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Consideration of approval of a Lease Agreement for certain portions of the Muellner Building and a Memorandum of Understanding regarding loan issuance terms between the City of Wauwatosa and the Wauwatosa Curling Club
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Submitted by:
David Simpson
Department
Department of Public Works
A. Issue
The planned remodel of the Muellner Building this year includes significant monetary contributions from the Wauwatosa Curling Club. A long-term lease is necessary in conjunction with these contributions to ensure the Curling Club’s investment into the facility aligns with a shared vision of a long-term continued partnership. In conjunction with this project the Wauwatosa Curling Club would like to secure a loan with the City so a Memorandum of Understanding describing proposed loan terms is also attached for review and potential approval.
B. Background/Options
The Wauwatosa Curling Club (WCC) has been an integral part of Hart Park since 1925 when the WCC began curling outdoors at the park. In 1941 the WCC moved to its current indoor home within the Muellner Building and has continued to utilize the facility ever since. The WCC continues to be one of two main users of portions of the Muellner Building with the other being the City’s Senior Center. The attached letter from the WCC includes more history about the WCC's partnership with the City as well as their request for approval of the attached lease and memorandum of understanding (MOU).
In 2019 the City and the WCC began working toward a plan to request utilization of tourism funding to improve a portion of the Muellner Building along with funding that would be provided by the WCC through a repayment agreement and a new lease. The COVID-19 Pandemic caused a significant delay in that plan, however, the Common Council’s decision to allocate $2,000,000 of ARPA funds to the Muellner Building has allowed the project to move forward.
Since the initial allocation of ARPA funds from the City, the WCC has committed to funding an additional $1,500,000 toward the project and the Wauwatosa Tourism Commission has awarded funding of $500,000 to the project as well. The City’s approved Capital Improvement Budget also includes additional funds for furtherance of building efficiency upgrades as well as solar PV on a portion of the building’s roof.
The WCC’s commitment to fund $1,500,000 towards the project will be a mix of funds from their fundraising efforts as well as a proposed loan from the City to cover the gap between their fundraising efforts and the $1.5M commitment. The attached MOU outlines the terms of the proposed loan. If the Common Council approves the Memorandum of Understanding the Finance Director and City Attorney would be authorized to finalize the loan documentation and issue the loan once the final value of the loan is known.
The proposed lease agreement is also attached which is largely based on the existing lease agreement that has worked well for both parties in the past. The largest change included in the proposed lease is the addition of a Building Reserve that will be funded by the WCC as well as the City. This Reserve would be set aside in a segregated fund that would only be used for future building repair or renovation items. The amount contributed will be determined through a Building Reserve Study that would outline all future expected costs by area within the building. This innovative approach to determining a contribution to the annual lease will allow for continued investment into the historic structure. The other significant change is that the initial term of the lease is 30 years, which allows for the WCC to feel confident that their large investment in the building is secure.
The building renovation project is currently out for bid with a planned bid opening of February 14th and potential award of the contract at the February 20th Common Council meeting. If the Financial Affairs Committee recommends approval of the agreements tonight it would potentially allow for award of the construction contract and these agreements on the same Common Council meeting. By aligning approvals in this fashion, we will know if bids have come back favorably prior to final approvals of these agreements.
The WCC has been a great asset to the Park and the Community so I am excited to see this partnership expand and continue for decades to come.
C. Strategic Plan (Area of Focus)
Priority 1: Economic Development and Financial Resilience; Promote and support local businesses and anchor institutions
Priority 3: Infrastructure
Priority 5: Quality of Life
D. Fiscal Impact
Approval of the lease agreement will require the WCC to contribute to the Building Reserve Fund upon completion of the loan repayment. The City would also contribute if our rental revenue were to increase beyond our budgeted revenue (50% of the increase). We would also contribute to the Building Reserve Fund in an amount equal to that amount contributed by the WCC barring an emergency circumstances or losses in revenue. Approval of the MOU will allow the City to issue a loan to the WCC that would be repaid to the City including interest.
E. Recommendation
Approval of the attached Lease Agreement for certain portions of the Muellner Building and a Memorandum of Understanding regarding loan issuance terms between the City of Wauwatosa and the Wauwatosa Curling Club