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Home My WebLink AboutJUNE 29, 1993 MINUTESCiter of %rir~irai~_~ l:5~_~c2ta "WORLD'S LARGEST RESORT CITY" CITY COUNCIL MAYOR MEYERA E OBERNDORF, At-Large VICE MAYOR WILLIAM D SESSOMS JR, At Large JOHN A BAUM, Blackwater Borough I INWOOD 0 BRANCH Ill, V~rgmta B~ach l~vugh JAMES W BRAZIER, JR, Lynnhaven Borough ROBERT W CLYBURN, Kempsv~lle Borough ROBERT K DEAN, Pnncess Anne Borough LOUIS R JONES, Bays~de Borough PAUL J LANTEIGNE Pungo Borough JOHN D ~tOSS, At Large NANCY K PARKER, At Large JAMES K SPORE, Cay Manager LESLIE L LILLEY, Cay Attorney RUTH HODGES SMITH CMC f AAE, C~t¥ Clerk CITY COUNCIL AGENDA 0.~ OUR N~'( 281 (_ ITY HALL BUILDING MU~qICIP 4L CEN'I t R VIR( d~,,'IA BI'A( H VIRGINI4 23456 9005 1804~ 427 4303 SPECIAL SESION JUNE 29, 1993 I. FORMAL SESSION - Council Chamber - 5:00 PM A. CALL TO ORDER - Mayor Meyera E. Oberndorf B. READING OF MAYOR'S CALL TO SPECIAL SESSION C. ROLL CALL OF CITY COUNCIL D. RECESS TO EXECUTIVE SESSION E. RECONVENE FORMAL SESSION - Mayor Meyera E. Oberndorf F. CERTIFICATION OF EXECUTIVE SESSION G. PUBUC BRIEFING 1. HORSE RACING FAClUTY - Status of Negobations and Possible Locabon. H. ADJOURNMENT MINUTES VIRGINIA BEACH CITY COUNCIL Virginia Beach, V~rginia June 29, 1993 Vice Mayor Sessoms called to order the SPECIAL FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Hall Building, June 29, 1993, 5:00 P.M. for the PUBLIC BRIEFING re the status of negotiations and possible location of a Horse Racing Facility. Council Members Present: John A. Baum, Linwood O. Branch, III, James W. Brazier, Jr., Robert W. Clyburn, Louis R. Jones and Vice Mayor William D. Sessorns, Jr. Council Members Absent: Mayor Meyera E. Oberndorf Robert I~ Dean Paul J. Lanteigne John D. Moss [ENTERED: 5:12 P.M.] ATI~ENDING YOUTH MEETING COUNCIL [ENTERED: 5:10 P.M.] [ENTERED: 5:25 P.M.] [IN EXECUTIVE SESSION WAITING FOR MAYOR] Nancy IC Parker [ENTERED: 5:12 P.M.] -2- Item I-B. ITEM # 36968 Vice Mayor Sessoms read the CALL TO SPECIAL SESSION: "HONORABLE MEMBERS OF CITY COUNCIL: In accordance with the City Charter, Section 3.06, the City Code, Section 2-21, and by the authority vested in me as Mayor of the City, I hereby call a SPECIAL FORMAL and EXECUTIVE SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Hall Building, on Tuesday, June 29, 1993, at 5:00 P.M. for the following purposes: The City Staff to give a Public Briefing re the status of negotiations and possible location of a Horse Racing Facility within the City of Virginia Beach. Sincerely, s/Meyera E. Oberndorf Mayor" June 29, 1993 City of Virginia Beach MEYERA E OBERNDORF MAYOR MUNICIPAL CENTER VIRGINIA BEACH, VIRGINIA 23456-9000 (804) 427-458~ June 25, 1993 HONORABLE MEMBERS OF CIIY COUNCIL In accordance with the City Charter, Section 3.0(~ the City Code, Secnon 2-21, and by the authority vested in me as Mayor of the City, I hereby call a SPECIAL FORMAL and EXECUTIVE SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Ilall Building, on Tuesday, June 29, 1993, at 5:00 P.M. for the following purposes: The Ctty Staff to give a Public Briefing re the status of negottations and possible location of a llorse Racing Facility within the Ctty of Virginia Beach. Virginia Beach Ct~_ Council Received Nottce Councilman John A. Baum Councilman Linwood O. Branch, III Councilman James W. Brazier, Jr. Councilman Robert W. Clyburn Councilman Robert lC Dean Councilman Louis 1~ Jones Councilman Paul J. Lanteigne Councilman John D. Moss Councilwoman Nancy IC Parker Vice Mayor William D. Sessoms Sincerely, Meyera E. Oberndorf Mayor -3- Item I-D. ITEM # 36969 Vice Mayor William D. Sessoms, Jr. entertained a motion to permit City Council to conduct its EXECUTIVE SESSION, pursuant to Section 2.1-344, Code of Virginia, as amended, for the following purposes: PUBLICLY-HELD PROPERTY. Discussion or consideration of the condition, acquisition, or use of real property for public purpose, or of the disposition of publicly-held property, or of plans for the future of an institution which could affect the value of property owned or desirable for ownership by such institution pursuant to Section 2.1-344(A)(3). To-Wit: Acquisition of Real Property for a Public Purpose - Princess Anne Borough. LEGAL MATTERS: Consultation with legal counsel or briefings by staff members, consultants, or attorneys pertaining to actual or probable litigation, or other specific legal matters requesting the provisions of legal advice by counsel pursuant to Section 2.1-344(A)(7). To-Wit: Legal Briefing Related to Financing Issues Regarding a Proposed Race Track Upon motion by Councilman Brazier, seconded by Councilman Clyburn, City Council voted to proceed into EXECUTIVE SESSION. Voting: 6-0 Council Members Voting Aye: John A. Baum, Linwood O. Branch, III, James W. Brazier, Jr., Robert W. Clyburn, Louis R. Jones, and Vice Mayor William D. Sessorns, Jr. Council Members Voting Nay: None Council Members Absent: Robert 32 Dean, Paul J. Lanteigne, John D. Moss, Mayor Meyera E. Oberndorf and Nancy 32 Parker June 29, 1993 -4- Item I-E. ITEM # 36970 Mayor Oberndorf RECONVENED the SPECIAL FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Hall Building, June 29, 1993, 6:20 P.M. Council Members Present: John A. Baurn, Linwood O. Branch, III, James W. Brazier, Jr., Robert W. Clyburn, Robert IC Dean, Louis R. Jones, Paul J. Lanteigne, John D. Moss, Mayor Meyera E. Oberndo~ Nancy IC Parker and Vice Mayor William D. Sessorns, Jr. Council Members Absent: None June 29, 1993 -5- Item I-F. ITEM # $6971 Mayor Oberndorf read the CALL TO SPECL4L SESSION: "HONORABLE MEMBERS OF CITY COUNCIL: In accordance with the City Charter, Section 3.06, the City Code, Section 2-21, and by the authority vested in me as Mayor of the City, I hereby call a SPECIAL FORMAL and EXECUTIVE SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Hall Building, on Tuesday, June 29, 1993, at 5:00 P.M. for the following purposes: The City Staff to give a Public Briefing re the status of negotiations and possible location of a Horse Racing Facility within the City of Virginia Beach. Sincerely, s/Meyera E. Oberndorf Mayor" June 29, 1993 -6- CERTIFICATION OF EXECUTIVE SESSION ITEM # 36972 Upon motion by Vice Mayor Sessoms, seconded by Councilman Clyburn, City Council CERTIFIED THE EXECUTIVE SESSION TO BE IN ACCORDANCE WITH THE MOTION TO RECESS. Only public business matters lawfully exempted from Open Meeting requirements by Virginia law were discussed in Executive Session to which this certification resolution applies; AND, Only such public business matters as were identified in the motion convening the Executive Session were heard, discussed or considered by Virginia Beach City Council. Voting: 11-0 Council Members Voting Aye: John A. Baum, Linwood O. Branch, III, James W.. Brazier, Jr., Robert W. Clyburn, Robert I~ Dean, Louis R. Jones, Paul J. Lanteigne, John D. Moss, Mayor Meyera E. Oberndorf, Nancy K. Parker and Vice Mayor William D. Sessoms, Jr. Council Members Voting Nay: None Council Members Absent: None June 29, 1993 Beso u on CERTIFICATION OF EXECUTIVE SESSION VIRGINIA BEACH CITY COUNCIL WHEREAS: The Virginia Beach City Council convened into EXECUTIVE SESSION, pursuant to the affirmative vote recorded in ITEM # 36969 Page No. 3, and in accordance with the provisions of The Virginia Freedom of Information Act; and, WHEREAS: Section 2.1-344. of the Code of Virginia requires a certification by the governing body that such Executive Session was conducted in conformity with Virginia law. NOW, THEREFORE, BE IT RESOLVED: That the Virginia Beach City Council hereby certifies that, to the best of each member's knowledge, (a) only public business matters lawfully exempted from Open Meeting requirements by Virginia law were discussed in Executive Session to which this certification resolution applies; and, (b) only such public business matters as were identified in the motion convening this Executive Session were heard, discussed or considered by Virginia Beach City Council. R~th Hodges Smith, CMC/AAE City Clerk June 29, 1993 -7- PUBLIC BRIEFING HORSE RACING FACILITY 6:20 P.M. ITEM # 36973 The City Manager introduced the following representatives of Churchill Downs, Inc.: Thomas H. Meeker President/Chief Executive Officer Jeffrey M. Smith Senior Vice President, Planning and Development Alexander M. Waldrop General Counsel & Secretary Cathy Zega Director of Community Relations Mr. Dean Block, Director of Budget and Evaluation, advised the purpose of the Briefing was to present available information concerning the possibdity of a Churchill Downs, Inc. race track, which wouM be a Public/Private Partnership. Churchill Downs, Inc, proposes to build a race track in South Hampton Roads. Virginia Beach is under very active consideration as the site. Pursuant to Resolutions adopted by City Council on December 8, 1992, and February 23, 1993, the City has pursued discussions with Churchill Downs. Mr. Block advised there would have to be a site selection by Churchill Downs favorable to Virginia Beach. The Virginia Racing Commission in early June established October First as the application deadline. This necessitates that Churchill Downs (and all other applicants throughout the state) move quickly to pin down sites and undertake the extensive VRC application preparation work required. In the local case, Churchill Downs must, if Virignia Beach is chosen, submit its conditional use permit application to the Planning Department by mid-July to allow for Planning Commission and City Council action by October First. This is a VRC requirement. Mr. Block displayed the illustrative site plan. This represents the construction on a 245 acre site, bounded by London Bridge Road, Harpers Road, Dam Neck Road and the proposed Southeastern Expressway. THE PROJECT 245 Acres Race Track and 60TBS $56. 6-MILLION Seats 5 - 6,000; 1,400 Horses Dormitories for 470 Persons, Parking for 3,500 Cars The Proposal is built around the fundamental principals of a Public/Private Partnership. Public/Private Partnerships have been and are a well established means around the United States for Cities to compete successfully for the location of industry and business and the furtherance of public goals and public programs. These have been important tools in a variety of areas. In most cases the public participation is an essential component in bringing the industry to the State or the locality. PUBLIC PURPOSE AND BENEFITS $2.6-MILLION/year in New Taxes Additional Spending for Goods & Services in Community: $23. 4-MILLION. 1,058 FTE Jobs, $22.2-MILLION Payroll One Time Revenues = $201,000; 840 Construction Jobs. June 29, 1993 -8- PUBLIC BRIEFING HORSE RACING FACILITY ITEM # 36973 (Continued) Mr. Block advised additional beneftts include: Promotion of Tourism Preservation of Open Space/Agricultural Lanes Public Use Days CITY IMPR 0 VEMENTS/A CTIONS No City Water Used. All Water from Lakes & Wells One-time Off-site intersection, Turn-lane Landscaping & Signal Improvements Sewer Pump Station/Electrical & Gas Start-up Advertising Estimated Total $1.37M .55M .25M $2.17M Operational Advertising support in Year 1, 2, & 3 TRT Service to Site Manure/Bedding Removal Mounted Police Horse Stalls FINANCING PLAN Developed after Intensive Discussions in Competitive Environment Components 40% Equity from Private Partners Bank Note for $22+ Million. Variable Rate Senior Note. Sports Authority Revenue Bonds $12.5-Million Construction Proceeds. City Enhances Sports Authority Credit Via Commitment to Replenish Debt Service Reserve Fund, if Needed. Protections & Conditions Bond Counsel Quality of the Product Projections are Very Positive All Debt Service Covered at 40% of Operating Revenue Forecasts. No Return to Equity Until all Debt Service Paid. No Construction Cost Risk No City One-time Investment Until Construction Assured. No Sports Authority Debt Issued Until Conditions Met. Performance Bonds to Insure Completion/Operation of Track Sports Authority Owns Land and Improvements Additional Lease Payments Independent Verification of Forecasts City Council Approval of All Contracts & Documents Construction Budget No Parity Debt Other Documentation needed by City Council. June 29, 1993 -9- PUBLIC BRIEFING HORSE RACING FACILITY ITEM # 36973 (Continued) FISCAL ANALYSIS Payback on One-Time Investment = 20 Months Financing "Worst-Case" - Track built, Not Operated, Sits for 20years. Only then City pays $2.2-MILLION/YEAR and still owns land. "Really Bad Case" - Track Built, Operated Less than 40% of Projections. City may pay something in a given year. "Very Likely Case" - Track Built, Operated at 85-100% of Projections. All Debt Service Paid. Return to Equity Good. Additional Lease Payments may be made. "Good Case" - Track built, Operated at 90-105% of Projections. All Debt Service Paid. Return to Equity Excellent. Additional Lease payments received in some years. AL TE RNA TIVE S Do Nothing. Discussions Will Cease. Reject Proposal. Discussions will cease. Accept Proposal. Will Return July 9 or 13th. Set New Criteria. Staff will pursue Churchill Downs at liberty. RECOMMENDATIONS June 29 -Direct Completion of Drafts (Option 3) july 6 Approve Agreement & Resolution Designate $1,000,000 of New Tax Revenues to School Programs. Other Recommendations as in report. The report is hereby made a part of the record. June 29, 1993 - 10 - Item I-I. ITEM # 36974 The City Attorney advised his legal opinion: "Mayor/Members of Council: I have re-reviewed the requirements for Executive Session under the FOIA and have located appropriate and pertinent opinions of the Attorney General, which I have attached. As the property in question is to be acquired by a public body for a public purpose - it is permissible to discuss this issue in Executive Session. I have prepared the appropriate motion for the Mayor, if you desire to discuss this issue in Executive Session. Leslie L. Lilley City Attorney" June 29, 1993 - 11 - Item l-J. RECESS INTO EXECUTIVE SESSION ITEM # 36975 A motion was made by Vice Mayor Sessorns, seconded by Councilman Baurn to RECESS into EXECUTIVE SESSION pursuant to Section 2.1-344, Code of Virginia, as amended, for the following purpose (7:05 P.M.): PUBLICLY-HELD PROPERTY: Discussion or consideration of the condition, acquisition, or use of real property for public purpose, or of the disposition of publicly-held property, or of plans for the future of an institution which could affect the value of property owned or desirable for ownership by such institution pursuant to Section 2.1-344(A)(3). To-Wit: Acquisition and disposition of Real Property for a Public Purpose - Princess Anne Borough. Said MOTION was WITHDRAWN at 7:10 P.M. June 29, 1993 - 12 - Item I-IC ITEM # 36976 Mayor Oberndorf entertained a motion to permit City Council to conduct its EXECUTIVE SESSION, pursuant to Section 2.1-344, Code of Virginia, as amended, for the following purposes: PUBLICLY-HELD PROPERTY: Discussion or consideration of the condition, acquisition, or use of real property for public purpose, or of the disposition of publicly-held property, or of plans for the future of an institution which could affect the value of property owned or desirable for ownership by such institution pursuant to Section 2.1-344(A)(3). To-Wit: Acquisition and disposition of Real Property for a Public Purpose - Princess Anne Borough. Upon motion by Councilman Jones, seconded by Vice Mayor Sessorns, City Council voted to proceed into EXECUTIVE SESSION. Voting: 11-0 Council Members Voting Aye: John A. Baum, Linwood O. Branch, III, James W. Brazier, Jr., Robert W.. Clyburn, Robert IC Dean, Louis R. Jones, Paul J. Lanteigne, John D. Moss, Mayor Meyera E. Oberndo~ Nancy I~ Parker and Vice Mayor William D. Sessorns, Jr. Council Members Voting Nay: None Council Members Absent: None June 29, 1993 - 13 - Item I-L. ITEM # 36977 Mayor Oberndorf RECONVENED the SPECIAL FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Hall Building, June 29, 1993, at 9:57 P.M. Council Members Present: John A. Baton, Linwood O. Branch, III, James W. Brazier, Jr., Robert W. Clyburn, Robert IC Dean, Louis R. Jones, Paul J. Lanteigne, John D. Moss, Mayor Meyera E. Oberndoff, Nancy IC Parker and Vice Mayor William D. Sessorns, Jr. Council Members Absent: None June 29, 1993 - 14 - Item I-M. CERTIFICATION OF EXECUTII~ SESSION ITEM # 36978 Upon motion by Vice Mayor Sessoms, seconded by Councilman Brazier, City Council CERTIFIED THE EXECUTIVE SESSION TO BE IN ACCORDANCE WITH THE MOTION TO RECESS. Only public business matters lawfully exempted from Open Meeting requirements by Virginia law were discussed in Executive Session to which this certification resolution applies; AND, Only such public business matters as were identified in the motion convening the Executive Session were heard, discussed or considered by Virginia Beach City Council. Voting: 11-0 Council Members Voting Aye: John .4. Baum, Linwood O. Branch, III, James W.. Brazier, Jr., Robert W. Clyburn, Robert K~ Dean, Louis R. Jones, Paul J. Lanteigne, John D. Moss, Mayor Meyera E. Oberndoff, Nancy I~ Parker and Vice Mayor William D. Sessorns, Jr. Council Members l/oting Nay: None Council Members Absent: None June 29, 1993 CERTIFICATION OF EXECUTIVE SESSION VIRGINIA BEACH CITY COUNCIL WHEREAS: The Virginia Beach City Council convened into EXECUTIVE SESSION, pursuant to the affirmative vote recorded in ITEM # 36974 Page No. 12, and in accordance with the provisions of The Virginia Freedom of Information Act; and, WHEREAS: Section 2.1-344. of the Code of Virginia requires a certification by the governing body that such Executive Session was conducted in conformity with Virginia law. NOW, THEREFORE, BE IT RESOLVED: That the Virginia Beach City Council hereby certifies that, to the best of each member's knowledge, (a) only public business matters lawfully exempted from Open Meeting requirements by Virginia law were discussed in Executive Session to which this certification resolution applies; and, (b) only such public business matters as were identified in the motion convening this Executive Session were heard, discussed or considered by Virginia Beach City Council. Ra~ Hodges §mith, CMC/AAE City Clerk June 29, 1993 - 15 - Item I-N. MAYOR'S STATEMENT ITEM # 36979 Mayor Oberndorf advised the City will go forward tomorrow (June 30, 1993) with continued negotiations by the City Staff with the principals from Churchill Downs, Inc. Resolution and Agreement will be scheduled for the City Council Session of July 6, 1993. June 29, 1993 - 16 - I~¢m l-O. ADJOURNMENT ITEM # 36980 Mayor Oberndorf DECLARED the City Council Meeting ADJOURNED at 10:00 P.M. Beverly O. Hooks, CMC Chief Deputy City Clerk City Clerk William D. Sessorns, Jr. Vice Mayor Meyera E Oberndorf Mayor City of Virginia Beach Virginia June 29, 1993