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04-02-90 agendaCITY OF RICHFIELD, MINNESOTA Council Letter No. 15 Study Session April 2, 1990 Issue Statement: Discussion on a•proposed ordinance which would prohibit persons under 18 from purchasing or possessing tobacco products. Background: The City Council requested staff to review the concept of an ordinance that would restrict minors from purchasing and possessing cigarettes and other tobacco products. As a result of our recently adopted ordinance removing cigarette vending machines, there was some concern that while State law provides for crimes prohibiting: -- Sales to minors -- Use of tobacco products by minors It does not provide for a prohibition by minors purchasing or possessing. Staff has reviewed this issue and prepared an ordinance. The City Prosecutor and Pubiic Safety will be at the Study Session to discuss the implications of an ordinance such as this. Some of our concerns are: -- We would essentially make our young people quasi - criminals. -- There would be an expectation that the Police rigorously enforce this ordinance when there are certainly more pressing problems to deal with. -- In many instances, parents allow their children to smoke, feeling that at least they're not on drugs. -- The court system is already over capacity and it is unlikely judges will take this too seriously. Because current law already addresses the most crucial part of this issue: (a) sales to minors and, (b) the actual smoking by minors; perhaps that is sufficient. Recommended Motion: The Council should discuss this proposed ordinance. Discussion /Decision Mode: No formal action is required at this time. Resp lly submitted, Jame Prosser City Manager JDP:sae BILL NO. 1990 AMENDMENT TO CHAPTER RY, OF THE ORDINANCE CODE OF THE CITY OF RICHFIELD THE. CITY OF RICHFIELD DOES ORDAIN: Chapter XI of the Ordinance Code of the City of Richfield is hereby amended by adding Subdivision 7 to. Subsection 1145.03, thereof to read as follows: Subd. 7. Minors: orohibit f� or anv tobacco orocucz, c 0 Passed by the City Council of the City of Richfield, Minnesota this day of 11990. CITY OF RICHFIELD BY Steven J. Quam • Mayor ATTEST: Thomas P. Ferber, City Cl *rk R.C145 -038 CITY OF RICHFIELD, MINNESOTA Study Session Letter Number 14 Agenda, April 2, 1990 Issue Statement: Review of 1990 Board of Review procedures. Background: The 1990 Richfield Board of Review is scheduled for Monday, April 30, 1990 at 7:00 p.m. in the Council Chambers of City Hall. As provided by City Charter, the Board of Review consists of the Mayor, Council Members, two citizens appointed by the City Manager with the confirmation by City Council. Mr. Lawrence Emond and Mr. Cory Bultema were recently appointed to serve on the 1990 Board of Review. The duties and responsibilities of the Board of Review are established by State law. In general, it is the Board's responsibility to hear appeals by property owners regarding the estimated market value established by the City Assessor and to determine if market values should be adjusted. The appeal is to concern market values rather than tax rates or other concerns which property owners may bring up to the Board. For the ninth year, the Richfield property assessment has been conducted through a contract with Hennepin County which is supervised by the Administrative Services Department. Staff works closely with Hennepin County Property Appraisers to ensure that the local assessment complies with the provisions of the law. In order to prepare for the Board of Review meeting scheduled for April 30, 1990, a review session has been established for April 2, 1990. At that meeting, Richfield Assessor Larry Miller will present information pertaining to the 1990 assessment process. Recommended Motion: It is recommended that the Council prepare for the Board of Review with a presentation from Larry Miller. Basis For Recommendation: 1. It is important to review significant property appraisal issues prior to the time of the meeting. 2. It is important for the Board to review their statutory responsibilities prior to the meeting. Alternative Recommendation: None. Discussion /Decision Mode: This matter will be presented at the Study Session on April 2, 1990. ResrMa lly submitted, Jam Prosser Cit ger JDP: ff CITY OF RICHFIELD, MINNESOTA Study Session Letter No. 13 April 2, 1990 Agenda Issue Statement: Presentation and discussion of the Robert Will Community Housing. Background: A proposal has been submitted to HUD to provide funding for the purchase and rehabilitation of an 11 unit apartment building at 6345 Pleasant Avenue. The proposal was submitted by Westminister Corporation, a subsidiary of the Archdiocese of St. Paul -Mpls. Westminister has an option with the owner to purchase the property. The 11 units would be occupied by adults with psychiatric disabilities. The Multi- Resource Center, Inc. would screen the tenants and provide support services to them. The HUD funding would provide a 20 year contract for Section 8 rent assistance in addition to funds for rehabilitation and purchase. A Board of Directors would oversee the management of the housing. Some Richfield citizens are on the Board. Recommendation: Discuss the Robert Will program with representatives of Westminister and the Multi - Resource Center. Basis for Recommendation: 1. This will likely be the only opportunity for the City Council to discuss the project before it is implemented. 2. Under state law, Robert Will does not need to obtain any approvals or license from the city except for a building permit. Alternative Recommendation: Do not discuss this program with the organization representatives. Discussion /Decision Mode: The program is moving ahead. A discussion at this time while the program is still in its formative stages will permit Robert Will to be more responsive to the community. Also, the Council will be better able to respond to questions from constituents. Respectfully submitted, JaX Prosser Ci ger JDP:sae ( I j wil �� IPW. Imik lh. Ap ti 'Pip, NOT IN MY v FTCTHSORHOOD g T) Jill Sherritt, opposition to the group rwrne -- - _, The idea of group homes is to put the mentally ill, chemically dependent and others into neighborhood settings. But what if the neighborhood doesn't want them? By Kay '.Miller Photos by John Croft he pink leaflet landed on Jill Sherritt's doorstep before she got home for the July 4th weekend. "Look what our new neighbors are going to be." Sherritt's fiance scrawled on a note that he left for her the kitchen table. Curious, Sherritt picked up the leaflet and scanned :t. Something called the Bill Kelly House was moving to the neighbor - ,d The leaflet described it as a p home for mentally ill adults who .e also chemically dependent. The plan was to house 23 such clients in what had been a 10 -unit apartment building. Sherritt glanced out her pic- ture window: The building was kitty - corner across Drew Av, from her own double bungalow. The more she read. the more upset ,;herritt became. "I thought, 'Well, gond Lord: What's this all about ?' " Bill Kell' House was founded in July 1982, inward the end of a three - decade -long process of releasing some 9 ()(F1 people from .'Minnesota's psychi- atric hospitals. For all its good inten- tions. delnstitutionalization went for- ward before there was anywhere near enough decent housing in the commu- nity for people with mental illness. Few were capable of caring for them- selves, and treatment was hard to came bv. So when Hennepin County solicited proposals for new programs to treat people diagnosed as both mentally ill and chemically dependent, Henry Nor- ton was among the first to apply. Nor- ton is a recovering alcoholic who in 1973 left a lucrative position at what was then J.M. Dain & Co. for a career in social service. Norton hired mental- health profes- sionals to run the Bill Kellv House and situated it in an 80- year -old boarding house at 2544 Pillsbury Av. S., in the heart of Minneapolis' group -home ghetto. It proved a rough neighborhood for such a vulnerable population. Over the years Bill Kelly House residents had been beaten up, sold drugs, robbed and propositioned for sex. At the same time, Minneapolis and Hennepin County were growing weary of being the treatment mecca for the entire state. They pressed operators like Norton to disperse their programs throughout the metropolitan area. Norton resolved that when his lease expired, he'd buy a building in the first -ring suburbs. One with grass and trees. Close to bus lines. That wav clients could get to jobs, hospitals and social services in the city. Norton found what he was looking for in Brooklyn Center. Studying a Hennepin County map dotted with group homes, Norton noted that Brooklyn Center had one of the lowest concentrations in the metro area. if any suburb was due for a group home. .'Morton decided, Brooklyn Center was. f everything went smoothly, Nor- ton figured, he could renovate the building by November 198" and move his clients in before the first snow. But on that hot July day in 1987, alarms were going off in .Jill Sherritt's head. What she knew of group homes came from the experience of a mental- ly ill relative who had lived in a series of such treatment facilities. More times than Sherritt cared to remember, she'd been awakened by po- lice saying her relative had walked Home continued nn page 8 �y Henn. .Norton hoped that a peaceful accommodation could be reached. Home —minued imm page - away from the unlocked facility- Hr's broken curfru, police would say. Hr:, got an ,open hottle He's earn -one a Run i, uh,ut a license Each time. Sherritt's heart leaped to her throat. Wearily she told herself that the relative must have gone off his medication again and become delu- sional. Each time. group -home person nel waited hours to inform the family. Each time. it was explained that the home was shon of staff. Now some stranger proposed stick mg a group home in Sherritt's neigh borhoxl, just three blocks from North port Elementar. Schad with its .00 children. Sherritt had no kids of her own. But her fiance did. And his two daughters. then 13 and 15, spent lots of time with them at Sherritt's house. When the school bus picked them up and dropped them. it was right in front of the proposed group -home site. Turning back to the flier, Sherritt read that Bill Kelly House was holding a get - acquainted meeting on July 8 for all interested parties. Sherritt was in- terested..4nd she saw to it that hun. dreds of her neighbors were interested as well. enn• Norton hardly ct exp- ed Brooklyn Center x wel- come him with open arms and platters full of warm cookies. There was opposition in 1984 when he located Oasis House. another of his residential programs for the mentally ill, in Golden Valley. Brooklyn Center already had shown itself to be less than hospitable to group homes. In 1983 its City Council refused to allow North- west Residence. another group home for the mentally ill, to locate in the city. Owner Diane 011endick Wright sued Brooklyn Center and won. It cost the city two years and $35,000 to learn that it couldn't use zoning technicali- ties to keep group homes for the men - tally ill out of Brooklyn Center. As it happened, Wright and Norton were colleagues and friends. Before Norton made his final decision to relo- cate. he dispatched a staff member for a long talk with Wright. "Expect a fight," Wright warned. Brooklyn Cen- ter wouldn't welcome another group home. But ultimately the city should have learned its lesson, and Norton would probably have an easier time there than in a suburb that hadn't been bested in court. With that in mind. Norton signed a purchase agreement for the building. All he needed was for Brooklyn Cen- ter's City Council to grant him a spe- cial- use permit. He hoped an accom- Jill .Shrrritt put her full r•nrrgies into her battle against Bill Kell% Housr . lh,� umrnts she collectrd on the case fill four cardboard boxer to her huusr modation could be reached with the neighborhood. But Henry Norton had no inkling how ferocious opposition in Brooklyn Center would be. Not until he pulled up to Northport Elementary School and found the parking lot and sur- rounding streets jammed with cars. In- side the packed auditorium, people were setting up additional folding chairs. And a Channel 11 camera crew was preparing to film. The night was beastly hot and sticky. People were already on edge as Norton and Richard Ellis, director of the Bill Kelly House, began describing program goals and architectural plans for the building. Sherritt and her neighbors shifted angrily on metal chairs. "There was something in the air that you just kneu you were being conned." recalls a mother of two who was there. "Only residents within 350 feet of the building had been notified about the meeting. Neighbors felt they were trying to sneak the group home in. If they had been up -front, perhaps the city and community could have worked together." Everything the two men said seemed to the neighbors intended to soothe, without relaying any concrete informa- tion. By the time Ellis started up an old film depicting life in a group home, the neighbors were openly hostile. Ellis remembers wishing that police were there. "Well go)-darn-it!" Sherritt remem- bers one man yelling as he jumped to his feet. "Why don't you give us some information? You're just kind of going round and about and not telling us anything about the people that will be in the program and how the program is really, truly run, the staffing. Is this a locked facility? Is this an open facili- ty? What is going on in our neighbor- hood?" Would the facility's presence bring drug dealers to Drew Av.' Would prop- erty values plummet? Would Bill Kelly House clients hurt neighborhood kids? Residents of the program were just sad, lonely and depressed people who were far more dangerous to themselves than anyone else, Ellis and Norton said. No one would be accepted into the program who would be a threat to neighborhood safety. It was good for mentally ill people to be main- streamed. And it was good for neigh- borhoods to have them. Not until late in the meeting. when the two men were challenged. however, did they concede that. yes, Bill Kelly House residents were also chemically dependent. Their problems with chem- icals were secondary. Ellis said. And though Norton disputes it. Sherritt recalls they claimed clients were ad- dicted only to caffeine, nicotine and marijuana. At that the crowd exploded. "I think that's a bold -faced lie!" shouted one woman, as others hissed and booed. "Who are you trying to fool?" yelled a man. "Are they addicted to cocaine or LSD or any of these other drugs ?" Angrily summing up her neighbors' feelings, a young mother addressed the people from Bill Kelly House: "We don't want you here. We're afraid of you. Can you understand that? We're afraid for our children. That's why we're here, because I think you should have a place, but it is not here. I'm sorry " Unbeknown to her, Bill Kelly House residents were dispersed through the audience. A row behind the woman, a young man with blond hair rose. He was red in the face and obviously terri- fied. "Why are you afraid of me?" he asked. Did he look like someone who would harm her? Yet he was on(-.,I the people living at Bill Kelp House. learning to cope with his illness "I'm not afraid of you." the startled woman replied. "I'm afraid of what the facility is all about and that we're m,t hearing the full story. This is ,ur neighborhood. And we read one thing. and they're not giving us answers t, our questions. That bothers me. And it scares me." The young man listened Then he asked if she would give him a hue Reluctantly the woman embraced him All the while, however. she thought hnw decewing appearances can be Surrounded by other people. n­ she wasn't afraid of the young man. But allow him to go off medication and set him on Drew Ay. at night. Then she'd be afraid. "I'll hug you." she said "I lust don't want you to hug my children ' If hope existed for a resoiuti­n be tween Norton and the neighhors, it was extinguished at meeting'- end Speaking with deliberate calm. Ellis said that the entire debate boiled down to a legal issue: Legally the mentalk ill have the right to live within the larger community. Rulings by the l'.S �u preme Court and the Minnesota Court of Appeals confirmed that right. Nor- ton didn't need the neighbors' approy al to move his facility here. The implication was clear Whether the neighbors liked it or nut. Bill Kell House was coming in. At that precise moment. Jili Sherritt and her neighbors set their jaws and dug in their heels In time they dug in deeper and deeper and deeper. No wad was Bill Kelly House moving to their neighborhood. raw Ay isn't in s prosperous neighborhood. „r even an es- pecially pretty one. It's close to freeways. Brookdale Cen ter is a half -mile away Just behind the building Norton wanted to buy is a sprawling apartment complex. where grass pokes up through cracks in the concrete. Yet, up and down Drew Ay.. the trees are full -grown. People take care to mow their lawns. Many of Sherritt's neighbors lived their whole lives in what the Brooklyn Center Post masthead heralds this "All- America City." Having searched an entire year for a double bungalow. Sherritt fell in love with the place five years before and moved in. Neighborhoods tend to be self- selec- tive places. For better or worse. people tend to plunk themselves down among people like themselves. And Drew Ax attracted a combination of middle - and working -class people— plumbers. nurses. electricians, secretaries. teach ers. construction workers. Nth Jill Sherritt owned and ran the Yukon Imo, Bar. although she'd had plenty of other life ttM. experience —as a private detective. a pars- sluv legal and a student of business, and axial SM, work. All that proved useful in the fight 6 that was to come with Henry Norton. the . Within weeks Sherri" and Norton be- awv came proxies for warring factions in a the% battle over community tiatment for the „b , mentally ill. And the neighborhood be- „t a came the field for a punishing two -year 1% it war. thr amt hirty yrn ea ago this society decided oncN that the mentally ill deserve to live TpDuible. .ma in the least restrictive settings the That meant community grm living. If the mandate was to be carried A out, group homes were essential. had The problem is. of course. in u hose - tae, neighborhood should they be located? drut The system economically sorts out a Nei certain socioerntamic group to bar the burden and live with residential institu- �,. _.:. A tons." says Hennepin County Commis- Peat snorer John Derus. "If you've got an area r;n,% that's zoned for fire -acre lots and 5300.000 I, home -, vou're not going to have one of in t ihe.r Don't uorn about it.... jre "But if vou're a working family. and you t he live to a little single- family home or apart- ment someplace in south 'Minneapolis. you t„ t can be sure you're going to get one." Derus lyre says Not only do older. lower - income tak, neighborhoods have the apartment build - ings and huge. old horses that are easily convertible into group homes. but housing c,Kts less than it would in more prestigious I.rat,ons. Perhaps as important. residents ,t poorer neighborhoods generally lack the - thrt political clout and cash it takes to sustain tng: a fight like that ultimately carried on in _._. -..... _....-•---- - - srµ Brooklyn Center. Inn Jill ahemti and her neighbors did not I have a great deal of money or Political rrtt muscle But they were better prepared. lees more determined and perhaps more. fright- tect ened than other neighborhoods in similar In„ situations. ' dra Brooklyn Center was considered a test gal case of sorts. With the pressure on to I disperse group homes into the suburbs, the twi fracas that ensued there could be repeated der dozens of times. So lot& of people watched JIM from the sidelines: Operators of other oth group homes. Politicians. State officials Ke charged with releasing more people from mental hospitals. County workers obligat- s mo ed to find scarce placements for them. cor Advocates for the mentally ill. Neighbors exl_ in other suburbs. PIN All had a stake in the outcome. In cal eople packed the Brooklyn Center em Planning Commission on July 16, the the overflow spilling into the hall- 08 way. So numerous were spectators = fur, that microphones and speakers had to be do set up outside commission chambers. vet Sherritt and her neighbors felt direc- it's ' Howe continued on pane 10 1 S I Home —minued ft,,m pate 9 tionles-c. angry and scared of the un known For three weeks they had met in anxious little factions Now they watched Henn Norton stride inw the room. flanked b> attorneys Felix Phil lips and Susan Lentz Lentz was known in Brooklyn Cem ter, it was she who took on Brooklyn Center in the Northwest Residence case and won After a stint with the civil -rights section of the V.S Justice Department. Lentz spent more than a dozen years htigatmg the rights of the mentally ill Through her work at the Minnesota Mental Health Law Pro Wt. she built a reputation for taking on neighborhoods that opposed group homes for the mentally ill, and beating them Now she was back in Brooklyn Center "Their law -•ere got up and said. 'We will -sue you if you don't let us put this remembers Phil Roche. who ecame one of the leaders of the ,_.00rhood opposition "And I don't know how many times they said that " Even-thing Norton's advocates said seemed so cut - and - dried: A raft of studies demonstrated that group homes do not adverselN affect properq values. Phillips told the commission was indffferent to the destruction of their neighborbood. To thole who worked moat closely with Norton, that characterization was astonishing. "I think he's a VvU%g, lim giving a." says Richard So to be pictured as he was by the neighbor- hood was ludicrous.... I think they triad to dig up trash about the pro - gram—to show he was in it for the money. They tried to shift the focus from mentally ill people to Henn." Although pl a ant, Norton is dis- tant and hard to road. He is tall and on the frail side. His socks don't cover the bare patches on his lop where his pants have crept up. And he has a way of pushing his wire-rim {lases up on his forehead and looking at you as if perplexed by unplemant• questions. When Norton talks about his pro - grams, it's a starched accounting of- fered by the Harvard business graduate that he s. It is the careful, wccinct language of an analyst. His subdued style is the exact oppo- site of Jill SherriteL Yet. without flinching. Norton de- scribes himself 20 years ago as a trsdi- tie- -t middle-clam. suburban alcohol - i Saturday morning his boas, 1 A Whitney, invited Norton ove..or a talk. If Norton sought treat. ment for his obvious drinking problem. Whitney assured him, his job would be Based on experience with similar foci) ices in the city. Brooklyn Center's own assessor anticipated no lowering of property values around the Bill Kel- ly House In the five years that Kelly Norton Programs had operated programs for mentally ill and chemically dependent people. Phillips said. there had been .'no incidents of a police nature " Ap- plicants were screened, and the pro- gram was not designed to treat sex offenders or criminal behavior. Its chi. ents simply were not dangerous. "After the Planning Commission meeting. I got the sense from a lot of people of helplessness." recalls Sher. rift. "it was sheer. total. 'My God. Martha We have worked all our lives for this house. M'e're finally retired It's paid for. This is all we have. And this rich guy. Henn Norton from Wayzata. and his two big attorneys are coming in and telling me. he's going to stick this in across the street from me And 1 got nothing to say about it.' "Then they got mad" With the help of Mate Rep Phil Carruthers. the neighbors persuaded the Planning Commission to delay its recommendation for 30 days. giving neighbors time to assemble a case against the Bili Kelly House. Neighbors began organizing in ear - nest, compiling lists of people willing waiting when be eaprrnsd That was 190. Norton has been sober stews. In treatment Norton am% he dis- covered what it was to bed. "As soma - body put it so welt, I didn't know whether I was angry or hu nllry." Many people find treatment so coo - pdImg that they seek assn in cbem- i :al- dependency compelling immedi- ateb afterward. Norton was moo tour boos, taking six years to matte the switch Dements of the investment bu swim gnawed at him, particularly the emphasis on turning a quick profit So in 1972 Norton rooii psd from Dam haviq first created a money - manopmant subsidiary that became so successful at meaIng pension portfolios that in 1996 Dais solid the business for $27.5 million By the floes Norton left, he bad gained esperienoe a. a treatment aftercare L at St Mary's Hospital and the Johnson In- stitute. In 1977 he received a car titi- cote in therms!- dependency counsel- ing from the University of Minnesota But when the businessman turned to social service. it was the profit- making and of the industry that he chose. Two- thirds of so -called Rule 36 facilities, community programs for the mentally ill, are profit- making busi- re . At the time Hennepin County sought new programs for people who w help and trading phone numbers Shemtt's phone would start ringing at 7 in the morning and wouldn't stop until late at night. Sherritt became the driving force behind the opposition At least at first. j she must not have appeared a formide ble foe. Now 37. Sherritt is a slim blonde given to wearing tight leans and crop tops Wispy curls are swept up from the nape of her neck and sur round a cherub - pretty face. But Shemtt is ae«- and street- smart At public meetings she had a way of expressing herself that matched perfectly the way her neighbors felt. j Neighbors were drawn to her instinc tivel} they trusted her. If research was needed. Sherritt did it. She took off from the bar or paid someone else to fill in for her. Docu- ments she collected on the case fill four cardboard boxes in her house For her the issue quickl% became a cause She said she cuuldn't let goof it. There were ppent% of reasons Sher ritt got so deeply mvoled. not the least of which was that she hates get Ling pushed around Drew Ay was a good place to raise kid and live out a retirement It wasn't right that one man could come in and change all that. she thought. More importantly. Sherritt came to believe that group homes were run in wan both severely mentally ill and ieally daPendtnt Norton was C for Behavior which he pre* owatd Though duaQy diag- noasd patients ton common. in 1992 than were no ksed programs the eaeI i I afiliedom to laser C useguse describe the melting BE Kalb Ham. named for a tae; a ad cbsmia Sale j andsoey counselor at St Mary's —as a pioneer aQort Nor- ton has mom lkma d three related businww —ag of which fours on msn- id illness and chsmital dependency: Oasis House, an 18-bsd residential paatment program, Stavaae Haar, a board -arid- lodging facility. and the Kany Ioetiluts, an ourtpatieat-troat- moat clinic. All art tinder the inablalle of KaUy- Norton Programs, of which Norton is the sole stockholder. For all his labors. Norton came to think of himasU ere an honorable man do' ag good for a population most pro- ple abum. That image of the men, how- ever, was not what neighbors were looking for. ways damaging u, the cen prpi� �h• were intended w sene the to . that the facilities were t.., lark, et pcxirh supervised The% were •ie au in whatever structure were a.n.le1 rather than in those most appr,pr;a:, If Sherritt was the nngieader opposition. Phil Roche wa- pr bar its mural center, having gn.wr, up :r son of a social worke- wh, i .:na, j Brooklyn Center's Communii . Emir genet' Action Program Roche .hart his mother's social sympathw- tits! r. raged against Norton'- appr,a: h: "If the% came to u- and said Thi. what we want to put in them The - how we're equipped t.. staft ti Heil _ so that we can fit it inu. \,,-- net c r. borhood . ' But the% neer a4ed i. that kind of input." Roche ,ay, Thr fought us wroth and nail Ar,c soh,: both dugs' hairs were up „n their I,a, P. they said. 'Well. the -tale ,a%- w. ,. du it, and we're coming in Anc is don't like it. shore it People in the neighh,.rh­.d victims 1 felt assauited . rrn� says "I think our whole n,ignh :h.,• felt assaulted and abused ' cer the month- neighb, came ti. .ee N .r•.r. a- mar, soh,. detiberair . mi,if-c them. soh, reaped huge peal its off a vulnerable popuian,.r and w h• knew somebody. And the biggest somebody that anybody knew was John Daps. T'hmugh Dear, Sherritt obtained a copy of the county's contract with the facility. It said that Bill Kelly House could be viewed ar a community alta- native to 6ospitalizedost "Rasidents, in ptttisrd have established extensive psychiatric histories with multiple hwksbudoar rhesnicswepandezxY treatments and f silurae in numerous residential F­ RNMgmtL" Its ttrpt population was people euf- fering from schizophrenia. psychotic spisodso, depression, chemical abuse and other behavioral disorders. But when she read that BE Kelly House's clientele could ins hide 'victims and perpetrators of physical sod sexist abuse," Sherritt's distort grew. Norton said nothmg about that. What also had he fat'led to cull them? Sherritt hfghl*mw those sections in pow and repeatedly underlined them. At Let. she I evati neighbors were petmg tmsstding answers W questions Dlcrton near wanted asked. lmmsdiat* after she was quoted in hen we alerted diggirug, we didn't quit," says Sherritt Neighbors pooled their resources for the fight with Nor- ton. Everybody knew somebody who the Brooklyn Canter Post on the bud- ding controversy, Sherritt received a aeries of phone all. Three came from a woman dasen'bing how a Bill Kelly Hoare patient named Rusty Maxwell �7 ■ >i g n Home continued from pose 11 was found dead under a bridge after overdosing on his medication. Sherritt tracked down documents in the result- ing wrongful -death suit, which was lat- er dropped. Another call came from Norton's landladies, offering to show Sherritt the present Bill Kelly House. Sherritt and Phil Roche toured the pink stucco building, snapping pictures of over- flowing garbage cans, knee -high weeds, ripped screens and broken plaster. Calla came from residents of other suburbs who fought group homes and lost. A mother in Golden Valley told Sherritt she keeps her children home from the park used by Oasis residents after her kids were asked for drugs. In Fridley, Marge Otten took Sher - ritt on a walking a tour of her neigh- borhood, pointing out home after home sold during the tumultuous de- bate over Community Options, anoth- er of Diane Wright's homes for the mentally ill. Using a city directory, Otten deduced that within two years, 74 of 107 families moved out of the six -block area. Often says most were long -time residents. Yet, her survey shows that most lived in duplexes, triplexes, fourplexes and apartments. "It was unbelievable how that neigh- borhood has deteriorated," Sherritt says. "I had been over a total of maybe six times. Not once did I ace's child playing in that neighborhood. Not once." During three different visits, Sher - ritt heard sirens screaming toward Ot- ten's house. "Watch this, Jill," Otten said. Just before the ambulance round- ed the comer, its siren was suddenly shut off. As Sherritt watched, the am- bulance pulled silently up to the facili- ty. Using her police-band radio, Otten learned that a resident was being taken to the detoxification center. °Met," Otten told Sherritt, "hap- pens all the time." Sometimes resi- dents were taken to a crisis center, sometimes to a psychiatric hospital. Twice, Fridley police dug through months of records to determine wheth- er Community Options brought with it more crime, as Otten and her neigh- bors contended. Twice, statistics showed it had not. One study showed the incidence of crime in the area actually dropped. In the second, police learned that not a single suspect in eight months' worth of reported neigh- borhood crimes was in any way associ- ated with Community Options. "We never had any problems around here until all this started," Otten says "With all the transients here, you can't keep track of who belongs here and who doesn't. "You see, it changes the character of Henry Norton found a place for Bill Kelly House in an apartment bu&jj g in the Nokomis area of Minneapolis. your neighborhood." Unquestionably Otten documented a high rate of turnover in her neigh- borhood What remained unclear was the cause: Had the presence of mental- ly ill people created a genuine threat? Had two-thirds of the neighborhood panicked unnecessarily and moved? Or was transiency a predictable outcome of a neighborhood composed largely of multifamily units? "The police do not feel that Com- munity Options, in and of itself, is creating any crime problem in that neighborhood," comments James Hill, Fridley public safety director. "Still, that doesn't eliminate the perceived neighborhood problem." Otten was convinced that Commu- nity Options was destroying a beloved neighborhood. And Sherritt carried that perception back to Drew Av. 0 ver a computer at Curt Wuollet's house, neighbors drafted letters for a letter- writing campaign to city of- ficiah, county commissioners and leg- islators. They besieged officials with phone calls. The neighbors located a study done by a Hennepin County coning task fora suggesting that the presence of group homes had a destabilizing effect on neighborhoods. a 1 Minnesota Department of Human Services report, Wuollet found an estimated 20.5 percent of patients in Rule 36 facilities like the Bill Kelly House were described as assaultive. "Bear in mind that these are not my figures, but those of the people who are telling me I have noth- ing to �� klyn Center Post. te a letter to the Brno The same study found that most Rule 36 facilities were inadequately staffed. Under Norton's plan, only one staff person would be in charge at nights and on weekends of all 23 peo- ple located over three floors. For the second of three Planning Commission meetings, Sherritt re- cruited Sgt. David Niebur to speak. Niebur was then head of the Minne- apolis Police Department's Recap unit, whose job it was to identify residences to which police were repeatedly called. Niebur testified that police had been called 14 times in 1986 to the Bill Kelly House for ammulta, theft, bur- glary, stabbing and drunken persons taken to the detoxification center. But that was only part of Niebur's volumi- nous list of repeat police calla to Min- neapolis group homes. Where group homes existed, Niebur warned, people could expect more crime. Someone spotted an article in Time magazine dealing with the "doubly mused " — patients with mental illness and chemical dependency. That com- bination made patients more prone to violence, suicide and illegal behavior that traditional community-based pro- grams were ill-equipped to handle, ac- cording to a University of Maryland School of Medicine study. Though the study's authors lauded programs like the Bill Kelly House, which it had studied, the neighbors used selected fodinp against the proposed move. Neighbors sought the police log on Oasis House. Golden Valley police re- fused to give it to them or to Car- ruthers. Neighbors persisted until they obtained the list, Showing 42 police calls in 27 months. On The list were several awuks within the house, an arr mt, vandalism calls to tramport Patients to psychiatric units, suicide attempts a patient darting a fire and a client suspected of poSaseing drugs. /-!!Yy -7 Through Derus, Sherritt got income figures on Henry Norton's programs. She digs through piles of papers to come up with the right one. "Henry Norton made an income last year of $70,000 off these programs — his salary and profit," Sherrie says. "See, that doesn't include that he got mortgage payments paid on all his buildings. He got his taxes paid. He got the buildings rehabbed. Upkeep done. Plus he gets depreciation.... Plus he gets pension• health insurance, vaation pay. "It's kind of a neat little package deal.. In fact, extraordinary expenses last year held Norton's combined profit and salary from his three major enter- prises to $50,654, says Cal Jenson, who supervises county spending on Nor- ton's programs. Over the seven years that Norton has been in business, the county has reimbursed him for $60,533 of the $159,874 that Norton has spent on building improvements. It has also paid real estate taxes, interest on his mortgage and maintenance expenses. "In case of a vendor who owns a building, he is accruing equity in that building and having his costs covered by the contract," says Jenson. "Not only does he get salary and profit. But the value of the building accrues to him over time, not to the county." But Jenson laughs out loud at the idea that Norton's group homes are making him rich. "If Norton wanted to get rich, he would have done much better staying in the investment busi- ness." he neighbors were so fright- ened—and by now so distrust- ful of Henry Norton —that all the information they gathered assumed the proportions of truth in- carnate. At meetings, neighbors traded horror stories, becoming still more frightened and angry. Diane Lerbs talked to a woman — she vaguely recalls that the woman was a psychotherapist and part of the neighborhood group —who told her that incest and sexual violence almost always accompany chemical dependen- cy. Frightened for her children's safe- ty, Lerbe extrapolated the conversa- tion to Bill Kelly House. "So when you have people who are chemically dependent and severely mentally ill, perhaps not as emotional- ly mature as you and I, who are their victims going to be?" Lerbs asks. "Their victims are going to be the people who are smack dab next door to you —the little elementary kids." That Lerbs did not remember the woman's name or check on the accura- cy of the assertion did not stop her from repeating it time and again. Partly, Lerbs' fears lay in her own situation: After years of apartment liv- ing, she and her husband scraped to- a gither money w buy a house on Twin Lakes Blvd. just months before the contro- versy began. No way could they afford to move if the Bill Kelly House proved dan- gerous. Lerbs' fears, in turn, were reinforced by the story told by Lvla Halverson, who just moved to Brooklyn Center. Just before they moved, Halverson says. her 5-year- old daughter was asked for sex by a client of a very small group home for the mental- I.%- ill Halverson hadn't even known that the facility was located down the block until iuc director came to apologize for the incident. Relief at moving away from the smallet home web soon replaced by fury at the prospect of living near a far larger group home. At a neighborhood meeting, a man who had been hospitalized in state psychiatric facilities described how easily he obtained drugs while living in a group home and how clients there hoodwinked their keep- ers . An explosive combination of fact and exaggeration fueled the neighborhood's growing fears. Perhaps Norton and all the bureaucrats in the world were right: The mentally ill are no more dangerous than people down the block. But what if the experts were wrong' They could go home — presumably to neighborhoods free of such risks —and Drew Ai would be stuck with their mis- take. hat basic set of objections, with bits and pieces added as the proc- ess wore tan, got repeated at three Planning Commission hearings, three Brooklyn Center City Council meet- ings. several public forums, innumerable neighborhood gatherings and two Henne- pin County Board meetings. To the neighbors, the need for constant reiteration only pointed up their power - lessness to affect an issue so directly af- fecting their lives. To Henry Norton it pointed up the futility of a proem that dragged on, seemingly forever, despite le- gal guarantees for the mentally W. From the first. Norton thought he was being candid. He was at a loss how to demonstrate that his facility would be a good neighbor, as experience had abown at j other Rule 36 facilities and at his own Bill Kelly House. Statistically the mentally ill were no more likely than the general population to commit violent acts. Norton brought in — experts to testify to that effect. He sup- plied study after study demonstrating it. In fact, he found that police bad been called more often to deal with unruly rent- ers at the Drew Av. apartment building than to either the Bill Kelly Hare or Oasis. Moreover, the Bill Kelly Hare re- fused to accept any patients with convic- tions for violent offenwa withia three years of admittance. "I don't know law to demonstrate that it's not dangerous," Norton says, sounding Home rontinued on pyre 14 `' y_ �r 14 Home cwtwusd &M pass 19 frustrated. Neighbors sought only evidence but- tressing their conviction that Bill Kel- ly House would be bad for the neigh- borhood, says Susan Lentz. And they were willing to twist and distort infor- mation to prove their case, she says. Perhaps the prime example was the list of police calla from Oasis House in Golden Valley. Virtually all the inci- dents affected only its staff and resi- dents, not neighbors. Every time the fve alwm malfunctioned. the police were automatically signaled. Those were included on the log. Included as well was a police call that Sherritt labeled NARCOTICS on the copy of the log she submitted to city hall. "One weekend one of our clients came back with a little Baggie of white powder that he had found at a bus stop," explains Norton. "Even though we didn't really think it was a drug, the stated procedure was that if any prospective controlled substance is dis- covered, the police should be notified " The powder was never tested, and Golden Valley police were present when the bag was flushed down the toilet- Had the substance been cocaine, it probably would have been $1,000 worth, Norton says. "So it was very unlikely that it was a drug." Norton repeatedly offered that ex- planation. And the neighbors repeat- edly ignored it. "They kept using that over and over and over again: The drug bust at Oasis," Norton says. N Commission rmally the process for get- ng a special -use permit is irly routine. The Planning staff reviews the application to ensure it meets legal requirements. The Planning Commis- sion recommends the permit be grant- ed, and the City Council approves it. The Bill Kelly House application, however, became anything but routine. After three long and raucous meet- ings, the commission on Sept. 10, 1987, recommended that the City Council deny the Bill Kelly House per- mit. Sherritt's group convinced the commission that the facility would threaten the neighbors' comfort and safety. "That was a little victory," says Sherritt. Then the matter passed to a more political forum, the City Council. From the first, Mayor Dean Nyquist and most of the City Council made no secret of their opposition to Bill Kelly House. The council's teak was further complicated when City Attorney Charles LaFevere advised that to decry the permit would put the council on shaky legal ground. People remember Nyquist grinding his teeth through the hearings, finally chastising Norton: In all the years I have been on the council, we've never had an applicant that handled the application worse than this one has been handled. You've said you want to be a good neighbor. You don't call your good neighbors ignorant." On Nov. 17, 1987, Sherritt and Roche organised the BC Community Action Group and saw to it that the group was incorporated, to protect in- dividuals from the lawsuits they be- lieved were coming. Soon it hired at- torney Dave Graven to represent them. Given the information they had as- sembled, it was relatively easy for the group in one night to raise several thousand dollars for legal fees. "We had a room full of people kick- ing in $125 apiece, my% Sherritt. "Re- tired people who couldn't afford that much gave $25 here and another $25 next month, whatever they could scrape up." Two hundred pages of information were submitted to the Brooklyn Center City Council by the neighbors and Norton. Four months into the process, the council on Oct. 26, 1987, approved Norton's permit, immediately after- ward passing a 12 -month moratori um on other group homes coming into the city. Within a week the neighborhood group filed suit against Norton and the city. 0 utwardly Henry Norton ap- peared cool, even bemused. Neighbors took that for ar- rogance. Inwardly, however, Norton was seething. Here he'd Left a remunerative career in investment banking for the world of social service. To Norton it seemed that that action should have spoken loudly of the sort of man he was. For yaws he had worked with the county's mental - health unit, and offi- cials there seemed to think he ran a pretty good program. They had ap- proved, even fostered this particular move. Mental illness was not just an inner -city problem. Suburbs should provide part of the service. As a man used to playing by rules, Nortoa kept looking to the law. Fight- ing in Brooklyn Center was a matter of principle: Who would stand vp for the mentally ill? Lots of people depended on him -- employees of the Bill Kelly House. its Clients, their families. Nor- ton felt that he was fighting for them too. Colleagues who owned group homes eacatraged him not to give in. As a practical matter, Norton feared Center might to�me equally Brooklyn resistance in another neighborhood If the Drew Av. coalition won, wouldn't that strengthen the resolve of other neighborhoods to fight group homes? Was there no place on earth for the mentally ill? So Norton set his jaw and counter- sued. He accused the neighbors of a has - ket -load of legal wrongs: trespassing, interference with contract, defamation and discrimination, causing him finan- cial hardship and emotional distress to himself and his clients. Jill Sherritt and Phil Roche were no in the suit, as were Jane Roe and John Doe, signaling Norton's intention to name other neighbors in the lawsuit. "All of a sudden you had neighbors backing off. When they were trying to get our list of names, I was real scared," says Sherritt. "That was ruth- less, absolutely ruthless." Neighbors who became suddenly in- volved in the fight became just as rapidly uninvolved. They told Sherritt they wouldn't be calling her and not to Tlected officials ... overreacted to the concerns of their constituents ... and said, We don't give a damn what the law says. Look at the room full of people we have here.' " Bill Fink Consultant call them. It hurt to see how quickly some neighbors backed off, though Sherritt understood the financial pres- sure. Facing a $50,000 -plus lawsuit, nobody understood that better than she. Graven says that the way Norton pursued his suit was a clear effort at intimidation: If Norton could put neighbors financially at risk, it would stifle public debate on what amounted to a public - policy issue. Says Sherritt, "They were going to hang is out to dry and use us as an example so when they go into the next place, the next area, they're not going to fight: Look what happened to Brooklyn Center. Look what they did to those people.' " y now the fight had shifted —at least in part—to a legal arena. Norton won the first round in court, defeating the neighbors ' plea for temporary and permanent in- junctions against the relocation and winning $11,000 -plus in attorneys' fees. Immediately Norton tried to at- tach the stocks to the Yukon Bar, which would have spelled financial ruin not only to Sherritt, but to her sister and mother, who co -owned the bar. Norton's victory came, however, at a terrible price: He acquired the enmity of John Derus. Dents was furious. He'd supported Norton's programs in the past. But Norton never notified him of the pend- ing move into one of the commission- er's constituent neighborhoods. The more Derus looked into the Bill Kelly House, the more concerned he became. "A bunch of people are going to be moving in who are complete failures in other programs, who have the worst kinds of drug addictions and mental illness. Ask yourself a subset of questions concerning that type of pro- gram: 'What is your ratio of success ?' They say, 'You can't measure success with these kinds of people.' ... 'Then why are we doing thisT 'Because it's more humane.'" Derus concluded that he couldn't ask constituents to accept something on their block that he would not want on his own. "The question I had to ask myself is, 'Do I want this next to me? No I don't. Do I have the right to put this next door to you when I don't want it next to me ?' " Derus says that question — "Would l vote to put it next door to myself?" — should be the litmus test for any public official considering whether to put a group home into a particular neighbor- hood. "Many times the answer to that question was yes. And 1 voted for it. over the objections of my constituents and everybody else. But in this in- stance I couldn't in clear conscience say that." The unspoken implication through the entire debate was that although the neighbors' lives might be altered for the worse, the greater good would be served. Proponents of siting group homes in neighborhoods end up sound- ing so high - minded, and yet it would be the neighbors —not the advocates — who would be Left to cope with the resldts, Derus says. Over the course of two County Com- mission meetings, Derus blocked NOT- ton from receiving $25,000 he had re• quested to finance the move and u defray legal expenses. The question or moving money, however, soon became moot. In March the Brooklyn Center City Council took the unprecedented step of rescinding Norton's hard -wor. permit. Norton sued the city. It was worse than being back at tht starting point: Norton and the neigh bon were financially and emotiona(h spent. Sherritt's business had been en dangmed. Neighbors were wounded b� the portrayal of them as spiteful, igno rant, discriminatory bigots. Sherritt knew they were being callec NIMBY9 —an acronym for Not In M� i 7 - /1 Back Yard. It was a scornful epithet, as if fighting for your home was somehow shameful. As for Norton, he worried continually about whether his entire business enter. pnae would go under. Every new meeting brought another sleepless night. In his life, Norton had weathered a nasty divorce, alcoholism treatment and a career change, but the Brooklyn Center imbroglio brought on the worst depression of his life. He smarted from the accusations hurled at him. Neighbors even made sport of his 20• year sobriety. derisively —and incorrect- ly— referring to him at a meeting in the fall of 198" as Snorttn' Norton, the Wall Street Junkie. For all the damage inflicted on both sides, the welfare and treatment of the mentally ill had not been advanced one whit. t is probably fair to may that Henry Norton quit first, though everything in him rebelled against it. Leaving his Alcoholics Anonymous meeting at St. Mary's Hospital, Henry Norton was on the freeway, driving back to Oasis, his mind churning over all that had transpired. Brooklyn Center fought u hard as any neighborhood in recent memory to keep out a group home In doing w the oppo- nents raised all of the most perplexing and frightening aspects of the mentally ill as neighbors. For a long time. Norton bolstered him- self by saying that this was not just his battle. But on this winter day in 1989. Henry Norton knew he had lost. Now his chief worn was finding safe harbor for his flagship program. "I remember vividly I was driving down the freeway and thinking. 'Now• what do we need." We need a place that's in a low - rnncentrated area and probably in Minne- apolis because we know their roles and regulations.... We need an amen far from individual housing, hopefully with open space. "Suddenly a light went on that said 'Bowen Field.' And I turned at the next exit." F, hen Sher•ritt hard that Hen- ry. Norton had puschemed a property in Min nit' No- komis am for the SO KaUy Howe, her fast thtxmgbt was, "I91 bet it's in a more oommercial neighborhood" Sherrill was right -- Low -rise apartment bumiiditmp aurroumod the new SO Kelly Hare on two aides, several blocks deep 7beee is not a single - family home for bioeb in three dbwdoiw Picture windows at the front of the hotse overbok a cbaia -link fence and the Crow town freeway. And to the aide lies an expanse of ball diammands —t4 beek aide of Boesten PnK a epirawliag park. Jet plaass aertam owr ties S� 0001 21011001 as lW 14 come nunud from Pep 15 ucco and brick building, intermit - ,nt]y hahing oom+ersation. The roar tar traffic is constant. The Bill Kelly House moved in Feb. ), 1989. Surf members and residents ak now about the plassures of living i cltsn, wwil- lighted quarters. None of ie present clients was around when )e Brooklyn Center fight began. So one Of them knows bow hard -won %is space was. But Norton knows. As if mystified, Norton shakes his sad. The arse with which his group ome located here was astonishing. nwn he held an informational meet - )g for Nokomis neighborhood. only 25 sopk alimed up. None of them was ostile. Only one person appeared be- ire the Minneapolis Planning Com- iission to oppose the Nokomis appli- ar ' khough the number of tesi- r time." Norton says, "but I suspect- that that might be something to Id against tea." The audit, issued in December, sub - ntiated some of Sherritt's concerns: isting residential treatment pro - Las often fail to address residents' ious mental problems. Residents' dicationa are not adequately moni- ed. State review of group -home fi- ves and program content is lax. me group homes are actually larger an the state hospitals they replaced. Yet auditors found that 74 percent neighbors surveyed who live near de 36 facilities described the facility a good neighbor — despite neighbors' itial apprehensions. "We didn't me acmes anything that would Lend dence to the theory that it's danger- s to have them in the neighbor - od: ' says Roger Brooks, deputy leg - stive auditor. "Overall, Rule 36 facilities receive zed, but mostly positive, reviews )m neighbors," the report said. "Giv- the nature of residents' illnesses dents was reduced from 23 to 16, the program was otherwise the same as that proposed for Brooklyn Center. "Approval went through." Norton says, "right on schedule." Perhaps Norton was more forth- coming in describing his program this time. In advance of the informational was", his staff visited naighbon, iuvitins them to serve on a citisan advisory council. Undoubtedly it begsd Norton's reuse that the neigh• borbood was filled with apartment dwellers, who had no permanent stake in its future. Certainly Norton's approach to poli- ticians changed: Immediately after finding the Nokomis building, he en- fisted the backing of Hennepin County Commissioner Jeff Spartz and Minne• Dennis spolis Schuhtad both Council whom were helpful Helier Jill Sherritt declared that the issues involved in the Bill Kelly House were so compelling that she could not let go of them. But when Norton located in a neighborhood oth- and their legal right to move fively in the community, neighbors am likely to see instances of strange behavior occa- sionally-11 Yet no one should take lightly neighbors' concerns, the report said, particularly those of supervision and six. t was any to watch the happen- ings in Brooklyn Center and paint one side or the other as vWa inous. It was harder to stand in the mid- dle, as did Bill pink, and assDaoQ:e with good motives taking intax�abk standa. For 17 years Fmk has been involved in the dithate, often unpopular task of creattag homes for vulnerable people within the community. Though Fink passionately believes the mentally ill are entitled to live in homelike mt- tings, he is often dismayed at the site and design of poop homes. When the Brooklyn Center debacle began, Fink was director of licensing for the Min - nmots Department of Human Ser- or than bar own, Sherrie did let go. Of course, she said the Drew Av. contin- ent would be there for any other neighborhood wanting to fight a group home. But ao one from Nokomis ever called Ttoo years into the battle, in the summer of 1988, Norton's at- torneys negotiated separate, out -of -court settlements with Brooklyn Center and the neighbor. The city agreed to give him $22,SM and a watereddown permit. The Drew Av. building could house a program for people who wen mentally ill or cbemi- cauy dependent, but not both. He could also put in a program for people who are physically handicapped or brain - injured. In return for his dropping the suit, Norton originally sought $5,000 from the neighbors, a public apology and guarantees that they wouldn't oppose Norton's enterprises in Brooklyn Can- to again. They rejected the offer. Fi- vices. He has smoe lap his job in Minnesota to become a management consultant on such issues. Distance and time have ggirvveenn Fink added par - spaetive on the Braatlyn Canter are. Fatly On, PWk drove tap to rant with neighbors at Sherritt's home. SLerritt remembers him a a good lis- tener. Generally people's concerns re- vohved around two thdnp: misty sod, of course, with napect to assatal ill- ness there's this larger myth of, 'They're dangerous people —you an never tell what they might do.' The other issue is mamtan.nce of the prop- erty," pink says. What was it, then, that separated the Brooklyn Center situation from those with more amiable sohaww? Fink laughs hghtiy. 'This is the point where it's nice to be 2,000 miles away. I think the way in which it was ditiatent was the deps to which elect- ed officials involved themselves and in My opinion, polarized the groups. "In Brooklyn Center, what hap- n&Hy Norton asked only that the neighbors let stand the original court ratting. They could keep their $SHOO and their apologias. So the man who declared he was in this for the long haul backed off. Norton had to be practical. Before him were :45,000 in legal fees and upward of 1120,000 in lost rent on the Brooklyn Center apartment building Bill Kelly House was ensconced nos m a permanent location eta continuation was his first goal. Derue made clear his displeasure with what he viewed as Norton's in- timidation of the neighborhood and his desire for a settlement. Derus had the power, if be chose to use it, to jeopardize the otherwise- routine coun- ty funding of all Norton's programs. Already Sherrie's group had lobbied for and gotten a $60.000 county audit of group homes for the mentally ill. Then she and Ron Christensen moved onto the state, lobby W for and getting a similar statewide legislative audit. "Maybe I was feeling paranoid at paned, reacted offscials, in my opinion, Overreacted to the concerns of their constiumts, even in the face of legal advice to the contrary, and said, 'We am law says. Look the room tau of people we beet hare.' It made it into a three -ring release." pink mys. "I don t think the legitimate con - aeos —•Gkhw Of the or the provider — could be�c�iestdi-m a raaansbhe way. All of those groups had legadmate concerns." Soon the sit. tstim blame one that couldn't be By�n, of course, it was too let.- for a di>rarent approach in Brooklyn Cen- ter. Ebro if violence was rue among mentally ill people, the neighbors were beyond the point of batitving it. "Tea penal thee is no increased risk of violence from mental patients. That's 100 parent dear," says Dr. Bill Erickson, the psyrhist ist who now hinds St. Pete Security Hospital. Whether the neighborhood had any- Bases orsssi ed as vase 19 'zr/7% /i .r Home watim.a from wa n thin= to fear from Bill Kally Hour residents depended on how ewli Bil Kelly House scnenad potential dienti and how wall it controlled them and they were there, he said In the querulousness of both aides. Fink saw something ewe mom insid. bus at work: Having diemiwd neigh Don as hysterical, it was ysier for officials to ignore valid eonewas. Finn agreed with neighbors that it wau wrong to put a group home the size of a small institution into a rssfdentilJ neighborhood. and not just because it would change the character of Draw Av. "I don't think it makes saw to put homes of that size anyplace," says Fink. 1 think that site, in and of itself, -aka it dif5cult for even the best - trained most well - unseeing staff to do the things that in my opinion are the most important — living like every- body else does, living a life that has routine. but isn't regimented" If he were God. Fink would have au4ned perhaps a third of the 10 spwtmenta in the Brooklyn Center building to Bill Kelly House clients and rented the remaining units to or- dinary people. Wouldn't that have done more to prepare the mentally ill for independent living? Rather that seeking such a creative alternative, of- ficials settled for a second -bast solu- tion in Brooklyn Center. Fink says. "I think that the people who had an interest in placing the facility there — Henry Norton. the county and the sate— thought at the very wont, 'This isn't the best possible solution. But it's a pretty good one.'" Ninety percent of her neighbors would have supported a small gOUP home —one of perhaps four to six peo- ple, Sherritt says. Unquestionably, amalkr group homes are preferable for residents, Fink says. "Our per diem increased almat 50 percent when we decreased the size of the house from 23 to 16," Norton responds. "It's a matter of public poli- cy: Does the public want to pay 50 percent more to have it 16 instead of 23? And would they want it to be doubled again by having eight im the building? I'd say that 16 is just ftei. We find that very manageable. We figure it-s a reasonable homelike at- mosphere, compared to what residents are likely to ezperseaw wban they move out to another apartment." "Money makes it difficult," Fink says. recalling comments at the Brook- lyn Center bearings 'Wall, this has got to go in Brooklyn Center. We wee r bell can't afford to put it in EdiimaP Or 'Yeah, it would be trine to have it smaller, but we can afford it. " The neighbors' frustration was that everts ►ilea Fink could we obvious taiWup in the mantel- bealtb poi, ! end y.c oJFicieM comcinu.d to apeead . flawed eytm .ra,t>d Neither aide in the Brooklyn Carter controversy won. Both Jill Sbwritt and Hen- ry Norton wars Wh with bitter tastes fm thsr mouth having bores two yam of contanuah streas. Coming to Nokomis was the path of Mast resistance for an exhausted Hen- ry Norton. It was a way to keep his business and big vision .live. That he was kept out of Brooklyn Center s proof that discrimination is alive and wall, he says. For the city of Minneapolis. it meant retention of another group home, albeit in a leestoncentrsted arse. That, despite a cotmty policy to "Paw them. Once spin the city bore the social-service burden because a suburban community would not. Fapwu in housing the mentally ill say that new federal antidiserimins- tion nulls may prevent cities from re- quiring opwW -ue permits for ppaownp homes like the Bill Kelly House. Than - reticalty that would prevent another controversy like this from erupting. Theoretically, however, sate policy should have prevented it in this wse. Neighbors in Brooklyn Center said they were willing to beer their fair sham of the burden. but they feared that if they gave in, group bona would flock to their suburb. and the problems of overconantaation would be vatted on them. If the mental-healtb system were changed to provide optimal cave, the cost would go far beyond wbat society has ".it u willing to pay. So the price a simply tratederred —in this case. onto the locality that is powerless to resat it Neighbors who oppose its a►tabbehment are excoriated for intol- erance, though they reflect the larger society's intolerance and its decision to spend only what it must For all that, the Brooklyn Center cue a still not completely set - ded. Sberritt looks across the street at the apartment comphx Nor- ton owns and grimaces as a police car Msves. police are called these more often these d.ya, she says. Neighbors complain that Norton venue to anaots who are aralees about Dew Av. Witbout any real effort, S6aritt ticks off half a dorm families that moved because of the Bill Kelly Hong. F rttt the nnngbborhood.om law= One of the sips aft on Shaeritt's lawn —not far tkom the stops where, two years . ago, an imaocuous Pak titer — ng I Any JIRAer is a ataf! writer Jar S1es- dty Magazine. ■ CITY OF RICHFIELD, MINNESOTA Study Session Letter Number 12 Agenda, April 2, 1990 Issue Statement: Consideration of a proposal to establish a Richfield Tourism Promotion Board. Backaround: The owners of the Hampton Inn Hotel have requested that the City consider establishing a Richfield Tourism Promotion Board. The purpose of the Board would be to provide promotion of Richfield with emphasis on the use of Richfield hotels and motels. The activities of the Board would be funded by a portion of a lodging tax to be levied by the City of Richfield in accordance with the request of the Hampton Inn Hotel. Minnesota Statute Section 169.190 authorizes the City to impose a tax of up to 6% on the gross receipts of lodging from motels and hotels. Of the taxes received, the law requires that 95% of the gross proceeds of the first 3% be used for the purpose of marketing and promoting the City as a tourist or convention center. The remainder of the taxes received may be used by the City for any lawful purpose. The owners of Hampton Inn Hotel have requested that a tax be levied and used to fund a Richfield Tourism Board. They have also agreed that the tax should be in the amount of 4% of gross receipts and the first 3% would be used for the Tourism Promotion Board. The Hampton Inn proposes that if the tax levied by the City is 4 %, the City would keep only 1 %. The principal basis of Hampton Inn's proposal is that a Tourism Board would assist with the marketing of their hotel and their advertised rates. At the present time, Richfield hotels advertise rates, which include expenditures for marketing. Many of these expenditures could be made by a Tourism Promotion Board of the City using the proceeds of a lodging tax. Recommended Motion: Approve the establishment of a Richfield Tourism Promotion Board and approve the establishment of a 4% lodging tax. Basis For Recommendation: 1. Hampton Inn has requested the establishment of the Richfield Tourism Board to assist with the marketing of their operation. 2. Hampton Inn has contacted the Motel 6 regarding this concept. Motel 6 has not indicated any opposition to this concept. 7- ' -/ 3. Proceeds from the lodging tax would be used to promote the City resulting with a benefit to merchants, employment, and property values. 4. Twenty -five percent of the 4% tax received under this proposal would go to the General Fund of the City to reduce the tax burden on other tax payers. 5. City Attorney and staff have reviewed the proposals to establish the Tourism Board, including the bylaws of the Richfield Tourism Promotion Board, the Articles of Incorporation, the agreement between the City and the Tourism Board regarding the expenditure of funds. 6. Establishment of the Tourism Board as outlined would not provide a burden to City staff or the Council. Alternative Recommendation: 1. The City could decline the request of the Hampton Inn Hotel. 2. City Attorney has stated a concern that the Richfield Tourism Promotion Board could make expenditures with tax dollars which were not authorized because they do not market or promote the City as a tourist center. To address this concern, the City and the Hampton Inn have developed a proposed contract between the City and the Tourism Promotion Board which provides that expenditures of the Board must be in accordance with law and that if the Tourism Board breaches the agreement, it may be terminated by the City on ten (10) days notice. Discussion /Decision Mode: This matter will be presented for general discussion at the workshop on April 2, 1990. Representatives from Hampton Inn will be present at that meeting. If this concept is generally acceptable of the Council, the matter will be placed on the agenda for future consideration. The following actions would be required: • Approval of the establishment of the Tourism Board. • Approval of a lodging tax. • Authorization to execute an agreement between the Tourism Promotion Board and the City of Richfield. • Appointments to the Tourism Promotion Board. ly submitted, Jam s . Prosser Cit anaaer JDP:ff 4ttornevs at La% ROBERT A. ALSOP PAt'L D. BAERTSCHi RONALD H. BATT% MARK J. BRENDEN STEPHEN J. Bt'Bt'1. ROBERT C. CARL SON CHRISTINE M. CHALE ROBERT L. DA%IDSON JOHN' B. DEAN ROBERT J. DEIKE M .ARV C. DOBBINS JEFFREi EN(; STEFANIE N. GALE) DAN ID L. GRA%E% CORRINE. A. HEINE JOHN G. HOESCHLE:R JA%tFs S. HOLMES March 23, 1990 Mr. Jim Prosser City Manager City of Richfield 6700 Portland Ave. S. Richfield, MN 55423 Re: Lodging Tax Dear Jim: HOLMES & GRAVEN CHARTERED 470 Pillsbury Center, Minneapolis, Minnesota 55402 (612) 337 -9300 Facsimile (612) 337 -9310 WRITER'S DIRECT DIAL 337 -9215 DAVID J. KENNEDI' JOHN R.LARSON WE:LI.INGTON H. LAW Juin, A. LAWLER CHARLES L. LEFEVERE JOHN M. LF.FEVRE. JR. ROBERT J. LINDALL LACRA K. MOLLET DANIEL. R. NELSON BARBARA L. PORTWOOD MARY FRANCES SKALA JAMES M. STROMMEN STEVEN M. TALLEN JAMES J. THoMSON, JR. LARRI M. WERTHEIM BONNIE. L. WILKINS I have been working with the attorney for the Hampton -Inn Hotel in the preparation of organizational documents for a Richfield Tourism Promotion Board which would promote Richfield as a tourism center. The activities of the Board would be funded by a portion of a lodging tax to be levied by the City Council in accordance with the request of Hampton Inn. The following general comments on this arrangement may be helpful to you and the Council in understanding the proposal of Hampton Inn. Minnesota Statutes Section 169.190, authorizes the City to impose a tax of up to six percent on the gross receipts from lodging, from hotels, motels, and the like. Of the taxes received, the law requires that 95% of the gross proceeds of the first three percent of any tax must be used for the purpose of marketing and promoting the City as a tourist or convention center. The remainder of taxes received may be used by the City for any lawful purpose. The owners of Hampton Inn have requested that a tax be levied and used to fund the Richfield Tourism Promotion Board. They have also agreed that the tax should be in the amount of four percent of gross receipts, the first three percent of which would be used for the Tourism Promotion Board. Hampton Inn proposes that if the tax levied by the City exceeds four percent, the City would still keep only one percent. There are two principle advantages to the City in this proposal. The first is that the City would be promoted as a center for tourism with the resulting benefits to merchants, employment, property values, etc. The second is that 25% of the taxes received under this proposal would go to the general fund of the City to reduce the tax burden on other taxpayers. -'�- Mr. James Prosser March 23, 1990 Page 2 The advantage to Hampton Inn, as I understand it, has to do with the marketing of hotels and their advertised rates. At the present time, Richfield hotels advertise rates which include expenditures for marketing. Many of these expenditures could be made by a tourism promotion board for the City of Richfield using the proceeds of a lodging tax. If the expenditures are made by a tourism promotion board, the hotels may enjoy essentially the same marketing which they now pay for; however, the hotels will be able to advertise rates (exclusive of taxes) which are lower than their current rates. It is true that there will be a corresponding increase in the overall charge to guests (room rate plus tax) because of the tax increase; however, the hotel feels that it will be to its benefit to be able to advertise the lower room rate and that potential guests of the hotel will not be put off by a corresponding increase in taxes. Presumably this is- partially the result of the fact that other cities with hotels in competition with Richfield hotels have a similar arrangement; that is, some of the marketing costs of those hotels are paid by the tourism boards of those cities thereby allowing the hotels to advertise rates (again exclusive of taxes) which are lower than the rates of Hampton Inn. My primary concern with this arrangement is that the Richfield Tourism Promotion Board could make expenditures with tax dollars which are not authorized because they do not market and promote the City as a tourist center. There may be expenditures for marketing of hotels which are of such a nature that they cannot be said to promote Richfield as a tourist center even though they may promote the hotels. For example, fees paid to franchisors and used to promote name recognition of a chain of hotels could have an incidental effect on tourism in Richfield, but I am not confident that such an expenditure would be regarded as a promotion or marketing of the City if it were challenged in court. On the other hand, there are many possible expenditures of the Tourism Promotion Board which would promote tourism and which would also specifically promote the Richfield hotels. If the City Council decides to proceed with this idea along the lines proposed by the hotel and in accordance with the framework outlined in the proposed documents, it would be on the assumption that the expenditures of the Tourism Promotion Board would be proper and lawful expenditures for the purpose of marketing and promoting the City as a tourist center. To ensure that this is, and continues to be, the case, the proposed contract between the City and the Tourism Promotion Board provides that the expenditures of the Board must be in accordance with law and that if the Tourism Board breaches its agreement, it may be terminated by the City on ten days notice. Therefore, it is in everyones interest to use their best efforts to ensure that the tax dollars received are properly spent. Copies of the proposed organizational documents are attached. These documents include the Proposed Articles and Bylaws of the Tourism Promotion Board and a proposed contract between the Tourism Promotion Board and the City of Richfield. The Tourism Promotion Board directors would be appointed by the Richfield City Council. The Board would have three members, who might, for example, represent the Chamber of Commerce and each of the two hotels in the City. I believe that it is the expectation of the Hampton Inn that most of the expenditures of the Tourism Board will be expenditures which are currently part of the marketing budget for the hotels. Some of these expenditures may have to be modified somewhat to -9 '� - Y Mr. James Prosser March 23, 1990 Page 3 comply with law. For example, flyers or mailed materials which currently promote only the hotel might have to be modified to promote other attractions in the City as well. However, I believe that it is safe to say that the Hampton Inn people would be disappointed if the proceeds of the tax were not used in a way which would allow the hotels to avoid many costs which they currently incur on their own behalf for advertising and marketing purposes. A letter from Mr. Jonathan P. Scoll, an attorney for Hampton Inn, and the attached memorandum relating to marketing expenses explains the position of the Hampton Inn on this question. If the Council is not comfortable with the general ideas and position stated in that memorandum, there should be some further discussions with the hotels so that all parties have a common understanding before proceeding with this agreement. I should note, however, that the City has the legal authority to impose a tax of up to six percent without the consent or approval of the hotels of the City if it wishes to do so, and although the first three percent of tax must be used for the promotion of tourism, any additional tax could be used by the City for any lawful purpose. If you have any questions about any of these matters, please feel free to give me a call. Very truly yours, Charles L. LeFevere CLL:rsr Enclosures RC145 -089 JPSby1300 02/16/90 BYLAWS OF RICHFIELD TOURISM PROMOTION BOARD, INC. ARTICLE I OFFICES; CORPORATE SEAL Section 1.01. Registered Office. The city, town or other community in which the registered office of this Corporation is located in Minnesota shall be as set forth in the Articles of Incorporation of this Corporation, or in the most recent amendment or restatement of such Articles of Incorporation, or in a certificate of change of registered office filed with the Secretary of State of Minnesota reflecting the adoption of a resolution by the Board of Directors of this Corporation changing the registered office. Section 1.02. Other Offices. This Corporation may have any other offices that the Board of Directors may from time to time determine. Section 1.03. Corporate Seal. If the Board of Directors determines it to be necessary or desirable, this Corporation shall have a corporate seal, circular in form and bearing the name of this Corporation and the words "Corporate Seal" and "Minnesota." ARTICLE II MEMBERS: MEETINGS OF MEMBERS; PROPERTY RIGHTS Section 2.01. Members and Meetings. The Articles of Incorporation of this Corporation provide that the members of the Board of Directors of this Corporation shall be the only members JPSby1300 02/16/90 of this Corporation and shall having voting rights only as directors and shall have no voting rights as members, except as provided in the Bylaws of this Corporation. Accordingly, there shall be no meetings of the members of this Corporation, and the members of this Corporation shall have no voting rights as members except as required in the implementation of Article VIII of these Bylaws. ARTICLE III BOARD OF DIRECTORS Section 3.01. General Powers. The property, affairs, and business of this Corporation shall be managed by the Board of Directors. Section 3.02. Number, Qualifications, Method of Selection, and Term of Office. The number of directors of this Corporation shall be three (3), to be appointed by the City Council of the City of Richfield. The term of each director shall be three (3) years, provided, that the first director named in the Articles of Incorporation shall serve for a term of (1) year, and the second director so named shall serve for a term of two ( 2 ) years and the third director so named shall serve for a term of three (3) years. Each director shall serve as a director until his or her successor shall have been appointed and have qualified, or until his or her earlier disqualification, death, resignation, or removal. Section 3.03. Organization. At each meeting of the Board of Directors, the President of this Corporation, or, in his or her absence, the Vice President, or, in the absence of both 2. JPSbyl300 02/16/90 # '6-7 the President and the Vice President, a person selected as chairman by the Board of Directors of this Corporation shall preside. The Secretary of this Corporation, or, in his or her absence, any person whom the President, the Vice President, or other chairman, as the case may be, shall appoint, shall act as secretary of the meeting. Section 3.04. Place of Meetings. The Board of Directors may hold its meetings at any place or places, within the State of Minnesota, as it may from time to time determine. Section 3.05. Annual Meeting. The annual meeting of the Board of Directors shall be held each year for the purposes of electing officers of this Corporation and for the transaction of any other business relating to this Corporation that shall come before the meeting. Notice of each annual meeting of the Board of Directors shall be given as provided in Section 3.07 hereof unless excused in accordance with Section 3.08 hereof. Section 3.06. Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the President, the Vice President, or any two (2) directors. Notice of each special meeting of the Board of Directors shall be given as provided in Section 3.07 hereof unless excused in accordance with Section 3.08 hereof. Section 3.07. Notices. Notice of each meeting shall be mailed or delivered to each director, addressed to him or her at his or her residence or usual place of business, not less than five ( 5 ) nor more than thirty ( 30 ) days before the day on which an annual meeting is to be held or not less than two (2) days 3. JPSby1300 02/16/90 before the day on which a special meeting is to be held. Each notice shall state the time, date, place, and purposes of the meeting. Section 3.08. Notices Excused. Notice of any meeting of the Board of Directors need not be given to any director who is present at the meeting; and any meeting of the Board of Directors shall be a legal meeting without any notice thereof having been given if all of the directors of this Corporation then in office are present at the meeting or waive notice in writing before, at, or after the meeting. Section 3.09. Quorum and Manner of Acting. Except as otherwise, provided by law, in the Articles of Incorporation, or in these Bylaws, a majority of the total number of directors of this Corporation shall be required to constitute a quorum for the transaction of business at any meeting, and the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present may adjourn any meeting from time to time until a quorum is present. Notice of any adjourned meeting need not be given other than by announcement at the meeting at which adjournment is taken. If a quorum is present when a duly called meeting is convened, the directors present may continue to transact business until adjournment, notwithstanding that the withdrawal of a number of directors originally present leaves less than a quorum. Section 3.10. Resignation. Any director of this Corporation may resign at any time by giving written notice to 4. JPSby1300 02/16/90 the President or to the Secretary of this Corporation. The resignation of any director shall take effect at the time, if any, specified therein or, if no time is specified therein, upon receipt thereof by the officer of this Corporation to whom the written notice is given; and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 3.11. Removal. Any director may be removed with or without cause and replaced by the City Council of the City of Richfield. Section 3.12. Vacancies. A directorship shall automatically become vacant upon the disqualification, death, resignation, or removal of a director. A vacancy in a directorship shall be filled by appointment by the City Council of the City of Richfield and each director so appointed to fill a vacancy shall hold office until his or her successor shall have been appointed and have qualified, or until his or her earlier disqualification, death, resignation, or removal. ARTICLE IV OFFICERS Section 4.01. Number. The officers of this Corporation shall be a President, a Vice President, a Secretary, a Treasurer, and any other officers that are appointed by the Board of Directors. Any two (2) or more offices, except those of President and Vice President, may be held by the same person. Section 4.02. Election, Term of Office, and Qualifications. All officers shall be elected annually from 5. JPSbyl300 02/16/90 among the Board of Directors by the Board of Directors, and each shall hold office until the next annual election of officers and until his or her successor shall have been elected and have qualified, or until his or her earlier disqualification, death, resignation, or removal. Section 4.03. Resignation. Any officer of this Corporation may resign at any time by giving written notice of his or her resignation to the Board of Directors, to the President, or to the Secretary of this Corporation. The resignation shall take effect at the time, if any, specified therein or, if no time is specified therein, upon receipt thereof by the Board of Directors, President, or Secretary of this Corporation; and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 4.04. Removal. Any officer may be removed, with or without cause, by a vote of two - thirds (2/3) of the total number of directors, at any annual or special meeting called for the purpose, provided that purpose is stated in the notice of waiver of notice of the meeting, unless all of the directors of this Corporation are present at the meeting. . Section 4.05. vacancies. A vacancy in any office because of disqualification, death, resignation, or removal shall be filled for the unexpired portion of the term in the manner prescribed in these Bylaws for election or appointment to that office. 6. -2�6e -// JPSbyl300 02/16/90 Section 4.06. President. The President shall be the chief executive officer of this Corporation; shall, when present, preside at all meetings of the Board of Directors; shall see that all orders and resolutions of the Board of Directors are carried into effect; shall, whenever authorized and directed by the Board of Directors to do so, execute and deliver in the name of the Corporation (except in cases in which the execution and delivery are either expressly delegated by the directors or by these Bylaws to some other or additional officer or agent of this Corporation or are required by law to be otherwise executed and delivered) any deeds, mortgages, bonds, contracts, or other instruments pertaining to the business or assets of this Corporation; shall have such other powers and shall perform such other duties as may from time to time be prescribed by the Board of Directors; and, in general, shall perform all duties usually incident to the office of the President. Section 4.07. Vice President. The Vice President shall, in the absence of the President and if present, preside at all meetings of the Board of Directors and shall have such powers and perform such other duties as may from time to time be prescribed by the Board of Directors or the President. Section 4.08. Secretary. The Secretary shall be the Secretary of, and, when present, shall record proceedings of meetings of the Board of Directors; shall at all times keep on file a complete copy of the Articles of Incorporation and all amendments and restatements thereof and a complete copy of these Bylaws and all amendments an restatements thereof; shall, when 7. JPSbyl300 02/16/90 -A�3 -/d directed to do so, give proper notice of meetings of the Board of Directors; shall have such powers and perform such other duties as may from time to time be prescribed by the Board of Directors or the President; and, in general, shall perform all duties usually incident to the office of the Secretary. Section 4.09. Treasurer. The Treasurer shall keep accurate accounts of all monies of this Corporation received or disbursed; shall deposit all monies, drafts, and checks in the name of, and to the credit of, this Corporation in such banks and depositaries as the Board of Directors shall from time to time designate; shall have power to endorse for deposit all notes, checks, and drafts received by this Corporation; shall disburse the funds of this Corporation as ordered by the Board of Directors, making proper vouchers therefor; shall render to the Board of Directors and the President of this Corporation and to the Authority, whenever requested, an account of all of his or her transactions as Treasurer and of the financial condition of this Corporation; shall have such powers and shall perform such other duties as may from time to time be prescribed by the Board of Directors or the President; and, in general, shall perform all duties usually incident to the office of the Treasurer. Section 4.10. Other Employees and Agents. This Corporation may have any other employees and agents that are from time to time deemed necessary by the Board of Directors. Those employees and agents shall be appointed in such manner, have such operational and administrative duties, and hold their positions for such periods of time as may from time to time be prescribed by the Board of Directors. 8. JPSby1300 02/16/90 Section 4.11. Compensation. The officers, employees, and agents of this Corporation may be paid such reasonable compensation for their services rendered to this Corporation in such capacities, and be reimbursed for such reasonable expenses necessarily incurred by them in rendering such services, as the Board of Directors may from time to time determine to be directly in furtherance of the purposes of, and in the best interests of, this Corporation. Section 4.12. Bond. All officers, employees, and agents of this Corporation from time to time having the duty or authority, alone or with others, to receive, endorse, deposit, or issue checks, drafts, or other orders for the payment of money to or by this Corporation shall be bonded at the expense of this Corporation, and the Board of Directors of this Corporation shall determine the amount of each bond. ARTICLE V FINANCIAL MATTERS Section 5.01. Books and Records. The Board of Directors of this Corporation shall cause to be kept: (1) records of all proceedings of the Board of Directors; and (2) such other records and books of account as shall be necessary and appropriate to the conduct of the corporate business. Section 5.02. Documents Kept at Registered Office. The Board of Directors shall cause to be kept at the registered office of this Corporation originals or copies of: (1) records of all proceedings of the Board of Directors; (2) all financial statements of this Corporation; and 9. -e f -i�/ JPSby1300 02/16/90 (3) Articles of Incorporation and Bylaws of this Corporation and all amendments and restatements thereof. Section 5.03. Accounting System and Audit. The Board of Directors shall cause to be established' and maintained, in accordance with generally accepted accounting principles applied on a consistent basis, an appropriate accounting system for this Corporation. The Board of Directors may cause the records and books of account of this Corporation to be audited by an independent certified public accounting firm whenever it may deem an audit necessary or appropriate and may retain any person or firm for that purpose which it may deem appropriate. Section 5.04. Fiscal Year. The fiscal year of the Corporation shall be as determined by the Board of Directors. Section 5.05. Contracts, Checks, Drafts, and Other Matters. All deeds, mortgages, bonds, contracts, or other instruments pertaining to the business of this Corporation, and all checks, drafts, or other orders for the payment of money, and all notes, bonds, or other evidences of indebtedness issued in the name of this Corporation shall be signed by such officer or officers, agent or agents, employee' or employees of this Corporation, and in such manner, as may from time to time be determined by a resolution adopted by the Board of Directors, or, in the absence of such a resolution, by the officer or officers so authorized by these Bylaws. 10. JPSby1300 02/16/90 ARTICLE VI WAIVER OF NOTICE Section 6.01. Notice. Whenever notice of any meeting whatsoever is required to be given by law or these Bylaws, the notice may be waived in writing, signed by the person or persons entitled to the notice, whether before, at, or after the time stated therein or before, at, or after the meeting. ARTICLE VII AUTHORIZATION WITHOUT A MEETING Section 7.01. Authorization Without Meeting. Any action that may be taken at a meeting of the Board of Directors may be taken without a meeting when authorized in a writing which is, or counterparts of which in the aggregate are, signed by all of the directors. ARTICLE VIII INDEMNIFICATION Section 8.01. Indemnification. This Corporation shall, in the exercise of the power granted to Minnesota nonprofit corporations generally by Minnesota Statutes, Chapter 317A, as now enacted or as hereafter amended, indemnify its directors, officers, employees, and agents against certain expenses and liabilities, and carry and maintain insurance therefor, but only under the circumstances, in the manner, and to the extent from time to time permitted by law. 11. _4� -14 JPSby1300 02/18/90 ARTICLE IX AMENDMENTS OF ARTICLES AND BYLAWS Section 9.01. Amendments. The Board of Directors of this Corporation may amend this Corporation's Articles of Incorporation, as from time to time amended or restated, and these Bylaws, as from time to time amended or restated, to include or omit any provision which could lawfully be included therein or omitted therefrom at the time such amendment or restatement is adopted. Any number of amendments, or an entire revision or restatement of the Articles of Incorporation or Bylaws either (1) may be submitted and voted upon at a meeting of the Board of Directors, notice of the purpose of the meeting and of the proposed amendments, revision, or restatement having been given, and may be adopted at the meeting upon receiving the affirmative vote of not less than two - thirds (2/3) of the total number of directors of this Corporation, or (2) may be adopted, in accordance with Article VII hereof, by a writing signed by all of the directors of this Corporation. 12. JPSart400 02/16/90 ARTICLES OF INCORPORATION OF RICHFIELD TOURISM PROMOTION BOARD, INC. The undersigned incorporator, for the purpose of forming a corporation pursuant to the provisions of the Minnesota Nonprofit Corporation Act, Minnesota Statutes, Chapter 317A, hereby adopts the following Articles of Incorporation: ARTICLE I Corporate Name The name of this Corporation shall be "Richfield Tourism Promotion Board, Inc." (hereinafter, "Corporation "). ARTICLE II Purposes This Corporation is organized and shall be operated, and the specific and primary purposes of this Corporation shall be: (1) To promote the City of Richfield as a tourist or convention center; and (3) To carry out such activities in furtherance of the foregoing as shall be permitted under Minnesota Statutes Section 469.190, Subdivision 3, or any amendment thereto or successor statute. For such purposes and not otherwise, this Corporation shall have and exercise all rights and powers conferred on nonprofit corporations under the laws of the State of Minnesota, including the power to contract, rent, buy or sell personal or real property; provided, however, that this Corporation shall not, except to an insubstantial degree, engage in any activitiew - 1 - JPSart400 02/16/90 - -/� or exercise any powers that are not consistent with and in furtherance of the primary purposes of this Corporation. ARTICLE III Prohibited Activities This Corporation shall not, incidentally or otherwise, afford or pay any pecuniary gain, or remuneration to, its member as such, and no part of the net income or net earnings of this Corporation shall, directly or indirectly, inure to the benefit of any private shareholder or individual. The Corporation shall not participate in nor intervene in (including the publication or distributing of statements) any political campaign on behalf of any candidate of public office. perpetual. ARTICLE IV Duration The period of duration of this Corporation shall be ARTICLE V Registered Office The registered office of this Corporation shall be c/o William Brusman, Realty Management Services, Suite 308, 2001 Killebrew Drive, Bloomington, MN 55420. 2 - JPSart400 02/16/90 -/17 ARTICLE VI Board of Directors The management and direction of the business and affairs of this Corporation shall be vested in a Board of Directors, consisting of three (3) persons. The qualifications, term of office, method of appointment or election, owners, authority and duties of the directors of this Corporation, and such other provisions with respect to them as are not inconsistent with the express provisions of these Articles of Incorporation shall be as specified in the Bylaws of this Corporation. The name and address of each of the directors of this Corporation at the time of the adoption of these Articles of Incorporation are: Name Address ARTICLE VII Membership The members of the Board of Directors of this Corporation shall be the only members of this Corporation. Each member of the Board of Directors of this Corporation automatically shall become and be a member of this Corporation concurrently with his or her becoming a member of such Board of - 3 - -Z�-- � -ao JPSart400 02/16/90 Directors, shall continue to be a member of this Corporation for so long as he or she is a member of such Board of Directors, and automatically shall cease to be a member of this Corporation concurrently with his or her ceasing to be a member of the Board of Directors of this Corporation. Members of the Board of Directors shall have voting rights only as directors and shall have no voting rights as members, except as otherwise provided in the Bylaws of this Corporation. ARTICLE VIII No Personal Liability The members, directors and officers of this Corporation shall have no personal liability whatsoever for obligations of this Corporation, nor shall any of the property of the members, directors and officers be subject to the payment of the debts or obligations of this Corporation to any extent whatsoever. ARTICLE IX No Capital Stock This Corporation shall have no capital stock. ARTICLE X Dissolution This Corporation may be dissolved in accordance with the laws of the State of Minnesota only upon the affirmative vote of all of the directors of this Corporation. Upon dissolution of this Corporation, and after the payment of all liabilities and - 4 - -tl& -C) / JPSart400 02/16/90 obligations of this Corporation and all costs and expenses incurred by this Corporation in connection with such dissolution, and subject always to the further provisions of this Article X, all remaining assets shall be distributed, exclusively for public purposes, to the City. Notwithstanding anything apparently or expressly to the contrary hereinabove contained in this Article X, (1) any assets then held by this Corporation in trust or upon condition or subject to an executory or special limitation, if the condition or limitation occurs by reason of the dissolution of this Corporation, shall revert or be returned, transferred, or conveyed in accordance with the terms and provisions of such trust, condition, or limitation; and (2) if the dissolution of this Corporation is required by the laws of the State of Minnesota then in existence to be conducted under court supervision, the dissolution of this Corporation shall be so conducted, and its assets not described in clause (1) of this sentence shall be transferred or conveyed to such one or more organizations described in, and in the order of priority provided for in, the preceding sentence of this Article X, as the court may determine. ARTICLE XI Transfer of Assets This Corporation may sell, assign, transfer, mortgage, encumber, or otherwise dispose of all or substantially all of its property and assets only upon the affirmative vote of all of the directors of this Corporation. - 5 - JPSart400 02/16/90 ARTICLE XII Amendments This Articles of Incorporation may be amended only as provided in the Bylaws of this Corporation. IN WITNESS WHEREOF, I, the undersigned incorporator, has hereunto set his hand this day of , 1990. Jonathan P. Scoll STATE OF MINNESOTA) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of , 19_, by Jonathan P. Scoll on behalf of the corporation. Notary Public JPSag400R 03/06/90 AGREEMENT THIS AGREEMENT made between the CITY OF RICHFIELD, MINNESOTA, a Minnesota municipal corporation, ( "City ") and RICHFIELD TOURISM PROMOTION BOARD, INC., a Minnesota nonprofit corporation ( "Board ") as of this day of March, 1990; WITNESSETH: WHEREAS, the City has imposed or contemplates imposing a tax on lodging to fund a local convention or tourism bureau, pursuant to the authority granted it under Minnesota statutes Section 469.190; and WHEREAS, the Board has the capability to carry out the functions of such local convention and tourism bureau, and to further the objectives of the City of promoting the City as a tourist and convention center. NOW, THEREFORE, the parties agree as follows: 1. Term. This agreement shall commence on the date set forth above and shall continue until terminated by either party. This agreement may be terminated for any reason by either party effective on the first day of January of any year on not less than 90 days written notice to the other, at the address stated below or to such other address as either party may, by notice in writing, designate to the other. This agreement may be terminated for cause at any time on ten days written notice. 2. Obtaining of Promotional Services By Board. The Board shall furnish to the City the following marketing and promotional services, to the extent the same are permissible expenditures 1. JPSag400R 03/06/90 e- )'I under Minnesota Statutes Section 469.190 (collectively, "Promotional Services "), and such promotional services may be obtained through contracts or agreements which may be entered into with individual hotels or motels in the City (each hotel or motel referred to in the singular as a "Facility "): (a) Planning and coordinating advertising and promotional activities; (b) The obtaining, on behalf of the Board, of "in- kind" services or accommodations at the published room rate of a Facility, made available in exchange for advertising space or services furnished by the vendor with respect to which such "in- kind" services or accommodations are furnished; (c) The following advertising or promotional activities: (i) Engagement of marketing personnel; (ii) Furnishing of electronic and print media; (iii) Airport advertising or promotion; (iv) Outdoor signage; (v) Media development; (vi) Appropriate marketing events; including the obtaining of necessary facilities, equipment and supplies; and (vii) Services of franchisors; and (d) Promotional activities related to regional and statewide advertising of the City's hospitality industry. 2. JPSag400R 03/06/90 3. Charges to Individual Facilities. Services procured by Board pursuant to this Agreement shall be without charge to an individual Facility unless authorized by contract or required by law. 4. Revenue Source for Board Functions; Annual Audit Report to City Council. The City shall fund the activities of the Board, in accordance with this Agreement, solely from revenues derived from a lodging tax imposed, or hereafter imposed, by the City pursuant to Minnesota Statutes Section 469.190 ( "Lodging Tax "). Nothing herein contained shall be construed to affect the right of the City to impose such Lodging Tax, or to increase or decrease any Lodging Tax once imposed, or to repeal such Lodging Tax in its discretion and as provided by law. Within one hundred twenty (120) days of the end of the fiscal year of the Board, the Board shall furnish, or have furnished to, the City Council of the City a certified audit of the operations of the Board for the immediately preceding fiscal year. The Board shall use its best efforts to ensure that the administrative cost of the operation of the Board ( "Administrative Cost ") for any fiscal year of the Board, including, without limitation, personnel, audit and office expenses, but excluding any amounts expended pursuant to any procurement by the Board of Promotional Services pursuant to this Agreement, does not exceed five percent of the estimated amount of the gross collections of the Lodging Tax ( "Gross Lodging Tax Collections ") anticipated for that year, as set forth in an 3. JPSag400R 03/06/90 administrative budget to be prepared and adopted by the Board annually prior to the commencement of the fiscal year in question .A In no event shall the Board incur obligations in excess of the revenues anticipated to be received by it out of Gross Lodging Tax Collections (and less the City Share to be retained by the City in accordance with Paragraph 5 below) pursuant to this Agreement. 5. Application of Gross Lodging Tax Collections; City Share Audit. On the 15th day of each month, the City shall remit to the Board, for the funding of the Board, and its operations hereunder, the Gross Lodging Tax Collections received by the City during the previous month lessAan amount reasonably estimated by the Board as representing the "City Share" (defined below) for the month in question. The Board shall, in turn, apply such funds to the purchase of Promotional Services, in accordance with this Agreement, and to the payment of Administrative Costs, as above - described. A The Gross Lodging Tax Collections shall be applied in the following manner and in the following order: (a) If the Lodging Tax is a three (3) percent tax, all Gross Lodging Tax Collections shall be paid over to the Board for Promotional Services and Administrative Costs, as required under Minnesota Statutes Section 469.190. (b) If the Lodging Tax is a four (4) percent tax, there shall be retained by the City and not paid over to the Board an amount ( "City Share ") equal to the difference between the Gross Lodging Tax Collections and the amount paid over to the Board under subparagraph (a). (c) If the Lodging Tax exceeds four (4) percent, there shall be paid over to the Board all amounts remaining after the application of subparagraphs (a) and (b). 4. JPSag400R 03/06/90 At the end of each fiscal year of the Board, the Board shall cause a certified audit of its operations for such year to be prepared and furnished to the City. In the event such audit discloses that expenses actually paid or incurred for Administrative Costs exceeded Five Percent (5 %) of the Gross Lodging Tax Collections, the excess shall be applied against and shall reduce the City Share for the next following fiscal year of the Board. 6. Procurement of Marketing and Promotional Services By Board. The Board shall authorize the expenditure of funds received by it hereunder for the procurement of Promotional Services from third parties, including individual Facilities, if it reasonably appears to the Board that such Facility has, or will have, the ability to procure such Promotional Services in a cost - effective manner. Provided, however, that the cumulative amount of all contracts entered into by the Board with respect to the procurement of Promotional Services by any one Facility in any fiscal year shall not exceed an amount equal to the product of (i) the Gross Lodging Tax Collections less (a) the total Administrative Cost; and (b) the City Share, as limited in accordance with Paragraph 4, above) and (ii) a fraction, the numerator of which is the Gross Lodging Tax Collections received from the Facility in question and the denominator of which is the Gross Lodging Tax Collections received from all Facilities. 7. Documentation of Procurement. All amounts disbursed by the Board hereunder for Promotional Services shall be paid out 5. JPSag400R 03/06/90 only upon submission of appropriate invoices or similar documentation and only for goods and services of the type described hereunder. All disbursements pursuant to engagements or contracts shall be made by the Board no more often then monthly to vendors or providers. Funding shall be made by check of the Board payable directly to the third party vendor or provider and not to the owner or manager of any Facility, except in the case of the providing by the Facility of "in- kind" services, such as complimentary rooms or lodging, in which event, reimbursement for rooms or lodging actually furnished, for promotional or "in- kind" purposes, shall be made at the published room rate for such lodging. Notwithstanding the foregoing, the Board shall reimburse any contract manager of a Facility for expenses of the kinds enumerated in Paragraph 2, above, which expenses have been, or may be, advanced or paid by such manager. 8. Hold Harmless. Any and all employees of the Board or any other persons, while engaged in the performance of any service required by the Board under this Agreement, shall not be considered employees of the City, and any and all claims that may or might arise under the Workers Compensation Act of the State of Minnesota on behalf of said employees or other persons while so engaged, and any and all claims made by the third party as a consequence of any act or omission on the part of the Board, or its agents or employees or other persons while so engaged in any of the services provided to be rendered herein, shall in no way be the obligation or the responsibility of the City. In 6. � -� -J7 JPSag400R 03/06/90 connection therewith, the Board hereby agrees to indemnify, save and hold harmless, and defend the City and all of their officers, agents and employees from any and all claims, demands, actions, or causes of actions of whatever nature or character arising out of or by reason of the execution or the performance of the services provided for in this Agreement. 9. Discrimination. The Board, in its operations hereunder, shall comply with the provisions of Minnesota Statutes Section 181.59 as the same may be amended from time to time. The Board shall not discriminate against any person or firm in any of its activities pursuant to Minnesota Statutes Section 181.59 which is incorporated into this Agreement as though set forth in its entirety. 10. Insurance. The Board shall carry appropriate fidelity insurance to cover its employees and agents while performing services pursuant to this Agreement, and shall provide proof of same to the City upon request. 11. Laws. The Board will comply with all applicable federal, state, and local laws in the performance of its obligations hereunder. 12. Integration. This document is fully integrated, embodying the entire Agreement between the parties. IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above - written. CITY OF RICHFIELD By: 7. JPSag400R 03/06/90 Its: Mayor By: Its: City Manager ADDRESS: RICHFIELD TOURISM PROMOTION BOARD, INC. By. Its: ADDRESS: 8. DO►HERTY RUMBLE & BUTLER PROFESSIONAL ASSOCIATION Attorneys at Lav Jerome Halloran Eugene M. Wartich lames K. Wittenberg John J McGirl. Jr Thomas E. Rohncht Boyd H Ratchye Dean R. Edstrom Ralph K. Morris Bruce E. Hanson I. lawrrnce Mclnrvre Richard A Wilhoit 'Williami Cosgnff lames A Stolpestad Stephen E. Smith lames I Rvan Kimball I. Devoe C Robert Beattie David G Ma= Jonathan P 5coll Timothv R. Quinn Alan I Silver James R. Crassweller John A Yilek Jeff ev B. Oberman Gregorv.A. Kvam William L. Sippel Gary Hansen Edward F. Fox .Mary E. Probst Elizabeth Hoene Mayan Lisa M Hurwitz Sue Ann Nelson Brent D Bostrom Lori Wiese -Parks David P. Swanson Stephen T. Braun Helen P. Starr* `eter S. Glaser' . orrest D. Nowlir Edwin R. Holmes Ronald D McFaLl Susan C. W'emgaraier Enn K. Jordahl Marc 1 Manderscheid Barbara S. Seders Dawn L. Gagne Donald W'. Niles Carolyn .M McCann Gena .M. Setzer Michael R. Docherty Terrance A. Costello Bruce J. McNeil Daniel C. Mott Margaret !. Madden Deborah B. Hiike Anne E. Brown 3750 1DS Tower 80 South Eighth Street Minneapolis, Minnesota 55402 -2252 Telephone (612) 340 -5555 FAX (612) 340 -5584 Writer's direct dial number. February 21, 1990 2800 Minnesota 6'Yorld Trade Center 30 East Seventh Street Saint Paul, Minnesota 55101 -4999 Telephone (612) 291 -9333 FAX (612) 291 - 931__ zC ) `CD If Magruder Building 1625 M Street, N.W. Washington, D.C. 20036 -3203 Telephone (202) 293 -0555 FAX (202) 223 -8790 (612) 340 -5594 Ilk(l cm 2 2 �ytoRpolisoffice Mr. Charles LeFevere, Esq. Holmes & Graven 470 Pillsbury Center Minneapolis, MN 55402 Re: Richfield Tourism Promotion Board Dear Charlie: As a follow up to our recent conversations and conference, I enclose a memorandum prepared by Realty Management Services regarding the type and nature of marketing expenses incurred by the Hampton Inn in Richfield. You will note that these expenses, are broken down into "in- kind" services, "marketing events ", "group and direct sales ", "advertising and outdoor signage ", "promotional fees /travel agent fees ", "media development /third party fees" and "franchise or services and fees" totaling approximately $140,000. You should feel free to call either Bill Brusman or myself with questions about this enclosure, or the nature of the expenses described. I think you will agree that the promotion of the Hampton Inn necessarily entails the promotion of the entire city as a tourist destination. John D. Docken Peter E. Hintz i ne e r e , Tracy A. Sykes Ronald L. Holzhacker Scott W ttingh! Jonathan C Miesen m Tra M. wvh;e• Cathenne D..er famesC Chi. onathan P. Scoll Timomy; Dean *Admired DC On;, JPS1tr2770 /alc Of Counsel I. C Foote Irving Clark cc: Bill Brusman (letter only) Frank Clay b,)u-me John L. Hannaford Perry .M Wilson, Jr. Daniel W O'Bnen William B. Randall Richard H. Magnuson Carl A. Swenson Richard B. Peterson 'Ack W. Hanson ,dney Berde REALTY MANAGEMENT SERVICES, INC. February is, 1990 REIMBURSABLE MARKETING EXPENSES Approximately 55,573 guests stay at the HAMPTON INN RICHFIELD per year. Because HAMPTON INN RICHFIELD is a limited service hotel without its own restaurant, its guests are likely to frequent local restaurants and grocery stores, whether they are traveling for business or pleasure. These 55,573 guests may also frequent gas stations, retail stores and entertainment centers. In the highly competitive hospitality industry, various media and promotions are tapped to extend reach and increase frequency. Media inherent to the industry and the scope of outreach is rarely available to local merchants. Through its specialized media and promotions, the hospitality industry is the "spokesperson" for Richfield and its local merchants. Media and promotions used to advertise the hotel and, therefore, the city as a point of destination include but are not limited to the following: "IN -KIND" SERVICES (TRADE (JUTS), ELECTRONIC AND PRINT MEDIA Outstate and out -of -state newspapers and radio stations reach business and pleasure travelers. The city experiences direct and indirect benefits through our hotel's use of these media. A direct benefit is .identification - travelers who may otherwise stay in commonly known areas such as downtown or Bloomington hear about Richfield's hospitality services. Consequently, Richfield becomes known as a convenient and competitive point of destination. Increased use of this media (frequency) strengthens city identification. Local merchants, thereby the city indirectly, benefit from the industry's advertisements. Increased visibility is likely from the number of guests brought into the city. Local merchants' advertisements and promotions are made available in the hotel in a number of ways: handouts, in -room directories, menus, coupons, posters and verbal information offered by the hotel staff. To encourage patronage, HAMPTON INN RICHFIELD offers free van service to local restaurants, the Hub and Market Place shopping centers. Outstate market targets include Rochester, Bemidji, Duluth, Mankato, Redwood Falls and their surrounding communities. Out -of- state areas include North Dakota, South Dakota, Iowa, Wisconsin and Illinois. Country -wide markets are reached through such media as _71,� - 3,3 airport and industry magazines. Expenses relative to this type of outreach: Approximately $24,000. MARKETING EVENTS Promotions are essential to increase market reach and product identification. Inherent to promotional offers is increased patronage to local merchants and increased city identification. Examples of how these promotions ,yc�-k are: 1. Shopper's weekend packages °- outstate and out -of -state holiday shoppers are targeted, By bringing shoppers into Richfield, rather than downtown or Bloomington hotels, local merchants again benefit and the city is recognized as a viable point of destination. Free van service within the community encourages patronage; local merchants are encouraged to offer customer incentives through flyers and coupons the hotel distributes. 2. Weekend coupons - Local residents are targeted. During the winter, "slow" months, special rate coupons are distributed to Richfield and surrounding communities. This incentive gets the resident who may otherwise have stayed at home out for get -away- weekends. Commonly, these quests shop and frequent local restaurants during the weekend. Secondly, those local residents who may have otherwise stayed in Bloomington hotels (with in -house restaurants) now stay in Richfield and frequent local restaurants. Other types of promotional events include: blitzes, where hotel staff members visit over 200 community corporations and businesses to "sell" the hotel's convenient location and its surrounding services; sponsorships, where local interests such as Little League, Miss Richfield and charities are sponsored by the hotel. The city of Richfield is represented through the hotel industry's participation in trade shows, conferences and expos. Some of these events include: Thunderbay Trade Show, Celebrate Minnesota Conference and the Bloomington Lodging Expo. Many of these events are "invitation only," open only to hospitality representatives. Direct Mail is another form of promotion which supports all advertising and other promotional efforts, increases reach and increases identification. City promotional materials and local merchants' incentive coupons can be included in direct mail campaigns. Expenses related to this type of outreach: Approximately $22,000 GROUP AND DIRECT SALES (MARKETING PERSONNEL) The hotel industry aggressively pursues group sales as a source of guaranteed room nights, especially when room nights are over weekends or during "slaw" seasons of the year. Inherent to the size and nature of groups, they are likely to stay within a close proximity of the hotel, thereby utilizing local merchant services. Some groups who stay in Richfield as a result of the hospitality industry outreach are: sport groups such as the "Street Rods" and youth hockey and basketball teams (who travel with parents and coaches), religious groups, business groups and wedding guest parties. Many of these attendees are staying in Richfield for the first time; many are attending seminars or sport arenas in Bloomington and choosing to stay in Richfield as a result of our hotel and our marketing efforts. All of the benefit to the city and its local merchants mentioned previously are realized, as well, through group sales. Corporations and local business groups are also called upon via direct sales visits. During these visits, not only are hotel features discussed, but the hotel's close proximity to local food and retail services are mentioned. Additionally, the city's nature center is used as a nearby amenity for walking and jogging. Expenses relative to this type of outreach: Approximately $8000 AIRPORT ADVERTISING AND OUTDOOR SIGNASE The airport phone board draws business and pleasure travelers to Richfield who may otherwise stay in the highly competitive downtown and Bloomington hotels. Highway identification sigmage attracts the "drive by" market and draws travelers to the Richfield side of the 1494 strip, The results of this type of outreach is increased guests which, in turn, benefits the city and its merchants as mentioned earlier. Expenses relative to this type of outreach: Approximately se,000 PROMOTIONAL FEES /TRAVEL AGENTS FEES Because the hospitality industry is highly competitive, travel agents have an important role in the marketing outreach program. Agents are reached via direct mail and direct sales, as well as through Hampton Inn Corporate incentive programs. Through these agents, and through its hospitality industry, Richfield hosts guests from outstate areas, cut -of -state areas and even other countries. Agents are a viable source of business for the Richfield hospitality industry. By promoting hotels in the city, they are indirectly promoting the city itself as a point of destination to groups, some of whom are traveling to the metro area for the first time. Expenses relative to this type of fee: Approximately $18,000 MEDIA DEVELOPMENT /THIRD PARTY FEES -* -3-915- The production and advertising agency fees are administrative expenses to the marketing efforts described previously. Expenses relative to this type of fee: Approximately $5,000 FRANCHISOR SERVICES AND FEES The Franchisor's main focus is to increase product awareness. Nationwide campaigns entail a scope of reach and frequency possible only at the corporate level. Within the Franchisor's marketing plan are localized campaigns through such media as local distributions of Time Magazine, USA Today, as well as local metro papers and television stations. These campaigns are the backbone of all local hotel advertising programs; no local hotel could as effectively increase product awareness and credibility on a nationwide basis. Expense relative to this type of fee: Approximately $55,000. SUMMARY Perhaps no other type of business in the community attracts guests to the city as much as the hotel industry, attracting in excess of 56,000 people with diverse tastes and .hobbies. Local merchants benefiting from these guests are rarely equipped to directly market to the wide scope of travelers the hospitality industry reaches. The nature of the hospitality industry lends itself to be the City's spokesperson, promoting the City of Richfield as the traveler's point of destination. DM /REALTY MANAGEMENT SERVICES, INC. CITY OF RICHFIELD Study Session Letter No. 11 Agenda, April 2, 1990 Issue Statement Policy and Strategy Recommendations for Airport Related Issues. Background: The Richfield Airport Strategy Group has met and reviewed issues and events related to the airport. R.A.S.G. has provided recommendations for policy and strategy implementation. Recent developments regarding the airport include the following: *New Ford Town Redevelopment Plan. 1. Update on Meetings and Communication Plan. The staff has continued to present the plan to local municipalities, agencies, state government officials and various community groups for visibility, feedback and support. A schedule is enclosed listing the meetings that have occurred and proposed meetings. t The individuals and groups who have seen the plan have been supportive. The only negative response to the plan was from Steve Cramer, Minneapolis Councilmember. An important component to the New Ford Town plan is the housing relocation issue. Option Four involves relocation of residents in south Minneapolis near MSP Airport. At a couple meetings, some individuals familiar with this area stated their opinion that residents may want to relocate due to the noise impacts and this plan would help them with their needs. 2. New Ford Town Plan Video Tape. The video tape will give the plan broad exposure to the state and increase the awareness of the airport issues to the community as a whole. An interactive community approach to future airport planning will be a major theme throughout the video tape. As a reference, the Bloomington- Richfield Airport Adequacy Report will be used in the video tape for background and data information. The staff has met with three video production firms and proposals are due from them by Friday, March 30, 1990. The firms submitting proposals include Youngquist and Associates, Henning Associates and Great Tapes. Staff will make a final decision the week of April 2, 1990. A deadline of 30 days has been given to complete the production of the video. The estimated budget has been increased to $10,000 - Bloomington has been asked to share the cost. 3. Property Acquisition. A letter, dated March 22, 1990, was sent to Jeff Hamiel at the Metropolitan Airports Commission regarding the acquisition of the Manley Magnuson home in the New Ford Town area (enclosed). As stated in the letter, the City supports MAC's effort to acquire the Magnuson property for safety reasons. The future land uses in the New Ford Town area will involve acquisition of the single family residential homes for mixed commercial use. When the MAC plans to acquire property in this area, it must be done in a timely and managed fashion. As a concern, the City does not want to lose the tax capacity as a result of decreasing property values or acquisition of properties by the MAC. • Development of an Interactive Community Airport Planning Group. The staff has met with MAC officials and suggested to them the formation of an interactive community airport planning group. The MAC appears interested in establishing this group. A facilitator should be chosen to convene this group. Richfield staff has presented a list of possible facilitators that might work well in this role. • Bloomington- Richfield Airport Adequacy Study. Rob Smith, Smith Patterson Company, submitted a draft Legislative Summary Report to the City on March 2, 1990. The R.A.S.G. members are reviewing the draft report and their comments are due back to staff on Friday, March 30. The group advised the City to send the report to the Legislature and use it with various presentations on airport issues to the community such as the inclusion with the New Ford Town plan video tape. • Extension of Runway 4 -22. Mayor Steve Quam met with Mayor Neil Peterson from Bloomington. Mayor Peterson stated the Bloomington has discussed runway 4 -22 extension with MAC. If the City of Richfield is trying to facilitate an interactive community planning approach to future planning at MSP Airport, then it might work to Richfield's and Bloomington's advantage to include the extension of runway 4 -22 in the interactive planning process. • State Advisory Council on Airport Planning. Sue Sandahl reported on the activities of the State Advisory Council. At the last meeting on February 27, 1990, the council gave comments and suggestions to the Met Council staff regarding the proposed bill before the Legislature on the New Airport Site Search Area Protection. A letter was sent to Senator Keith Langseth, Chair of the Council from Sue Sandahl with comments on the Met Council Scope of Work Report - Major Airport Planning Activities. Steve Keefe (a member of the council) responded to her letter which further raised questions on the cost /benefit analysis being used by the Met Council for the new airport planning. Ms. Sandahl asked for suggestions in responding to Mr. Keefe's letter. Recommended Motion: With this background, the following recommendations are provided to address these issues: • New Ford Town Redevelopment Plan. 1. Update on Meetings and Communication Plan. The strategy group gave recommendations to staff of additional groups and individuals to include in presentations of the New Ford Town Redevelopment Plan. As a way to initiate the concept of interactive community airport planning at MSP Airport, the group suggested presenting the plan to all the surrounding communities for their involvement of ideas and suggestions. 2. New Ford Town Plan Video Tape. The strategy group will be involved in the content of the video tape by meeting with the selected video production firm and reviewing the script to ensure the Richfield position on future airport planning is properly translated to the viewers. 3. Property Acquisition. Charlie LeFevere and staff are currently in the process of developing an acquisition and clearance agreement between the City of Richfield and the MAC regarding the acquisition of Manley Magnuson property. Staff will initiate a meeting with MAC officials to develop a cooperative arrangement between the City and MAC involving the future acquisition of property in New Ford Town. There are a number of issues that must be discussed to minimize any adverse impacts this acquisition might have on the City. • Interactive Community Airport Planning Group. The staff has developed a list of possible individuals to facilitate the group (enclosed). This list will be forwarded to MAC officials to,use when they form the group and chose a facilitator. • Bloomington- Richfield Airport Adequacy Study. Staff will submit changes in the draft Legislative Summary Report to Rob Smith by April 2, 1990. The final Summary report is due to the City by Rob Smith on April 13, 1990. • Extension of Runway 4 -22. This issue is possibly best discussed in the Interactive Community Airport Planning Group MAC is establishing. There will be various MSP Airport planning issues that will involve the City of Richfield and we must be willing to negotiate on the runway extension issue if we want to be a legitimate member in the group. • State Advisory Council on Airport Planning. The strategy group suggested the State Advisory Council needs to develop a formal process of committee action, reporting on issues, and developing a list of issues to cover airport planning at the existing and a possible future airport. This group includes a number of influential individuals that can make an impact in the community on future airport planning. The staff and R.A.S.G. members will assist Sue Sandahl in developing a strategic plan for the Council to use for more effectively implementing its roles and objectives. Alternative Recommendation: A variety of alternative recommendations may be discussed at the April 2, 1990 Study Session. Discussion /Decision Mode: These matters will be discussed at the April 2, 1990 Study Session. Respectfully submitted, James Prosser City anager JDP:kab Enclosures NEW FORD TOWN REDEVELOPMENT COMMUNICATIONS PLAN Date Time Group /Individual Set -Up Person 1/29/90 3:30 PM Gertrude Ulrich JP 2/1 9:00 AM Bloomington Staff JP 2/2 8:00 AM Freeman (Gertrude JP Ulrich, Steve Quam, Edwina Garcia) 2/8 8:30 AM Minneapolis Staff JP (Bill Barnhart) 2/8 2:00 PM Halloran (JP, SQ, TM, TM Dick Miller, Jeff Hamiel) 2/8 4:15 PM Mayor Fraser, Staff TM 2/9 8:30 AM Sue Sandahl JP 2/12 8:00 AM Steve Cramer, Freeman Freeman 2/12 9:00 AM Chris Tjornhom, Denny JP Shulsted 2/12 3:30 PM Press Preview DJL /RS 2/12 5:30 PM Richfield Council, HRA, JP Planning Commission 2/15 10:00 AM Paula Hanson, Tom Todd, KB Jill Schultz 2/20 Richfield Chamber JP 2/21 9:00 AM Edina Council /Staff JP 2/21 7:30 PM New Ford Town Public Mtg. JP 2/23 1:30 PM Met Council TAC Advisory JP Board 2/26 Bill Crawford JP /DF MnDOT 3/1 2:00 PM MAC Staff (Finney, Fortman, KB Ryan) 3/8 10:00 AM Rep. Bernie Lieder, KB Rep. Joyce Henry Air Trans. Subcommittee of Air Transportation 3/9 8:00 AM General Mgmt. Staff JP (Richfield) 3/12 1:00 PM Steve Keefe, Met Council JP /SQ /GU 3/12 3:00 PM Bloomington Gen'l Staff JP 3/13 1:30 PM Senator Dave Durenberger JP 3/13 2:00 PM Met Council Staff (Kari, DF Case, Kozlak, Diaz) 3/13 4:00 PM Credit Union Board DF 3/14 11:30 AM MAC Consultants JP (HNTB) 3/19 NOON Bloomington Chamber 3/21 2:00 PM Citizens League JP Curt Johnson 3/22 7:30 AM Richfield Rotary JP 3/22 9 :00 AM Minneapolis Staff JP (Dick Heath, Philip Meininger, Gordon Wagner, Bob Morgan, Perry Thorvig, Linda Waite) 3/22 11:00 PM FAA (Heath, Meininger, KB Wagner, Morgan, Thorvig, Waite) 3/28 2:00 PM City of Mendota Heights KB (Tom Lawell, Kevin Batchelder, Larry Shaughnessy, Jim Danielson) 4/3 1:00 PM MAC Planning & Environment JP Committee 4/4 1:300 PM City of Eagan KB (Tom Hedges, John Hohenstein) 4/11 2:30 PM Connie Levi KB (Mpls. Chamber) Bloomington Legislators, Staff (Kathleen B1atz, Bill Belanger, Joyce Henry, John Himle) - - -- City of St. Paul KB - - -- Governor's Staff - - -- Hennepin County (Randy Johnson) NWA KB /Finney - - -- Downtown Business JP - - -- State Advisory Council KB /Rep. on Airport Planning Lieder - - -- Sen. Schmitz (Senate Local & Urban Gov't Committee) - - -- Minneapolis Rotary - - -- St. Paul Chamber /Business Community - - -- N. Dakota County Chamber - - -- W. Suburban Chamber Group - - -- Bloomington Hospitality Group - - -- Carlson Companies - - -- Martin Sabo - - -- MASAC Potential Facilitators for Collaborative Community Airport Planning Process Ned Crosby, Jefferson Center for New Democratic Processes Tom Dwar, prior affiliations include Star Tribune, Chair of Metropolitan Council, Tx. 926 -5245 Jim Hetland, former Met Council Chair, First Bank Tx. 926 -6284 John Clark, Humphrey Institute, Tx. 625 -0830 John Bryson, Humphrey Institute Curt Johnson, Citizens League John Rice, previously worked for a committee of 12 on the dowtown revitalization plan, Tx. 341 -2464 Moe Dorton, former Chair of Met Council, Tx. 374 -4969 Fred Hoi ington, former partner with Don Brower, Tx. 83E -9960 Ghaleb ABDUL - Rahman, former Met Council employee, worked on Mega Mall issues, Tx. 703 - 749 -1416 Mike Brenda, former staff to Jack Rice, former employee MCDA Walter Mondale, former Senator George Latimer, former Mayor of St. Paul, presently Dean of the Hamline Law School Bob Terry, Humphrey Institute Harlan Cleveland, former Dean of Humphrey Institute. Jan Smaby Roger Williams, State Planning Agency City of Richfield • 6700 Portiand Avenue - Minnesota 55423 -2599 City Manager Mayor James D. Prosser Steve Quam March 21,1990 Mr. Jeff Hamiel Metropolitan Airports Commission 6040 28th Avenue South Minneapolis, MN 55450 Dear Mr. Hamiel: Council Edwina Garcia Ivan Ludeman Martin Kirsch Michael Sandahl We have been informed that the MAC is considering the acquisition, by voluntary sale, of a single family residential home in the New Ford town area of Richfield for safety reasons. It appears that the most likely future uses for the property in the New Ford Town area will require acquisition of the existing single family residential homes in that area, either for airport or other governmental use or for private redevelopment to land uses which are more compatible with the airport. However, in the meantime, the residents of that part of Richfield are experiencing a good deal of frustration, uncertainty and hardship because they do not know what will happen to their homes and their neighborhoods or when it will happen. The City of Richfield is most anxious to help these people and to begin an orderly transition to the final land use of this area. Therefore, we support the acquisition by the MAC of the single family residential homes in the New Ford Town area from residents who are prepared to sell voluntarily, and we encourage the MAC to proceed with the acquisition it now has under consideration. However, we are concerned about the way in which the land use transition for the entire New Ford Town area occurs and the impacts which it will have on the residents of New Ford Town. If the transition is not well planned and managed, the problems of the people in the New Ford Town area may become worse rather than better. For example, a prolonged period of sporadic acquisition by the MAC of residential properties in this area could mean the neighborhood would deteriorate due to an increase in the number of vacant lots, vacant houses, and non -owner occupied residences. This could increase the uncertainty felt by the people in the neighborhood, cause further disinvestment in the community and decreasing property values. We are also concerned about the potential impact on the City of Richfield as a whole. Property in the New Ford Town area represents approximately 3-% of the tax capacity of the City of Richfield. The City cannot afford a decrease in tax capacity resulting from either decreasing property values or acquisition of properties by the MAC. Telephone 861 -9700 (612) Fax 861 -9749 An Equal Opportunity Employer - Mr. Jeff Hamiel March 21, 1990 Page 2 Therefore, we would appreciate the opportunity to meet with you at your earliest convenience to discuss how Richfield can cooperate with the MAC to facilitate this transition and to minimize its adverse impacts on the City of Richfield. We would like to discuss which properties in the area will be acquired, and how, when and by whom the acquisitions will be undertaken. We will want to discuss how the properties will be managed for interim uses, how the acquired properties can be integrated into a comprehensive redevelopment plan for the area, and how the impact on the tax capacity of the City of Richfield can be avoided. ere Jam s D. Prosser y Manager JDP:sae METROPOLITAN COUNCIL Mears Park Centre, 230 Fast Fifth Street, St. Paul, MN. 55101 612 291 -6359 March 1, 1990 Suzanne M. Sandahl Attorney at Law Suite 210 1518 East Lake Street Minneapolis, Minnesota 55407 Dear Ms. Sandahl : I was pleased to receive your comments on the Scope of Work Report - Major Airport Planning Activities as a result of the discussion at the State Advisory Council on Metropolitan Airports Planning. You raise several important questions that we, too, are concerned about. In fact, they will be addressed during this multi -year planning process. In regard to the concern about financial planning for the dual -track strategy, I agree that additional financial analysis is needed. Actually, although it may not be obvious to you in reading the report, our decisions about the relative choices and their attractiveness in the airport adequacy study were based on a cost - benefit analysis. We concluded, for example, that, if growth is adequate to justify the construction of a new airport as projected in our study, capital costs of the new airport would be paid for in 3.5 years by the savings in fuel to airlines and in time to passengers. ince airports are paid for by user fees levied on airlines and indirectly on passengers, the new airport could recover its cost in that way without exceeding the savings that would accrue to passengers and airlines. The same is true of the runway decisions where we looked at the potential cost savings in constructing a new runway as compared to the cost implications in terms of delays if the runway was not built. We found, depending on the price of the new runway, that the cost savings, in the fuel to airlines and time to passengers, would pay for the cost of a new runway at existing Minneapolis /St. Paul Airport in as little as 2 years. In the current planning process there are several places where financing issues will be examined. All the cost /benefit and financial analysis will be combined in the final report to the legislature. The annual contingency planning process is a good forum for the discussion of financial issues raised by both tracks of the strategy. In fact, Tom Holloran, chair of the Airports Commission and a member of the Council's annual contingency planning advisory committee, has asked that the topic be considered by the Council in the next round of special studies for the annual contingency planning. I am sure that this will be discussed in the 1990 contingency report. Suzanne M. Saindahl Attorney at Law SuIrE Vo 1316 EAST LAKE STREET Minneapolis, Minnesota 55407 AREA CODE 612 OFFICE: 722.2693 HOME: 861 -4789 January 16, 1990 Office of Senator Keith Langseth Attention: Paula Hanson G -24 Capitol St. Paul, Minnesota 55155 Dear Ms. Hanson: Please consider this letter my written comments to the Scope of Work Report -Major Airport Planning Activities prepared by the Metropolitan Council and the Metropolitan Airports Commission in September of 1989. After reviewing the Scope of Work Report, I wish to make three separate comments. 1. Financial Planning_ The first concern I wish to share is the apparently limited financial planning undertaken by the Metropolitan Council. If a new airport w411 cost somewhere around 3.5 billion dollars (as has been suggested in the press), I would hope that the Metropolitan Council would look at a cost versus benefit analysis and would also suggest or recommend proposed sources of financing. The Metropolitan Airports Commission is proposing to complete a working paper on "financial analysis" (page 17 of the Scope of Work Report). I would hope that this analysis, among other things, would include an examination of the financial feasibility of both expanding and improving the existing airport while developing and financing a second site. I would also like to know MAC's proposed sources of financing so that we could judge the impact on the taxpayer, both in the metropolitan area and state -wide. 2. Assumptions I am very concerned that both the Metropolitan Council and the Metropolitan Airports Commission have made numerous assumptions in their planning processes which are not necessarily immediately apparent in reading their report. I think it is absolutely vital that assumptions made by these March 1, 1990 Page two A major assumption of the study was, in fact, that if we are to build a new airport it is necessary to close the existing airport. This reasoning is based largely on the implications of hubbing for Twin Cities' air traffic. In a certain sense, Northwest Airlines controls demand at the existing airport because their decisions about where to do hubbing operations, and through what cities to route passengers, account for almost half of the passenger traffic at Minneapolis /St. Paul Airport. Northwest Airlines has said that they will not move to a new airport if the old airport stays open. This makes perfect sense from their business point of view because, since hubbing is the main reason for so much traffic volume at this airport, they cannot afford to divide their operation. What makes this airport work as a hub is the fact that when, passengers arrive, there are many choices cf flights to which- to change. If passengers are arriving at two different airports, the hubbing would be very inconvenient and passengers would be inclined to choose another airline, hubbing through another city, or Northwest flights hubbing through another city. On the other hand, Northwest is not willing to move their operations to a new airport if the old airport is going to be left open to commercial traffic. Under those circumstances they are worried about a Midway Airlines -type situation where a competitor moves into the closer -in, more convenient airport, captures a big chunk of the local traffic and undermines Northwest's domestic position. Their high domestic passenger volume through the Twin Cities is part of what makes this a suitable hub for them. The large amount of domestic traf f is increases the number of flights they can generate here and the number of planes they can maintain overnight because it provides a large passenger base for the first flight in the morning. The airport has a significant impact on the economy of the region and the state. In addition, as you point out, it has an important role in the economic life of the communities directly around it. The assumptions that will go into the various cost - benefit analyses should be made explicit, and that is our aim. Sincerely, 'St Steve Keefe Chair cc: Members of the Airport Advisory Council G:SK0000i Office of Senator Keith Langseth January 16, 1990 --2 agencies and any other planning agencies be incorporated in their reports so.that the reports can be reviewed in light of the basic underlying assumption. This will also be extremely useful in the on -going long term planning process.. If decisions are made based on one set of assumptions and those assumptions are later proved inaccurate, it will. be much easier to fine tune the long term plan if the inaccurate assumptions can be readily identified and corrected. I can give one example of an assumption clearly made by the Metropolitan Council on page 32 of its report. Under I. Purpose and Objectives, the Metropolitan Council is clearly assuming that the new airport site will replace the existing airport and that the existing international airport will no longer be used for aviation purposes. Nothing in the statute passed by the legislature requires the closing of the MSP as an airport facility. 'Nevertheless, the Metropolitan Council is proposing a reuse study that includes only non - aviation uses. Historically, in many instances throughout the United States, close -in airports have remained open even though newer "replacement" airports have been built. The Council assumes it will not happen here. In long term planning in an industry subject to numerous variables, it is vitally important that the basic assumptions underlying the planning process be made known and frequently reviewed for accuracy. 3. Economic Impact of the Airport The Metropolitan Council's Reuse Study will be looking at the signi- ficant impact the airport has on adjacent communities. This impact cannot be stressed enough. This report should examine not only the direct effects on the neighboring communities but also'the indirect benefits and costs associated with the airport. Similarly the costs and benefits associated with the second site and its impact on the surrounding.areas need to be examined in detail. Again, where assumptions are made in reaching conclusions, they need to be disclosed and periodically re- examined. Respectfully submitted By Suzanne /M. Sandahl, Public Member Stat�Advisory Council on SMS:ml Metropolitan Airports Planning P.S. Please circulate this letter to all other members. bcc: Melanie Ault, City of Richfield CITY OF RICHFIELD, MINNESOTA Study Session Letter Number 10 Agenda, April 2, 1990 Issue Statement: Pending litigation update from attorneys. Background: The City has a number of items of pending litigation which require review on a periodic basis. City Attorneys will be present at the meeting to provide status report and discuss potential settlement options on several items. Recommended Motion: Receive report from attorneys. Basis For Recommendation: 1. It is necessary that the City Council provide direction to the attorneys regarding items of pending litigation and possible settlement. Alternative Recommendation: 1. This discussion could be deferred to a later date. Discussion /Decision Mode: The matter will be presented at the workshop meeting of April 2, 1990. Jim Thompson and John Dean from the City's law firm will be present to review these matters. Respectfully submitted, QO Jam D. Prosser Cit Manager JDP:ff -:FO�/