City Council Meeting Date: June 18, 2024
To: Mayor and City Council
From: Ben Martig, City Administrator
David E. Bennett, Public Works Director/City Engineer
Title
Review Resolution Approving New Ice Arena Funding Partnership and Architect Contract.
Body
Action Requested:
The Northfield City Council considers approval of the attached resolution approving new ice arena funding partnership and architect contract.
Summary Report:
The City has been seeking a solution to resolve the long-term issues of the existing Ice Arena that needs significant investments that would cost the tax payer the same amount as building a new Ice Arena with our partners’ financial support. The City is committed to being a good steward with its financial resources and staff believes that the partnerships that have been formed provide the opportunity for the City to act to resolve the existing Ice Arena issues.
Over the last year, the City has been meeting with partners on the Ice Arena to seek a solution. At the March 12, May 7, and June 4 2024 City Council meetings, staff gave an update on the Ice Arena Partnership along with updated project options, costs, and economic impact. The City contracted with JLG Architects and RJM Construction to provide updated costs on a new ice arena, along with remodeling/expanding the existing Ice Arena.
The resolution before Council tonight will approve the funding partnership for a New Ice Arena at an estimated cost of $20.9 and also approve the contract with JLG Architect to move forward with the design of the new Ice Arena. This is option 2 that has been presented to Council.
Option 2 - New ~45,800 SF Ice Arena
$18,843,254 Construction Cost
$2,053,244 Soft Costs
$20,896,498 Project Cost
Optional Upgrades - Could come from additional donations or in the future
$382,951 Floor Dryland (small space 1,350 SF)
$1,307,785 Upper Level Dryland (5,300 SF)
$2,361,439 Precast Concrete Stadium Seating
$24,948,673 Project Total with all Options
The partners have provided their commitments:
Northfield School District
The Northfield School Board approved their letter of support/commitment for a New Ice Arena at the May 13, 2024 board meeting. The School District would contribute $250,000 for a 20-year lease (Note: about $200K would go toward new debt for new Ice Arena, and $50K for annual ice fees).
City of Dundas
The City of Dundas Council approved their funding partnership at the May 28, 2024 City Council Meeting. The shared split with Dundas and Northfield is based on Estimated Market Values of each City (Northfield 87.9%, Dundas 12.1%).
Northfield Hockey Association
The NHA has indicated a fundraising effort to reach $2 Million and also the donation of 7 acres of land that has a land value of $375,000 per Rice County. Any fundraising beyond the $2 Million, the NHA has indicated they would like to have it go towards the Optional upgrades in Option 2 that were removed to bring the project cost down for a New Ice Arena to $20.9 Million. For example, they have indicated adding the Precast Concrete Stadium Seating back into the project.
Next Steps
There are numerous items that will get into motion based upon Council action tonight. Those steps are included in the attached timeline.
Background Information
Economic Impact
The City leveraged two reports by the University of Minnesota Extension, the first report was “Economic Contributions of Attendees of East Grand Forks Ice Arena Youth Events” in 2022 and the “Economic Impact of the Hermantown Amateur Hockey Association on Duluth, Hermantown, and Proctor, Minnesota” in 2020. The reports look at number of visitors, visitor spending, accommodations, and influence of visitor destination. Both reports quantify direct and indirect spending.
The City reviewed the ice related events at the Northfield Ice Arena and approximated economic impact. The economic impact is shown in the table below.
Direct Spending Impact is the initial activity of spending by people attending youth skating events.
Indirect spending impact “is the summation of changes in the local economy that occur due to spending for inputs (goods and services) by the industry or industries directly impacted. For instance, if employment in a manufacturing plant increases by 100 jobs, this implies a corresponding increase in output by the plant. As the plant increases output, it must also purchase more inputs, such as electricity, steel, and equipment. As the plant increases its purchase of these items, its suppliers must also increase production, and so forth. As these ripples move through the economy, they can be captured and measured. Ripples related to the purchase of goods and services are indirect impacts.” Indirect impacts are those associated with ice arena events.
The induced impact “is the summation of changes in the local economy that occur due to
spending by labor-that is, spending by employees in the industry or industries directly impacted. For instance, if employment in a manufacturing plant increases by 100 jobs, the new employees will have more money to spend on housing, groceries, and going out to dinner. As they spend their new income, more activity occurs in the local economy. This can be quantified and is called the induced impact.”
Alternative Options:
Renovate and expand existing Ice Arena or get out of the ice business and close the Ice Arena. These options would be another alternate action for the meeting to consider at the end of June.
Financial Impacts:
Three different options were reviewed, and a summary of the costs are below. The costs below are for 2025 construction.
Option 1 - New ~52,000 SF Ice Arena
$25,166,480 Construction Cost
$2,887,486 Soft Cost
$28,053,966 Project Cost
Option 2 - New ~45,800 SF Ice Arena
$18,843,254 Construction Cost
$2,053,244 Soft Costs
$20,896,498 Project Cost
Optional Upgrades - Could come from additional donations or in the future
$382,951 Floor Dryland (small space 1,350 SF)
$1,307,785 Upper Level Dryland (5,300 SF)
$2,361,439 Precast Concrete Stadium Seating
$24,948,673 Project Total with all Options
Option 3 - Existing Ice Arena Improvements - Renovate/Expand
$ 4,545,998 Remodel/Refrigeration System
$10,528,983 New Addition
$15,074,981 Project Cost
Tentative Timelines:
• Attached