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12-18-95 agendaCITY OF RICHFIELD, MINNESOTA. MONDAY, DECEMBER 18, 1995 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS 7:00 P:M. AGENDA CALL TO ORDER APPROVAL OF MINUTES OF REGULAR HRA MEETING OF NOVEMBER 20, 1995 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF SELECTION OF FACILITY PLANNER FOR JOINTLY USED AMERICAN LEGION AND VFW POST HRA LETTER NO. 75 3. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF RICHFIELD REDISCOVERED PROPERTY AT 6601 LOGAN AVENUE TO ROCKPORT HOMES AND 6844 14TH AVENUE TO AFFORDABLE SUBURBAN HOUSING HRA LETTER NO. 76 4. CONSIDERATION OF RESOLUTION AUTHORIZING EXECUTIVE OF CERTIFICATE OF COMPLETION FOR CSM CORPORATION, PHASE I HRA LETTER NO. 77 5. CONSIDERATION OF HOUSING GOALS RELATED TO METROPOLITAN LIVABLE COMMUNITIES ACT LOCAL HOUSING INCENTIVES PROGRAM HRA LETTER NO. 78 6. EXECUTIVE DIRECTOR REPORT 7. CLAIMS AND PAYROLL ADJOURNMENT Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the Administrative Services Director at 861-9702. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. ~s Agenda December 18, 1995 Issue Statement: Consideration of housing goals related to the Metropolitan Livable Communities Act Local Housing Incentives Program. Background: On November 13, the City Council authorized the HRA to formulate housing goals and submit them to the Metropolitan Council. This action is part of the ongoing response to the Metropolitan Livable Communities Act Local Housing Incentives Program. The Metropolitan Council has established a deadline of January 15, 1996 for approving Richfield's goals. The HRA is requested to consider the housing goals prior to the end of December. A copy of the principles and housing goals for review by the. HRA are attached. The City Council reviewed and approved them on December 11, ..1995 subject to HRA review. Each participating community is being asked to certify a "Housing Goal Agreement" which was drafted by the Metropolitan Council. The first Section is titled "Principles". These are appropriate for Richfield and the City has generally been operating by these principles. The second section relates to "Goals". Based on a housing affordability index entitled "City Index", 97 percent of Richfield housing is considered affordable. By studying the southwest metropolitan housing market, the Metropolitan Council concluded that Richfield should increase the ratio of market rate homes (thereby reduce the percentage of affordable housing) within a "Benchmark" range (second column). The third column is Richfield's response based on locally decided goals, plans, and programs, to approach the Benchmark range. Accomplishing these goals is consistent with the following objectives which are shared by the City Council and HRA given sufficient resources and reflect current programs: • More market rate new construction and remodeled homes. • Development of low density attached single family homes. • A greater variety of apartment choices. • Affordable housing opportunities such as Vo-Tech or Habitat. By June 1996, an action plan to achieve the stated goals must be developed. Recommended Motion: Authorize the Executive Director to: take those actions, in partnership with the City, which can be considered best efforts, given market conditions and resource availability, to achieve. housing goals as outlined herein; and arrange for the Mayor's certification of the goals and submission to the Metropolitan Council; and prepare an action plan, for review by the HRA, which achieves the stated goals. Basis of Recommendation: 1. The goals are consistent with community needs. 2. The submission of these goals is the next step in the City Council and HRA participation in Metropolitan Livable Communities Act programs. 3. The Mayor is required to certify the goals to the Metropolitan Council, following review and concurrence by the Richfield HRA 4. The Metropolitan Council requires certification by December 19, 1995. 5. The "Benchmark" provided by the Metropolitan Council is reasonable. The Richfield goals in response, considering all public and private market actions are taken into account, appear possible. 6. Check points at five year intervals (2001 and 2006) provide an opportunity to adjust goals for market conditions and resources as they change over time. Alternative Recommendation: 1. Modify the goals. Discussion/Decision Mode: The goals will be finalized with the Metropolitan Council after HRA review. Respectfully submitted,, James rosser Executive Director JDP:cak HOUSING GOALS AGREEMENT METROPOLITAN LIVABLE COMMUNITIES ACT PRINCIPLES The City of Richfield supports: 1. A balanced housing supply, with housing available for people at all income levels. 2. The accommodation of all racial and ethnic groups in the purchase, sale, rental and location of housing within the community. 3. A variety of housing types for people in all stages of the life-cycle. 4. A community of well-maintained housing and neighborhoods, including ownership and rental housing. 5. Housing development that respects the natural environment of the community while striving to accommodate the need for a variety of housing types and costs. 6. The availability of a full range of services and facilities for its residents, and the improvement of access to and linkage between housing and ,employment. GOALS To carry out the above housing principles, the City of Richfield agrees to use benchmark indicators for communities of similar location and stage of development as affordable and life-cycle housing goals for the specified periods, and make its best, efforts, given market conditions and resource availability, to remain within or make progress toward these benchmarks. The goals will be reviewed by the Richfield Housing and Redevelopment Authority (HRA) in 2001 and 2006. CITY INDEX FOR RICHFIELD BENCHMARK (1996 to 2010) RICHFIELD GOAL (1996 to 2001) Affordability Ownership 97% 64-77% 92% Rental 64% 32-45% 59% Life-Cycle Type (Non-single family detached) 36% 38-41 % 36-41 %° Owner/renter Mix 65/35% 64-70 / 30-35% 65-70 / 30-35% Density Single-Family Detached 3.6/acre 2.3-2.9/acre 2.9-3.6/acre Multifamily 21 /acre 11-15/acre 15-21 /acre To achieve the above goals, the City of Richfield elects to participate in the Metropolitan Livable Communities Act Local Housing Incentives Program, and will prepare and submit a plan to the Metropolitan Council by June 30, 1996, indicating the actions it will take to carry out the above goals. CERTIFICATION Mayor Date HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. ~~ Agenda December 18, 1995 Issue Statement: Issuance of Certificate of Completion, CSM Phase I. Background: The HRA entered into a contract with CSM for construction of Phase I improvements April 11, 1994. Section 4.7 discusses the Certificate of Completion. It indicates that a certificate is to be issued for each phase with the issuance process being initiated by CSM. The HRA approved concept plans for Phase I. Construction in accordance with the concept plans is complete. A survey of various City divisions including inspections, fire and engineering indicate there are no outstanding concerns with regards to construction compliance with the concept. With regards to PETsMART, the building shell is complete. Installation of merchandise display equipment and plumbing fixtures is now underway. Inspections has issued a temporary Certificate of Occupancy so workers can enter the building to undertake this work. Once this work is completed a final Certificate of Occupancy will be issued. The Certificate of Occupancy has been issued for Best Buy and SPORTMART. This is a process separate from the HRA's Certificate of Completion. Recommended Motion: Adopt a motion which approves the attached resolution which authorizes the execution of the Certificate of Completion by the Executive Director and Chair. Basis of Recommendation: 1. Phase I is complete in accordance with the concept plans. 2. CSM has requested issuance of the Certificate of Completion . Alternative Recommendation: 1. Delay issuance. Discussion/Decision Mode: CSM has requested issuance. Respectfully submitted, James Prosser Executive Director JDP:cak 3. The Letter of Undertaking will, in the judgement of legal counsel, adequately protect the interests of the HRA and assure completion of oustanding items. Alternative Recommendation: 1. Delay issuance. 2. Reject the Letter of Undertaking concept and direct staff to find an alternative. Discussion/Decision Mode: CSM's Phase II lender is seeking the Certificate of Completion. Respectf submitted, James .Prosser Executive Director JDP:cak HRA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF A CERTIFICATE OF COMPLETION FOR CSM CORPORATION PHASEI WHEREAS, the Housing and Redevelopment Authority entered into an Agreement with CSM Corporation (Developer), a Minnesota business corporation, dated April 11, 1994, pursuant to and in furtherance of the ILN Redevelopment Project heretofore adopted by the City and the Richfield Housing and Redevelopment Authority; and WHEREAS, the Agreement obligated the Developer to construct certain improvements to property identified in that Agreement; and WHEREAS, Section 4.7 of the Agreement required the HRA to furnish the Developer with a Certificate of Completion upon completion of the Phase I construction in accordance with Concept Plans; and, WHEREAS, the Agreement establishes the form for the Certificate of Completion in Exhibit B; and WHEREAS, staff has found the improvements to be in accordance with the terms of the Agreement. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment. Authority that the Executive Director and HRA Chair are directed to execute the Phase I Certificate of Completion and deliver same to the Developer. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 18th day of December, 1995. Thomas E. Harms, Chair ATTEST: Vern Luettinger, Secretary CERTIFICATE OF COMPLETION The undersigned hereby certifies that CSM INVESTORS, INC., a Minnesota corporation, has fully and completely complied with its obligations under Article IV of that documents entitled "Contract for Private Development," dated April 29, 1994, between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD and CSM CORPORATION, a Minnesota corporation with respect to construction of the Improvements located on the tract of land described in the attached Exhibit A in accordance with the requirements of such. document and is released and forever discharged from its obligations to construction the Improvements under such above-referenced Article on the above-referenced tract. DATED : 1995 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By Its Executive Director JBD97193 RC125-95 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 76 Agenda December 18, 1995 Issue Statement: Public hearing and consideration of a resolution authorizing the sale of Richfield Rediscovered property at 6601 Logan Avenue to Rockport Homes and 6844 14th Avenue to Affordable Suburban Housing. Background: The HRA has acquired 6601 Logan and 6844 14th Avenues under the Richfield Rediscovered Program. Rockport Homes is proposing a $160,000 three bedroom home at 6601 Logan. This home will also be part of the Twin City Home Builders Association "Spring Preview". This will be the fourth home built by this builder in the Richfield Rediscovered Program. Affordable Suburban Housing (ASH) is proposing a $120,000 three bedroom home. at 6844 14th Avenue. This project is a Richfield Rediscovered "Affordable Homes Initiative" wherein, the end buyer is a moderate income purchaser and the HRA defers the value of the land with a second mortgage. ASH has not built with the program before. However, they are using Marlin Grant Homes as their general contractor. Several homes have been built by Marlin Grant under Richfield Rediscovered. The essential elements of the development contracts remain unchanged from previous projects: Address Lot Price Completion Date Performance Security 6601 Logan $30,000 May 31, 1996 ~ $30,000 6844 14th $26,000 May 31, 1996 $26,000 The Logan lot would be paid for at completion of the home. The 14th Avenue lot would be paid for at a future time should the first time buyer sell the property. Recommended Motion: Following the public hearing, adopt the attached resolution which authorizes the Chair and Executive Director to execute agreements which sell 6601 Logan Avenue to Rockport Homes and 6844 14th Avenue to Affordable Suburban Housing. Basis of Recommendation: 1. Rockport Homes and Affordable Suburban Housing (when teamed with Marlin Grant. Homes) are both experienced and financially secure builders. 2. The HRA owns 6601 Logan and 6844 14th Avenues and wants to redevelop these sites. 3. Staff continues to explore ways to provide market rate homes at more affordable prices. Vo-Tech and Habitat are two ways. ASH provides another. 4. Development Agreements have been negotiated in conformance with program guidelines. 5. Notice of public hearing was published in the Sun-Current on December 6, 1995. 6. The Planning Commission found the disposition of these properties to be consistent with the Comprehensive Plan. Alternative Recommendation: Direct staff to find other buyers. Discussion/Decision Mode: Closings are anticipated to occur by the end of December. Respectfully submitted, James .Prosser Executive Director JDP:cak HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 6601 LOGAN AVENUE TO ROCKPORT HOMES INC. AND 684414TH AVENUE TO AFFORDABLE SUBURBAN HOUSING IN ACCORDANCE WITH A DEVELOPMENT AGREEMENT. WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in furtherance of the Richfield Rediscovered Program Redevelopment Project (Project) heretofore adopted by the City to Richfield (City) and the HRA, said real property being described as follows: Address Legal 6601 Logan Avenue The North 1/2 of Lot 10, Block 2 Fairwood Park Addition, Hennepin County 6844 14th Avenue Lot 1, Block 1, "Richlands" Addition, Hennepin County WHEREAS, the HRA is authorized to sell real property within its area of operations after public hearing; and WHEREAS, Rockport Homes Inc. is the developer of 6601 Logan Avenue in accordance with a developers agreement; and WHEREAS, Affordable Suburban Housing is the developer of 6844 14th Avenue in accordance with a developers agreement; and WHEREAS, the public hearings have been held after proper public notice. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. A public hearing has been held and 6601 Logan Avenue is authorized to be sold for $30,000 in accordance with a development agreement to Rockport Homes Inc. 2. A public hearing has been held and 6844 14th Avenue is authorized to be sold for $26,000 in accordance with a development agreement to Affordable Suburban Housing. 3. The Chairperson and Executive Director are authorized to execute the Development Agreements, and other agreements as required to effectuate the sales. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 18th day of December, 1995. Thomas E. Harms, Chair ATTEST: Vern Luettinger, Secretary u ; ~-~ ~~ ' I ; it ~ I ! ~I~i~ (~ ,, I~~ -~ I~~ li, ~ fib ~ ! ~ I II iii ~~ -q- ~~~ i,. I ~~ u I ~ I' ~ I I „ ~ ~, s d z ~; I ~ ~I~ ^ ~~~ ,. 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' .Vt,T ~ ~~I_C saw ~ ~~I ~.~~~ ~®inl --- ~ IV , ~ ou¢ _ j yr `,, = P 1 ~ ~ J ' - - - - -___ ~ a .~ P~ j -~ xrr auc . ~ - ~- g- ----- - - - `- I ~ hl ~cen _. :I ~i ~ 6 ~ I o -~., I I; !_ _ o I F,~~ i j I Uu EKGdv dTF_D LOWER LEVEL ; ; i ~~ • I s r HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 75 Agenda December 18, .1995 Issue Statement: Selection of a facility planner for a jointly used American Legion and VFW Post. Background: As reported to the HRA in November, the VFW/Legion have begun to explore the joint development and use of a combined facility. This activity was triggered by the American Legion receiving an offer to purchase their property from Housing Services Inc. for the development of senior co-operative housing. However, both groups also must resolve the same issues; outdated facilities which are expensive to operate and declining membership. Staff has also joined the discussions. The VFW/Legion have made significant contributions to Richfield. They continue to have a valuable role in community life and a joint facility would help make that possible. Through weekly meetings with leadership of both organizations, it became apparent to staff that the key to moving forward was the retention of a consultant who would help determine the appropriate size and design of a new facility (parking, restaurant, banquet and bar). On October 26 representatives of several organizations who plan and design this type of facility attended a meeting to hear a presentation of need. Representatives included: • MN Hospitality Training Center • Connoisseur Restaurant Management • Shea Architects • McMonigal Architects • The Beard Group Three proposals were received by the November 9 deadline; • Shea Architects • Maxfield Research Group teamed with McMonigal Architects • Connoisseur Restaurant Management On November 15, staff and VFW /Legion representatives interviewed the applicants. The interview panel has unanimously concluded their deliberations and recommends that Connoisseur Restaurant Management (CRM) be retained. Mr. Domoracki President of CRM will attend the December 18 HRA meeting. The CRM proposal has two distinct phases Introductory study $4,000 plus up to 5% expenses. Would basically utilize existing demographic data and existing industry information to determine general size~and configuration of facility. The results of this report could negate the necessity of proceeding any further. II. Advanced Feasibility study $7,500 plus up to 5% expenses. Consumer specific information through interviews of existing active members, and collection of data form surrounding restaurants, and bars. Generation of site specific data. The interview panel requested CRM to add an additional element to the study - surveying members who are not active. CRM is proposing to survey about 500 members at a cost of $4,700. Recommended Motion: Adopt a motion selecting Connoisseur Restaurant Management to undertake the feasibility study and authorize the Executive Director and HRA Chair to execute an agreement not to exceed $16,775. Basis of Recommendation: 1. There is a need in Richfield for more housing options especially those targeted at empty nesters and the retired. 2. The VFW and American Legion are incurring the expense of operating outdated facilities and declining membership. 3. These organizations have benefited the community in a variety of ways. 4. The continued existence of these organizations is important to community life. 5. The relocation of both organizations to a new facility would help assure their viability. 6. There is need for professional assistance to evaluate the size, design and location of a new facility. 7. The panel selected CRM for three reasons: a) They area "for fee" restaurant management company involved in the management of operating restaurants. b) They are often involved in the development of restaurants from concept through construction and opening. c) Their proposal was competitively priced. 8. Funds are available from the HRA General Fund. 9. With almost 640 opinion cards returned by members of the VFW/Legion, the favorable response rate is about 10 to 1. Alternative Recommendation: Direct staff to look at other options. Discussion/Decision Mode: The process has gained a momentum which needs to continue. Respectf Ily submitted, Jame .Prosser Executive Director JDP:cak Development Proposal Restaurant, Meeting, Banquet Facility American Legion VFW Consolidation Richfield, Minnesota Prepared by: Connoisseur Restaurant Management, Inc. November 8, 1995 COl]Y~1tS CRM QUALIFICATIONS .....................................................:..........................3 CRM CLIENT LIST .......................................................................................4 PLAN OF ACTION AND ASSOCIATED COSTS ...:...................................5 FEASABILTTY STUDY ..............................................................................5 INTRODUCTORY STUDY .......................................................................5 ADVANCED FEASIBII.TTY STUDY ........................................................6 RESTAURANT DESIGN AND CONSTRUCTION .....................................6 ONGOINGMANAGEMEN'f SERVICES ....................................................7 Richfield 2 CRM QUALIFICATIONS Connoisseur Restaurant Management, Inc., (CRM) is a food service CRM, Successful consulting and management firm specializing in the retail restaurant ~,t industry. Since our inception in 1983 CRM has had the opportunity to Consulting and successfully assist a variety of clients in the restaurant, finance and real Management estate industries address the challenges and questions they had about Firm the restaurant industry. Frequently our clients .are individuals or organizations that are associated with the restaurant industry without being restaurant operators themselves. Financial institutions with investment interests in Diverse Client restaurants, real estate development or management firms with Profile restaurant tenants, attorneys, accountants and others who advise restaurant operators comprise the basis of our consulting and management clientele. Our diversified service portfolio includes all aspects of restaurant development, management and operation. A brief listing of our experiences and capabilities includes: evaluating restaurant locations market feasibility reports Experienced and restaurant. layout and design Capable construction costs and supervision consumer and industry trends pro forma budget generation staffing and personnel concept development demographic profile and analysis project financing menu development operating cost controls bookkeeping and accounting purchasing management A wide variety of more detailed services are also available from CRM and can be elaborated on at a later time if necessary. In our careers the management personnel of CRM have been 3o Construction responsible for the initial construction or total remodeling of over 30 Projects full service restaurant and bar facilities with an estimated construction value in excess of 80 million dollars. A list of the restaurants and the clientele we have serviced is included within this proposal. Richfield 3 OPERATIONS AND RESTAURANT MANAGEMENT PILLSBURY COMPANY FANNY HII.L HOFFMAN HOUSE RESTAURANTS VICTORIAN HOUSE RESTAURANT GREEN GIANT CORPORATION NEWPORT SEA GRII.L CHI-CHI'S MEXICAN RESTAURANT CONNIE' S SUPPER CLUB SCARPELLI'S RESTAURANT LONE STAR GRII.L RESTAURANT KELLOGG RESTAURANT CONSUL RESTAURANT COPORATION HENRICI'S RESTAURANTS CAMELOT RESTAURANTS ESTABAN'S MEXICAN RESTAURANT 5 MAMALU'S RESTAURANTS WINAMAX COPORATION EDENVALE COUNTRY CLUB FIRST NATIONS GAr~IING TED WII,LIAMS RESTAURANT TIlVIES GRII.L AND BAR DOW JONES RESTAURANT FIRST EDITION RESTAURANT PINES SUPPER CLUB AUSTIN'S STEAK HOUSE BRAXTON SEAFOOD GRILL FAVORS' RISTORANTE' EMBASSY CLUB RAINBOW CASINO UPPER DECK RESTAURANT EAGLES NEST CASINO FOODSERVICE CONSULTING CRYSTAL SPRINGS C.C PRUDENTIAL INSURANCE CO TRAVELERS INSURANCE CO. UNITED PORPERTIES THORWOOD INNS PANNEL, KERR & FORSTER CPAS TOWLE REAL ESTATE MGMT. THE CENTER COMPANIES EQUITABLE LIFE ASSURANCE MARRIOT CORPORATION HARRIS DEVELOPMENT RIVERPLACE MONTGOMERY WARDS MEPC PROPERTIES SCOTTSBLUFF CO-OP OPUS CORPORATION NORMANDALE PROPERTIES BCE DEVELOPMENT OLE' MEXICO RESTAURANTS CRITERION RESTAURANT COLDWELL BANKER JENSEN, DURESS R.E. MGMT. ROUSE COMPANIES MIDLAND MANAGEMENT CALHOUNSQUARE RIDGEDALE SQUARE MII.LE LAC GRAND CASINO SIGNATURE GROUP SHELARD GROUP Richfield 4 PLAN OF ACTION AND ASSOCIATED COSTS CRM will present several sepazate components to a plan of action that the reader of this proposal can review for suitability to the project at hand. We provide this information in an effort to Available Options illustrate the options the reader can have in considering how to progress. The reader may select the components they believe will be most useful in advancing the project. With this approach you our client can construct a plan and budget that aze acceptable to you. FEASIBILITY STUDY We would first suggest the readers consider funding the development of a brief feasibility study to analyze the value and appropriateness of the project under consideration. This can be accomplished in one of two different ways with sepazate time frames and cost factors attached to each. INTRODUCTORY STUDY CRM could provide a basic overview of the proposed restaurant, lounge, banquet and meeting room facility which Basic Project Analysis would include its projected sales volume, suggested size, position within the restaurant industry and Richfield community and a brief outline of the desired objectives of those promoting the development. CRM would use established demographic data and available industry information in the creation of this level of report. From this report the promoters of this project would be able to review the impact the project would have on the size and Sales membership of the groups and other area clientele, examine the Recommendations basic sales projections for the complex and analyze our recommendations for the size and configuration of the complex. This degree of reseazch could be accomplished within 30 to 40 days of authorization at a cost of approximately $4,000 plus any out of pocket expenses. Richfield 5 ADVANCED FEASIBII,ITY STUDY This report would include the generation of all the information listed in the introductory study plus the development of consumer specific information obtained through extensive Additional interviews of existing American Legion and VFW members, Infon~-ation collection of existing business data from surrounding restaurant Available and bar operations, pyscographic profiling of Richfield and other surrounding communities and the generation of other site and project specific data germane to this development. This report could be completed in 50 to 60 days from authorization at a cost of approximately $7,500 plus out of pocket expenses. RESTAURANT DESIGN AND CONSTRUCTION CRM is-not an architectural or interior design firm. Our purpose in the design and utilization stage of a food service project is to assist the client in understanding what needs to be built Converting Ideas Into according to its proposed function and utilization. CRM Practical Plans understands the importance of customer profiles in the specifying of construction type, quality and finishes. We interpret the productivity factors of restaurant operations into our recommendations. We understand ongoing labor costs, equipment productivity factors, maintenance costs and the consistency factors built into all successful restaurant operations. We use our expertise in assisting our client in understanding the Designing the workings of the food service industry and how that information Restaurant for can be used to develop the desired facility at the least possible Success cost and with the highest degree of acceptance by the buying public. We are frequently retained by clients to "make a restaurant CRM Can Supervise happen". Our responsibilities include assisting in the selection of The Entire Project the architect and design firms that we know are experienced and fluent in the design and construction of restaurant facilities. We generate and supervise the complete budgeting process of the - design and construction. We also assist the client in the selection of a general contractor for the construction phase of the project We specify the furniture, fixture and equipment packages for all aspects of the project and submit those packages for competitive bids to a variety of suppliers that are proficient in the food service industry and are willing to supply the necessary furniture Richfield 6 and equipment at the least possible cost. With the client's approval we award the bid to the most viable supplier and Ready for Customers supervise the delivery and installation of the packages. When we have concluded our responsibilities the project is completely ready for occupancy and service to the consumer the next day. By retaining CRM the client shifts complete responsibility for the development of the project to us. The client is not mandated to Tlie Client Decides, participate in any portion of the development but can participate CRM Implements ~ any area at any time they wish. Periodic progress and cost reporting is made to the client or its designated agent at whatever time is convenient to them. CRM has extensive experience at budgeting and developing restaurant projects. Our procedures and expertise frequently Opportunity to Save allow the client to save enough money on the development to cover CRM's entire fee structure. All of the additional support the client receives through this arrangement can be without additional cost. The cost for retaining CRM for this type of service is usually __ calculated ~s a percentage of the total project cost. Depending on the size of the project our fees can range anywhere from 4% to 10% of the project. The larger the project usually the smaller the percentage. Detailed fee estimates .can be provided when the project takes more formalized shape. ONGOING MANAGEMENT SERVICES The majority of C1ZIvi's time is utilized in the ongoing management Restaurant Profits of restaurant facilities. In today's ever increasingly competitive Are Elusive climate it is more difficult to operate a restaurant at a profit then ever before. Because of this individuals and organizations who wish to maintain efficient and profitable operating restaurants are looking to professional management companies for assistance. CRM is the oldest and most successful "for fee" restaurant management company in the upper Midwest. A "for fee" management company manages restaurants for a fee. We do not seek or accept equity positions in the restaurants we supervise. We work strictly for the benefit of the client as a hired resource. Richfield 7 Management companies similar. to CRM have been in existence in larger cities for: quite some time. Some of the most successful high profile restaurants in major cities are conceived and managed by outside firms who do not own the facilities.. All major sporting arenas and parks hire national management firms to oversee their food service facilities. Management of private and corporate food service facilities is a multi-billion industry. As part of our ongoing management package CRM provides a wide variety of support services. A partial list of our capabilities includes: daily operations management staff and labor management Complete Support purchasing bookkeeping and Capability accounting advertising and marketing promotions and functions asset management and deployment quality controls concept development and refinement capital management operating cost controls sales volume enhancement product development menu specifications Within each of the listed categories of expertise there are a multitude of separate disciplines that are too numerous to list in the confines of this proposal. We would suggest further elaboration on the nature and benefits of each at a later time when more appropnate. High Profile A list of our clients who have benefited from these services is Successes included with this proposal. We have developed and/or managed several successful high profile restaurants in the Twin City market. We know the market well and are fluent in the buying habits and preferences of the Twin City consumer. The cost of retaining CRM for ongoing management responsibilities is calculated as a percent of gross sales and a smaller percentage of the operating profits. Depending on the proposed sales volume of the project our fees range between 3% and 5% of gross revenues and 10% of the distributable profits. These fees are negotiable depending on the responsibilities involved. Richfield 8 We at CRM believe we can be of invaluable assistance. To the VFW and American Legion organizations in their endeavors to realize this highly desirable restaurant, lounge, banquet and meeting facility. We understand the consumer needs to make the facility a success. We know the operating requirements that need to be designed into the property. We are highly experienced in the design and construction components of the development. And we know how to position a property like this for profitability In closing, we would like to thank the Richfield VFW and American Legion organization as well as the personnel of the City of Richfield for the opportunity to submit our qualification and expertise in support of the upcoming project. We would be more than willing to meet with the development committee at their convenience to further discuss this opportunity and supply any additional information the decision making bodies may need. This concludes our proposal. Richfield 9 CORPORATE. REPOR'~~ Real estate clients hunger for restaurant consulting TI-~ Tvvnv crrrES AREA his always been a tough place for restaurants, says industry con- sultantJim Domoracki. I-Ie cites a recent study which showed that restaurant revenue per capita in the metropolitan area is 89 percent of the national average. "Its' the culture;' Domoracki gays. "You have not as frequent a diner in the Midwest and a more casual diner. In Minneapolis, people's idea of a big night out is a dinner at Chi Chi's and then a trip to Target." Lately, conditions have become tougher for restaurants, particu- larly for those located in office buildings, which face a combina- tion of soft overall demand and high vacancy. rates in their com- plexes. Although the combination can be deadly for restaurants, it has been lucrative for Domoracki and his Connoisseur Restaurant Management, Inc. "The worse restaurants and real estate get, the better off Connoisseur be- comes;' says Domoracki. The Minneapolis firm offers a number of fee-based restaurant SEPTEMBER 1990 VOLUME 21. NUMBER 9 consulting services, including handling all day-today opera- tions for the owners and inves- tors. These days, Domoracki says his clients are frequently people in the real estate industry "who hire us when the restaurants in their buildings are less than suc onssful and it's important to keep them in operation." Successful restaurants are im- portantreal estate selling points, particularly in a buyer's market. Some leases even promise that a certain number of restaurants will operate in an office building. Domoracki, who has spent 22 years in the industry, both with corporate restaurants (Pillsbury and Chi Chi's) and independents, has been hired by Prudential, Travelers Insurance and United Properties. Most recently, Domoracki's services were engaged by a unit of Equitable Life Assurance Soci- ety, which owns the Interchange office complex in St. Louis Park, and the space for the Interchange tower's Dow Jones Restaurant, now in its sernnd year of opera- tion. Having recruited a general manager from the Afton House Restaurant and a chef from the Hotel Sofitel for Dow Jones, Domoracki is keeping the restau- rant open to the public in the morning and through the lunch hours, and trying to book private functions in the evenings, as per the client's request. Some oJDomoracki's clients are obligated to keep restaurants in their buildings operating. ,ittle or no restaurant expertise. In addition. three of Connoisseur's 10 employees manage restaurants' day-to- i:~~- ~,Ikrations for clients. he entire restaurant industry has hit "tough sledding;' sans John L,:ibalestra, chief executive officer of Lido Cafe Italia in Roseville. Like many others, L:tbalestra exlxcts things tee ~_ct tougher. Iic predicts a ZO to 2S percent reduction~in viable restaurants ++'ithin the next two vears in .Itc T+vin Cities. "And that is a cottservativc estimate," he adds. Arnold Ilewes. executive vice president of the i\•linnesota Hospitality Industry. agrees that customer counts are down and that tl~e recent closings of the Blue Horse, Gar~nor~'s. Tomtny IQ's and Spazzo Cafe in St. Paul, "may just be the tip of the iceberg." Domoracki. has been hired to revive Spazzo, which is in the World Trade Center's retail court. '`T~•'e hired Connoisseur because they brim a level of restaurant expertise to the table that we as developers can't bring," says Rich Forslund, general manager of the World Trade Center for Brooldield De+'eloptnent. DO(17ot'aCkl Is alSO O+'erSeelll~ the former Brixton's res- taurant in Minneapolis' Riverplace. The restaurant is now called Ne+vport SeaGrill. a seafood dining establishment. C}utck Paton, general manager for Newport SeaGrill, says that monthly sales are "up 10 to 15 percent and. wing" since it was converted in April. He credits Con- t,uisseurfor defining Newport's market, developing a plan to woo business and `'giving us the tools and support to execute that plan." Domoracki lirt}:s Spazzo's troubles to its Lack of market identity, a problem he intends to correct when the restau- rant re-opens in September as Favore, another Italian eat- ery. `'y'ou need at least one or hvo dining items in order to create a brand i<Icntifiraticm "hc s:lys. 13ut llonroracki acknowledges that not every restaurant can be saved. `'We turn down one-third of the requests because their locations aren't suitable," he says. Domoracki's restaurant expertise is the product of more than 20 years in the industry. During that time he }tas held neirl~' every restaurant job, from dishwasher to general manager. In ]967, Domoracki became a bartender at the Leilani Supper Club in ~•Iilwaukee, his hometown. His plan was to work long enough to replenish his college savings. Instead, he found a career. After working for a supper club in northern Wisconsin, Domoracki was recruited in the mid-1970's to become the general rnana~er of the Victorian Hottsc in Green Bay. It ~'as his first chance in aturn-around situation. Domoracki says he straightened out management prac- tices. trimmed exlxnses and beefed up employee training. `Without any material increase in the restaurant's volume, we were able. to ihlxeciably increase prof its" within a year, l~onaorarki sans. In 1977, Domoracki joined Hoffman House restaurants. then a division of the Green Giant Co. During his three. years there, he rosy w regional vice president cif olxra- tions and oversaw 19 restaurants. 2.000 employees and $3S million in sales. His duties included puffin- out "brush fires" at I-loffman House restaurants. But Domoracki decideil to turn his career in a new di- rection and became a restaurant management consultant. 11is first job was working for a franchisee ~+•ho owned three Esteban restaurants. `'We worked wish them for t+vo years and were able to substantially improve the cash flo+v of t++'o of the three restaurants," Dotoracki says. In 1985, Domoracki incorporated his business as Con- noisseur Restaurant Management. He will not disclose the firm's annual revenues. "We have gone from being a local to regional company in two years," Domoracki says. He hopes to establish a national reputation b}' ++'orkin~ with small national chains or nationally known individual restaurants. As a consulting and management firm, Connoisseur does not take an ownership stake with its clients. "Wc feel it is better, at this time, to not cloud the waters by owning some properties we manage and not owning others," Domoracki explains. Domoracki's mission often is to turn around troubled restaurants so the owners can sell out and recover their in- vestment. In other cases, clients want help getting their businesses back on track. "Frequently, restaurat~ts•are ailing businesses because they have become underperforming in the marketplace," Domoracki says. `The expectations of the dining clientele are very sophisticated and demanding." For each restaurant he works with, Domoracki studies its location, market and demographics. We try to understand who lives and works around the restaurant and the reasons they select restaurants," he says. `We try to find unique ways to interest the buying clien- tele." Sometimes, Domoracki recommends that a restaurant adopt a new concept. `te'e frequently find restaurants that can't keep up with the changes in the marketplace," he says. 'They are no longer unique or have lost their specialty." When he reviewed the Dow Jones restaurant Domo- racki found the business needed to strengthen its image since it is in an office building and is not visible from nearby freeways. After reviewing possible specialties, Domoracki recommended promoting the restaurant as a steak house. Domoracki says he like being able to salvage businesses and save people's jobs. He notes that restaurant work is one industry where an entry-level employee who has little education can still rise to the top to become a genera) manager. ~EALESTATEJOIIRNAI; VOLUME 5, NUMBER 9 ©tee9s-ronerreaiMediacompany FEBRUARY 27, 1989 52.00 Focus ON RESTAURANTS Connoisseur Analyzes the Restaurant Climate for the Real Estate Industry Restaurant experts say 1989 won't be a big growth year for the Minne- sota food and beverage industry. But the business could be booming by 1990 or 1991 thanks to new concepts, increased demand by office and retail landlords, and the opening of huge new real estate developments. The number of restaurants in Minnesota has leveled off in recent years. But new concepts are replac- ing old ones, and restaurants in office and retail complexes are taking the place of many freestanding units, according to industry sources. There are not that many new restaurants coming out on the market. It's almost a flat industry, especially in Minnesota," says Jim Domoracki, president of Connoisseur Restaurant Management, Inc., aMinneapolis- based food service management and consulting firm. "It's my belief that we haven't seen peak development yet. And as retail and office space grows, there'll be a need for more anchor restaurants," predicts Steven J. Wagenheim of the. Minneapolis office of Laventhol & Horvath (L&H), an accounting firm that tracks the leisure time industry. The roughly 619,000 food service operations in the United States generated estimated sales of about $213.5 billion last year according to a 1988 report by the National Restau- rant Association and L&H. The industry generated estimated rev- enues of slightly more than $3 billion in Minnesota in 1986 (the most recent year for which estimates are avail- able), according to a 1987 study L&H did for the Minnesota Restaurant Association. Traditionally, Minnesota has not been a restaurant hot spot.. `This area is not perceived as being a good area by national chain operators," Domoracki says. "It's the last on the list. It's the weakest area nationally." Although the East Coast, West Coast and Southwest continue to expand, he says the North Central region, which includes Minnesota, is disdained by many major chains. That's because per capita away-from- home restaurant-style food sales in the North Central region are only 89 percent of the national average, he says. 'That number is a reflection of both soft check averages and dining frequency," Domoracki explains. In short, we don't dine out as often as people in other parts of the country, and when we do, we don't spend as much. Domoracki says Minnesota and its neighbors lag behind other regions because we don't have as much convention and tourist traffic. We also don't have quite as much discretionary income. Midwesterners aren't known for trying new things, either. "We're nowhere near as adventur- ous in our dining," Domoracki days. Minnesotans tend to favor quantity over quality, he says. Restaurants are Becoming Anchors Primarily intended to serve the lunch- time needs of tenants, some restau- rants in office settings are so success- ful that they become destinations. Kincaid's in the 8400 Tower in Bloomington is one example, Wagenheim says. But high office vacancy rates in the Twin Cities real estate market are hurting some anchor restaurants, Domoracki notes. If a restaurant opened as an amenity to an office building, and it draws 98 percent of its business from that building, a rise in that building's vacancy rates is going to have a negative impact on food and beverage sales, he points out. Res- taurants in retail centers are also at the mercy of the project itself, Wagenheim adds, citing closings at St. Anthony Main in Minneapolis as an example. Yet many developers of office buildings and office parks are con- vinced that a restaurant is a must- have amenity to be competitive in today's leasing market. High demand for strong restaurant operators has led to some financial arrangements that were unheard of a few years ago. First of all, Domoracki says, amenity type restaurants generally can't survive in office developments of less than 200,000 square feet. But some landlords believe that an onsite restaurant is so essential that they are willing to subsidize its operations. 'There are some building owners who are actually paying restauranteurs to stay in business," Domoracki says. For example, if a landlord can get an extra $2 per square foot in rent for 200,000 square feet because a building features a restaurant, it might be worth it to provide a cash subsidy. Direct subsidies are uncommon, industry sources agree. 'There are many landlords, however, who are cutting below-market rate leases to restaurant tenants," Domoracki-says. The lease rate for restaurant space is often less that the office rate. Anchor restaurants might also receive other bonuses, such as large exterior signs and generous tenant improvement packages. Many landlords attempt to make up for the subsidies with percentage leases. For example, 'rf a landlord is discounting base net rents by 25 percent to 33 percent for a restaurant tenant, the landlord can try to recoup the discount by collecting a percent- age of the restaurant's gross monthly income in excess of the base rent. "So, it's not an absolute-lose deal," Domoracki says. Picking a Winner Eight to 10 years ago, Domoracki says, the growth of the Twin Cities metropolitan area allowed restauranteurs and real estate devel- opers to depend on an almost auto- matic growth in food and beverage sales, which sparked an increase in the number of restaurants. Even marginal operations were able to stay afloat thanks to a booming market. Today, however, the Minnesota market has matured, Domoracki says. Currently, almost one restaurant closes in the state for every new one that opens, he says. So how do landlords identify restau- rants that are likely to be successful? Domoracki says there are five basic ingredients: quality of product, level of service, capitalization, management and location. "Five out of five is great, four out of five is OK. Three out of five and you're really running the risk of an unsuccessful tenant." Every restaurant figs strengths and weaknesses among the five key factors, Domoracki notes, and a restaurant that is weak in one factor often compensates for it with strength in other areas. Sources of Industry Growth "Cornenience restaurants are where almost all of the growth in our industry is expected to come from in the next few years," Domoracki says. "Grocery stores are upgrading and expanding their food service offerings, while more convenience stores are targeting food service as a growth vehicle," a 1988 Li3~H study reports. Changing demo- graphics and lifestyles have increased the demand for takeout food, fostering a growth area for grocery and conve- nience stores. A new generation of Applebee's- style neighborhood bar and grill-type restaurant chains is also on the way, Domoracki says. The bar and grill operators will select prime locations, draw almost all of their business from within athree-mile radius, and will serve a limited menu designed to be appealing to diners out for "highly recognizable" convenient food. Besides Applebee's, Domoracki says at least two other neighborhood bar and grill chains are under develop- ment in the Twin Cities metro area. He declined to identify the firms involved. Thy monthly -wwal~tt~rts-ving eompanla and ~ntployNaln tM West Suburban Business Communities a/on~ 1-394 and Hwy. 55 from Hwy. J00 to W94. Lone Star Grill and Bar... Hey Pardner, Real Tex-Mex! By Connie Sandler Minnetonka's Lone Star Grill and Bar offers more than just a taste of Texas. Recently opened in the Cedar Hills Shopping Center,. just off County Rd. 73 and Cedar Lake Rd., this casual neighborhood restaurant serves up authentic Tex-Mex. Even the decor is southwestern, from the Aztec print tablecloths to the art'rfacts cleverly displayed around the room. According to Jim Domoradci, whose company, Connoisseur Restaurant Management, created the restaurant's decor and menu, everything the restaurant serves is homemade, including the sweet yet slightly spicy, house barbeque sauce. "Let's just say it's a protected recipe," says Domoracki. FROM THE PIT Stand-outs on the menu are the "Smoked" selections -all painstak- ingly prepared literally "in-house". (The bade of the Lone Star's menu explains their Texas-style or "pit" barbequing.) "We have a great big authentic wood. smoker in the bade of the restaurant," explains Domoradki. Here meats are cooked without the benefit of fiery coals diredly under- neath, as we midwestems tend to do. Instead, it's the heat of the smoke which cooks the food, not the lick of the flame. Afire is built at one end of the pit with a flue at the other, and the meat is set on a grill between the two. Lone Star uses a combination of oak and hickory to flavor their beef brisket, pork and chicken. It's a long, slow cooking process which gives the meats their distinct, smoky flavor, Domoracki explains. "We sbw smoke our meats at least 14 hours." Heading up the menu are several "Preliminary Provisions," aka appetiz- ers, including onion rings, nachos and chicken wings -both the hotly sea- soned buffab variety and the popular "Moppo's,"with their trademark special seasoning. Not to be missed are two out-of-the-oniinary salads -the Smoked Chicken Salad with mixed greens, tomatoes, onions and of course smoked chicken, tossed in a honey mustard dressing (again, homemade of course!) and the Fajita Salad, in essence all the fajita fixins' in a tortilla shell topped with beef or chicken. TRUE TEX-MEX What's aTex-Mex restaurant without chili? Never fear -you can take your pick of chili three ways, all available by the cup or bowl, priced from $1.75 - $5.58. The Bladk Bean teams coarse ground beef with blade turtle beans and medium-hot spices. This one's recommended for the chili novice. Then there's the Lone Star, with chopped, smoked beef and beans, and for the very daring -the Bola Red, better known as the "bowl of red," a house favorite. This genuine award- winning Texas hot chili is not recom- mended for the faint at heart. In fact the menu cautions "order at your own risk - no refunds." They're all served with cornbread and four tortillas to soften the sting. October 1990 SLOW SMOKED Sandwiches, priced from $3.95 to $4.50, run the gamut from Bacon, Lettuce and Tomato on Texas toast to a Pork Sandwich, sbw-smoked pork raost on a Kaiser bun topped with barbeque sauce. Both smoked brisket and turkey also tum up in sandwich form. The five "Western Burgers" are suitably topped with flavortul Tex-Mex fbcin's, the likes of peppers, jack cheese and guacamole. The House Burger Number 12, which is seasoned by no less than 12 special seasonings, adds peppers and provolone cheese - it's a "feature burger." Many of the restaurant's entrees ($7.50 - $13.95) come direct from the smokehouse out bade, like the Brisket and Smoked Chicken dinners and Pork Ribs. All come with choice of fries, baked potato or potato salad, cote slaw and naturally, Texas toast. Fajitas are the unequivocal "house" Mexican specialty. Choose from marinated chicken breast or beef, both charbroiled, then sliced and finished in a sizzling skillet with peppers and onions. Single orders go for $7.95, doubles to share for $14.50. The smoked meats also turn up in enchila- das and chimichangas, with some unusual fillings -would you believe zucchini and chili verde enchiladas? SPECIAL PRICES Open from 11:30 a.m. to 10 p.m. Sunday through Thursday and until 11 p.m. on weekends, the restaurant seats 160 between the dining room and bar. Best-kept secret is the Lone Stars Happy Hour. "VNe've got the best deal going in the Twin Cities," boasts Domoracki. "V11e not only discount drinks 35 percent, but we also sell all of our appetizers at wst between 4 and 6 p.m., seven days a week." Another plus is that most items on the menu can be packed to go at the restaurant's own drive-through window. StarTri NEWSPAPER OF THE TWIN CITIES SUNDAY/May 22/1994 Restaurants leap at chance to buy at a discount chain restaurants with which they compete. Despite the enviable reputations of such establishments as the Loon Cafe and the clubhouse at Hazel- tine National Goff Club, they have little more bargaining power than the ma-and-pa diner down the street when it comes to dealing with suppliers. The fact is, ma and pa, Hazeltine and the Loon are all comparatively small, independent operators with limited ability to negotiate the kind of favorable prices that large res- taurant chains have the clout to extract from their vendors. Until now, that is. Until Jim Domor- acki, a 26-year veteran of the eat- ery business hereabouts, came up with Price Purchasing Inc. (PPI), a buying co-op of independent Twin Cities restaurants organized to match the purchasing power of the Formed less than two years ago, the co-op has drown so far to 70 members rangmg m size and prom- inence from the Egg ii I and Noko- mis Lanes to Hazeltine, the Decath- lon Club and Lord Fletcher's. For monthly fees ranging from $150 to 5250, depending on volume, co- op "affiliates" are given access to a list of t 5 food and non-food ven- dors who have signed contracts to provide price discounts comparable to those commanded by the chains. Domoracki, 47, figures the result is a 4 to 10 percent saving on food items and upwards of a 20 percent saving on nonfood products and services. Of course, he's not exact- ly what you'd call an impartial wlt- ttess, considering that he expects PPI to add several hundred thou- sand dollars to his bank account in 1994. However, Domoracki's estimates were confirmed by some of PPI's more renowned affiliates. "We're paying 5250 a month to belong, and we're saving much more than that in a week," said Jeff Johnson, ex- ecutive chef at the popular Loon Cafe in downtown Minneapolis. What's more, other vendors who are not involved with the co-op have dropped their prices as well, Johnson said, "so [PPI) seems to ba keeping everybody honest." Down the block. Mike Jennings, co- owner of Rosen's Bar 3 Grill, was humming a similarly cheerful tune. "Before pining [PPI), we couldn't seem to get our food costs under control, no matter what kind of in- temalcontrols we installed," he said. "What it came down to was that we had no bargaining power" with the vendors. Dick Youngblood With the help of PPI, however, Ro- sen's has carved out about 4 per- cent of its food costs, thereby add- ing about $25,000 a year to the bottom tine. Jennings regards that as an agreeable return on the $3,000 a year rt costs him to belong to the Co-op. The concept isn't for everyone, however. Kathy Kirchner, general manager of Wallaby's Lanes 8 Nightclub in Columbia Heights, quit PPI after eight momhs "because our volume wasn't high enough to justify the membership fee." And Donatelle's Supper Club in New Brighton quit after about five months. Limited volume wasn't the only reason, said bookkeeper Shar- on Kamholz: "We found that the kind of [food and nonfood) items that were available through. PPI didn't quite fit our operation. It's a good idea. but k just didn't work for us." Nonetheless, Domoracki claims an 85 percent retention rate since he started PPI with a handful of partici- pants late in 1992. The comp, which produced $130,000 In revenues for Domor- acki last year, began 1993 with 19 affiliates and ended the year with 65 members. He's shooting for 1994 revenues of $300,000 and a total of 125 members by yearend. The PPI concept grew out of Oo- moracki's own experience in the. restaurant business. For many years he managed Chl-Chi's outlets for Consul Corp. and Hoffman House units for Green Giant before starting a restaurant management and consulting. business called Connoisseur Management Inc. in 1983. The company, which collected about $400,000 in revenues last year, specializes in helping real es- tate management companies and their lenders to rescue failing res- taurants -what Domoracki, in an inspired burst of political correct- ness, prefers to call "challenged restaurants." Currently, Connoisseur has ahalf- dozen consulting clients in four Midwestern states. And it's running three restaurants with combined annual sales of $3 million: Favore Ristorante in the World Trade Cen- ter in downtown St. Paul, Austin's Steak 8 Fish House in the Inter- changeoffice park in St. Louis Park and Jefferson Pub & Grill in Winona. In the process of dealing with trou- bled restaurants, most of them small independents, Domoracki was struck by the difference in prices that vendors imposed on smaller, independent restaurants compared with the chain operations witlt which he had been familiar. "tt was like the same delivery truck would stop at your independent restaurant and sell you a case of ketchup for $2 more than the price charged the chain restaurant across the street," he said. "And premium ground beef would run the independent nearly 30 cents a pound more." Three years ago he began studying the possibility of forming afor-profit purchasing assodation and discov- ered that similar organizations had been operating successfully for several years in southern California and Michigan. He spent 11 months negotiating the price-cutting con- tracts with the vendor group and started selling co-op memberships in September 1992. He sees plenty of potential in Min- nesota alone. "There are 3,800 in- dependents in Minnesota alone. and I'm just starting to look at Wis- consin and Iowa," Domoracki said. While he has no illusions about sigrnng up anything but a small fraction of the total, however, he noted that the restaurant purchas- ing co-op in southern California claims 3,500 members and the Michigan operation has nearly 700. including branches in Chicago and Cleveland. CONNOISSEUR Restaurant Management, Inc. December 7, 1995 Mr. Bruce Palrnborg Housing and Redevelopment Director City Of Richfield 6700 Portland Avenue Richfield, iynv 55423 Dear Bruce: Pursuant to our .telephone conversation this week regarding supplemental information on our service capabilities, please accept the following. Connoisseur could conduct a survey of a representative sampling of VFW and American Legion members who are currently registered but non-active members. This sampling would be to approximately S00 members utilizing a cross reference of existing demographic profiles of the membership. If I understood your inquiry correctly, the purpose of the survey would be to collect data pertaining to the usage or lack there of the YF'W and American Legion facilities by the existing membership. We can address those questions issues and solicit information concerning the followiriti<g items: What type of food service facilities the membership utilizes other than the VFW or American Legion. Identify the level of expenditures the members customarily spend when dining out. How does distance from the facilities affect support frequency. Identify what components of the VFWIAL facilities members are most likely to support. The frequency of away from home dining. 10201 WAYZATA BLVD., SUITE 245 MINNEAPOLIS, MN 55343 (612) 525-1992 The present employment status of the respondents and how it relates to dining frequency. Other pertinent data that may be requested by the VFW/AL management committees. We would be able to mail the survey to the S00 members not later than three weeks after receiving authorization to proceed. We would like to meet with the VFW/AL committee members and City officials not later than one week after approval to solicit final questions. A proper response time for the members would be ten days after receiving the mailing. We would need seven working days to tabulate and analyze the responses. We could prepare a report for the committees within seven working days after that. The report could be in committee hands five to six weeks after authorization. The cost of the survey would be 54,000 plus printing and mailing expenses, estimated at $700. If this outline is acceptable to the City we would be prepared to begin immediately, Thank you for your inquiry Bruce and please feel free to calf if additional izd'ormation is needed. Sincere! , - ,/A. ~~/'.~ ysr i~f 3D/me