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3.5. Chanhassen Bowl: Review Liquor License.r r I MEMORANDUM 3,5 CITY OF CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 • FAX (612) 937 -5739 TO: Don Ashworth, City Manager FROM: Todd Gerhardt, Assistant City Manager DATE: August 8, 1996 SUBJ: Liquor License for the Chanhassen Bowl Update (9- 5 -96): The council tabled action on this item on August 12 (see attached minutes). Mr. Dahlin was to report on his progress in securing a developer loan for the entertainment project, including paying back taxes, at this meeting (9- 9 -96). DWA On April 22, 1996, the city council approved the Chanhassen Bowl's liquor license with the condition that Mr. Dahlin pay his May 15 property taxes. Mr. Dahlin was also instructed to appear before the council again in three months to show the progress of paying his back taxes and to demonstrate some effort to finish paying off the outstanding balance of taxes for an additional 3 -month extension (see Attachment 1). ' Staff has been advised by the Carver County Treasurer's office that the first half taxes for 1996 have been paid. The city council should also be aware that the HRA is concerned about the ' potential of losing $385,000 if the property should go through the tax forfeiture process: Tax Forfeiture Proceeds/Distribution: Statutes are clear in that the dollars received ' from a tax forfeiture shall be redistributed to the city, county, and school district in proportion of the amount that each are currently levying. The HRA would not be a party entitled to tax forfeiture proceeds. Assuming that the forfeiture approximated the ' $465,000 currently being owed in back taxes, the city would receive a check for approximately 17% ($80,000) of the $465,000 captured through the forced sale. If the highest bid received for the property were half that amount, the amount of the check to ' the city would then be approximately $40,000. ' To ensure that the back taxes are paid, the HRA endorsed the position of using the next 3 -6 months to monitor Mr. Dahlin's efforts to secure private placement financing to pay back taxes. If Mr. Dahlin is not able to secure a mortgage within this time period, the HRA would then ' consider a highly secured mortgage position against the property, if that were the only means by which to ensure that the back taxes in fact were paid. Mr. Don Ashworth August 8, 1996 Page 2 RECOMMENDATION Staff would recommend granting Mr. Dahlin a 3 month extension with the condition that he show progress in attempting to secure private financing to pay off the back taxes. ATTACHMENT 1. Minutes of the April 22, 1996 City Council meeting. g:\admin \tg \chanbowl 1.doc -_J City Council Meeting - August 12, 1996 ' Mayor Chmiel: Thank you very much. I just might add that from the city's standpoint, in the last 8 years that I'm aware of, the City in itself is the one who gets the smallest piece of the pie and keeping your roads, the snow ' removal, maintenance upkeep and everything else. In 5 years we had given reductions, out of the 8. Anywhere from 5 to 10 percent for each of those given years. We remain with our taxes the same level that we did the year before. One year we did have to raise taxes, that's because of the cuts that were done by the State of Minnesota and that one year was 2 /10` of 1 %. So I'm hopeful that the City has been operating in the positions that you're asking to continue in and that we have most diligently watched the dollars and the costs associated with it. As we all sit up here, except our attorney, we're all those same kind of taxes and we're all not too happy with them either. There isn't too much that we can do about it. More specifically since a lot of those things are done through the County in ' raising and assessing and enforcing, the City doesn't have anything to do with that but I don't disagree with you at all. I think there should be some areas that something should stop at some given time and hopefully it should start soon. So appreciate that. The next item that we have on our agenda is a public hearing. ' PUBLIC HEARING: REQUEST FOR ON -SALE INTOXICATING LIQUOR LICENSE, APPLEBEE'S NEIGHBORHOOD GRILL & BAR, 550 WEST 79 STREET. Mayor Chmiel opened the public hearing. ' Mayor Chmiel: Is someone here from Applebee's to present their request? Would you please come forward and state your name. ' Catherine Liebman: Catherine Liebman and I have Naomi Nelson here as well. She'll be the General Manager. Mayor Chmiel: Alright. And is there any concerns that you have in regard to the issuance of the liquor license, other than the fact that you'd really like to have one. ' Catherine Liebman: No sir. Mayor Chmiel: Okay, alright. Thank you. I just wanted to see who was represented here by Applebee's. ' Catherin Liebman: Thank you. And we'll see you at our VIP party... Mayor Chmiel: Okay, thank you. Can I have a staff report on this please? ' Don Ashworth: Yes Mr. Mayor. Application has been made. The notices were sent out to all property owners within 500 feet. Public Safety Department did review the application and the background of each of the individuals making the application. Staff recommends that the City Council approve the request for an on -sale intoxicating license for the new Applebee's Neighborhood Grill & Bar restaurant at 550 West 79` Street. Mayor Chmiel: Thank you. As I mentioned before, this is a public hearing. Is there anyone wishing to address this issue? ' Councilwoman Dockendorf moved, Councilman Senn seconded to close the public hearing. All voted in favor and the motion carried.The public hearing was closed. Councilman Senn: Move approval. ' Councilwoman Dockendorf: Second. Mayor Chmiel: Moved and seconded. Any other discussion? ' Councilman Senn moved, Councilwoman Dockendorf seconded to approve the request for an on -sale intoxicating liquor license for the new Applebee's Neighborhood Grill & Bar restaurant at 550 West 79 Street contingent upon receipt of the license fee. All voted in favor and the motion carried. ' REVIEW OF LIQUOR LICENSE FOR THE CHANHASSEN BOWL. Don Ashworth: The City Council acted to approve the liquor license for the Chanhassen Bowl back in May, but with the condition that the item come back to the City Council wanting to ensure that in fact the applicant did pay first ' half taxes and then they wish to see progress being made on other back taxes. Staff was unsure as to what the Council was looking for as far as additional progress on back taxes. Again they did pay first half. Typically a license is for a one year period of time and again your action in May was to have that for basically a three month period of time and then return to the City Council so the item is being returned. City Council Meeting - August 12, 1996 Mayor Chmiel: Okay, thank you. Does the applicant have anything further that he'd like to discuss. Brad Johnson: I'm Brad Johnson, 7425 Frontier Trail, representing Mr. Dahlin in the absence of his attorney, as the developer of the project... Basically I think we reported to the HRA that we are making progress on the problem that's been created because of the tax... primarily anticipated that we'd have financing in place for the entertainment center. As a part of that process we had ... current time. That has been delayed due to one of the tenant's process of getting their financing. We met with Mr. Ashworth and Todd and also visited, a brief visit together... we're in the process now of saying well maybe, since or the idea is why don't we just bridge this current time and pay off the taxes bringing the title clean and we're in the process of doing that. We have a couple of interested bankers that are interested in doing it. Today's process is that we must at this time prepare an operating statement and some performance for Filly's, assuming that nothing ever else happened to the entertainment complex. We didn't build. We didn't move Pauly's over there. The banks want to know... establishment will be able to pay off a loan of about $450,000.00... Mr. Dahlin has agreed to personally guarntee the debt that the, and his financial statement would support it. The problem we have is we just don't have the necessary paperwork in place. We're working on that and we anticipate either later this week or the first part of next week we'll have that. The HRA asked us to keep them up to speed ... so I'd say we're working on that process. That would not involve the City whatsoever in paying of the taxes and then we can progress on with the rest of the development so we're trying to take care of... Any questions? Mayor Chmiel: The only one I was going to mention, regarding follow -up on negotiations with Mr. Dahlin's attorney was going to get back to us and inform us on a daily basis as to what is happening, or as quickly or as much as he knew at that particular time. Has he followed through with that, and I didn't have a chance to talk to Todd on this. Brad Johnson: We have talked to Todd. I'm not sure, he's on vacation ... but we did... Right now we're missing the performa on the bowling center by itself. We never had anticipated something... Mayor Chmiel: And I'd like to at least have the Council made aware of this so we know where this is really at. Good. Is there any discussion by Council? Councilman Senn: I do. First Don, I'd like to just clarify the motion that we made and... Which extended the renewal of the liquor license for a period of three months on the condition that he pay his May 15` property taxes, and he come back in a 3 month period and show progress for paying back taxes. You know kind of draw kind of a period there even though there isn't one. And be able to demonstrate some ability to finish paying off the back taxes within the next 3 months should another 3 month extension be granted. And to date no payment has been made on back taxes. Councilman Berquist: The only one that's been made is May '96. Councilman Senn: Correct. Mayor Chmiel: Right. Councilman Berquist: There is $115,000.00 sitting in a bank. Councilman Senn: I don't know. Where is it? Councilman Berquist: That's what I've been told anyway. Mayor Chmiel: Okay. We can probably get back to that and see. Steve, go ahead. Councilman Berquist: Mr. Dahlin is not here and his. Brad Johnson: Yes he is. Councilman Berquist: Oh he is here, okay. First half 9 96 was paid. And there's currently $115,000.00 sitting in one of the local banks in town that was going to be assigned by a letter of credit to the City of Chanhassen. Brad Johnson: Not correct. Councilman Berquist: Not correct? Brad Johnson: No. We said what we would do is, the City of Chanhassen pay the taxes to the HRA. We would assign part interest in it. They did not do that and I don't know if it's the right thing for them to do. He left the cash r n r 7 C City Council Meeting - August 12, 1996 in the bank for the following reasons. You have to look at Mr. Dahlin as like a bank himself. He repossesed the property. He's invested a half million dollars so he could ... over the years. He didn't want to own the building. What we were going to do is use the letter of credit, or the cash that we have in reserve, to pledge against the payment of mortgage we're trying to raise. The $450,000.00 and the reason we're doing that is that because, Filly's and the bowling does not necessarily have the worlds greatest history of operation, historically. And we don't have the performance so we said to the bank, what happens if we pledge for real estate, or $450,000.00. That's worth about a million two to a million eight. What happens if we pledge Mr. Dahlin's personal net worth? What happens if we pledge against the performance of the $115,000.00 that you have in your hands... We're using that as sort of leverage to make sure that we can balance that against any shortfalls that may exist at Filly's. And they're offereing it. The banks, in order to make a loan today, have to see that there's an operating payment and so we need that money for now... for a couple months of negotiations recommend that we do do something with the next half taxes. We're just hoping to use that as an additional collateral... our proposal is, to provide a personal guarantee Our proposal is to provide a letter of credit of $115,000.00 to pay the first mortgage of about a million two to a million eight as collateral for the loan and we think we can get the loan done. The reason we don't have it done to date is quite honestly... Councilman Berquist: Did I understand you right to say that there is no performa available on the bowling center? Brad Johnson: There will be one on the bowling center available in about 2 weeks. Councilman Berquist: So then the question regarding the revenue that's generated by this liquor license is unanswerable? Brad Johnson: No, that's not the question. The question is it profitable? Is it a profitable enterprise from the bank's point of view... Councilman Berquist: Can you answer the question, how much revenue is generated by the liquor license? Brad Johnson: ...about half a million dollars. Councilman Berquist: Just the liquor license aspect of it is, the bowling center including the on -sale? I'm sorry, the on -sale portion is half a million dollars and ... Okay. So 50% of your revenue is from there? Alright. Brad Johnson: It's Mr. Dahlin's opinion that it won't be able to... Councilwoman Dockendorf: Yeah, and that was my question Brad. I mean I'm having a hard time divorcing what we do tonight with what may happen in a few weeks. It was my understanding that bank financing was somewhat questionable and that it may come back to what the City would be asked to float the loan and that's... Brad Johnson: I can't speak, I think it's a financable transaction. I think if we keep it all lined up like that. I think because of the way banks will allow ... and because of it's history. Remember Mr. Dahlin foreclosed on this loan. The reason he has possession of it is he is the bank. Okay. So now he's got the first bank has foreclosed on it. This was years ago. Another banker foreclosed on it. So Mr. Dahlin pays it all off. That's not a real good trend to come in with. To a bank. So we're trying to structure it as such that it would be half the plan... arrange the financing for the whole entertainment complex to include the tax payoff as a part of that transaction. I Councilwoman Dockendorf: But that... stuff done? Brad Johnson: Well I think... all these players over there. Everybody seems to be working towards the direction of ' getting it done and this, you know. Now they're trying to, and I think the solution is ... we're suggesting. We need a little bit of time to accomplish that. We have two applications out right now. Possibly three. ' Councilwoman Dockendorf. And you think. Brad Johnson: They also asked for an appraisal and the appraisal will be done in about a week, week in a half. Councilwoman Dockendorf: So you think we'll have all our answers in a couple weeks? City Council Meeting - August 12, 1996 Brad Johnson: We can keep you posted. We are getting an appraisal and we are doing all those kinds of things that the bank requires. And the key element is the appraisal and the financial performance. And Mr. Dahlin has the financial part of it ... Any other questions ?... Councilman Berquist: I'd sure like to have a, well go ahead Mark. Councilman Senn: I understand I guess the need to keep the money somewhat loose as it deals with the financing terms but you know the back taxes are what, $450,000.00 is it? And so the $115 we're talking about is less than 25% of the amount that's due. It seems to me a good way for us to proceed would be to go ahead and grant an extension for another three months but make it contingent upon the $115,000.00 being put in a letter of credit to the City saying that only drawable by the City is the taxes aren't paid in the next 90 days. Councilwoman Dockendorf. So you're saying they get the $115...? Councilman Senn: They have it. It allows them to take the $115 to get the loan. And if they get the loan, they pay the back taxes, which means the $115 stays loose. But should we end up at the end of the three months again with absolutely no progress, then the $115,000.00 comes to the City as payment of less one quarter of the taxes and this goes forward or whatever. But you know, it at least protects our position as it relates to ... grant time extensions with absolutely no proof of performance. And that seems a reasonable say to do it. It does not tie money up and it allows him to accomplish what he wants, yet puts us in a secure position. To at least get the $115. Brad Johnson: I think we have to stop and think that this money is not the bowling alley's money. It's Mr. Dahlin's personal money. And I think he has to think about ... that's where we are ... give us a couple weeks and we'll be able to answer that question. Mayor Chmiel: Well we can also be granting in conjunction with what you're saying, except without the total amount of dollars that would be involved. Is rather than going with the additional 3 months, 15` of October is when taxes are basically due. We could have our meeting in the second Monday of the month to determine what has transpired. Councilman Senn: My concern with that Don is if we give another 3 month extension, we're going to be there and you're going to have second half taxes due and now you're got $465,000.00 already due and if this comes back to us 3 months with no progress or no financing, that $465 is then going to become what, what's the annual Don? What's the annual tax payment for that? Don Ashworth: I believe they're right around $85,000.00. Dan Dahlin: $88,000.00. Councilman Semi: So it becomes approximately $550,000.00 then at that point we're in the hole on back taxes. What I'm saying is, if we give that time, we ought to have $115,000.00 worth of security to guarantee that we at least get that much at that point in time for granting those time extensions. That's all I'm saying. And if he does his financing, gee that works out great. He's got his money free and pays the back taxes and we're all set. Brad Johnson: Without checking both with Mr. Dahlin's attorney and Mr. Dahlin, I can't comment on that... if it has no liquor license, there is no bowling alley. If there is no bowling alley, there is ... just give us two weeks to give you a better answer than we do right now. Councilman Berquist: It's discussable then? Brad Johnson: Huh? Councilman Berquist: His idea is discussable? Brad Johnson: Yeah. I think there are things, we're just trying to work our way through.. . Councilwoman Dockendorf: Well instead of working with unanswered questions, why don't we just grant a month extension. Let's talk about it. If you do in fact think you're going to have things in place, let's just talk about it then. Mayor Chmiel: I agree. That was going to be the other part of it as well. I I , r r n 1 City Council Meeting - August 12, 1996 Councilman Senn: So you're going to grant another month's extension with no commitment for any payment whatsoever in the next month? Councilwoman Dockendorf: They don't have, they're working on it. I mean they really are. Councilman Senn: I know they're working on it but. Councilwoman Dockendorf: Well, it's on a month. Mayor Chmiel: Well even if we cut that month to two weeks, as Brad indicated, we would know that by our next Council meeting. Councilman Mason: Well let's give him some cushion. I agree with Colleen. I think the month is a good compromise. And then they'll have time to discuss this other option amongst themselves and see what shakes out. Brad Johnson: The reason I can't answer... Councilman Senn: Well has Mr. Dahlin talked about it? I mean he and I and his attorney talked about that idea a month ago. Brad Johnson: His attorney is absent today... we're working on it. Mayor Chmiel: Okay, is there a motion? Councilwoman Dockendorf: That would be my motion to extend the liquor license for Chanhassen Bowl for one month, or two meetings shall we say? Two Council meetings. Councilman Mason: Whichever comes first. Councilwoman Dockendorf. Whichever comes first. Councilman Mason: I'll second that. Mayor Chmiel: Moved and seconded. Any other discussion? Councilwoman Dockendorf moved, Councilman Mason seconded to extend the liquor license for the Chanhassen Bowl for two City Council meetings to discuss it at that time. All vcoted in favor, except Councilman Senn who abstained, and the motion carried. PRELIMINARY PLAT REQUEST TO SUBDIVIDE 4.57 ACRES INTO 10 SINGLE FAMILY LOTS; FRONT YARD SETBACK VARIANCE REQUEST; LOCATED EAST OF HIGHWAY 41 AND ADJACENT TO MELODY HILL ROAD MELODY HILLS, SPRINGBROOK CORPORATION. Sharmin Al -Jaffa Thank you Mr. Mayor, members of the City Council. This is a very simple, straight forward subdivision. The applicant is requesting to subdivide 4.57 acres into 10 single family lots. The property is currently zoned residential single family. It is located east of Highway 41 and Chaska Road, south of Melody Hill Road and north of Minnetonka Middle School West. The average lot size is 16,180 square feet. The resulting gross density is 2.1 units per acre. All the proposed lots meet the minimum requirements of the zoning ordinance with exception of one lot. That is Lot 8. This parcel has frontage of 85 feet. The ordinance requires a 90 foot frontage. We believe this can be easily corrected. They just need to shift a few lines and we'll work with the applicant on it. The access to the project will be via a newly constructed cul -de -sac which will extend southwest of existing Melody Hill. There are trees distributed throughout the site with a natural line along the north and south side of the property. Due to grading, a large number of those trees will be removed. The applicant is requesting a 5 foot front yard variance to push the homes closer to the cul -de -sac at Lots 8, 9 and 10 and save the trees located south of those parcels. Staff is recommending the applicant be permitted to place the homes 20 feet from the front property line. This way we can MEMORANDUM CITY OF CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 • FAX (612) 937 -5739 TO: Housing & Redevelopment Authority FROM: Don Ashworth, Executive Director /Todd Gerhardt, Assistant Executive Director DATE: July 29, 1996 SUBJ: Participation in Taxes --- Chanhassen Bowling Center This item has been debated by both the HRA and city council. Most of the discussion has revolved around questions such as whether the HRA should be stepping in and acting as the developer for one -third of the project, i.e. Bloomberg Companies and Mr. Copeland appear to have secured financing for their part of the project and have posed the question as to whether or not the HRA could become the third partner to ensure that the overall project would go forward. The proposal recognizes the difficulty Mr. Dahlin has had in obtaining a loan for the overall project and recognizing the significant back taxes against the property ($465,000). Most of the HRA /council discussion has revolved around public vs. private, precedent setting, security, obtaining clear title, etc. Tonight's action is should not be a discussion as to whether the HRA will be a developer in the project. Instead, tonight's action should be seen one of firmly stating that the HRA will do everything within its power to ensure that the back taxes against the property are paid. If in that process we take some form of ownership position of the bowling center itself, such should be seen as a secondary event which can be more thoroughly analyzed during the time frame that the first objective is being accomplished. The necessity to ensure that back taxes are paid can best be understood by understanding various state statutes and, if orchestrated in concert, could have a significant affect on the finances of the HRA. Hopefully, the entire discussion this evening should be one of how to ensure that the city/HRA protects the dollars owed to us. The following interpretations of the state statutes should be the focus of this evening's discussion and have been obtained through telephone conversations with the county attorney, county auditor, Graven & Kennedy, and Roger Knutson's office: • Tax Forfeiture Declaration: 'The county is charged with the responsibility of declaring a property tax forfeiture and administering the laws in regards to a forced sale, declaration, and distribution of proceeds. The county attorney and auditor have determined that Dahlin is in default of the bankruptcy settlement. The next step is the actual declaration/notification; and 7 r ' Housing & Redevelopment Authority July 29, 1996 ' Page 2 • Tax Forfeiture Proceeds vs. Tax Delinquency Dollars: At the time a property goes into a ' forced sale, the delinquent taxes virtually disappear. The county has obtained various opinions which coincide with the opinions we have received from our two law firms, i.e. at ' the date of a forced sale, the proceeds received from that forced sale are not tax delinquency dollars but instead tax forfeiture proceeds to be redistributed based on tax forfeiture laws; and • Tax Forfeiture Proceeds/Distributions: Statutes are clear in that the dollars received from a tax forfeiture shall be redistributed to the city, county, and school district in proportion to the amount that each are currently levying. The HRA would not be a party entitled to tax forfeiture proceeds. Assuming that the forfeiture approximated the $465,000 currently being owed in back taxes, the city would receive a check for approximately 17% ($80,000) of the $465,000 captured through the forced sale. If the highest bid received for the property were half of that amount, the amount of the check to the city would then be approximately $40,000. In light of the above statutes, it is of the utmost importance for the HRA to look at this evening's action as an action to protect the assets of the HRA. As it currently stands, if the back taxes are paid before the property is declared tax forfeiture, the HRA would be receiving virtually 100% of the $465,000 paid. If by contrast the property does go into tax forfeiture and the same $465,000 is paid, the city would only recoup $80,000 of the $465,000 owed to the HRA/city. The previous offer by Dan Dahlin was to pay the county $115,000 if the HRA would advance the remaining $350,000 to keep the property out of tax forfeiture and to obtain clear title. The offer also included obtaining clear title to the property and putting the HRA into a first mortgage position against the property. The HRA would be repaid the $350,000 owed to them in a similar fashion as to how the developer would have received his dollars, i.e. repayment was to occur on a pay as you go plan through future tax increment from the overall development. In this instance, we would be receiving approximately 3 /8ths of the total increment that originally had been scheduled to be paid to Mr. Dahlin. [Clarification: If the HRA advanced the $350,000 in October, we would receive a payment from the county of $465,000 in November. In addition, the HRA would collect another $350,000 from future increment.] RECOMMENDATION As stated earlier in this memorandum, I believe that the primary action that would be taken by the HRA this evening would be to state that it will attempt to do everything in its power to ensure that back taxes against the property are paid and that the $465,000 currently owed to the city/HRA in fact are received. Secondarily is the issue of whether the first action in fact placed the HRA into a mortgage position (first, second, or third) and how much assurance was received that in fact the $350,000 being advanced by the HRA would be recouped. Staff would recommend that the initial indication of the HRA be that the HRA's first desired form of repayment be through a letter of credit from Mr. Dahlin. However, I believe the HRA should remain open in terms of whether that guarantee took the form of a first party mortgage after clear title had been demonstrated. Staff would recommend that the HRA endorse the position of using Housing & Redevelopment Authority July 29, 1996 Page 2 the next 3 -6 months to ensure that the back taxes are paid and that the HRA would consider a highly secured mortgage position against the property if that were the only means by which to I ensure that back taxes in fact were paid, r r r Fi � r 0 City Council Meeting - April 22, 1996 Councilman Mason: Well let's work something out as easily as possible. Mayor Chmiel: I don't think we need a motion. You have direction. Don Ashworth: Yes. Mayor Chmiel: Okay. We can go from there. Thank you. Lois Degler: Thank you. REQUEST FOR RENEWAL OF ON -SALE INTOXICATING LIQUOR LICENSE, 581 WEST 78TH STREET, CHANHASSEN BOWL, INC., DANIEL DAHLIN. Don Ashworth: The city has received an application from Mr. Dahlin for a liquor license at the Chanhassen Bowl. Most of the paperwork is in place and we assured that whatever is remaining will be obtained before we would give that license. At issue is the fact that under city ordinances, or city ordinances basically state that we will not issue a liquor license if the owner is delinquent in property taxes. The Council's probably aware the Bowling Center did go through a bankruptcy action approximately 2 -3 years ago and just kind of pulling themselves out that and then had kind of another slide backwards. They now appear to be, if they can make this entertainment center work, they would be able to pay off back taxes, which is what they've told us, if that entertainment center would go forward. Which then another key point there is the advice from the City Attorney saying that the ordinance portion is discretionary back to the City Council. So you have the discretion of saying you are going to follow that requirement, or if in a particular instance you feel that a waiver may be warranted or you want to establish some other conditions as a part of approval. I guess I have a difficult time seeing how denying the license is going to help out Mr. Dahlin or help out the city in trying to recoup the taxes that are delinquent. So I guess I turn it back to City Council. I don't know how you want to go. Mayor Chmiel: Okay. Anybody have any questions of Don? Councilman Senn: When does the license actually renew? Don Ashworth: The first of May. Mayor Chmiel: Yes, I was going to see if they had any questions and then I would call. Mr. Dahlin, do you have anything to add to what Don has said? If you would like to come forward. Please state your name and your address. Daniel F. Dahlin: Daniel F. Dahlin, 1889 Fairmont, St. Paul, Minnesota. Mayor Chmiel: Okay. Is there anything in addition that you may want to say to what Don has already discussed? Daniel F. Dahlin: No. As you know Don has been very cooperative and very helpful and thank you for the nice comments in the data here that I received. We are working on several offers to sell the property for the taxes but we basically need some more time. Would appreciate your graciousness in letting us continue with our license until this can be worked out. 21 City Council Meeting - April 22, 1996 Mayor Chmiel: Okay, thank you. Is there any questions of Mr. Dahlin? I guess we have none at this time. Colleen. Councilwoman Dockendorf: All I can think of are two really poor metaphors. One is throwing good money after bad and the other is shooting yourself in the foot if we don't extend... We'll never get the money. I guess it only makes sense to renew it. Mayor Chmiel: Okay, Michael. Councilman Mason: I don't know that either one of those metaphors are poor but yeah. It certainly won't happen if we don't. Whether I like it or not so. Mayor Chmiel: Good. Mark. Councilman Senn: I guess for one thing, I guess I want to repeat my comment that I made effectively at the time that we talked about the entertainment complex and the TIF and that is, how do we expect a property in this kind of shape to turn around with a new mortgage on it, new investment and everything. Pay the mortgage, the new mortgage and all the back taxes while the new taxes on higher value...basic economic principles... I agree with Colleen and Mike in the sense that I'm not sure where it gets us but I guess if we're going to do it... every 2 -3 months, .I don't want to see it back in here—don't want this to become an ongoing game... I think we need to make it known that this is a short leash and also very short time period ... lot of extensions. Mayor Chmiel: Yeah, I guess I have basically the same concerns that you mentioned. I want to see this all work. I want to see everything go but I too want to see something tight on this in making sure that somehow you bring this back to Council, even on a monthly basis knowing exactly where it's at. If there's something there, fine. If not, that too. But it's one of those things that I had to quote from Steve's portion. That's Councilman Berquist and he wrote me a few notes here and he said it's sort of staggering. He says how much more rope do we provide someone. It reminds me of the fellow who I trusted who kept telling me it's coming. It's coming. We'll get it squared away. He ended up taking him for approximately $100,000.00. I want to have it very tight. Don Ashworth: I need a little clarification. Taxes are basically paid twice per year. And I can provide hopefully a status report as to how they're doing with the entertainment complex. Is that what I'm hearing you say or is it the tax issue? Councilman Senn: Let me try on the tax issue. As far as May 15th goes, that payment better be made or this is immediately revoked. So more or less there's no further going in the hole on back taxes. Okay. As far as review period goes, I think we should extend the license for 3 months and to come back here in 3 months and either there's something really to show us that this is about to happen or something like that, or there's got to be some hind of a reduction of payment on the back taxes at that point to get an additional extension beyond 3 months. That would be my opinion on the taxes. Don Ashworth: So you're saying the equivalent of first half taxes for 1996? Since he is so far in arrears, anything you make on taxes will first be applied to the oldest tax that you owe. Councilman Senn: That's why I said go no further in the hole. 22 J L City Council Meeting - April 22, 1996 Mayor Chmiel: Okay, Roger. ' Roger Knutson: I would just point out that you can't pay, technically you can't pay recent, you have to pay the oldest ones first. ' Councilman Senn: I understand. That's why I say no further. Mayor Chmiel: Okay. Any? Councilman Senn: I'll make that a motion if you want me to. Councilwoman Dockendorf: I'll second it. Mayor Chmiel: Okay. Motion's been made with a second. Yes. ' Don Ashworth: I heard some discussion from the back. Vernelle Clayton: Only because I told Gerry exactly what ... and was told otherwise. Gerry Rummel: Mr. Mayor and City Council, my name is Gerry Rummel. Dan Dahlin's attorney. I called last week, the County Treasurer's office on this and they said that the payment would first be applied to current debts before you can pay any back. I was the same... that's what I was told by the County Treasurer's office. Don Ashworth: ...that's really statute, right? (There were a number of people speaking at the same time at this point.) Don Ashworth: ...Councilman Senn's position is clear. ' Councilman Senn: To be honest with you, I've heard that argument both ways. You know our company does some things, work up work and I'll tell you if we paid current taxes and ... I mean there are exceptions to every rule but let's not argue that. Let's deal with the issue. No further in the hole. If it goes further in the hole, it's going to be revoked. The other ... 3 months. In 3 months you'd better be back here ready to perform... Mayor Chmiel: Okay, motion on the floor with a second... those specific conditions. Councilman Senn moved, Councilwoman Dockendorf seconded to approve the request by Dan Dahlin for renewal of on -sale intoxicating liquor license for the Chanhassen Bowl, Inc. for a period of three months on the ' condition that he pay his May 15th property taxes and that he come back in that 3 month period and show progress for paying back taxes and be able to demonstrate some ability to finish paying that off within the next 3 months should another 3 month extension be granted. All voted in favor and the motion carried. WETLAND MITIGATION PROJECT FOR TRAIL CONSTRUCTION ALONG COUNTY ROAD 117; FILLING .13 ACRES OF WETLANDS AND REPLACING WITH .22 ACRES ON SITE, CITY OF CHANHASSEN. 1 23