 We'll call the eighth regular meeting of the common council order Pat would you call her old please Bowman excused Berg excused Bonnet Doyle Graf Manning Monty mayor moody excuse Perez Ruinfish Stefan Ben Akron Vanderweal Longham in here Warner Winninger 13 present Corms present all of a gruff Moving to the second at the minutes of this council meeting be approved under discussion hearing none all in favor All those motion carry Alderman Manning would you lead us in a pledge, please? I pledge allegiance to the flag of the United States of America and to the Republic for which it stands One nation under God in invisible with liberty and justice for all Meers appointment Steve Hereby submit the following appointment for your consideration David Rappinsky to be considered for appointment to the system citizens advisory committee on Community development to fill the unexpired term of Teresa Blondell Does not meet residency requirement whose term expires 430 04 signed by the mayor and that will lie over Presentations this evening Denny Moyer from the Chamber of Convention and Visitors Bureau is here this evening Denny Thank you Good evening everybody pleasure to be here In fact, it's really a pleasure. I wasn't sure after last week that I was going to survive it I don't know if you were aware of it, but that Amistad was here last week, and it was an absolutely wonderful wonderful Event and before I start with my presentation. I want to thank The city and the various committees and departments that that helped our committee put that on because we couldn't have done it without you We do it do we do appreciate it Now because of your full agenda earlier in the spring Matters bearing heavily on economic development. I thought it'd be wise to put off our annual report until a little bit later in the year Although you have a big schedule tonight, too. So maybe that wasn't such a good idea And while tourism is a priority, I don't know if you would have You know Given us your full attention earlier But since it is already July, I think it would be wise to Not only give you a review of 2002, but also give you a report of the first six months of 2003 So with the time that I have tonight, I will give you brief summaries of both You have all the statistics and all of the material in your packets That you can look over at your leisure So I will not you know bore you to death with numbers tonight Before I get into this though, I need to thank the entire chamber staff For their diligent effort on behalf of tourism the knowledge that they impart and their helpfulness and their courteous to visitors Their efficiency in response to the thousands of requests that we get I think more than any other single thing Makes shabuigan tourism successful and they need to be recognized for that Both the staff and the chamber board because they understand how important tourism is as well The council doesn't get the recognition it deserves either Mayor Shram and the council members you need to be Commended for your foresight in tourism and your knowledge of the Importance that it gives to economic development So on behalf of the chamber, I thank you very very much And not only on behalf of the chamber, but on half of the behalf of the thousands of people who earn their livings in tourism and the hundreds of businesses that that do a Classic understatement might be to say that 2002 is a challenging year It was all of that it began for us late in 2001 Economic times were down as you understand and we were wondering just what to do with our tourism dollars Because we didn't know how much traveling was going to go on And then everybody's world changed when those two jets ran into the World Trade Center Now even before that we expected revenues would be down, but but now this what's going to happen to tourism How is the American traveling public going to react to that? Certainly people aren't going to be anxious to jump into airplanes for a while Would they travel at all? The fear factor the financial factor the uncertainty of the time Would we be going to war would there be more? Terrorist attacks are there going to be more layoffs. What's going to happen to the price of gas all these things? We're going around our head as we were planning to budget for tourism Because of the seasonal nature of tourism here in Sheboygan we need to do our planning in late winter and early spring We need to do all our investing then Hoping hoping that it will be attractive enough to lure tourists here So that they will stay in our hotels We will collect room tax and we will get our money back that we put out in the spring I Because of the Uncertain nature of what was going to happen my recommendation to my advisory board was that we take a conservative path. I Didn't feel that we should be spending money that we might not be able to get back And I proposed to do only the promotion that was necessary and my advisory board agreed I Cut back on trade shows. I cut back on electronic advertising. I cut back on print advertising I emphasize partnerships and co-op advertising programs that stretch our dollars The cutbacks are reflected in the downturn in inquiries But as the year wore on people began to resume traveling At least short-trip traveling and that is where our bread is buttered here So we had a decent year and room tax monies came in better than we anticipated But while things turned out surprisingly well, I have to tell you that I would make the same decision again Those were very shaky times The market marketing we did is all outlined in the attached 2002 CVB promotion report and the tracking material is all there as well quickly our inquiries in 2002 were up 7.4 percent, which is a huge increase because of website activity And that offset the drop in trade show and print responses Despite the hesitancy and all the questions regarding tourism in 2002 the bottom line is that room tax revenues increased for the city and Traveler expenditures in Sheboygan County rose to 267 million dollars That's an increase of more than four million over 2001 Now let's take a quick look at where we are in 2003 As we saw 2002 picking up toward the end of the year We began to get a little more aggressive in our thinking for 2003 We plan to do print ads in 20 different publications this year. We planned appearances at eight trade shows We plan to do our usual publications Plus reprint the trails map and redo the fishing brochure We plan to expand our efforts in electronic media We plan to develop our continue our partnerships and develop more and we wanted to investigate doing some new brochures We are carrying forth with all those plans The economy as you know still hasn't recovered and terrorism is still in the back of many people's minds But we anticipated that this would be a good tourism year as our cultural and our Recreational inventory continues to grow and develop We budgeted for an increase in room tax revenues Plus because of our cautionary approach last year we had an $80,000 carryover from 2002 Some of which of course is due to our partnership with Sheboygan County and the town of Sheboygan The aggressive campaign has resulted in a dramatic increase in inquiries at the halfway point this year In all of 2002 we had 85,000 inquiries Through the first six months of 2003 we already have 61,000 And the most dramatic is in response to our print advertising We've had more than 17,000 already this year and last year we only had 6,700 Now again, you have all them numbers in front of you So I'm not going to go over it But I would like you to turn to page three if you've got the thing in front of you there Sheboygan County tourism items of note. I just like to quickly review these Economic impact was 267 million an increase of 1.63 percent over 2001 Now 1.63 percent may not sound like much to crow about but can consider that a lot of counties were down last year So to break even or come out a little ahead is a good year We retained our ninth place ranking among Wisconsin 72 counties Tourism provided 4,612 full-time equivalent jobs in the county an increase of almost 2% Tourism provided eighty four point six million dollars in resident income an increase of four point five percent Tourism is the best investment you can make for every tourism dollars spent by the CVB last year 833 dollars was returned to our economy Sheboygan County generates 15 point six million in state revenue and seven point nine million in local revenue Now you ladies and gentlemen, I was talking about keeping taxes down Were it not for the money tourism generates in taxes and fees each Wisconsin resident would face an average of $992 in additional taxes annually to maintain existing government services Increase for 2003 or 33 percent of last year Stories about Sheboygan Sheboygan County tourism appeared in 29 publications last year this year already in 16 And we've been advertising more than 30 different editions The last word about partnerships They pay off our partnership with Wisconsin Harbor Towns has resulted in a $26,000 coastal management grant that will be used for a Harbor Towns visitors guide, which by the way will be getting tomorrow Our partnership with Manitowoc and Fond du Lac County's resulted in in a $10,000 gem grant to promote the lake-to-lake arts connection and our partnership with Alcott Lake resulted in a $34,000 gem grant to promote fall tourism this year Now while our marketing plans for 2004 are Still in a preliminary stage We are considering in investing in new collateral material Including fishing dining and retail brochures so that we can take advantage of the huge influx of tourism and Visitors that we're going to have next year You're all aware of the golf tournament, but you may not be aware that we have a state bowling tournament here next year as well And that is January through May a time when usually things are pretty quiet. So we anticipate a good year next year Nonetheless, we're going to start planning for 2005 because there might be a drop That's all I have mr. Mayor if anybody has any questions. I'll be happy to answer my time is like but console Again, thank you so much. We appreciate all your support Danny hang out Alderman Doyle Just a quick question. I'm very supportive of your efforts, but I've always been curious like I get Midwest living and It's popular magazine, but in a typical issue. It'll have like Four or five hundred, you know ads for different communities How do you know if those things are effective or not when there are so many other ads? In the in the issue if you understand, huh? Well, the only thing we can do is count the inquiries we get from the magazines And Midwest living is one of our number one good housekeeping and Midwest living our Number one and two Response vehicles Midwest living this this year already has resulted in more than I think fourteen or fifteen hundred inquiries Now the question is do they convert to travelers and we don't know I mean we just don't know But there has to be if there's that many inquiries. There's got to be a certain percentage And you go to bat ten times you gotta That's right, they fill that out and we get labels we send them back Okay, thank you Jenny public forum Okay, what's that we'll go to the consent agenda Alderman graph Thank you your honor for items eight one through eight twenty one I move that our all our O's be accepted in file all our C's be accepted and adopted And all the resolutions be put upon their passage Move to second at all our C's be accepted and adopted our O's accepted and filed and resolutions be put upon their passage That's eight one through eight twenty one Is there any discussion? Alderman Monty mayor Thank You mayor 817 I Noticed that phase two environmental study for the northwest corner of eighth and Indiana is going to proceed I just thought that's a real good move We need to develop that property that beautiful piece of choice property as fast as we can and get some tax revenue from Thank you. If there's no other discussion Pat, would you call the roll, please? Doyle graph Manny Montemayor Perez Rinflai Stefan then Akron Vanderwill Wongamon Warner Weninger Bonnet 13 eyes motion carried 822 through 826 to be referred 827 will lie over 828 through 840 to be referred 841 will lie over 842 and 43 will be referred 844 by protection public protection safety recommending grant grant various license Alderman Vanderwill Make a motion to accept and adopt DRC Move it in second to accept and adopt DRC under discussion under discussion. I need to amend the RC by holding 6084 6052 and 5083 just a second 6084 6052 and 5083. Thank you. I Need us Okay, let's move to second on amendment. Is there any discussion on amendment? It's not all in favor of the amendment Opposed motion carried. Okay proceed didn't like to pass DRC as amended Moved in second at the RC be put upon as fast we accept and adopt it under discussion Hearing none. What do you call the roll? Graf Manny Montemayor Perez Rindflash Stefan Then Akron Vanderwill Wongamon Warner Winninger Boney Doyle 13 eyes motion carried 845 to be referred also 846 and Alderman Vanderwill you want to speak on 846 Thank you, Your Honor. I Just wanted to make a statement about the pet fancers permit In Sunday's paper a letter to the editor regarding the pet fanciers permit stated that pet owners with three or more pets Would have to pay for the permit. I Just wanted to say that this isn't correct. The permit is free with the license of your pets. Thank you Thank you 684 757 and 758 will lie over and we will explain that to you shortly Tonight I'd like to Present everyone with update on a blue harbor project and our progress on completing all documents Related to its success or the past several days our city staff have been working Integralously in order to meet our financial closing deadline of July 31st It appears now that this will happen. In fact the plan is to have our financial documents for review and approved By you on the 28th and close on July 30th Throughout the discussions in the past couple of days We have been able to clarify and protect the city's position as it relates to the development agreement presented to you last week Well these discussions have led to several language changes the city's position will continue to be protected Our legal representation and kumer is here with us this evening to brief you on these changes in Order to incorporate these changes to the agreement and to allow the approval of the financial agreement at the same time The city's documents will be ready for approval on the 28th copies of the documents will be distributed to everyone in the next couple of days While our original intent was to approve the development agreement this evening the discussion over the past couple of days have been foresight Beneficial and necessary to ensure a successful project that a successful project will continue to protect the city's position To pass on this opportunity would have been short-sighted Again to clarify for everyone We will be able to approve both our development agreement and our financial agreement on July 28th In addition, we will have agreement that continues to protect and clarify our position I would encourage everyone to continue their support on this vital project. Thank you With that I would like to ask Anne to lend her expertise in explaining our position to everyone and Where we're going from here and I have notes tonight. I have notes tonight to make sure I cover everything Over the past several months the mayor and others in the city administration have come before this council on several occasions to ask for approval of prior versions of the development agreement and On other occasions to advise the council of any proposed changes to the transaction Which in our opinion differed from what had previously been approved by the council as The mayor pointed out we're here tonight to do that again We all believe we are nearing the end of the development agreement Negotiation for a lot of us and a lot of concerned citizens It's been a painstakingly slow process But as you know good things seldom come easy and haste rarely goes along with caution We all think that the South Pier district is a very special piece of real estate When the city acquired the South Pier land it did so believing that it had the possibility of becoming one of the many jewels in The city's crown a property that if properly used would provide benefits to the city well beyond the boundaries of the land itself This was not property that the city would part with easily because along with the knowledge that it was special Came the fear that we may have but one chance to as they say get it right as As a result it's been the city's Understanding throughout the process that while we may enter in it into an agreement with the developer prior to a closing We would not convey the property by lease to the developer or mortgage the authorities interest in it until we were assured to our Satisfaction that everything needed to make the project happen was in place At the lease this meant that between the developers own funds the construction lenders loan funds and the fixed amount of money The city had agreed to contribute to the project the entire cost of the project was at hand Recently in recognition of the multiple parties to the transaction and the complexity of the transaction It was proposed that the transaction closed in stages and that's what your development agreement last week reflected Our documents would have been signed, but we would have held them in escrow until all of the other elements of the transaction were completed We've been told however that while that this will not satisfy the conditions of the developers arrangement with its equity investors So the city's being asked to close with the developer this month by the July 31st Albeit with certain conditions that would protect us from funding any part of our money for the resort or the convention center Until the construction lender has also agreed to fund its construction loan The practical effects of closing this month rather than closing an escrow are that we will be entering into the lease with the developer signing the mortgage To secure the developers obligations to the construction lender We would need no further extensions of the early start letters because the construction would progress under the development agreement Should the transaction for some reason fail to come together say if their construction lender for some reason failed to close for any reason We would be in a position of foreclosing our lease to clear title to our parcel We would obtain a release of the construction lender's mortgage and Possibly observe other conditions of the development agreement all of which might not be necessary if we waited until all the essential elements were in place We would have more construction on the site and if the developer doesn't complete it We would have to deal with that greater amount of construction But we believe there are ways to address these items in advance I'd like to go through those ways that we think we can address those items in advance Protect the city and we would place these protections in the development agreement First none of the city's 12.2 million dollars would be paid out Unless the city's conditions to funding are met and the construction lender is also prepared to fund its construction loan The city would not fund any of its 12.2 million dollars if there were any Conditions to the funding other than those specifically approved by the city in its discretion Second the equity investors money would be deposited with the title company that will handle construction Disbursements and we would receive an acknowledgement that it is available to be dispersed That money would be available to pay for the work that is currently Ongoing at the site and the work that will be done prior to the city's money and the construction lenders money being used Third the construction lender would also close its loan at the same time that the city closes Even though the construction lender is not yet ready to say it will fund that loan The construction lender is still in the process of receiving information and reviewing it and approving it Fourth if for any reason the construction lender is not prepared to fund its loan by September 30th at the latest That would be a material breach of all of the city's documents and the city at its option could declare a default and either for You didn't want to hear me anymore And the city could at that point declare a default and either for close on its ground lease or Terminate its documents Fifth all of the fees of the transaction payable to the construction lender and any brokers would be paid out of the equity That has been deposited with the title company and Six the construction lender would agree with the city that if for any reason the construction lender does not fund its loan The construction lender will satisfy the mortgage that the authority gives it on its fee interest We spoke today with both the developer and the attorney for the construction lender on these points Both were in agreement with these terms We can tell you that the construction lender is working on this transaction The construction lender has said that it will be prepared to close the transaction with the city by the end of the month And the construction lender will work diligently after that to get to the point of funding the transaction There's a second point The construction lender does not want us to declare a default under our documents If the deposit to the $500,000 reserve fund that is required by January 1st of 2005 is not made We have proposed and the developer has agreed that if the deposit is not made by January 1st of 2005 Then rather than return the condominium completion escrow the entire million dollars that the city will be holding to the developer a Minimum of $200,000 of that money will be used to fund the reserve That is the amount projected to be needed on January 1 2005. We believe that is actually a Better arrangement for the city on this point So those are the two Significant changes that we wanted to point out to you that will be reflected in the development agreement that comes out this week And that you'll be voting on next week Thank you, and Steve. Did you have to add one add anything not to add anything mayor? We just Invite your council if they have any questions on where we are Alderman graph We would need a motion to proceed then with this as the language changed, correct Move it in seconded under discussion Alderman Rainfler Thank you for the presentation regarding what changes are been made I'm a little concerned about agreeing to the changes without actually having a document in front of me to vote on in black and white Yeah, I could address that your honor. I guess you all of them inflation. It's a good point You would not be approving those changes. I guess we want to get a sense as to whether the council is willing to Continue along In that vein to make those changes to insert them in the document that would then be presented to you If the council says no, they don't want to do that they want to deal just the way it is then we can save a lot of time, you know, we won't have to do that and And we'll you know go another course, but this is to get a sense of the council as to whether That sounds like it is something we should pursue On my press Thank you, honor. Could we ask rich just to give us his opinion on this if you would please where is rich to see rich I believe as and stated that we feel that after some of this discussions really was started by the lender and some of these areas like the reserve that this is a more comfortable position than what we had before for the city and Obviously it took both sides to reach agreement on it, but I think it is is beneficial to the city Rich, can you speak up just a little bit? They can't hear you up front here. Maybe you got a little Okay Could you restate what you just said? Yes Okay, this better all right as I stated earlier I Felt that after this discussion, which I started by the lender for Great Lakes initially on the reserve that Really is more beneficial for the city and and the approach on here that we worked out together with Great Lakes That we know there'd be a minimum amount of funding if the other funding is not in place That we would transfer basically part of this escrow condo escrow into the reserve so All of them in order I Think I think it's a good idea to get the changes into the documents so we can look at the whole document with the changes in it Obviously makes sense. I think this has been a living document as we've been going along We're all aware of the fact that there have been many changes made with all everything that's in in that agreement There's bound to be a few more that may pop up come our Monday of our July 28th meeting yet to hopefully not but It is a it's a it's a document still in the works and by getting these changes in we'll have a solid document At least a lot more solid than we have right now And I think it's beneficial to do that so the council can review the entire thing. Thanks Alderman right flesh just one more question would you classify the request made by the Pardon if I don't get the terminology correct, but the lending partners of the developer Would you classify their request as a way of securing or perhaps providing more confidence in the project that on their behalf? Or why did they come forward with these requests? I'm only pausing to make sure I understand your question Yes, no the equity investors. I think if you're asking about that I think it's just the terms of the arrangement with the equity investors would not allow us to do it in a student two-stage closing So I think it's just the terms that they've already agreed to with them and that's on the equity side on the construction lender side The construction lender will be looking at a lot of the same things the city is looking and other things They will also be looking at them with Not with the same interests of the city, but sort of the same view of the city You're both looking at everything as lenders so to the extent a construction lender Want something done it is more than likely also going to be protecting the city Is that responsive? Yes. Okay. I guess the final question I have regarding that is if it's beneficial to the city Why was not something per sep something we requested from initially from the negotiation standpoint? We did It's a timing issue Originally or the way the document stands now well The way the document was originally or stood now that would have all been done prior to the closing Now what we're saying is we're going to close with certain of the conditions that would have been taken care of Prior to the fact or prior to the closing now being taken care of after to the closing But prior to the funding of the money Okay All the way present. Thank you, your honor just a couple of more questions. I guess I'm a little confused How can a construction lender agree to close on the deal without actually lending money? And the second part of that question is if we're going to be closing September 30th, I believe you said Does that not in effect mean an extension again? On your first point the construction lender is going to close It's what the construction lender is saying they'll have all of their documents signed Everything will be operational But the construction lender is saying but we don't have to fund our money Until certain certain things happen until we've had a chance to receive certain documents and certain things have been reviewed and approved But the construction lender will be closed and like the city will just fund at a later date That's I think your first question and I've already forgotten your second question 30th when we have another 30th. I'm sorry. We're both closing on the 31st. What we're saying is We want this thing funded. We want all of this receipt of documentation review We want to get that done and we want it done by at the latest the 30th It could happen sooner than that, but we've kind of put an outside date on Getting that information and reviewing it and approving it so that we can have the funding occur not later than the 30th It's it's a way of getting up the finality to the funding I think it's similar to closing on a house a lot of times when you close on a house You don't get the pile of money right away in that aspect But I guess beyond that I'm really glad to see the fact that all these lenders are Taking on such a good look at this because it makes me feel more comfortable that they're gonna ensure and make sure that their money is protected because They're really looking at everything that's involved and I think that's very important Thank you all the one banner will Thank you, your honor. I just wanted to ask you to clarify the closing date. Was that July 31st? It's on her before July 31st. Yes, okay, there's another discussion. Would you call her? Oh, please? I Motion carried Okay, those light over everybody knows why they're lying over until the 28th 759 resolution By Alderman Graf Longham an authorizing continuation of a self-insured workers compensation program Alderman Graf Thank you, your honor, and I also take resolution 761 which is by Myself all women one in your stephen Doyle and authorizing transferring of funds to establish estimate revenue and appropriations for donation received for part benches I Would move that those two resolutions be put upon their passage Moving a second at the resolutions be put upon their passage under discussion Alderman right play Regarding the transfer from the general fund contribution to the park benches I hope that fund does include enough money for signs to go on the park benches There's no other discussion would you call the roll please Don't Motion carry That's three one lies over 461 lies over Alderman Graf you want to explain something yes, S3 one is for funding of the self-care project and 461 is also for funding in that except 461 is for our own work by the public works department Rather than waiting till September 30th To fund that finance Has discussed it and we would like to proceed with that August 4th to fund that portion which is a million seven forty four five hundred which is for public works to do the lights and Storm sewer and sanitary sewer and water street sidewalks and trees For that Southview project And Tom is running out of time right now because the summer is fast fading and So he'd like this this done on our original date of August 4th Thank you 770 by public protection of safety recommending mending the two-hour parking limit Limits regulations to add the north side of Washington Avenue from the east curb line of south 12th Street to a point east All of an order Thank you, honor. I make a motion to accept and adopt the report of committee and pass the attached ordinance Moved in second to accept and adopt report committee and passed ordinance on your discussion under discussion your honor This is in reference to a communication from the president of Colville Banker and Werner Holmes Requesting a two-hour parking limit between 8 a.m. And 4 p.m. School days only in front of their building There's been an ongoing problem with the high school across the street and students parking there Throughout the day and littering problems and this just will help turn over to the neighborhood during the week during school hours only and The residents in the area will be able to park there on weekends nights holidays Sundays Public protection safety recommends approval We're ready to if there's no other if there's no other discussion That would you call the roll please I Motion carried 847 arrow by the board of electrical examiner submitting license which have been issued Who is taking that one? Jerk Alderman Doyle you want to take that? All of my Baldwin is in here I move that we accept and file the our report of officer Move it in second to accept and file the our all under discussion hearing none. Would you call the roll please? Motion carried Steve other matters a document 848 is a communication from James Mavis Requesting a two-year extension on his connection to a mini storm sewer public works 849 is an arrow by the city clerk submitting a summons and complaint in the matter of lighthouse therapy services for alleged problems with their sewer committee on risk management 850 is an arrow by the city clerk submitting a claim from Pam Rieger for alleged damage to her clothing when she came in contact with Newly painted benches and tables at Cleveland Park special committee on risk management 851 is a communication from Michael Harvey CEO of Andervart objecting to being an assess for the water main along the south end of their yard public works 852 is a communication from Michelle Somerfeld of Davell engineering Along with the plat affidavit of correction for still meadows plat located in town of Sheboygan in reference to the highway setback relates not lots 1920 that will go to plant commission 853 is a communication from Jim Rinal 512 South Water Street stating he believes the committee on public protection and safety should have had their meeting on July 16th, even without a quorum That will go to public protection and safety Mike before we adjourn did you want to discuss this at all? Okay Move to the second adjourn under discussion hearing none all in favor