball Volleyball Volleyball 10:00pm I Sources: Columbia Heights Park and Recreation: Columbia Heights Schools; Maxfield Research Inc. 45 MAXFIELD RESEARCH !:'-Ie. City of Columbia Heights New Recreation Center Kraus-Anderson Construction Company Parker Durrant Date: March 29, 2005 Program Space 7,920 15,050 2,900 3,000 2,200 1,200 1,800 2,200 Page 1 of 4 City of Columbia Heights New Recreation Center Kraus-Anderson Construction Company Parker Durrant Date: March 29, 2005 Budget Summary Based on 3/29/05 Program Study Total Cost Lower Range Higher Range 7,920 $175 $195 $1,386,000 $1,544,400 15,050 $130 $150 $1,956,500 $2,257,500 Childcare Pia Area 2,900 $175 $195 $507,500 $565,500 Da Care Center 3,000 $150 $175 $450,000 $525,000 Senior Center 2,200 $150 $175 $330,000 $385,000 Teen Center 1,200 $150 $175 $180,000 $210,000 Racquetball Courts 1,800 $175 $195 $315,000 $351,000 Aerobics Studios 2,200 $175 $195 $385,000 $429,000 Page 1 of 1 City of Columbia Heights New Recreation Center Kraus-Anderson Construction Company Parker Durrant Date: March 29, 2005 Program Space Locker RoomlToiletlShowers - Mens - about 20' x 29' Locker RoomlToiletlShowers - Womens - about 20' x 29' Locker RoomlToiletlShowers - Famil - about 20' x 29' Public Toilets - two at about 9' x 17' Lobb - about 20' x 20' Concessions - about 10' x 20' Level 2 Toilets - Two unisex toilet rooms - about 9' x 10' Fitness Area - fitness machines, free weights - about 40' x 50' Meeting Rooms Two smaller rooms - about 15' x 20' each (15 eople) One larger room - about 30' x 30' (45 people) 580 580 580 300 400 200 180 2,000 600 900 Provide for two High school courts that can be divided in half with dro One court is 84' Ion b 50' wide There should be 10' all around, Ius at least 10' between the courts. The overall foot rint would be 130' wide b 104' long. This would have an area of 13,520 sf - use 13,650 per P-D. The running track would be su orted off the roof structure over the courts. The track would be 10' wide. The interior length of the track would 388 feet. It would be about 13.5 la s to the mile. Area of track surface would be 10' x 428' Note: Do not include area of track in over-all building area The bottom of the track should be about 12' above the court. The to of the track would be at 13' above the floor. The bottom of roof structure should be about 12' above the track, or 25' above the floor. To span 104', the bar 'oists would need to be about 5' deep. The to of the structure would be 30' above the floor. The roof will need to be slo ed about 1/4" er foot from the mid oint for draina e, The total slo e would be about 13". The roof insulation will be about 4 or 5 inches thick. The to of ara et should be about 8" above the top of roof insulation. Therefore, the top of the wall panels should be about 32' above grade. 13,650 4,280 Page 2 of 4 City of Columbia Heights New Recreation Center Kraus-Anderson Construction Company Parker Durrant Date: March 29, 2005 Program Space Similar to Eagles Nest Assume pia structure is 20' x 40', 16' hi h Open space around structure - 40' x 40' Page 3 of 4 City of Columbia Heights New Recreation Center Kraus-Anderson Construction Company Parker Durrant Date: March 29, 2005 Program Space Provide two rac uetball courts One court is 20' wide b 40' Ion ,with a 20' clear height The bottom of roof structure should be about 21' above the floor, minimum. The bar joists to span 20' would be about 18" dee . Should rovide about 18" for ductwork above the ceiling. The to of the structure should be 24' above the floor - same as the support area. Use the same 27' wall panels. 1,600 Page 4 of 4 Potential Community Center Locations f~~~~~~~" IT:j ~ ~.-. 8=1 '-<::.1 f-:,-".__. ~~~~~~ / 11 ltJ I=~I~~I 1'IF~1~\FJ~. J n,""'- IJ ~'____" 1'----lITD&I'11 1..1.1' I: ':1!U'I' I I; ~11111~~=lj ~~ r::Ej p-:; ~ m ~4i+iHj-' ~ P-13 ~ tih!1 r.:rr,:.:~~::;/:I'i':1 i,'OEJ t.:,t.::J r....., :J 1-.-. ....... " .., r I .. t:E3 WJJ b:::.l d::J CiU': , I,r-i, 1".11" I'-""'~ .;"'<::1 I rjiI.uL... ,_" ~= D/~ rTn~rr=---'------'~" . . 'I,~. M r=tl ~ ~ ~ g,,:,I,q,li1lid ~ l;=~~::J ~Iql~~~~! f.tI:.:_j I !]j ~ f.f-. ['-,-1' "" r;rrt"'1 I I, I ~~-\ iT!Tr1 :::::Ei _.i.. B:J t:.:t::-.l ":::L..i: I: , ,Li.ll.U . ~............. JTITI LLUJ..j.........:..... DIl'ffiffihllltI:H:llill"i"'! IIT1TIIjr--l' BJiil[ll ~1)ii!j~l~~L;;:'il,:h;~~;~1 L'~-l I 'lili:~ uH:I:L,,; ~ ' l]:rr]~_L--_~ I . _-__ iT-'" i-I i ' !mm~fTw.Cj0iTnJII = q::::; 6"': l E ,..... r- '; i=i It'''' 1-+H'rttrlT!, 1" "11;)= ;-,-, i=t.:.:! =1 ~ f---o i ~_~;'~;c~~f;~ NEI J,";!I".Jjlk'-! :,jjIL..:...;J,:-" i--i--fS'S;::::R I ;----"'1 -----, i~bLllilil-JjJ~dJt-b:;!y:W{:?:_=r~~;:::;~~~: ~ (, I ~~Li..LLul.LL--m Ll.J..u ,!~.q..J I..t:~/,"r:::7;=C3"'"::::tJH'-''-'L r,,:-- r- I ] ~ ;:.1J..J-~...> ;.-,:..=//__J-;',t-::<..=~ .:::J-:':--- : r- t,:/.:.~')-'-r:~)'- r::: c;: ~fCJm.-ri H ~ =tj / :' : 1~ - - -"'. .....::: /," 7 Mt'.....:;/ :.... /-r' ~~~ ,-" I ,I J.LW i-j . crj r----r I ~ . :~~'j -,l~~W7~' ~;:,/-~~'fg-l'W= a ~\~~~1', I i--0 1 _J...." '1''-"" /--,-u ':....r-- H rrn ........t:tJ1 ,Y, ,....~....~ i :' .__.!~t:{>~~~'f~:..::'I~~=~,~~~B~~\,' fiil-II Ul~;:..:r7~ ~~~.-,;<< :=-:= pul ......,.i E8 ~4-W-,-;-j.;~? I J '1",:",,",rruLilil.~' ,:~~~~>',~=lG~IL.L-Ll.Il-.::::,:~~ c:::[ - rrrillIill~", ~"S:::A),: " , c.;J ~ =.::rt:;= L'1:-:; : ~ ' C-jUI,.I^~'>" "('~., "",':' n:=;;::r-:;=.J=::::iF.t;, ,-, -~-LJ:<(\)Y ",:::::::.c~ !r-;~::L...__ ~_L.l C3..y, ,'X"~Y:":' '!JJljj~'~--r'"i:::i::l1 ' i1~~~~~~~~~~~II' ~'Jh"=ELll!~'i\L--:~~b ; ",) <' .rf:;{-'" ,Y,-,:::l=t!=:rJ " I , L......_.' r?,(~~t,'7..{,;r~..' '. ',H=1r~._. \\ : :i--'-; I ' ,(' 'J:,''''ffy 'C' ,H p:3....., . '''1- \ ] , ; c"';':. ~~~~i::_~2?/b'{ II j r ttrrj i::oS EtD i ~_L.<:>'" j City of Columbia Heights 2003 Fund Balance FYE: 12/31/2003 Summary of uncommitted funds that could be used for City Council designated projects. Needed for Uncommitted See Fund Balance Cash 2005 Bud or Cash Note Fund Fund Description PerCAFR Balance Working Cap 440 Capital Eq Cable TV 306,326 264,149 264,149 226 Special Project Revenue 10,176 18,938 18,938 235 Rental Housing 53,424 51,508 51,508 A 609 Liquor 3,035,506 2,019,152 1,500,000 519,152 390 4 Cities Bonds 689,214 684,354 684,354 B 411 Capital Imp General Gov Bldgs 3,195,578 3,070,426 1,500,000 1,570,426 412 Capital Improvement Parks 925,805 926,982 444,250 482,732 C 884 Insurance 801,026 769,819 250,000 519,819 887 Flex Benefit Trust Fund 37,655 41,512 20,000 21,512 290/405 Downtown Parking Ramp Maint 740,308 733,865 250,000 483,865 I Sub Total of Available Funds I 4,616,455 Funds listed above that maybe marked or planned for specific activities Planned for ongoing housing activities with GMHC 51,508 A Maybe restricted to Housing by Bond Covenance 684,354 B Planned for ongoing improvements to Huset Park 482,732 C Net funds available???? 3,397,861 Note 1: Some of the above cash balances are currently used for interfund loans. Utilizing these funds for projects would require redesignating the interfund loans to other funds. Note 2: The amounts listed as needed for 2005 budget or working capital are basicly estimates to cover amounts in the budget or to set up reserves for contingencies. Note 3: Fund Balances listed above represent the net worth of the fund if all assets were sold, all receivables collected and allliabilites paid off at current book value. josephkllnternal Reporting/Fund Balance 2003.xls C H ART ERE 0 470 U.S. Bank Plaza 200 South Sixrh Street Minneapolis, MN 55402 (612) 337-9300 telephone (612) 337-9310 fax hnp:llwww.kennedy-graven.com d ~d~. -7'!t.Ji",. " .lXenneuy' . 0 Graven STEPHEN J. BUBUL Attorney at Law Direct Dial (612) 337-9228 Email: sbubul@kennedy-graven.com May 9,2005 Robert Streetar City of Columbia Heights 590 40th Avenue NE Columbia Heights, MN 55421-3878 RE: Community Center Financing Dear Bob: You asked me to summarize the two alternative methods the City could use to finance a proposed commmrity center: lease-purchase revenue bonds, and voter-approved general obligation bonds. Following is a brief description ofthese options. Lease Purchase Revenue Bonds Under the lease-purchase stmcture, the City would lease the underlying real estate to the EDA. The EDA would then constmct (and technically own) the community center facility built on the leased land. The EDA would lease the facility back to the City for a stated period. The EDA would issue revenue bonds, payable solely E.-om the lease payments made by the City to the EDA. At the end of the lease period (i.e., when the bonds are paid), the City would have title to the entire facility (land and building). The; bonds are not general obligations of the DDA or the City-they are revenue bonds secured only by lease payments made by the City to the EDA. The EDA's rights in the lease-purchase agreement are typically assigned to a bond tmstee, so all lease payments are actually made to the tmstee for the benefit of bondholders. A key feature of the lease is that it must contain a "non-appropriation clause." TIns means the City must have the right to stop appropriating fimds arld terminate the lease at the end of each year. If that light is ever exercised, the City would relinquish the property to the trustee for the bonds. Investors purchase the bonds with the risk that tills termination might occur, and that no subsequent tenant may be foUnd who will pay enough rent to cover debt service on the bonds. Tills risk is considered small, since the City is unlikely to impair its programs by losing the facility. However, because the bonds are not secured by the City's filll faith and credit, they carry a slightly lngher interest rate. SJB-262446vl CL205-3 Robert Streetar May 9,2005 Page 2 of3 If the amount exceeds $1 million, the lease-purchase obligation of the City is subject to the City's net debt limits (i.e., two percent of market value). This limitation is usually not a concern, as most other bonds typically issued by the City (such as improvement bonds and tax increment bonds) are not subject to the debt limit. Further, tmder current law, a tax levy to make the lease payments is considered a "special levy" not subject to levy limits. General Obligation Bonds The other alternative is general obligation bonds issued by the City with no involvement by the EDA. The bonds are secured by the City's full faith and credit, which means that bondholders may require the City to levy taxes as needed to pay debt service. Accordingly the interest rates are somewhat lower than for lease-purchase revenue bonds. Issuance of general obligation bonds to finance a commtmity center must be approved by the voters (because none of the usual exceptions to the election requirement apply). To obtain voter approval, the City would need to approve ballot language and schedule the question for a special or general election. Under current law, the most significant time constraint is that the City needs to deliver the ballot form to the COlmty Auditor at least 53 days before the election. (Legislation was introduced in the current session that would require all special elections to be held at the time of the general election in November; that legislation is not likely to be approved this year, but this is a recurring issue at the legislature and could return in the 2006 session). The ballot must state the general purpose of the bond issue and the maximum principal amOlmt of the bonds. The ballot must also provide certain details about the tax levies for debt service, and must contain following statement: "By voting 'yes' on this ballot question, you are voting for a property tax increase." The City may not undertake activities or spend money to advocate approval ofthe bond question, but may provide informational matelial. One key difference between lease-purchase revenue bonds and voter approved general obligation bonds is the way taxes are levied. For lease-purchase bonds, the tax levy is spread like the general city levy, against net capacity in the city. TIns means that taxes are imposed on different classifications of property-commercial, rental residential, homestead residential, etc.-at differential rates. Generally, commercial property has a higher class rate and therefore pays a X higher tax than a homestead residential property with the same market value. For voter-approved bonds, however, the tax is levied against market value, without regard to the normal property classification system. Therefore, a commercial and residential property with the same market value pay the same bond levy. The bottom line is that homeowners pay somewhat higher taxes for a voter-approved bond levy than they do for a lease-purchase levy. Like lease-purchase bonds, voter-approved general obligation bonds are subject to the city's overall debt limit, but the tax levies are outside any applicable levy limits. SJB-262446vl CL205-3 Robert Streetar May 9, 2005 Page 3 of3 Ehlers & Associates can provide additional information about the difference in interest rates and impact on taxpayers for the two types of bond financing. If you have other questions of me, please let me know. Very~y::'i7 11 uO ~LV7JdJ\ '-- Stephen J. ubul SJBI cc: Mark Ruff, Ehlers & Associates SJB-262446vl CL205-3 J\\'\S COnflllUnicationS . l'ub\ic l'articipation l'rocess for l'ub\ic Faci\ities l'ro}ects City of Co\uU\bia CoU\U\unity Center l'roposa\ 1'roposal summar)' of A.cti~ities . COlnmunications pl""OMS) . . & fr J1ilg issnes tltree open honse pl""S, . Strategic couununlcatlOns 1 al (It t d :,anlUcS' three neWs releases, 1'ower1'oint de~elo\,rnent oftmee neWs etterh eJ( "" "., ,', presentation. (JN1S) . 'Boards for o\,en houses (JMS) . Eblets Fin""cial options and Re~ieW Estimated 'fotal (Not_to-E1.ceed 1\.ourIY) O'PtiOl1S~ . survey $ 3,500 $\5~50 $3~~ $ i~OO g5~O $\0,000 1 Step Step Purpose Produc1t and Deliverables Participation Estimated Costs Timetable Basic Planning Council affirms . Project Needs Statement (how does lack of City Staff 8 Hrs 2 to 4 weeks facility need (why) recreational facilities impact ability to serve Review and and process (how) for residents). Affirm Needs use throughout the . Public Participation process and timetable. Statement; project with public, Approve Public others; development Participation of a Citizen's Task Process Force/Study Group. Open Honse Council appoints . Open house planning. City Staff 10 4 to 6 weeks No.1 Task Force that . Open house plan outline. Hrs reports back at key . Q&A Newsletter (including layout/design, Public decision points. City but not printing or mailing). JMS 40 Hrs @ $5,000 Participation in Staff Team works . News release. $125/Hr. Establishment of with Task Force to . Boards (about 12 boards -layout, design Boards $1,640 the Need and the prepare for Open $800, printing costs $840). Process House No. 1 designed . Communications plan. Communications to get feedback on Plan $3,500 problem and process, . Optional community survey. potential options to Optional Survey be studied. News $10,000 release in newspaper and Q&A newsletter mailed to all homes. Options Council affirms . Concept options with pros and cons. City Staff 16 4 weeks Identification results of Open . Evaluation criteria. Hrs and Analysis House No. 1. City . Preparing a summary of each options Staff works with developed by architect with detailed (City's cost of Task Force and Staff advantages and disadvantages of each option. architect not Team to identify included in this options; architect . Establishing evaluation criteria for proposal) develops preliminary community review. concept options for evaluation; Task Force establishes evaluation criteria. 2 Step Step Purpose Product and Deliverables Participation Estimated Costs Timetable Open House City Staff Team · Open house planning. City Staff 16 2 to 6 weeks No.2 Public works with Task · Open house plan. Hrs Force to prepare for · Q&A Newsletter including Open House 2 Participation in Open House No.2 inforn1ation, plus feedback summary from $5,000 Review of designed to get Open House 1 (including layout/design, but JMS 40 Hrs @ Options feedback to ensure all not printing and mailing costs). $ 1 25/Hr. Boards $1,400 viable options studied · News release. and feedback on · Boards (about 10 new boards-layout, evaluation criteria. design $700, printing costs $700). News release in newspaper and newsletter mailed to all homes. Assessment of Task Force assesses Financial options and estimated tax impacts. Ehlers 16 hours $2,800 4 weeks Options options and public Selection of Preferred option. @175/Hr. feedback; Ehlers reviews financial City Staff 20 impacts, financing Hrs options; Task Force reports to decision- makers; Task Force selects final option for consideration by public. Open House Use open house and · Open house plam1ing. City Staff 10 4 - 6 weeks No.3 Public communications tools · Open house plan outline. Hrs to inform and receive · Q&A Newsletter (including layout/design, Participation in feedback on final but not printing) including feedback JMS 40 Hrs @ $5,000 Review of option. summary from open house 2. $125 Selected Option News release. Boards. (about 6 new boards -layout, design Boards $800 $380, printing costs $420) 3 Step Step purpose produd and Deliverables Participation Estimated Costs Timetable Final selection City Staff assist Task News Release after selection. City Staff 8 Ers 2 weeks & Report to Force which Newsletter optional (not included in cost Decision- considers feedback, proposal). makers affirms a final powerpoint for Council Presentation. JMS 6 Hrs @ $750 selection; reports to $125 decision-makers. Meetings and Regular meetings Monthly meetings, phone contacts. City Staff 16 Ongoing Coordination with staff; reporting hours to staff on general coordination; responding to concems, questions by phone. Total $25,890 22 to 32 (optional survey weeks uot included) , Estimated costs include lnyaut but not pdnting costs or "wiling cost of Q&A ",,,,sk""'. PUBUC P AR1\C\P A l\OM 4 ~ 12 May '05 Parker Mr. Robert Streetar (!) Community Development Director DURRANT City of Columbia Heights 590 - 40th Avenue N.E. Columbia Heights, MN 55421 430 Oak Grove Street Suite 300 Minneapolis, MN 55403 Re: Pre-Design Services Agreement T 612.871.6864 F 612.871.6868 www.parkerdurrant.com Architecture Engineering Planning Project Delivery Financing Interior Design Graphic Design Chicago, IL Denver, CO Des Moines, IA Dubuque, IA Hila, HI Honolulu, HI Madison, WI Milwaukee, WI Minneapolis, MN Phoenix, AZ St. Lou is, MO T ucsan, Al Dear Mr. Streetar: Parker Durrant, along with Kraus Anderson for cost estimating, is pleased to submit to you this letter of agreement regarding your selection of our firm to provide pre-design services for your potential Community Center. Based upon our telephone conversation on 10 May '05, we are sending you this letter to assure a clear understanding of the matters relating to this project and our mutual responsibilities. BASIC SERVICES Parker Durrant agrees to provide a statement of reconciliation of the major issues making up the project with an anticipated quality level for building, site and systems to include: 1. The required program elements. 2. Site options relative to individual context, constraints and criteria. 3. The architectural and engineering systems necessary to support the functional program. 4. The reality of the project schedule relating to its requirements, milestones and deadlines. 5. The project and construction budgets. All of this is more fully detailed in the attached. Please carefully review the Scope of Basic Services above to be sure there are no desired items or services omitted. OWNER'S RESPONSIBILITIES City of Columbia Heights, as the Owner, agrees to provide Schedule A information and/or services when requested by Parker DurranUKraus Anderson for the project at its expense, and Parker DurranUKraus Anderson shall be entitled to rely upon the accuracy and completeness thereof. COMPENSATION For the Basic Service Parker Durrant provides, it is agreed that Parker Durrant will be compensated on a Fixed Fee of $86,000, plus Reimbursable Expenses at 1.10 times their cost to Parker Durrant. The Fixed Fee breaks down as follows: Parker Durrant Kraus Anderson M/ElP Civil $61,000 $20,000 $ 5.000 $86,000 w, Additional Services beyond the scope of Basic Services will be performed only when authorized or confirmed by you. Compensation for such Additional Services will be 3.43 times Direct Personnel Expense. Direct Personnel Expense is the salary of Parker Durrant personnel engaged on the Project, plus the cost of their mandatory and customary contributions and benefits. . Reimbursable Expenses are the actual expenditures made by Parker Durrant in the interest of the project for expenses such as travel, long-distance communications, reproductions and mailing, data processing, photographic reproduction, overlay drafting or CADD materials expense, and any state or local taxes imposed where the project is located. SCHEDULE If the project, or any part thereof, is suspended for more than 15 days, we shall be compensated for services performed prior to suspension. Services upon resumption after suspension shall be adjusted to compensate for interruption of our services. It is anticipated that the basic services will begin approximately 01 June '05 and be completed on or about 01 December '05 for the entire public process. Duration of Parker Durrant's time on the project will be approximately four (4) months. TERMS Parker Durrant will invoice you monthly for Basic Services, any additional services and any reimbursable Expenses. Payment is not conditional and is due upon receipt of the invoice. Any invoiced amount not paid within thirty (30) days of the date of invoice will include an interest and service charge of one percent per month. Objections not made to a Parker Durant invoice in writing within thirty (30) days are deemed waived. If proper objection is not made, and you fail to pay Parker Durrant, Parker Durrant may, after giving seven (7) days written notice, suspend services until the outstanding balances are paid. MISCELLANEOUS Since the compensation for Parker Durrant's services is a fixed fee, the monthly invoices are in effect monthly progress payments that reflect the team's best estimate of the proportion of the total services that have then been rendered. It is understood that neither Parker Durrant nor the Owner has control over the factors that determine construction costs. Accordingly, Parker Durrant cannot warrant or represent actual bids or negotiated construction costs may vary from any estimates of such cost that Parker Durrant/Kraus Anderson may prepare. The Owner and Parker Durrant shall not be liable to each other for any consequential damages, including loss of use, loss of profit, or cost of financing. Parker Durrant and its consultants shall have no responsibility for the discovery, presence, handling, removal or disposal of or exposure of persons to hazardous materials of any form. Parker Durrant shall retain intellectual property rights to the drawings, reports, or other documents it prepares. You may retain copies, including reproducible copies of such documents for information and reference. This agreement may be terminated by either party upon seven (7) days written notice should the other fail substantially to perform in accordance with its terms, through no fault of the party that initiates the termination. In the event of termination, Parker Durrant shall be compensated for all services performed and expenses incurred to that date. Nothing contained in this agreement shall cause any third party to be a beneficiary of this agreement. ~, This letter, any documents attached hereto, referenced herein are intended to be the entire agreement between us. Any changes or additions to this agreement must be in writing and signed by all parties involved. The pre-printed terms and conditions of any purchase order issued for convenience that may be signed by both parties are not an addition of amendment to this agreement and are of no force and effect. This copy, and an additional enclosed copy of this letter agreement, has been signed by us on behalf of Parker Durrant. If this agreement is satisfactory, please sign and date as indicated below. Once you have signed both copies, please return one to Parker Durrant and retain the other for your file. Our receipt of the fully signed copy will constitute our authorization to proceed. Thank you again for your selection of Parker Durrant on this project. Respectfully submitted, PARKER DURRANT ~ Colleen Nelson Associate Karl Ermanis, AlA Principal CITY OF COLUMBIA HEIGHTS CITY OF COLUMBIA HEIGHTS By By Title Title Date Date Cc: Denny Wallace Amy McCollom Tom Sackett ~, Parker Durrant Pre-design Services 1. Programming services required to establish the following requirements: .1 A description of program elements and spaces of the components for the project. .2 Basic diagrams illustrating general internal program adjacencies. NOTE: A preliminary space program and cost estimate, dated 29 March- '05, was developed by the City of Columbia Heights staff, Parker Durrant/Kraus Anderson, which will serve as a base for the above stated programming tasks. 2. Analysis of two (2) sites selected by the City of Columbia Heights: .1 Criteria and/or constraints of all sites; .2 Generalized conceptual topography, building siting and grading for each site; .3 Impact of the two sites on building and functional options; .4 Special considerations, such as future expansion, hydrology and soil/groundwater contamination issues for each site considered. 3. Review of building issues of the project for one (1) site: .1 Criteria/Concepts/Options .1 Statement of concepts and options relating to site conditions, occupancy requirements, hazardous materials, operating costs, codes and local conditions; .2 Statements of concepts and options relating to major architectural, mechanical and electrical systems. 4. Development of two renderings, site plans, diagrammatic building plans and other materials for public and city council presentations. 5. Review of time and cost considerations of the project for one (1) site: .1 Project Budget for one (1) site: .1 Evaluate first cost versus life cycle costs; .2 Develop a preliminary statement of value engineering concepts and design alternates; .3 Statements describing the frequency of estimates and their integration into the master project schedule; .4 Statement of a preliminary project cost budget for the entire project which would include preliminary estimates of construction costs plus NE fees, soft costs with appropriate contingencies for all areas. ~, Owner Predesign Responsibilities Schedule A 1. Owner proviqes: .1 Owner-developed building program; .2 Owner objectives/philosophy/expectations; .3 Schedule; .4 Special equipment or systems; .5 Statement of client's desired building and site image with respect to other public facilities in the City of Columbia Heights; .6 Statement describing the general quality level expected in the project in both function, materials and system performance. 2. Site Information and tests: .1 Geotechnical engineering services which may include test borings, test pits, determinations of soil bearing values, percolation tests, evaluations of hazardous materials, ground corrosion and resistivity tests; .2 land surveys describing legal limits, physical characteristics, set backs, utility locations and encroachments; .3 Data pertaining to existing buildings, other improvements, trees and available utilities; .4 Written legal description of the property along with any deed restrictions and easements. 3. Information that the Owner may have about the site that are to be part of the project including: .1 Site surveys, topographic information, site photography, site geotechnical reports. 4. Any special test for water pollution, hazardous materials or other special tests, inspections or reports required by code or requested by Parker Durrant 5. Legal, insurance and accounting services as may be necessary for the project including a review of lender requirements. 6. Designate a representative authorized to act on the Owner's behalf with respect to the project. ~. Parker Durrant Hourly Rates Schedule Staff Category Principal Billing Rate $160.00 $130.00 Design Architect Interior Design Architect $120.00 $115.00 $110.00 $110.00 $100.00 $ 95.00 $ 80.00 $ 80.00 $ 80.00 $ 75.00 $ 75.00 $ 70.00 $ 60.00 $ 60.00 $ 50.00 Project Manager Manager of Interior Design Manager of Graphic Design Project Designer Construction Administrator Designer :- Architect . Architect Engineers Architectural & Engineering Technicians Project Accountant Interior Designer Graphic Designer Intern Architect - E.I.T. Administrative Assistant ~. Pre-design and Architectural Design I Design Documentation Services Pre-design - Consists of programming, flow diagrams, site analysis and selection, site development and utilization, on-site and off-site utility studies, and zoning. · Development of initial approximate gross facility areas and space requirements . Space relations . Flexibility and expandability . Site requirements . Conversion of programmed requirements to net area requirements . General space allocations' . Adjacencies Site Analysis and Selection consisting of: . Identification of potential site(s) . Movement of traffic and parking studies · Topography analysis . Analysis of zoning and other legal restrictions . Ecological requirements . Land utilization . Review of soils report . Electrical and Mechanical systems service and distribution . Confirmation of location, size and adequacy of utilities serving the site(s) . Diagrams, plans and conceptual renderings based on site analyses . Presentations to governing authorities . Attendance at public meetings and hearings . Development of a preliminary budget for the Work Architectural Design I Documentation - Consists offive phases - Schematic Design, Design Development, Construction Documents, Bidding & Negotiation and Construction Administration. During the Schematic Design Phase, responding to program requirements and preparing: . Review of Owner's Program and Budget . Conceptual site and building plans .. Preliminary sections and elevations .. Development of approximate dimensions, areas and volumes . Perspective sketch(es) . Study model(s) . Identification of potential architectural materials, systems and equipment and their criteria and quality standards consistent with the conceptual design NOTE: During this phase, other disciplines such as mechanical, electrical, structural engineering, civil engineering, interior design, landscape architecture and cost estimating develop their respective portions of work. Each project may also require special consultants not already mentioned. During the Design Development Phase consisting of continued development and expansion of architectural Schematic Design Documents to establish the final scope, relationships, forms, size and appearance of the Project through: . Plans, sections and elevations . Typical construction details . Three-dimensional sketches(es) . Study model(s) . Final material selections . Equipment Layouts ~. · Development of architectural outline Specifications or itemized lists and brief form identification of significant architectural materials, systems and equipment, including their criteria and quality standards. NOTE: During this phase, other disciplines such as mechanical, electrical, structural engineering, civil engineering, interior design, landscape architecture and cost estimating develop their respective portions of work. Each project may also require special consultants not already mentioned. During Construction Documents Phase consisting of preparation of Drawings, Specifications and other documents based on approved Design Development Documents, setting forth in detail the requirements for interior construction and for furniture, furnishings and equipment for the Project. . Preparation and coordination of special Drawings and Specifications for obtaining bids or prices on alternate subdivision of the Work . Preparation and coordination of special Drawings and Specifications for obtaining alternate bids or prices on changes in the scope of Work · Preparation and coordination of Drawings, Specifications, Bidding Documents and schedules for out-of-sequence bidding or pricing of subdivisions of the Work · Preparation and coordination of Drawings, Specifications and Bidding Documents for multiple prime contracts for subdivisions of the Work · Development and preparation of architectural Specifications describing materials, systems and equipment, workmanship, quality and performance criteria required for the construction of the Project. . NOTE: During this phase, other disciplines such as mechanical, electrical, structural engineering, civil engineering, interior design, landscape architecture and cost estimating develop their respective portions of work. Each project may also require special consultants not already mentioned. Bidding I Negotiation Services consist of organizing and handling Bidding Documents for: . Coordination . Reproduction . Completeness review . Distribution . Retrieval . Receipt and return of document deposits . Review, repair and reassembly of returned materials. . Assistance to Owner in establishing list of Bidders or proposers . Prequalification of Bidders or proposers . Participation in pre-bid conferences . Responses to questions from Bidders or proposers and clarifications or interpretations of the Bidding Documents · Attendance at bid opening(s) . Documentation and distribution of bidding results Addenda services consisting of preparation and distribution of Addenda as may be required during bidding or negotiation and including supplementary Drawings, Specifications, instructions and notice(s) of changes in the bidding schedule and procedure. Contract Administration Services consist of: . Processing of submittals, including receipt, review of and appropriate action on Shop Drawings, Product Data, Samples and othe~ submittals required by the Contract Documents ~, . Observation or visits to the site at intervals appropriate to the stage of the work or as otherwise agreed by the Owner and Architect in writing to become generally familiar with the progress and quality of the Work completed and to determine in general if the Work when completed will be in accordance with Contract Documents; preparing related reports and communications. c J a. ORDINANCE NO. BEING AN ORDINANCE AMENDING ORDINANCE NO. 853, CITY CODE 1977, AND PERTAINING TO JUNK VEHICLES: The City of Columbia Heights does ordain: 7.205 (7) No person shall park, keep, place, store or permit the parking or storage of any stock car, racing car, or junk vehicle on a public street or alley, or any private lands or premises which he owns, occupies or controls for a period of longer than 96 hours, unless it shall be within a building on such private premises. For purposes of 7.205(7), 7.205(8) and 7.205(9), (a) "Bus" means a vehicle designed for carrying passengers and having a seating capacity of more than nine persons, but not to include any such vehicle which has been altered for use for camping purposes exclusively. (b) "Motor truck", "truck tractor", or "commercial vehicle" means a vehicle having either a capacity of more than one (1) ton or weight of more than 5,000 pounds or both, but not to include vehicles which are designed exclusively for recreation purposes. (c) "Junk vehicle" means any motor vehicle which is not in operable condition, or which is partially dismantled, or which is used for sale of parts or as a source of repair or replacement patis for other vehicles, or which is kept for scrapping, dismantling, or salvage of any kind. Failure to prominently display a motor vehicle registration license for the current year shall be prima facie evidence that such vehicle is a junk vehicle. Is hereby anlended to read as follows: 7.205 (7) No person shall park, keep, place, store or permit the parking or storage of any stock cat., racing Cat", or junk vehicle on a public street or alley, or any private latlds or premises which he owns, occupies or controls for a period of longer than 96 hours, unless it shall be within a building on such private premises. Said person shall be given a notice of violation by the City to take corrective action. COlTective action shall be defined as follows: (1 ) When the vehicle is legally pat'ked and in compliance with all applicable City Ordinances atld State requirements for atl operable vehicle on public roads. In the event corrective action is not taken within ninety- six (96) hours from the notice of the violation. the city may take the vehicle into custody. impound it. and the vehicle is eligible for disposal or sale as atl unauthorized vehicle under section 168B.08. 45 days after notice to the owner. For purposes of 7.205(7), 7.205(8) and 7.205(9), (a) "Bus" means a vehicle designed for carrying passengers and having a seating capacity of more than nine persons, but not to include any such vehicle which has been altered for use for camping purposes exclusively. (b) "Motor truck", "huck tractor", or "cOlmnercial vehicle" means a vehicle having either a capacity of more than one (1) ton or weight of more than 5,000 pounds or both, but not to include vehicles which are designed exclusively for recreation purposes. (c) "Junk vehicle" means any motor vehicle which is not in operable condition, or which is paIiially dismantled, or which is used for sale of parts or as a source of repair or replacement parts for other vehicles, or which is kept for scrapping, dismantling, or salvage of any kind. Failure to prominently display a motor vehicle registration license for the CUlTent year shall be prima facie evidence that such vehicle is a junk vehicle. This OrdinaIlce shall be in full force and effective 30 days after its passage. First Reading: Second Reading: Date of Passage: Offered by: Seconded by: Roll Call: Mayor Gary L. Peterson Patricia Muscovitz, Deputy City Clerk 283353 1 Clb ORDINANCE NO. BEING AN ORDINANCE AMENDING ORDINANCE NO. 853, CITY CODE 1977, AND PERTAINING TO PARKING ON LANDSCAPED SURFACES: The City of Columbia Heights does ordain: Section 7: Screening and landscaping Every yard of any premises on which a dwelling or dwelling unit is located shall have installed and maintained landscaping in accordance with the provisions of this section. (i) Sodding and ground cover. All exposed ground area sunOlmding the principal building and accessory buildings that are not devoted to driveways, parking areas, sidewalks, or patios, shall be sodded or landscaped with shrubs, trees, gardens, or other ornamental landscape materials. No landscaped area shall be used for the parking of vehicles or storage or display of materials, supplies or merchandise. The owner of an unauthorized motor vehicle shall be given notice of violation by the City and will be given fifteen (15) days to take conective action. Corrective action shall be defined as: (1) An owner has taken corrective action when the vehicle is legally parked and in compliance with an applicable City Ordinance and State requirements for an operable vehicle on public roads. In the event conective action was not taken within fifteen (15) days from the notice of the violation, the city may take the vehicle into custody, impound it, and the vehicle is eligible for disposal or sale as an unauthorized vehicle under section 168B.08, 45 days after notice to the owner. Is hereby amended to read as follows: Section 7: Screening and landscaping Every yard of any premises on which a dwelling or dwelling unit is located shall have installed and maintained landscaping in accordance with the provisions of this section. (i) Sodding and ground cover. All exposed grOlmd area surrolmding the principal building and accessory buildings that are not devoted to driveways, parking areas, sidewalks, or patios, shall be sodded or landscaped with shrubs, trees, gardens, or other ornamental landscape materials. No landscaped area shall be used for the parking of vehicles or storage or display of materials, supplies or merchandise. The owner of the propeliy and/or the owner of said vehicle in violation hereof shall be given a notice of violation by the City and will be given ninety-six (96) hours to take conective action. Corrective action shall be defined as follows: (1) The owner of said propeliv and/or vehicle has taken corrective action when the vehicle is legally parked and in compliance with all applicable City Ordinances and State requirements for an operable vehicle on public roads. In the event corrective action is not taken within ninety-six (96) hours from the notice of the violation, the city may take the vehicle into custody, impound it, and the vehicle is eligible for disposal or sale as an unauthorized vehicle under section 168B.08, 45 days after notice to the owner. This Ordinance shall be in full force and effective 30 days after its passage. First Reading: Second Reading: Date of Passage: Offered by: Seconded by: Roll Call: Mayor Gary L. Peterson Patricia Muscovitz, Deputy City Clerk 283347 1 >- .- W VJ > Wo::: ~:J 5; en wen enW o~ W...J 1-<( OC!) ~w ........J Zit) og .0 N en o::w we.!) J:O::: I-<C OJ: CJ z o i= :J CJ W en o 0::: D. en n:w we.!) ::cO::: I-<C OJ: CJ .J ~ W Z W e.!) - .J :; C3 w ~ o E in N C'I!. Oi tR- :is 0::: u:: e ~ Q) - en ~ ~ ::l e.!) ni' e ~ lU m w ~ o E ~ - Q) ~ e ~S ~ Q) tR-~ :is 0::: u:: ~ ~ ::l e.!) ft e lU Q) ell: lG Q) mCi.i z o ~ .J :J D. o D. co Cl) cg as .... ~ CJ <C men :is I- :JJ: .Je.!) 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OJ OJ c1: C CO Q)J:: ~o ~ "'0 C o (J) ~ c OJ en C Ql ., o .... m ci '" o -.:t CO N '" W D- O J: :s: W Z ...J ~ en ~ u - CIVIUGENERAL PROSECUTION OTHER OTHER , CITY POPULATION FIRM RATE CHARGES FIRM RATE CHARGES FRIDLEY 27,460 Holstad & Knaak, PLC $5,450 $75/hr addt'l after 1st Carl Newquist $95/hr per mo 10 hours on litigation $37/hrfor (includes long per month law clerk distance chgs up Filing fees, court costs, to $25/month; witness expenses, & Chg'd act photocopying up tc faxes billed at actual fee for 500 pages/month; cost process & up to 30 minutes Court time on HRA serving search time on issues billed if it Westlaw) exceeds 5 hrs/month BROOKLYN 29,185 Kennedy & Graven, $995/mo other work chg'd Carson & McClelland $90/hr CENTER Chartered retainer hourly at $135 (covers phone to $146/hr. calls & council meetings only) ROSEVILLE 34,100 Jensen, Bell, Converse $9,018/mo Actual costs charged Jensen, Bel! Converse, & $1 DADO/mo Erickson Retainer for parking, meals, Erickson retainer long distance calls, postage, messenger, court/arbitration! other contested case costs; IRS' mileage rates; $.20! page for copies; $1!page for faxes " CIVIUGENERAL PROSECUTION OTHER OTHER CITY POPULATION FIRM RATE CHARGES FIRM RATE CHARGES COON RAPIDS 62,177 Three attorneys on staff $40.56/hr to $53.75 per hr City Attorney & benefits $34.38/hr to $45.57 per hr Asst. City Attorney & benefits . BROOKLYN 68,600 Kennedy & Graven, $6,500 Roger Fellows :&229,792 PARK Chartered per mo yr Retainer paid in monthly installments of $19,149.33 per mo I c: 0 "C l/) c: Q) CO 'i: Q) '5 Q) u O"c: c: c: ,_ co '0 S .... :::J :=0 l/) .0 .... ~ - .f: :::J ,- c..0l en e: o .- "C ...... e: c: l/) 'co 0 Q)~ .0 l/) .... ~ c: co 0- c..:::J ro l/) 01 I--- i-- .... Q) iJ) ..- .... .... c: en en 0 u Q) Q) ..... Q) :2 0 :I:: (5 e: 'E 0 0.. :;::::; E Cii co 0 e: .... co u e: 0.. :t:: 0 ~ co ~ 0.. ...... 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"0 ro (]) c: c: ..... l/) (]) co c: u .f: .$ ltl (]) l/) l/) e: (]) en c: 'E .~ ..- ro c: E ~ ro :::J E 0 (]) OJ 0 ..- 0.. .... 0 Z (!) ~ 'i: Q) C' l/) 0 0 (]) OJ U '0 l/) (]) :;::::; 13 (]) :J :::= .... u l/) ell Cii ~ "0 c:: 'S; (]) I co (]) co OJ > 3: c: :::J 0 c:: 0 .c: 0 OJ 0 (]) :;::::; Q) co ro 0 0 :E ..... (]) 0 a:: :.:J 0 D... OJ () i< 0 c: -l ....L- P j b CITY #OF ARRESTS #OFPARTI # OF PART % OF CRIME SWORN CRIMES II CRIMES CLEARED OFFICERS Columbia Heights 22 1,828 1,066 2,197 53% Mounds View 17 420 734 789 31% East Bethel * 346 403 630 48% Ham Lake * 285 432 656 40% Robbinsdale 20 676 649 982 46% Anoka 28 838 734 1,064 40% New Hope 27 947 612 1,137 54% Crystal 25 881 905 927 48% Fridley 37 1,333 1,558 2,989 47% Brooklyn Center 42 2,260 2,284 1,950 50% Roseville 46 1,333 1,649 1,312 41% Coon Rapids 61 2,267 3,024 4,675 35% Brooklyn Park 81 3,084 3,292 5,052 41% *Police services under contract with another agency. Data taken from Bureau of Criminal Apprehension Criminal Justice Information Systems Uniform Crime Report, Minnesota Crime Information 2003 ....L I' , (. City of Columbia Heights Payments to Barna Guzy & Steffen 1999 2000 2001 2002 2003 2004 Civil Process 137,024 63,633 59,067 58,707 50,025 59,229 Prosecution 119,925 106,088 110,706 112,888 1 i 6,062 106,675 Other 12,876 22,736 31,345 13,434 2,348 1,133 Total 269,825 192,457 201,118 185,029 168,435 167,037 jpk note: Payments are shown above in the year they were issued to the vendor. In some cases, this is not the same year in which services were rendered. CITY OF COLUMBIA HEIGHTS DATE: MAY 10,2005 TO: WALT FEHST CITY MANAGER FROM: WILLIAM ELRITE FINANCE DIRECTOR RE: PURCHASE OF PROPERTY TO BUILD A CITY-OWNED LIQUOR STORE The City reviewed this subject in 2001 and it was put on hold. With the reduction in state aid and the concern about continually increasing property tax levies, I feel it is essential that the City review the concept of acquiring land and build a stand-alone liquor store. This could save the taxpayers of Columbia Heights thousands of dollars in the future. If we look back, had the City purchased property and built a liquor store in 1984 rather than renting, the store would be paid for today with the money that we paid in rent, plus we would have an additional $140,000 per year (amount we are currently paying for rent) to use for other City activities or as a reduction to our property tax levy. It is true that if we own our own property we will have some minor annual maintenance costs. However, this would be a small fraction of what we are currently paying for rent and CAM expenses. Currently, if the City sells a $2 million bond to acquire property and build a liquor store, the bond principal and interest will be paid at the san1e amount we are currently paying for rent and CAM expenses. In addition to this, we will be gaining equity in a property and building with no out-of-pocket expense to the taxpayers. Also, owning a new state- of-the-art liquor store in a prime location should see a significant increase in sales. This would result in a higher profit and additional money available to offset City expenses for property and tax levies. Staff is recommending acquiring the three properties on the southwest corner of 50th and Central. Two of these properties are currently for sale. The acquisition of these properties would provide us with adequate space to build a liquor store that would be a huge asset to the City of Columbia Heights. I have attached the proforma that was done in 2001 showing the projections of a city- owned operation versus rental. As you can see, if sales remain the same, the net income from a city-owned operation is virtually the same as the current rental location. The only change is that we are taking the money that is used for rent and CAM and applying it to the bond principal and interest expense. The last column on the profonna shows where we would be with a 10% increase in sales at a new location. As you can see, this increases our annual profitability by approximately $60,000. It is staffs recommendation that we seek council authorization to acquire these properties for the future construction of a liquor store. I have compared the 2001 proforma to current operations and there have been only slight increases in rent and other factors. In general, the 2001 proforma should show a slightly more conservative picture than a current proforma would show. WE:sms 0505102CM Attachment City of Columbia Heights Cash Basis Proforma on the Relocation of Top Valu Liquor (Central Ave.) Prepared 2-Apr-02 I A B C Actual Future Future 2001 Proforma Proforma Owning Owning Sales 1 Liquor, Beer, Wine, Other 3,039,808 3,039,808 3,343,789 Operating Expense 2 Cost of goods sold 2,405,354 2,405,354 2,645,890 3 Operating Expense 334,487 334,487 334,487 4 Rent & C.A.M. Expense 141,741 5 Building Maintenance 1,000 1,000 6 Bond Interest 90,000 90,000 7 Bond Principal 60,000 60,000 8 Equipment Depreciation 5,596 9 Total Expense 2,887,178 2,890,841 3,131,377 10 Net income from operations 152,630 148,967 212,412 Actual 2001 Net Income for Liquor Store #1 Projected Net Income for a new store with a 10% increase in sales. ...... --- Based on Based on land & land & building building costs of costs of 2,000,000 2,000,000 and and no increased mcrease sales of in sales 10% Note: For 2004 the Net Operating Income for Liquor Store #1 was $139,541. Staff attributes the reason for part of this decrease to the old store location, losing Walgreens as an anchor tenant and competition from MGM and St Anthony with new modern stores.