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Driving Range - Miller Property Page 2 The plan from the time of acquisition has been to find a suitable interim use which would generate income to help defray the cost of acquisition. Annual payments to acquire the site are $1,750jmonth or $21,000 per year. The proposal to build a golf driving range on the site is structured in a way to keep construction and start up costs as low as possible until the city can determine if the range is economically viable. We are also not recommending any lighting or permanent structures at this time. staff is presently working with the construction firm Shafer Construction, that has the contract for widening 694 next summer, to provide fill and topsoil on the site at no cost to the city. Shafer Construction will also, at not cost to the city, grade the entire site, provide aggregate material for the parking area and seed all turf' areas. Staff was also directed to investigate the possibility of leasing the driving range to a private vendor. Several vendors expressed interest but were concerned about the proximity of the rendering plant. 'They also were interested only if they could secure a ten year lease on the property. One vendor, Ultimate Golf of Roseville, has submitted a proposal. Their first option is that the City deed the property to them in return for a 10% cut of net profit. staff's position is that this is ~nacceptable because it precludes the possibility of more intensive commercial development at a later time and will not generate enough revenue to justify the purchase of the land. The second option of managing the course for a fee can be considered at a later date but it is probably not feasible either because the city already has a management team in place with necessary skills to operate this facility. See Attachment A. Staff has visited nearly all the nearby driving ranges and have requested budget information from many of them. The privately owned ranges were not willing to share their information, however, we were able to get adequate information from the publicly owned ranges. The driving range itself is expected to generate income of $530,600 over five years with total expenses, including capital and operating, totalling $388,412. The net profit after five years is expected to be about $140,000. See Attachment B. Their appears to be very little risk associated with this venture if the city is able to commit to more than two years of operation, with the free fill and grading services available in 1991 the timing is good. The market for golf activities of all kinds is showing a dramatic increase. There are no driving ranges located in the area and given high. land costs, private development in the New Brighton area is unlikely.