PRECM 03-03-1982 - Laserfiche WebLink

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February 5, 1982 TO: The Honorable Mayor and P4embers of the City Council FROM: James W. Fornell, City Manager RE: Financial Analysis - Lonc Lake Park As you know, some residents living on or near Long Lake are interested in lease/purchase options for the development and acquisition of Long Lake Park in an effort to maintain as much local discretion as possible in the development and operation of the park. I am in agreement that this concept needs exploration but the proposal has some assumptions and conclusions I do not consider valid: 1) The development budget is proposed at $600,000. The County staff and Advisory Committee have reduced the proposed plans (:schedule .i). i find the lesser development budget suspect. A $2.5 million IJUdget may be high but I don't think an acceptable park can be developed for $600,000. 2) The financing of the $600,000 C.I.P. is proposed to be at 8~. The actual interest rate at todays B.B.I. is more like 13-14°x. 3) There is a desires to have the City lease the park, as a revenue producing asset, earning a fair return on investment consistent with the market value of land and improvements. I have strong concerns that ~~etro Council, the source of the money, would not accept such an arrangement - the theory being that government should not make a (speculative) profit on the lease or resale of the land. The concept of invested Metro Council bond funds serving as a lease/acquisition funding source needs to be explored but there may be ` problems with arbitrage or legal considerations under the bonding authority of the Open Space program. 4) Protective services and maintenance expenses are to be borne by the lessee or as a regional park. The City may not experience much of any cost increase other than materials - if services can be provided without adding additional personnel. The local services (only City police, fire and beach are }proposed currently) would give the City greater control.