95-604ORIG4NAL
Presented By
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Referred To
Council File # ��� v � �
Green Sheet # ��` J
RESOLUTION
SAINT PAUL, MINNESOTA
Committee: Date
as
RESOLUTION APPROVING AI3ll AUTFIORIZING EXECUTION OF A
MEMORANDUM OF iTNDERSTANDING WITH
T`HE SCIENCE MUSEUM OF MINNESOTA
G�i�l:l�l:i�`.`i
1. The Science Museum of Minnesota, a Minnesota non-profit corporation ("SMM") proposes
to construct new facilities in the Riverfront Redevelopment Area of the City of Saint Paul, which
facilities will include, but are not limited to, a museum of not less than 300,000 square feet and a 700
car parking ramp (collectively, the "Project").
2. T'he Project wili be one of the first major developments in the RiverFront Redevelopment
Area, will draw over 1,000,000 to 1,500,000 visitors to the City, and will have a significant employment
impact.
3. A Memorandum of Understanding, between the SMM and the City, the form of which has
been submitted to the City Council, has been prepared which sets forth, among other things, the
obligation of SMM to construct the Project and the contribu6on to be made by the City to the Project.
RESOLVED:
1. The City Council hereby approves and authorizes the Mayor, Director, Deputment of
Planning and Economic Development and Director, Department of Finance and Management Services to
execute the Memorandum of Understanding in substantially the form submitted. In the absence of the
Mayor, Director, Department of Planning and Economic Development and Director, Department of
Finance and Management Services, the Memorandum of Understanding may be executed by and any
other appropriate officers.
31 ����
32 _ 2. The staff is authorized to proceed with the preparation of a final Development Agreement
33 between the SMM and the City, the terms of wluch will be consistent with but which will supersede the
34 Memorandum of Understanding within 60 days after adoption of this resolution.
xequested by Department of:
Adopted by Council: Date
Adoption Certified by Council�cretary
By:
Approved by yor: Date $ � �J'�
By: �, f/
Plannina & Economic Development
�-'
qs���
OEP T UN 1 � , OATE lNl IAT D � v� 3 2 9 3 4
��. � � s GREEN SHEET _
INI E INRIAVDATE
C9NT 5&� DEPpqTMENTDIRE R O CRYCOUNqL
� ASSIGN diYATTOFNEY �CI7YCLER
MUST E ON COUNGIL AGENDA (DATE) UYBEfl FOR ❑ BUDGEf OIRECTOR � FlN. & RVICES DIR.
qOUfING
O�� O MAYOH (OR ASSISTANT)
TOTAL # OF SIGNATURE PAGES (CLIP ALL IACASIONS FpR SIGNATIfRE)
QUES7ED: � � ��� �/' Ol
,�? `'�'� n �h �;.�� � (�n� f���
� -�'��e ��<:e�.� ►�41�,�w✓vt Tcv (�j;�p �, .
IU
RECqMMENDA7loNS: npprove (n) m Rejen (a) pEpSONAL SERVICE CONTpACTS MUST ANSWER THE FOLLOWING �UESTIONS:
_ PLANNING COMMISSION _ CIVIL SEflVICE COMMISSION 1. Has this peruNfirm ever worketl under a contract for this aeparlment? �
_ GB COMMfTTEE _ YES "NO
— �� F 2. Ha5 this personrtrm ever been a city employee?
— YES NO
_ DfSTRICT COUpT _ 3. Does this perso�rm possess a sklll not no�matl
y possessed by any current crry employee?
SUPPORTSWXICHCO11NCiLOBJECTIVET YES NO
Expla{n ai{ yes answen on saparate shaet and attaoh to green sheet
INITIATING PROBLE ISSUE. PORNNITY (Who. Whet, When, Whe , Why): � . ./') /
f�'��� - � - o ,� �'. ✓�t �. P
t�, � a�z� 3 aca �� ; c;.� 7aa c�, �t r
� U
��
ADVANTAGES IF APPROVED:
�x�„/L `� � d�'J /YY'l E �"�- ' f° l"� ��-
leisi� -(-a� (.S rh.+��., -�cm ao��o�
DISADVANTAGES IF APPf30VED.
9�
od�i� �. � ���J
DISADVANTAGES IF NOT APPROVED:
TOTAL AMOUNT OF TRANSACTION $ � COS7lREVENUE BU�GE7Ep (CIRCLE ONE) YES NO
FUNDI{dG SOUNCE ACTIV{TY NUMBER
FINANCIAL INGORMATION: (EXPLAIN)
�SGoS�
�T
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE SCIENCE MUSEUM OF MINNESOTA AND THE CI'I`I' OF SAINT PAUL
'This Memorandum of Understanding (the "Agreement") is made by and between
the Science Museum of Minnesota, a Minnesota non-profit carporation ("SMM") and the
City of Saint Paul (the "City"), as of this day of , 1995.
'The purpose of this Agreement is to formalize the understandings between SMM
and the City (collectively, the "Parties") in connection with the construction of certain
public improvements described in Section 2D hereof (the "Upper Ianding Improve-
ments") and certain private improvements described in Section 3A through F hereof (the
"SMM Improvements"). The Upper Ianding Improvements and the SMM Improvements
are hereinafter collectively referred to as the "Project". The Project is to be constructed
within the area outlined on F�chibit B attached hereto (the "Development Area"), which
Development Area is in the Seven Corners Renewal Area, the Riverfront
Redevelopment Area, and Community Development District 17. The terms of this
agreement will be consistent with but superseded by a final development agreement
described in Section 20 hereof (the "Development Agreement").
The Parties mutually agree to the foilowing terms, conditions and undertakings:
SECTION 1
FINDINGS
The Parties have made the following findings in connection with the Project.
A. Prioritv Pro,�ect. The Parties recognize that SMM's program is Minnesota's most
popular indoor year-round cultural center attraction, and has regional importance
to the State, the City of Saint Paul, and the surrounding community. (See Exhibit
A-1 and A-2)
B. Current Campus Conditions. SMM's program is currently located in two buildings
at Wabasha and Exchange in Downtown Saint Paul. SMM currently serves more
than 800,000 people per year in buildings designed to seroe 500,000. Over 150,000
children annually visit in schoo] trips from every county in the State of Minnesota.
At peak times, pubiic spaces are severely overcrowded. Any expansion at the
cunent site raises the following issues:
28]11�.8
, r �
9s GO`f
�����
1. Costly renovation and inadequate room to grow because of extraordinary
relocation cost of neighbors;
2. Insufficient student drop-off space;
3. Second oldest Omnitheater in the world;
4. Risks to museum collection due to fire suppression, moisture and humidity
control, control and overcrowding problems;
5. Fxcess costs associated with being closed for two years if expansion
occuned at current location; and
6. Physical restrictions which prevent programming to incorporate the
Mississippi River.
C. Future Campus. Pauons and Employment. Based on the limitations of the
current facility and SMM's need to eacpand, SMM has spent significant time in the
years 1992 through 1994, in defining its program and space needs for a faciliry to
bring SMM into the 21st century. This pianning has resulted in a Long Range
Strategic Development Plan for a new SMM campus that includes site location,
expansion of museum facilities, increased visitorship, additional administrative
space, increased parking capacity, improved visitor access, and innovative
programming that involve the Mississippi River.
Based on the Long Range Strategic Development Plan, it is projected that by
2005, the future SMM campus will include or accommodate (a) 1,500,000 patrons
a year, (b) 500 employees (full time equivalents), (c} 300,000 sGuare feet of place
for visitors, and (d) a 700 car parking ramp. E�ibit A-2 attached hereto contains
additional deta3ls of the expansion project.
D. Public Benefits of SMM to the Communitv. The SMM Improvements would
provide the following benefits to the City of Saint Paul and the surrounding
community:
L Major Cata3vst for Riverfront Develo�ment. The SMM Improvements
would be the first major project below the bluff of the Mississippi River
and would provide public access to the Mississippi River from the Rice
Park area.
2. Magnet for Tourist and Local Visitors. As the leading center for informal
science education in the region, the SMM Improvements will draw
1,500,000 visitors and another 500,000 through regionai outreach programs.
3. Re�ional Impact. A study commissioned by SMM in 1944 indicated an
annual impact of $106.5 million and 2253 jobs in terms of spin-off for the
City and surrounding community. 'This is a significant increase from the
ze�n�.s 2
�T
current $55.4 million impact and 1,1�1 job impact currently provided by
SMM operations.
4. Major Emplo r�er. With S00 full time jobs by grand opening in 1999, SMM
will be in the top one-half of one percent of downtown employers.
E. Reuse of Existing Cam u�s. The Parties recognize that the construction of the
SMM Improvements will result in the need to address the reuse of SMM's existing
campus as addressed in more detail in Section 5 hereof.
SECTION 2
CTI'Y UNDERTAKINGS
In addition to the other undertakings of the Ciry set forth elsewhere in this Agreement,
the City agrees to undertake the following activities as set forth in this Section 2.
A. Land Assembly, Demolition and Relocation. The land descxibed in Exhibit C-1 is
hereinafter collectively referred to as the "Land". The City wii] acquire control of
that portion of the Land identified as Parcels 1, 2 and 4 on Exhibit G1 by
December 31, 1995. Unless the Parties mutually agree to an earlier date, the City
wi11 acquire control of that portion of the Iand identified as Parcel 3 on E�ibit
C-1 no later than September 1, 1997. The City shall have Parcel 1 cleared not
later than October 1, 1496, and Parce] 3 cleared not ]ater than March l, 1998.
Control of the Iand shal] be evidenced, at a minimum, by option or purchase
agreements which give the City the unconditional right to acquire the ]and.
The acquisition, demolition and relocation costs, excluding any environmental
clean up costs which are addressed in 5ection 6 hereof, for Parcels 1, 2 and 3 shall
be paid by the City. The costs of acquisition, demolition and relocation costs for
Parcel 4, excluding any environmental cleanup costs which are addressed in
Section 6 hereof, shall be paid equa]ly by the City and SMM. The City's share of
the costs of acquisition, demolition and relocation, exciuding any environmental
clean-up costs, is estimated to be . SMM agrees that it will use all
resources reasonably available to it to enable the Iand to be acquired at the
lowest possibie cost.
B. I.ease. A portion of the Land mutuaily acceptable to the City and SMM and
sufficient to satisfy the requirements for the State Grants (as hereinafter defined)
will be leased by the City to SMM. The lease between the City and SMM (the
"Lease") will be executed prior to commencement of construction of the SMM
Improvements.
zs,n, e 3
�
,
� � a
The Lease will include, among other things, the following provisions:
�
c. Payment of Taxes and Assessment, if any by SMM
d. Payment of Utilities by SMM
e. Condiuons relating to State Grants
f. Sale of Premise
C.
Q
8•
h.
i.
J•
k.
I.
m.
Rent - $100 per year
Term/Renewal - Original Term of 20 years and options for SMM to
renew for 3 additional ten year terms
Construction of Improvements and Repairs
Insurance
Indemnification
Ownership of the Improvements at end of the L.ease
Default
Remedies
Arbitration
Citv Contribution. In return for SMM's agreement to undertake the Project, the
City agrees to make a contribution to the Project of (i) $10,500,00Q (less the
cleanup costs paid by the City pursuant to Section 6, clause 2 hereof�, plus (ii) the
City's portion of the land assembly costs set forth in Section 2A hereof, plus (iii)
the portion of the environmental clean up costs to be paid by the City pursuant to
Section 6 hereof, and plus (iv) the City's portion of the costs of the East Skyway
Link as described in Section 22 hereof (collective]y, the "City Contribution"), all
upon the terms and conditions set forth in this Agreement.
Upper I.andine Improvements. The following is a description of the Upper
Landing Improvements.
1. Traffic Flow and Pedestrian Crossine. Improvements set forth on E�ibit
E-2 attached hereto to ensure smooth and safe traffic flow for visitors to
the SMM Improvements and Civic Center, service vehic]e access routes
through the Development Area, and traffic controls at the Kellogg/West
Seventh/Eagle/Exchange intersections.
2. New Mississippi River Pedestrian Connection. Improvements to link the
pedestrian access from downtown along Keliogg to the Mississippi River.
This integrated pedestrian connection system will be handicapped
accessible and allow pedestrian and visitor traffic over railroads and
roadways through the Development Area.
zsnn.s 4
�
� '
9 = k- �
3. East Skyway Link to Civic Center. Subject to Section 22 hereof, an all
weather enclosed skyway to connect the Museum to the Civic Center.
4. Utility Relocation. Relocate major utilities in the Development Area for
safety of service and maintenance into the future, except for the NSP
overhead lines which are further described in Section 15 hereof.
The Parties agree that it is in their interest and the public interest to design and
construct the Upper I,anding Improvements in the most cost efficient manner in
order to maximize the use of the available funds for Museum and e�ibit
development in order to attract the maximum number of visitors to the SMM
Improvements. In addition, because of the construction interdependencies
between the Upper Ianding Improvements and SMM Improvements, and the
rapid design and construction schedule, the City agrees that SMM will act as agent
for the City in the design and construction of certain of the Upper L.anding
Improvements. 'The final determination of design and construction responsibilities
wil] be made before execution of the Development Agreement. As agent for the
City, SMM will comply with the requirements in Section 21 hereof.
The City shall designate an acceptable project manager from the Degartment of
Public Works to work with SMM to monitor the design and construction of the
Upper Landing Improvements. SMM shall have the right to approve the
preliminary pians for any Upper I.anding Improvements for which it is not the
City's agent. 'The City will design and build such portion of the Upper I.anding
Improvements for which SMM is not the City's agent on]y to meet, but not
exceed, the Ciry's design standards, unless the Parties otherwise agree, or the
additional costs to be incurred by designing such portion of the Upper Landing
Improvements above design standards are approved in a Capital Improvement
Budget of the Ciry.
E. Release of City Contribution. The City Contribution described in Section 2C(ii)
and (iii) shal] be paid by the Ciry as the costs of land assembly and environmenta]
clean up are incurred, provided that no moneys shall be released until execution
of the Development Agreement.
The City Contribution described in Section 2(C)(i) and (iv) hereof shall be
released as foliows:
1. $506,000 will be released to SMM as and when needed to defray design
costs for the Project;
zanv.a 5
� ����'
2. $250,000 will be expended by the City to defray environmental cleanup
costs of the Land as and when needed subject to Section 6 hereof;
3. The remainder will be disbursed to SMM upon satisfaction (or waiver by
the City) of the following conditions:
a. The Parties have executed the Development Agreement referred to
in Section 20 hereof;
b. The Parties have approved schematic design for the Project, the City
has approved the construction drawings for the Upper Landing
Improvements for which SMM is not the Ciry's agent, SMM has
approved the construction drawings for the Upper Landing
Improvements for which SMM is the City's agent, the City has
reviewed construction drawings for the SMM Improvements;
c. SMM has received the 1994 and 1996 State Grants;
d. SMM has established a fully funded construction escrow which,
together with 1994 and 1996 State Grants and the City Contribution,
is sufficient to design and construct the Project;
e. SMM has satisfied all preconditions imposed by any and all
agreements for the release, to pay costs of the Project, of all of the
fully funded construction escrow for the Project;
f. The Parties have executed the I,ease described in Section 2(B)
hereof, the West Building Lease described in Section 3(K) hereof
and the Parking Agreement described in Section 3(B) hereof.
F. State Grants. The City will cooperate with SMM to secure the 1996 State Grant
as more fully set forth in Section 4 hereof, and will accept on behalf of SMM, the
1994 and 1996 State Grants.
G. Reuse of E�stinp SMM Campus. The City will cooperate with SMM to develop a
strategy to reuse the existing SMM campus as set forth in Section 5 hereof
H. Cit��tions for Financing. The City's Budget Director will develop a multi-year
finance plan to provide funds to finance the City Contribution. Sources to be
e�rplored include, but are not necessarily limited to, District Heating and Cooling
Franchise fees, CIB, MSA, BNT, RTC assets, Sales T�, Ta�c Increments, and area
wide user fees. The �nance plan will be presented to Ciry Council and/or HRA
before or concunently with the approval of this Agreement.
I. City as Issuer. As and when requested by SMM, the City will use its best efforts,
or will use its best efforts to cause the HRA to use its best efforts, to issue conduit
�uzs 6
i
i
! }� a
revenue bonds to finance a portion of SMM Improvements, in accordance with
City and HRA's established procedures.
SECTION 3
5MM UNDERTAKINGS
In addition to the other undertakings of SMM set forth elsewhere in this Agreement, and
subject to performance by the City of its undertakings under this Agreement and the
Development Agreement, SMM agrees to undertake the following activities as set forth
in this Section 3.
A. Museum Construction. SMM wili construct a new facility of not less than 300,000
gross square feet for use as a science museum (the "Museum"). Subject to Section
14 hereof, the construction of the Museum will commence on or before October
1, 1996, and shall be completed on or before December 31, 1949.
B. Parkin� Ramp. SMM will construct a 700 car ramp (the "SMM Ramp"). The
SMM Ramp is currently anticipated to be bui]t to the east of the existing Civic
Center parking ramp on the former county morgue site and adjacent properry.
The Parties agree that, because of the financial and operational consequences to
the existing Civic Center ramp and the planned underground Civic Center
F.xpansion ramp, SMM wil] agree in the I.ease, or a separate parking agreement
(the "Parking Agreement"), as set forth below:
l. Coordination. SMM will enter into an agreement for the term of the Lease
under which SMM will agree to operate the SMM Ramp in a competitive
manner, and to coordinate the hours of operation of the SMM Ramp with
the C`ivic Center ramps.
2. Weekdav Parkine. During the weekday, sub}ect to SMM needs, SMM will
make the SMM Ramp available for public parking.
3. Evenine and Weekend Parking. During weekends and evenings, subject to
SMM needs, the SMM Ramp will be avai]able for Civic Center and/or Rice
Park area visitors.
C. Science Parks. Subject to Section 14 hereof, and subject to the City completing
Shepard Road as described in Section 7 hereof, SMM will substantially complete,
by December 31, 2000, a four season park and p]azas, (the "Science Parks") to be
located both adjacent to the Museum and south of Railroad tracks and rebuilt
Shepard Road near the Mississippi River.
�in.e 7
9s �e�
�� ��
D. Landsca�ing and Utilities. SMM will landscape and screen the SMM
Improvements sufficiently to buffer raiiroads and edges of the site. SMM will
relocate the utilities and undertake soil correction (e.g. pilings) necessary for
construcuon of SMM Improvements; provided that environmental cleanup will be
governed by Section 6 below.
E.
F
G.
improvements to the Civic Center, through the Development Area to Eagle and
east(west route to District Heating and Ramsey County offices.
Access. SMM will maintain service access, during construction of the
Si a e. SMM will erect a sign announcing the Science Museum facility at the
corner of Kellogg and Eagle.
Estimated Costs. The estimated costs of the SMM Improvements set forth in
paragraphs A through F hereof are as follows:
E�roenses
Construction costs, inciuding
contingency; project management;
furniture, fixtures and equipment;
and renovation of leased space
Architectural and engineering fees
Program-related costs, including indoor
elrhibits, Science Parks, Imax/Omnitheater
equipment
Miscellaneous project costs (fundraising,
marketing, financing, moving, etc.)
Total
H.
Estimated Sources
Range in millions
$43.5 to 50.0
$4.5 to 5.0
$15.0 to 18.0
$4.5 to 500
$67.5 to 78 million
Tentative Funding Plan (excludes $10.5 million commitment from City
• Pubiic Funds
State of Minnesota
Federa] agencies
Subtotal
$31.5 to 35 million
$2 to 3 million
$33.5 to $38 million
aa,in.s 8
i �
�' � '
- Private Funds
L.ocal sources
Regional and national sources
Subtotal
TOTAL
$32 to 37 million
$2 to 3 million
$34 Yo $40 million
$67.5 to $78 million
I. Project Costs. SMM will pay for all costs of the Project which exceed the City
Contribution.
Ca�ital. Operating and Maintenance Cost. SMM will pay for al] capital, operating
and maintenance expenses of the property leased to SMM under the Lease during
the entire term of the Lease, except for security costs associated with a new
Mississippi River Pedestrian Connection, which will be negotiated as part of the
Development Agreement.
K. Repayment of Portion of City Contribution by SMM. In recognition of limited
local resources, SMM's desire for a long term mutually beneficial relationship and
the fact that the City holds title to the West Building, SMM agrees to repay a
portion of the City Contribution by entering into a financing lease pursuant to
which the Gity will ]ease the West Building to SMM (the "West Building Lease")
to replace the existing Lease dated July 15, 1984, betcveen the Parties. The West
Building Lease will include terms commonly included in financing leases, including
but not limited to, the following:
1. Term - 20 years.
2. Rent - Annually in
or 10%a of the gros
arrears in an amount equal to the greater of $250,000
s revenues derived by SMM from the West Building
during the preceding calendar year, including any rent
received by SMM
pursuant to any subiease.
3. Pavment of Ta�ces, if an�, Insurance and Utilities - by SMM.
4. SMM Purchase Option - At any time, upon payment of any amount equal
to the present value of the rent for the remaining term of the lease, based
on $250,000 per year, discounted at the applicable treasury bond rate.
5. Default - Inciudes, but not limited to, failure to pay rent after 60 days
written notice.
6. Remedies - Include termination of I,ease, repossession of the leased
premises by the City, and any other remedies mutually agreed upon by the
Parties.
7. Non-recourse Obli�ation of SMM.
7snvs
9��0�
�����
L. State Grant SMM will use its best efforts to secure the State Grants as more
fiilly set forth in Seetion 4 hereof.
M. Reuse of F�stin�SMM Campus. SMM will develop a strategy to reuse the
existing SMIv1 campus as set forth in Section 5 hereof.
N. Reimbursement to Citv. If the Development Agreement is terminated, SMM
agrees to reimburse the City up to $500,000 of the City Contribution which has
been disbursed to SMM for design costs of the Project.
O. Promotion of Citv. Prior to execution of the Development Agreement, SMM will
provide the City a list of its suggestions on who it can assist in the promotion of
the City and implementation strategies therefor.
SECTION 4
STATE GRANTS
A. Descri tion. The Parties agree to work together to obtain two grants for the
Project from the State of Minnesota in the total range of 32 to 35 million (the
"State Grants"), on terms mutually acceptable to the Parties. The State Grants
will include the following:
i. 1994 State Grant -$1,000,000. SMM has secured a 1994 State Grant of
$1,000,000 for costs associated with p]anning the Project. The Parties will
jointly work to satisfy the terms for the release of those funds for the
Project.
2. 1996 State Grant The Panies will work to secure a State Grant in the
range of 31 to 34 million for capita] costs of the Project, and to assure that
the proceeds of the 1996 State Grant will be available for distribution by
August 31, 1996.
B. Main Points of the 1996 State Grant. The Parties anticipate that the State Grant
will address the following main points:
1. Use of Proceeds
2. Operation of Property
3. Acknowledgement of State Bond Financed Property
4. Preserve tax exempt status
5. SMM I.ease is for a governmental purpose
6. Oversight by City
7. Conditions on term and renewals of I.ease
zs�uzs 10
�Gof
:s���,��
8. Default Conditions
9. SMM during Lease will pay all costs of operations and maintenance
10. Approval of I.ease by the State
11. Conditions on Sale of Facility and Proceeds
12. Preconditions for Receipt of Grant (e.g. donation of a portion of existing
campus)
SECTION 5
REUSE OF EXISTING SMM CAMPUS
The parties agree to develop a joint strategy to reuse SMM's existing building at
Wabasha and Facchange Streets, commonly referred to as the East Building. The parties
agree that if a labor interpretive center is funded by the state legislature, and the
legisiature approves the 1996 State Grant for the Project, the parties will convey their
respective interests in the East Building to the State for $1.00, on the condition that it be
used primarily as a labor interpretive center. As provided in Section 3(K) hereof, SMM
intends to continue to lease the West Building from the City and to operate, among
other things, an Omnitheater program therein.
SECTION 6
ENVIRONMENTAL
The Parties agree that any costs associated with the clean up of any environmental
problems with the Project shall be paid as follows, provided that unless the Parties
otherwise mutually agree, no monies wili be disbursed until the execution of the
Development Agreement:
l. Any clean up costs up to and including $250,000 shall be paid by the City;
2. Any clean up costs in excess of $250,000 up to and including $500,000 shall
be paid by the City, but such payment shall reduce the City's obligation
dollar for dollar to contribute $10,500,000 for the Project;
3. Any clean up costs in excess of $SQ0,000 up to and including $625,000 shal]
be paid by the City; and
4. Any clean up costs in excess of $625,000 up to and including $750,000 shall
be paid by SMM.
Upon execution of the Development Agreement, the City shal] proceed with all necessary
actions to undertake any necessary environmental clean up as soon as practicable and
shall keep SMM advised of the progress and estimated costs.
asnv.a 11
���� �� ��G o�!
a`�°"� E, � .��'_"� e:
i11
In the event the City notifies SMM that the clean up costs are estimated by an outside
consuitant to exceed $750,000, unless a mutually agreeable solution is reached within 60
days, either of the Parties may, upon written notice to the other, terminate this
Agreement.
SECTION 7
RAILROADS AND SHEPARD ROAD
A. Railroads. The Parties recognize the benefit of opening up the Upper I.anding
and Lowertown to the Mississippi River by ]owering or removing the main railroad
tracks below the bluff. Hawever, the Parties understand that it is unlikely that
there are sufficient funds and multi party agreements in place in order to alter the
present location of the railroad lines through the Development Area in order to
meet the schedule for the construction of the Project. Tk�e Parties agree to
coordinate their efforts to work together with respect to issues related to the
raikoads.
B. Shepard Road. The City will complete the construction of Shepard Road through
the eastem edge of the Development Area by December 31, 1999.
SECTION 8
SCHEDULE AND TIMELINE
The Parties agree to the timeline set forth on Exhibit E attached hereto.
SECTION 9
DESIGN REVIEW
The Parties agree that SMM will design the 5MM Improvements and the Upper L.anding
Improvements for which it is the City's agent consistent with Design Principles set forth
on Fxhibit F attached hereto. The City shall review and approve the schematic design of
the SMM Improvements and the Uppet Ianding Improvements.
SECTION 10
PUBLIC ACCESSIBILITY
The Parties recognize the shared goals of increased visitor activity that the SMM
Improvements will bring, the importance of pedestrian access to the Mississippi River,
the unique design cha]lenges of the site, and the importance of visitor accessibility.
zsnizs 12
9����
�
SECTION il
PARKING MANAGEMEI�IT PLAN FOR AREA
The City agrees to prepare a parking and management plan for the vicinity of the
Project. The plan will be reviewed by SMM and the Neighbors descn'bed in Section 12.
SECTION 12
GOOD NEIGHBOR
A. Communication. The Parties agree to keep their neighbors informed of key
developments during design and construction of the Project. The neighbors
include the Civic Center, Fort Road Federation, West Publishing, Plastics Inc., the
Minnesota Club, Ordway, Saint Paul Public Library and, District Heating, Ramsey
County, Railroads, and sunounding business owners and residenis (the
"Neighbors").
B. i3pper I.andinq Pianning. The Parties will participate with the Neighbors in a
Riverfront Development Framework process scheduled to begin in Apri] 1995.
SECTION 13
EMINENT DOMAIN
If condemnation is necessary for the acquisition of any of the L.and, the Ciry or one of its
redevelopment agencies will exercise its powers of eminent domain, including quick take.
SECTION 14
ZONING/REGULATORY PERMITS
SMM will obtain all necessary zoning and regu]atory permits for the Project, excluding
any Upper Ianding Improvements for which SMM is not the agent of the Ciry. SMM
will pay for any and all costs of any Specia] Use Condition Permit, Indirect Source
Permit, EAW, or other environmental review required for the Project. Any undertaking
by SMM or the City to commence or complete the Project within a specified time period
may be modified to the e�ttent of unanticipated delays, inc]uding without ]imitation, delays
resulting from compliance with local regulatory activities, i.e., zoning changes, variances,
bui]ding permits; or additionally for the Parties resulting from federal and state
regulatory requirements.
�arin.s 13
9S- 60�
����,� �
SECTION 15
MAJOR UTILITIES
The Parties recognize the following major utilities of NSP, Water Utility, and District
Heating and Cooling impact the successful outcome of this Project:
A. NSP. The Parties recognize that removing or relocating underground the existing
overhead high voltage lines through the Development Area is an important
priority but that the cost of relocation or removal is not included in the City's
contnbution under Section 2C hereof or in SMM's obligations under this
Agreement. Before construction of SMM Improvements, the Parties will strongly
encourage NSP to contribute to this priority Riverfront initiative by removing or
relocating underground Riverfront overhead high voltage lines through and near
the Project area at NSP's eacpense.
B. Saint Paul Water Utilitv. SMM will explore the possibility of including water
conservation as part of the museum programming.
C. District Heating and Cooling. SMM or its consultants will evaluate the costs and
benefits of using District Heating and District Cooling for the SMM
Improvements. The Parties understand District Energy is considering a
cogeneration expansion and are prepared to work with District Energy to have a
successful District Energy project which respects the riverfront and has reasonable
limits to the storage of fuels on site.
SECTION 16
COOPERATION BETWEEN CITY, SMM AND PROJECT LENDERS
The Parties agree to cooperate and provide, in a timely fashion, any information
requested by lenders for the Project. The Parties will work together to amend the
existing state legislation to allow SMM to more easily secure private financing for the
SMM Improvements. The City agrees, to the extent permitted by law, and if necessary
to allow SMM to secure private financing for the SMM Improvements, to join with SMM
as a co-mortgagor in any mortgage granted on the property subject to the L,ease and to
subordinate its interest in the Lease to such mortgage, subject to such conditions as to
use as the City may determine.
SECTION 17
EXECUTION OF PLATS/PETITIONS
The Parties agree to cooperate in order to accommodate the recording of all plats, lot
spiits and street and alley vacations for the Project.
�nza 14
q.s.� ���� �:� :��
� ��
��
G
SECTION 18
TERMINATION OF PROJECT, PERFORMANCE DEFAULTS
The Parties agree to complete all their respective undertakings for the Project set forth
in this Agreement by December 31, 1999, except for construction of the Science Park by
SMM.
The Parties agree that the Project cannot proceed without the 1996 State Grants. Unless
the Parties can reach a mutually agreeable solution within 60 days, either of the Parties
may, upon prior written notice to the other, terminate this Agreement or the
Development Agreement, if (i) the 1996 State Grant has not been approved by the time
the 1996 State Capital Budget is adopted, (ii) if the environmental clean up costs exceed
$750,000, as provided in Section 6 hereof, or (iii) if it becomes evident to both Parties
that the preconditions to the release of the portion of the City Contribution under
Section 2,E.3 hereof can not be met.
SECTION 19
RESPONSIBILITY FOR FEES
SMM agrees to pay for the typica] City and HRA fees associated with the Project
including:
A. Normal City fees associated with the planning and construction of the
Project.
B, Issuer fees associated with Revenue Bonds issued on behalf of SMM.
City agrees not to charge an administrative fee for acceptance of 1994 or 1996 State
Grants.
The Parties shall pay for their respective lega] costs for the preparation of this
Agreement and Develapment Agreement.
After the grand opening af the Museum, shou]d the Parties decide to cause underground
relocation of the NSP overhead wires referred to in Section 15 hereof, any costs with
respect thereto which are properly allocable to costs within the Development Area shall
be paid by SMM and any costs which are properly allocabie to costs outside the
Development Area shall be the responsibiliry of the City.
zs�m.e 15
9�=�0�
� � �.. � s_�,
SECI'ION 20 �' �: .;, x°-��, � ,.
DEVELOPMENT AGREEMENT
HRA and SMM will use their best efforts to enter into a fina] development agreement
(the "Development Agreement") within 60 days after the last governing body has
approved this Agreement. The terms of the Development Agreemeni will supersede this
Agreement but will be consistent with the terms hereof, unless mutuaily agreed to
otherwise by the parties.
SECI'ION 21
COMPLIANCE
SMM and its contractors shall, to the eactent applicable, comply with all state and local
laws and policies with resgect to construction of the Project, including prevailing wage
standards, affirmative action, public art ordinance, and targeted business programs,
including with respect to the Upper Ianding Improvements for which SMM acts as agent
for the City, appiicable competitive bidding laws.
SECTION 22
EAST SKYWAY LINK
The City agrees that, prior to execution of the Development Agreement, it will notify
SMM whether the City will connect the Civic Center to the downtown skyway system. If
the City notifies SMM that such connection will be made, the Parties agree that the cost
of a skyway to connect the Museum to the Civic Center described in Section 2(D)(3)
hereof (the 'Bast Skyway Link") shall constitute an "Upper Ianding Improvement" for all
purposes of this Agreement (except that the City contribution in clause (i) of 2C hereof
shall be increased by $50�,0�0 to $11,000,000. Tn the event the City notifies SMM that it
does not intend to connect the Civic Center to the downtown skyway system, the East
Skyway Link shall be de]eted in the Development Agreement as part of the Upper
I.anding Improvements and the Project.
SECTION 23
APPROVALS
This Agreement is subject to the approvai of the City Council and/or HRA, their
respective legal counsel, the Board of Directors of SMM, and its legal counsel, and the
execution of mutually acceptable legal documents, including the Development Agreement
referenced in Section 20 hereof. Each of the parties agrees to proceed diligently and in
good faith toward executian of a legally binding Development Agreement, but neither of
the Parties shal] be liable to the other by reason of an actual or alieged breach of this
Agreement, except to the extent and as otherwise expressly stated herein.
zsnv.s 16
9��0�
�� n �� ,�
���.����
�
IN WITNESS WHEREOF, the Parties have executed this Agreement as of this
day of , 1995.
�
SCIENCE MUSEUM OF MINNESOTA
B
Its
Approved as to form: CITY OF SAINT PAUL
:
Assistant City Attorney
:
Its Mayor
Its Director of Planning and
Economic Development
Its Director, Department of Finance
and Management Services
zsnv.s 17
9s�a�
EXHIBIT A-1
EXHIBTT A-2
EXHIBIT B
EXHIBIT Gl
EXHIBTT G2
EXHIBTT D
EXHIBIT E
EXHIBIT F
,�
- Science Museum Background Information
� . "'"" ,n, —4 e;.p
aY� �
v .../' � _. � ...w ��
- Public Benefits of the Science Museum Expansion
- Map of the Development Area
- Land Assembly List
- Area Parcel Map
- Traffic F1ow Improvements
- Timeline - 1995 to 2004
- Design Principles
axnn.s
9s=�d �'
EXHIBIT G 1 ��° ;T . _ � < � .
DESCRIPTION OF THE LAND
Acquisition for SMM Project
Farcei i. Former Ramsey County Morgue
Parcel 2. West
Parcel3. Plastics
Possible Acquisition for Upper Landing Imnrovements
Parcel 4. Eagie/F�change/Kellogg area for right of way for Eagle/Exchange Street
Improvements
a. Robert Walsh (former Rehab Center land) - Partial
b. W3W Properties
a Wilder Foundation
1%7117.8
�� �d�
EXHIBIT F
DESIGN PRINCIPLES �'��
�� �� �
ffil1,,.8
CITY OF SAINT PAUL
Nomr Co[eman, Ma}�or
June 28, 1995
TO: Councilmember Dave Thuna
Councilmember Jerry Blakey
Councilmember Mike Hams
Councilmember Bobbi Megard
Councilmember Janice Rettman
Councilmember Marie Grimm
Councilmember Dino Guerin
FROM:
SUBJECT:
390 Ciry Ha11
IS West Ke11og� Badecard
Saint Pau1, MN 5�102
��
Pamela Wheelock j���
Deputy Mayor J � '
Financing Options �or Committed and Proposed Projects
�S -�o
� ao
Telephone: 612-266-8570
Facsimile: 612-266-8.i! 3
Tlus memorandum is in response to requests from Council to provide options for financing various approved or
proposed projects. Attachetl you will find several options for tbe financing of the Science Museum, Wabasha
Bridge, and Shepard Road.
These options rely on both "cash-on-hand" and financing through the issuance of bonds. Bonding proposals �Omore
both the issuance of general obligation bonds and riverfront tax increment bonds. Certainly, m�Y
combinations of available funds exists bu[ these are presented in order to highlight some of the policy and
operational issues that must be considered in determining appropriate financing for these pro]ects•
Before referring to the specific finaucing options, Pd like to draw your attention to Page 3 of t6e attachment,
entitled "Maximum Pocential Funding Sources". T6is comprises the "menu" of funding sources that were under
consideration for financing the projects and a few comments are in order about each of them.
District Heatina Fees: These district heatin� franchise fees aze a new source of revenue to tLe city and could be
used eitber to support debt service payments, or as a revenue source for genenl fnnd operations. The amounts
listed are projections based on current franchise fee rates and are inflated by 3% annually beginnin� in 1997.
Nei�hborhood Sales Tax: These estimates show no annual growth, but rather are the minimum amount ezpected
annually for investment in neighborhood projects. While none of the options recommend any finanoing from this
source, it is listed as a possible option for your considezation.
Culturat Sales Tax: Again, these estimated receipts are conservaGve in that Wey do not reflect the anticipated annual
growth in the receipts. Since the Science Museum is the laraest cultural capital project anticipated in the foreseeable
future, it is appropriate [o list this as a funding source. However, since the funding is not requued mmtil 1996, this
projec[ could be submitted to the Cultural Star Board for a recommendation back to the City about appropriate
funding levels. It should also be noted tLat the autbority to use future cultural sales tax proceeds to support debt
is unclear and that must be clarified with bond counsel before finalizing the financing.
�
qS_6o�1
Downtown Tax Increment Financing (TIF): Though it is not specifically addressed in the attachments, these
financing options assume that the Downtown Tff' would also fund the HRA's obligation for the reopening of the
Holiday Inn - as outlined in the proposal currently before the HRA. Thougfi the District remains in place un[il ihe
year 2008, is is unclear whethet proceeds can be used after tLe year 2001 to pay debt service on bonds issued befoie
tLe year 1990.
IIDACs Regavment RiverEront TIF: These are excess payments from District Heating(Distric[ Coolina that flow
through the Riverfront TIF through the year 2014.
Scattered Site T7F: T'hese are balances in other scattered site TIF districts that are not needed to meet existing
obligations in those districts. Redevelopment project area plan changes would need to accompany a decision to use
these funds for financing.
UDAG: UDAG balances on hand - also used as a fmancing source for PED staff. Funds for staffmg would be
available fot 1996, but may affect 1997 staffing levels.
CIB Available: These CIB funds were set aside in the 1494l45 CIB cycle for a program (BN'1� that had not yet
been developed. Since then, new funds have become available for neighborhood developmen[, including the
foliowing:
Enterprise Zone
EDI Grant
HUD Section 108 loans
CDBG allocation in
excess of budget
Federal Home Program
HOPE Pragzam
Sales Tax - Neigh.
Community Resources
Program
��� ���
��� ���
, � �1� ��1
��� ��►
��� ��t
. ���
t��
� ��� ���
•i ���
plus $3 M in tax credits
Fiscal Year 1994
Fiscal Year 1995
annually for 30 years
over two years
This recommendation does not impact the any cunent CIB recommendations for the 1996/97 cycle. Also, if the
proposed baseball stadium groceeds, the city's expected par[icipation is $700,000 for road and infrastructure
improvements financed with CIB funds. The remaining $12 to $13 aullion would be financed by private investment
and bonds supportetl by tbe revenue generated by the facility.
CDBG Available: This includes both unappropriated funds and funds that were set aside for the BNT prooram (see
notes above).
Annual CIB less Residential Street Pavine BSPI: This is the amount of CIB funds available on an annual basis
assuming a$12.5 million bond issue, and a 13 to 15 year residential street paving pxogram.
Annua] MSA: This $6.0 million repzesents the amount the city currently receives on an annual basis.
2
�-�o�(
Civic Center Reserve - Advance Refundin�: These funds will become available in 1996 as part of the advance
refunding previovsly approved by the Ci[y. This $500,000 is recommended as con[ingency fundin� in the event
that the east skyway behveen tLe Science Museum and the Civic Center is funded.
RTC Assets: Tlvs $2,900,000 is the anticipated amounY available from the RTC assets. It does not include The
anticipated final payment to the HRA of $1,100,000 in August, 1995 by JLT.
SMM Theatre Revenue: This, along wi[h the District Heating Franchise Fees, represents another new funding
source availabie to the City as part of the agreement with the Science Museum. The terms of the agreement include
the payment to the City of $2�0,000 a year, or 1090 of [he revenues from the OM1VI theatre in ttie west building,
whichever is greater. These receipts could be userl to finance debt, or as receipts to fund general operations.
Payment to the City begin the first year of operations for the new Science Museum.
PROJECT RECOMMENDATIONS:
A. Sheoard Road: Anticipated expendiNres in 1998 and 1999 are at a]evel that would require full utiliration of
available MSA dol]ars. If there are no state legislative changes before that time - such as the adoption of a
gas tvc to provide more funding for these infrastructure projects - staff recommend the consideration of
revenue bonding supported by MSA receipts. Tlvs change in practice may be necessary in recognition of the
drain on annual MSA funds that such a large project would generate - and it would allow the City to continue
funding other MSA projects in the same funding cycle.
B. Upper Landing Improvements and Wabasha Bridoe: These projects are considered together because some
bonding will be required as part of each financing pactcage. 1Lere are three financing optioas includerl to
highlight some of the combinations available [o the city to complete these projects. All three rely on "cash-on-
hand" and some me[hod of long-term financing. Options 1 and 2 assume bonding to our CIB limit and
designating funding sources for that portion in excess of our $12.5 million planning estimate.
PROJECT FINANCING OPTIONS - SUMMARY: It seems appropriate to include in the financing proposa] some
long-term financing. Both the Wabasha Bridge and Upper Landing Improvements will have a]ife span far
exceeding that of even the proposed bond issues. Today's St. Paul residents and taxpayers should not be expected
to make the full payments for these improvements that will benefit future residents and taxpayers. Naturally, the
disadvantage of debt is the cost of issuance and interest. Before fmaIizing the financing for these grojects, the City
should carefully consider the policy issues raised by these proposals.
The financing options also attempt [o recognize that the upper landing improvements reflect a project that benefits
several of our neighborhoods, that it is also a culmnl facility, that the expenditures are both for public
improvements such as streets, liahting, utility relocation, but also for economic development purposes. Therefore,
there is a mix of financing proposed to reflect the variecl naNre of this project and its benefits.
Also, by increasing tbe size of the CIB bond issue, or by issuing revenue boads, none of the projects undet
consideration by the CIB CommitYee should be jeopardized since they ralied on the $12.5 million planning estimate.
Bonding for the Wabasha Bridge and the Upper I.andin� Improvemen[s would be in addition to our regular CIB
bonding.
3
. RS - ���f
OPTION 1- CIB BONDS WITH MLTI,TIPLE F'UNDING SOURCES
Cost
Upper Ianding Improvements
Cash-on-hand
Long-term financing
$14,500,000
Wabasha Bridge
Cash-on-hand
Long-tetm financing
Fiaancing
512,808,000
$ 1,692,000
$ 4,203,000
$ 2,036,000
Bonding summary for OPTION 1-$3,728,000 in ten year CIB bonds financed with District Heating Franchise
Fees, Cultural Sa1es Tax, Downtown TIF, UDAG repayments, and Science Museum of Minnesota (SMM) Theatre
Revenue.
OPTION Z- CIB BONDS FINANCED WTTH DISTRICT HEATING FRANCHISE FEES AND SD�14
Tf�ATRE REVENUE
Cost
Upper Landing Improvements
Cash-on-hand
I.ong-term financing
$14,SOO,Q00
Wabasha Bridge
Cash-on-hand
Long-term fmancing
Fl[I3i1C1Ra
$12,808,000
$ 1,692,000
$ 4,203,000
$ 2,036,000
Bonding summary for OPTION 1- $3,728,000 in ten year CIB bonds financed with District Heating Franchise Fees
and Science Museum of Minnesota (SMM) T'heatre Revenue.
OPTION 3- REVENUE BONAS (RIVERFRONI' TIF�
Cost
Upper Ianding Improvements
Cash-on-hand
I.OIIa IEI$ f1II2pC1Ilg
$ 6,239,000
$ 6,239,000
$14,500,000
4
Financing
$ 8,808,000
$ 9p�8-8B19" .S�
�S-��
Wabasha Bridge
Cash-on-hand
Long-term financing
$ 4,203,000
$ 2,036,000
Bonding summary for OPTION 3-$7,728,000 in 17 year Rivezfront TIF Revenue bonds fmanced with Cultural
Sales Tax, Downtown TIF UDAG repaymenks, and SMM Theatre Revenue.
I,everase of non-citv funds bV nroiects: Not only aze these projects an investment by the City in out community,
it is important to note the other public or private funds that are being leveraged by our participation.
A. Wabasba Bridge - Project includes the investment of $12.4 million in fuleral funds, and $3.2 million in state
funds.
B. Science Museum of Mianesota - It is anticipated that the City investment would leverage $30 to $35 million
in state funds, and another $30 to $50 million in private funding.
C. Shepard Road - Between the Shepard and Wamer Road projects, almost $22 million in fecleral funds will have
been spent in completing the projects.
Finally, for your consideration, we have included an analysis of the economic impact of [he Science Museum of
Minnesota project for your information. This analysis was cotnmissionetl by the City with Bugbee, Anton &
Associates. As you will see, the impact of this project on the community is aQ estimafed increase in economic
activity by roughly $19 million per year.
CONCLUSION: It is my hope that t}us information gives you wfficient confidence that the financing required as
part of the City's agreement with the Science Museum can be reasonably provided through a combination of
appropriate funding sources. These are put fonvard for informational purposes at this time, and any final decisions
can be made at a later date - perhaps in conjunction with the CIB budget.
Please let me know if you have any additional questions.
$ 6,239,000
cc: Mayor Coleman, Joe Reid, Stacy Becker, Bemie Bullert, Joe Reid, Iarry Buegler, Bob Geurs, Bmce
Engelbrekt, Tom Cran, District Council Presidents, Lois West (Cultural STAR Boazd), Steve Wellington
(STAIi Board), 7im Peterson, Teresa Stems, 7oe O'Neill, Chris Hanson, Thom Gmeinder (CIB Committee),
Greg Blees
�
H
U
W �
� Z
� U
a Z
Z
H
Z LL
W Z
� Q
a
O Z
lJJ �
Z
W a
0 �
F �
Z u�i
O a
� o
�
� a
W
�
�
0 0 0 0
d 0 0 0 0
o 0 0 0
`.g o ° o c�i ° o n
1-� O � N O t�
< � � �
a M
m
Oi
�
�
rn
0 0
0 0
° o ° o
m �
° o o
N �
h
� v
0 0
° o_ ° o_
° o ° v
� �
- a:� o o��, .
v . cy
m o
O �
� �
�:
a ,-
�
C
a
C
�
Q.
�
N
W
�
L
m
m
�
�
m
t
�
�
3
�
�'7
E
�
m
0
�
�
m
C
m
L
�
N
C
m
�
�
O
c
�
�
c
'v
c
m
�
�
m
a
a
�
0
0
0
0
0
0
co
O
0
0
0
0
0
co
0
0
0
0
0
c�
�
0
0
0
�
�
�
�
0
0
0
0
�
R
O
1--
m
C
.
C
R
C
li.
95
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
O O O O O N CO N O O O p� pj
O O O O O� tD (� N O O O � n ^
t"� � O O� V(O W O��
N N �- �� t0 N c'J uf
�
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
° o ° o
0 0
° o ° o
ri oi
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
° o o
° o ° o
0 0
ri ri
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
o ° o ° o
� o �
v
° o o ° o ° o ° o o ° o ° o ° o ° o 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 °
O �
O � O O � � �V W � � �
n
N c- �- N (V M
0 0 0 o a o 0 0 0 0 0 0 0 0 0 0 0 0 0
� o
0 0
o �
� �
.�o 0 0.0-0 0.0�0 0 o�o'a-a;o<�o-o�o:a.-.-
- - :O b - O:O:O O' -
'- -.-0 O -.Q OEQ.O...
a:� o.a:a�
m � o�..o�
� �.�o�
m _
�.:..._ _
d �
�
j ^y N ` �'
Q� m� N Q y C
� � > .�.. L N C (p 4l (n
� C �.�. (n N Ul O N m y C �
� a a n a� C o W
U p a d m m d o� m o m U
c 'C :3 �m ��a � m � � .°- a o� w O
�o o? �:° :° �� � � y m � a =�
y o� cn U . U . v a U� m m m` a
Q m Q Q c� V m m d Q m Z
R ll u. l� p p c° ¢1 tn �n > �-. a� m:°- � i° O
f/� F- F- I- � U U U�� U K L� lL tn �� ID
s
0
0
0
0
0
0
co
0
0
0
0
0
0
�
0
0
0
0
0
M
�
0
0
O
�
W
�
�
0
0
0
0
�
�
R
O
F-
�
W
�
a
�
�
�
�
�
0
C
0
U
�
�
d
ol
U
3
m
d
U
�
�
N
O
>+
m
�
C
O
:+
3
a
.`
..
c
0
u
3
R
a c�
w 2
� U
14 Z
� Q
O �y
�.�. 0
U ¢
.... �
!q Z
z z
W W
� a
� N
� w
O �n
� O
Q. O
� a
V , a
Z
�
Z
J
�
w
a
a
�
0 0 0 0
y O � O O
O �
r o `° `°" `° a
L c7 O
a �
0
�
m
rn
0
0 0
o ° o
0 0
� o
h
o a
O O
0 0
o N
c� w
� �
° o ° o
0 0
0 0
0 0
N u�
: .o. o �
9 ..
N'
> _ _
o,-
Q
�
C
'o
s
m
n
�
U
� �
� m
E �
> o
o U
n �
� Y
T C
� m J
w c �
y � 3
Q -J Y
a � �
J � W
0
0
0
0
�
�
0
O
0
0
�
�
0
0
0
0
0
n
M
O
�
CA
C
.�
c
m
c
�
95-6p4
0 0 0 0 0 0 0 0 0 0 0 0 0
O O O O O O O O O O O O O
O O O O O O O O O O O O O
O O O O O < N tD W O O N O
O O O O O tn (p 1� p O � O
i� � O O W � O O uJ Q> (p tA
N N � � .-- ry r y�
�
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
0 0 0
0 0 0
� co 0
� N O
.- o �n
O O O p O O O O O O O O
O O O O O O O O O O O
0 0 0 0 0 0 0 0 0 0 0
O O O O O N N f") O N
c�i u�i � o � rn v w � m �
N .- c- N r
0 0 0 0 0 0 0 0 0 0 0 0
0
0
0
n
'� O O' 'O -: O. O O'� O -D� O.
N II
a
m � R �
R � `� ¢
m v > m � tn
� C � � N N � �
U o o w � m d fY V
c 't � �R 'm � v y O
� o ? c�i v � �R a�i N d
y ❑ d' (n Ur � v � f6 �
t� F- 1- F- � U U U � U � m
0
n
0
0
0
0
�
�
c-
O
O
0
O
�
.N
0
° o
0
0
ti
ri
m
a
c
0
v
L
�
A �
F d
�
3
0
�
c
¢
c
c
a
m
3
N
�
W
�
Q
a
�
rn
m
N
O
C
O
U
d
�
m
rn
v
�
m
d
U
�
�
N
j
T
N
�
C
O
.
�
C
�
U
�
a
C
.�
N
O
+.�+
U
�
C
d
�
d
>
�
Q
C
�
C
a
R
J
N
a
c
..�.
d
�
7
�
�
�
.�
C
16
C
�
R
C
. ai
O
Q.
�
C �
L
X
c N
l...
�
.-": O O h N b � � m Q n m W ` N o N 10 O
n>' O o � � �
- Q I'�' [7 O N N f0 P tl W [V N 1� f� 0 O� � C 0 [7 W
.. SC O O N C3 N N H � [V l7 t7 W P P Q � t� A 0 �
' L�.�"'. (O [O t0 fO fp (D fO f0 fD 0 (D !O ^
M (O (D !D 0 t0 O
m= o000000aa00000
� A �. o 0 0 0 0 o S o 0 0$ o o�
y t_T- v�j H � � � � � � O O O O o O
�.�: N N ry N N N N cV N [�`! N N N N
�
���� O � � � m O [� h O N �D O
���:�1: O O v m N � V b P O i[� � � N O C A C� W
.' G' 0 O N 1A d C W N N � l � C < P �
�:-O. O N (V lV N N C! O O � � � m (V P m m � �
I�' � lD fD (O (O t0 !O t0 W ' P b In
m �c fc m fo m m m m o �
__. m
0
`-.j '"?' o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
�_ o
m o 0
- _a. V -.m m o
�:a_ N rn
ri
_��,a o ° o a o 0 0 0 0 0 0 0 0 0 0 0 0 0 0
� o
>da h °
V �,�, v
e
'"`�' o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
� ._....._ o
m_= 4. o 0
� C N. o 0
mQ�i. o 0
� O
�
���a� °o 0 0 o a o 0 0 0 0 0 0 0 0 0 0 0 0 0
a+ v N °- o
m;_.K o 0
� �..� � o
!'QV V h
P
-m O O O O O O O O O O O O O O O O O O O
CS �: o
0
fl % � o
` Ua. °i �
r Q � m
� o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
RS �K (V O
� � �
y P �
Q P
_. o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o c
U'" o
"Q o
j d
I� a� o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o c
,`'..� �y. o
� F o
R.d O
N N N
" o 0 0 0 0 0 o a
Q� A` i� o 0 0 0 0 0�' o ° o ° o o ° o o ° o ° o o ° o c
m o 0 0 0 0 0 0 0 o d o o � o 0 0 o c
� y�. P Y P P Q < Q O Q C C V P � 0 N 6
fL�: K
�- ° o ° o o ° o ° o ° o o ° o 0 0 0 0 0 0 0 o c
L�p' O o O o O o 0
O O Y O o o O o o �
� N Cl l� Cl [7 f� �
'�_ ' O O O O O O O O O O O O
m�K .'a. o o o 0 0 0 o o o 0 0 ° o 0 0 ° o ° ° o
A 10 ° o ° � � n v �° h i i ° ° � � �
� r U O h 1� h 1� n 1� n 1� A n r F � I� r � n
'}�� O O O P O O O O O O � O O O O O O �
R � O O O O O O O 0
O O O O O O O O O O O p
d� O O O O O O O O O O O O O O O O O O
- q = O O O O O O O O O O O O O O O O O O
� .
Y1 K P < P C C Y O P P P Y P < P < C
� O O � N �
-W:� O O O ti P � �
C� M O O h l0 h � P b V O N W � m Y P < h
@ b O N H 0 Y W b CI O 0 h ¢l W �rj
l6 9
2�-1t: � � n n m m m m m a m o 0 0 ° w m o
_ � ._ � .- ._ .- �
�: (n t0 f� 0 O .- {y N
-_- q ¢ `1 W W Oa O O O � � O O p O p � ' �
�" V C� N N N N N N N N N (��! N ry
. r 9 J �: �i �: . , .
.... O) 0 N N N d d N 01 N O N N N N 01 1 W
�- (V (7 'Q N t0 1� 0 O+ O � e�- � � � � �
° o
�
0
0
N
0
0
�
O
O
N
a
0
n
O
O
O
W
v
�
95-604
m
m
n
n
m
m
m
n
n
N
m
n
u
m
e'e
O
m
C
R
m
N
R
U
�
o m
Q
� �
LL j
~ C
O
t '
>
K O
t
m a
o fL
y a 2
m
� y s
C O
O C
N
� C N
O 16 T
Z U �
O = 6
� R ` a
.= A c
d o
m � E
T d
O
d �' 0
� a
p � c
y � O
N > C
U 9 d
X N O
W � p
M
W
Q
a
m
m
O
�
z
z
LL
K
K
N
F
W
�
�
K
W
y
lt
0
�
h
�
�
0
�
Q
O
T
�
C
�
..�.
Q
�
0 �
� C
� �
�II =
a .a
L. d
• R �
� ��
wm
O w ,
� �
U N
� R
C t
d h
� �
d S
R
Q �
2 =
� 'a
� �
G V
'a _�
�
J
d
Q
Q
�
N
d
i
3
Q
N
d
Q.
7
�
N
a
c
Q
m
m
U
T
c
0
a
0
d
i
7
O
�
�
C
.
L.
�
C
tL
�
d
N
O
Q
O
a`
a. m o
0
�'�. o
a
i'a c. N
•, _ m..a: �
:.�m �
=%:�O'1� ° o ° o ° o ° o o° o 0 0 0 0 0
�-2�Q. m o o ° o ° - o ° o ° o_ ° o °o ° °
;;':�:a: o 0 0 ° o o °o o ° o 0 o m
-.'L7:Y. N v� �n �n in in u� i �° � i �
� m
n
:. m .-
�'��!�� ° o ° o ° o 0 0 0
:-R� m'. o 0 0 ° o_ o ° o
0 0
'.'J'��� N N N tV � � O
N N h
�:'._��QE O O O O O � O O O O O O
�_'' O O O O O tp � � O O p �
�':�'1--: N h h u� h N N N N N N �
. . � �
�
�..�: o 0 0 0 0 0 0 0 0 0 0 0
' o.
U a' o ° o
1� N. W O
� Q
N W
' - N
;��� O O O O O O O O O O O O
Z.C.': O
r o 0
' •m h °
I.L:_Q �q
� T�_" =' O O O O O O O O O O O O
� y; � o
0
N +E' O �
T � o
���_ o 0 0 0 0 0 0 0 0 0 0 0
0
�� � �
o. b �
•- b
��¢ o O O O O O O O O O O O
m= - o
O m. �n -
U � m
< � m
,__ Q o 0 0 0 0 0 0 0 0 0 0 0
Q1 tp N p
U m. � ci
-: G< `°
v
-- o 0 0 0 0 0 0 0 0 0 0 0
a ° o
n. ° o �
� � �
� �
��: O O O O O O O O O O p O p
� }!. p 0
v:« o 0
�— p o
� !A: N <
N
O O O O
0�'� O O O O O � � O O O O O
0 2 ° o 0 0 ° o � �° � � � � °
.� °
�::'� ° o o o o ° o ° o 0 0 0 0 0
0 0 0 0 0
'� h N t�V N � O
N O
th
O O O O
�'. �� O O O O O O O O O � O O
� s: � a o o o ° o o o ° o o ° °
�: o 0
� �
�� . � O O O O p p 0 '
�a O O O O O � � Q � � O
}@ O O O O O O O O � p O
� O
O
��� a m m m W O � � T h
m U °.' °.' �,' � o o ° o ° o o °
Y � . . , , N N N N N N
. m L N d d Y N N N N N
`- N M V' N �O 1� f0 Ol O
�
95 �
o ° o o
U� O 00
(O N�N�
� O f n
N �Itti
s m
ai a
c o '�
9 m 0
� V
O W �
m � �
a y � „
�
7 y J
� a a
m
� 7
�
0
�
P
n
rn
Oi
m
n
n
h
0
n
Y
W
"
O
R
m
u
T
m
N
U
a �
o �
N m
�
W '�
� �
LL Q
�
c
o F-
t J
W '
> E
� �
t Q
� �
o =
� � d
m a �
F a o
3 �
� m G
C O! N
� L T
2 � 6
O �
m m
E a ,�-_
o �
N � O
d � �
� U
T � �
(O p �
2
d 4 0
C j
� y
p E C
7 0
w � c
d �
N
W � 0
a �
rn
m
�
O
U
y
�
�
�
Q
O
�
�
W
C�
a
�
Q
�
.4
G
Y O � 07
V =
.. a
m =
a ,
_ �
�� �
� '�
wm
O ,,,
.w d
U `
�
N
C t
d �
d �
�
Q �
Q. �
� �
� "—�'
= U
a �
c
R
...�
L
�
c
a
�
N
d
�
�
d
w
�
v
�
�
m
m
U
N
e
0
Q.
�
N
�
L
�
0
�
�
C
U
c
R
�
LL
a
d
0
a
R 0
W
m= o
'.^ �
aS N
0 o r-
� �
--�: O.� o ° o 0 0 o o ° o 0 0 0 0
-�Z q, o 0 0 0 0 0 °a o 0 0 0 0
�>� O ° ° o ° o o ° o ° o ° o ° o o d ei
::.U'_t-_ N 'n �n n �n �n �n � � h � m
•- r
�-R�� o 0
' ° o o ° o o ° o 0
m. m ° o 0
_ N 1O IO 1O � h O
___b,' N N N N t� h
•��: J O O O O O O � O O p O O
.�___�Q: m O o O O O O O O O O O
":_'.0: � � O O ' O 1� h h h h y�j �
N � h N N N N N N c�j
� 0
�:,.��_ o 0 0 0 0 0 0 0 0 0 0 0
0
U w o o
OC Q m p
N p�
U ��2 0 O O O O O O
y, o 0 0 0 o a o
y � o o
m o
�ma � o
C a.. in
'_ Q.�' o O O O O p O O O O O O
:.� ( oi o°
W �' ^ p W
n
� O
r.' o � � � � p O o 0 0 0 0
�m � o
m V ' o �
'� �- o
'�_-��a� o 0 0 0 0 0 0 0 0 0 0 0
p1 �. o
fl � � o
v .> m
¢ � �
_ a o 0 0 0 0 0 0 0 0 0 0 0
m n °- o
N O
O q �p
� Q N
Q P
� o O O O O O O O O O O O
O
° � Q o
�' � �
� �
'_ m.`� o 0 0 0 0 0 0 0 0 0 0 0
� �.° o 0
V y' p O
O
y N . N Q
, 1L p O O O O p p N
0 0
' E,= o 0 0 0
aRm o 0
'ffa � °
O O O O O O O O O 9 O O
3 '2 L' Q O
OwY. o 0
� 'n o
� �
IOJ � O O O O O O O O p 0 �
�
V1 � �- °o
L1 m
' o 0 0 0 0
�� m' o ° o o o o o o p o �
7 2� �D �n h tq N � N N h �[J
N N N N N
2
� � rn rn rn m ° o o ` '�
m� U � m m rn �`1 M N N N N
�` � � • .
� W N N N N d N N N N N
< � � d h f0 l` [O T O
O
° o
n
0
O
N
�
m
O
�
c
�
w
�
�
�
r
�
�
�
0
m
a
O
m
0
Y
N
m
N
U
9 5'604,�
U O O O
d t0 N N�
� O !��(�
Nt-l7
a
ma
� a �c
a m`o
c
O m V
m d �
m � ° c
��
� N J
� a N
R 4
3�
<
O m
N af
W
A N
�
� �
,= a'
C L
O F,
1
N �
>
a o
s
� �
O � _
^ d N
� a «
c °�
°' o
c
� a' c
� v
O L T
� U R
p � n
m
E a c
o �_
rs �
y d o
v 1O E
E v T �
N O
� 4 W
N
� m ?
0 E _
� O O
H � C
U y y N N
X N O
W � Q
�
W
�
a
�
h
�
tD
y a y
?
Z
Z
�
�
N
W
O
7
m
N
�
w
h
�
Ci
U
N
a
a
a
m
U
�
o`
�
�XVa+.
�
.�i
�
w
�
�
C
Q �
U =
3 �
R �
a �°
w d
C �
• R �
V7 �C
w m
O
A N
.. y
� �
�
s ._
� �
m �
�
Q �
Q �
� 'a
p� 3
= U
'a �
�
R
J
d
Q
Q
�
w- p
0 0 U j J
$ � � o �
O N 0
a` o _ o �
o m o o e
o w o
N O N � b
n m
A 0
95
__�_Z Q: O O O O O O O O O O O O O O O O O O p
Q} m m 0 0 0 V m tl (O (D tO (O tG (O f0 [D O
�:: CtS' F A I� 1� 1� 1� 1� 1� 1� 1� m 1� I` A A A 1� �
'.U' 3'.' m'
N
N
O O O O G
���i:� � O O O � O o O � O O �
� � O O O O G O O O O O O O O
4 m O
E ': � O O � O p O O O O O O O
A:Y LV ry N (V N N N N N N N N' N ry
YC
h
'-� o 0 0 0 0 0 0 0 0 o c o 0 0 0 0
�-- 1 � o o ° o ° o ° o ° o ° o ° o °o 0 0 0 ° o 0 0 ° o
0 o c o o ° o 0 0 ° o ° o
' 3- ' o m m fO m n 'c �6 �c (u c5 fu �o c� ac lc c5 0
':�- m n r n H N b H N N N N N N h N n p�j
0
O
O O O O O O O O O D O O O O O O O O O
� O' � O
N �
SL' Q N 6�i
N
y O O O O O O O O O O O O O O O O O O O
C pw O
�.��_ o 0
�.m o 0
>' m 9 ti N
V �. ¢.
�� o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
�..:' o
'm »` m
�� s
-• o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
w' °
_m� �
`U o
���' e g o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
V.c o
R
U i d'
m g o 0 o a o 0 0 0 0 0 0 0 o a o 0 0
ma °
N
� q �
Q:
' O O O O O O O O O O O O O O O O O p
::-_: ¢
'. . �.
_ s� O O O O O O O O O O O O O O O O O O
mY
5�
G �.
N N
� ' -� Y� ° o ° o ° o a ° o ° o ° ° o ° o o ° o °o o a o 0 0 0
Tt= o 0 0 0 0 0 0 0 0 0 0 0 ° o ° o ° o � ° o
¢' �m` ° o o ° o ° o ° o o ° o 0 0 0 0 0 0 0 0 0 0 0
� m�� P P P Y P C P P < P P Y V P P Y Q
�C
° o 0 0 0 0 0 0 o a o 0 0 0 0 0 0 o c
e�.c' � o 0 0 0 0
;-�; $ c o 0 0 0
� E��� b N N N N
�... ' '
���_:�q O O O O O o 0 O O O O O o p O O O O O
N O O O O O O O p O O O O O O O O
q'Y 3 v��i � � � � � m � � � � n ' � �o `o �o `
V � � � �
:. �' O O O O p O O O O O O O O O O O O O
V..L e..
� v m_
]_�
. _
. N m t� m o � n n o �n m f� o .- '
� < m a ° o ° o °o 0 0 0 0 0
-- p_ V N N N N N ry N N N (V lV N N
�` N _
m m m u y m w m m m m m m m v m m y
-- �`+ o+ v v+ �o r m w o ci ri a m
�
�
0
s
° o
0
0
�
0
N
Y
0
O
° o
°
m
° o
N
0
N
N
G
O O
�' 000
0 f0 O�+ N
� Ob1�
NNI`
a
c a y
9 m �
O
m m m
y N C
� c�
u A
K A o.
��
m
0
�
N
a
n
a
N
m
n
n
P
N
m
u
N
a
O
0
A
s
U
d
m
�
0
q �
V i
m -
a
m �
� �
N •
O
O
C �
N �
o
1
0
d `
K [
�
<
a
N
b
m
0
�
Z
r
LL
�
�
F
�
N
h
LL
�
0
L
D
m
�
O
>
m
E
95
d
�
�
m
�
�
w
�
R
t
N
R
a
R
�
a0000000
d o 0 0 0 0 ° o o
N
y � n O O � �N N O
F- O � � oJ O (O O
i M
n � c-
0
0
O
Oi
e"f
N
�
O
O
0 0
° o_ ° o
� N
�
� O O O O
0 O O O O
� O � O (p
N � h � O
0
O
O
O
V
�
O
O
O
O
0
0
O
O
O
�
r
r
c
O
O
O
O
'd'
�
�. o � _....�a� .o� -
�p.:_o - o_..o : . ... o
d. O O .0 - ..p p. O
> - .N p -,. p �
`- �1' o
� -::.� - u°� �.: i . a ° v ^
..
. �-_,.._� . .r r_."- :-- o�
Q `_.'. .., <' .-
L11
4
c
d
a
�
�
d
O
C
O
�
c
O d
oi � a
.� O 9
O � a
c
c o m
.� - N
Q �o Z
� + N, N
a'S � c m a�i >, a
W p
� ..�-. V U N N d'
� '3 H o � �' �
� � v Q W o r
a U �
R
F�-
�
U
c
R
c
LL
a
m
N
O
a
0
a`
000 0
� O O O O
� N O (O 6i
r � � O N
N N tp
0
o I a
0 0
0 0
O p
� N
�
O
O
O
c�i
n
N
�
O
O
O
�
c�
0
N
O
O
O
W
r
�
V
O
O
O
O
V
�
�.o. o- o
-O . O.��.0 O-�...0 O O ri
.`o - o -- a t� .
.o _o -. O tn ` � v
.. oa �n . ro cy - rn- � m
::rz � <- . �- � � a
�- c
�=- - � •" -_ ..�,. : .�_ :
0
d
m
�
0 19
� U
�
0
m
R
c
a
0
�
3
�
N
� o
o `� a �
.fl in C �
W
m o a W
U
� v a � �
�o m a h- 7 a
a� a`> d ¢ � � O
N N � � � Q1 >N Z
lL ll (n � � U > C�
#
�
95
�
R
O
�
�a
m
a
d
�
N
0 0
y � �
d w
O O � O
1. �... O O
a � ,�;
� r
O p
� O O
� O O
a�
� o
� �
O p
� O O
� O
O
O p
� �
LT O O
� O O
O � O
0
o < o° o° _
]„ M M
O O
�I o I o
o.- o
v.:.
d . _.
> ,.: -:.
o :., ;:;'__.
a --
R
Y
Q
F
�
C
'a
C c
d �
❑. —
� 3
01 N
fp C
O �
� U
O
b
a
�
C
U
C
l4
C
IL
a
m
N
O
C
O
V
a
o a o
O p p
O O O
O O O
O O O
m � �
r
O O �
O O p
O O �
O p �
O
M M (p
O O p
O O p
O O �
O O �
O
c+i c�i �p
� O O
O p
o a
o a
0 0
M �.j
O p p
��
o : . o. o
�
0
3
O
N
�
N
L
O
o`
N
�
C
O
�
¢ 4
� �
� �
R
V
0
F
95 �
Bug6ee, Arrton � Associates, tnc. "
256 Frst Avenue North, Suite 300
Minneapolis, Minnesota 55401
Office:612-371-0364 FAX:fii2371-D269
7une 20, 1995
Ms. Pam Wheelock
Deputy Mayor
City of Saint Paul
25 West Fourth Street
Saint Paul, Minnesota 55101
Re: Economic Impact of Proposed Science Museum of Minnesota
Dear Ms. Wheelock:
This is the first of two reports assessing the economic and financial aspects of the proposed new
Science Museum that our firm, Bugbee, Anton and Associates, Inc., has been commissioned to
prepaze for the City of Saint Paul.
To prepaze this assessment, we have reviewed the figures included in the study entitled "Science
Museum of Minnesota: 7-County Regional Economic Impact Assessment 1994" bp Sheiley S.
Baxter. We have taken her figures for 1994 operating statistics as conect and have used her
figures for projected costs and saies after the proposed eacpansion. We understand that more
detailed projections will be made available in the neaz future, but these figures appear to us to
provide an adequate basis for this preliminary analysis.
In addition to the $gures from Ms. Ba�er's report, this opinion is atso based on a number of
other documents and reports (see attached list).
We choose to consider economic impact in two sepazate components, "quantifiable" and non-
quantifiable'.
QUANTIFIABLE ECONOMIC Il�IPACT
We have estimated the quantifiable economic unpacts of the Science Museum by measuring the
direct spending planned by the facility and by estimating the additional related spending which
wouid result from such an injection to the local economy. The d'uect spending component
95 �
includes three categories: construction spending, annual direct spending by the institutioa, and
annual related spending as a result of the institution.
Construction spending is a one-time expenditure which will have an economic impact but should
not, by itsel� be the basis for a public investment. What matters is the ongoing stream of services
and benefits generated by the project. Annual direct spending is a measure of the e�cpenditures on
goods and services (including payroll) generated by the investment. In the case of the Science
Museum, we examine the additional direct spending generated by ihe expansion of the Museum.
Related spending is the additional spending by other Qarties generated as a result of the pro}ect.
For ihe Science Museum, it includes visitor spending on restaurants, gifts, and parking. It should
also include spending on travel and lodging by visitors who aze attracted by the new project but
wouid not have come otherwise. Additional travel and lodging expenses are very di�'icult to
estimate at this stage and Ms. Baxter chose not to include such estimates in her calculations. We
wiIl not attempt to do more at this stage.
Construction Spending
Total projected construction costs for the project aze estunated at about $89 million, spread over
two-yeazs. Of course, the actual economic impact ofthis construction spending will depend on
preciseIy where the money is spent, i.e. from where materials are pwchased and where employees
and contractors live and are headquartered. The Baxter study includes this $89 million as
impacting the 7-county Metro Area but we have no way of breaking it up more finely. As
mentioaed above, however, the breakdown of this one-time benefit should not be important to the
decision to make a public investment.
Annual Direc# Museum Spending
The annual direct spending component consists of the additional spending which would be done
by the Science Museum if the expansion takes place plus the additional spending for parking or
for goods in the Museum Shop. The Baxter study is based on $20,202,000 for Museum spending
in 1994 and an estimate of $39,154,000 for spending by the new Museum. T'his leaves a
difference of $18,952,000 per yeaz in additional direct spending as a result of Yhe Museum
expansion. Roughiy $8.5 million of that total is the increase in the Museum payroll; the rest is
increased spending on supplies and services in the 7-county azea.
Annual Related Spending
Annual related spending is the amount spent on meals, retail shopping, parking, and cuitural
activities in addition to the Science Museum by the Museum's visitors. The Baxter report uses
actual numbers from visitor surveys to estimate cwrent related spending at $5,249,000 and post-
expansion spending at $10,172,000. We chose to use the same actual value for current retated
spending, but think it wise to plan based on a somewhat more conservative forecast of related
spending growth. While the Baxter study assumed a 93.8 percent increase in overall related
spending, we chose to base our estimate on a targeted 55 percent increase in non-schooi
95 i
admissions and a modest 10 percent increase in average spending based on expanded food service
and shopping opportunities embodied in the proposed design
Therefore, we estimate an increase in related spending of $3,674,000 measured in I994 dollars.
The sum of estimated direct and related spending is $22,675,000 of additional annual spending
generated by the proposed Museum expansion.
Induced Spending
Induced is the addition to overnll economic activity of the region as a result ofthe direct spending
generated by a project. For example, as employees spend their eamings on goods and services in
the local community, additional activity and jobs result. The Baxter report uses a detailect
modeling strategy to produce an estimate of this induced spending of approximately $28 million
per year. By her calculations, each dollar spent d'uectly generates rouglily $1.17 of additional
activity.
This multiplier effect is in-line with the assumptions used in many studies, but it must be realized
the multiplier is very sensitive to sma11 changes in assumptions and actual impact is sensitive to
differences in spending pattems. Although we believe there will be induced economic activity as a
result ofthe 5cience Museum expansion, we choose to do further caiculations including a cost-
benefit caiculation using the smaller but more concrete direct spending numbers for the project.
NON-QUANTIFIABLE ECONOMIC IMPACT
In addition to the quantifiable economic benefits, tfie Science Museum project brings additional
benefits to the City of Saint Paul. These benefits increase the vatue of the project to the City and
coordinate with other plans and initiafives to help the City achieve its overall economic goals.
While some of these are indicated in planning documents and reports relative to the project, ihree
elements are, in our view, especially important:
Contribution to Riverfront Development;
Synergy with the Civic Center; and
Enhancing the Attractiveness of the Region to Tourists
We consider these three topics in tum.
Contribution to Riverfront Development
The development of the River&ont azea is an important, perhaps critical, element in the long-term
growth of Saint Paul. Anchoring that development with an attraction such as the Science
Ivluseum will be a positive and powerful first step in that development of this important City
95���`�'
resource. While this cannot be estimated within any degree of accuracy, the value to Saint Paul
is, in our view, substantial and should be considered in any investmerrt decision.
Synergy with the Civic Center
The City has already committed itself to a strategy of spurring economic activity through
refurbishing the Saint Paul Civic Center and has embarked on an aggressive campaign of buiIding
convention and meeting business through that facility. The proposed Upper I,anding Iocation for
the new Science Museum increases the chance for crossflows between the two attractions. For a
consideration of the benefits to the City from a new, eacpanded Science Museum at the proposed
site, it is importam to include the help which the Museum would provide to the Civic Center.
There are two sources of possible economic impact to the City from this source. First, the Civic
Center might be relatively more attractive to groups whose members tend to bring their families to
their meetings. Even though it is probabiy un]ikely that a group would choose Saint Paul over
another ciry solely on the basis of the Science Museum, its presence might be a helpful swing
factor. 5econd, the closeness ofthe Science Museum and its expanded program might encourage
more members of groups which are scheduled into the Civic Center to bring their fanvlies with
them and to, perhaps, lengthen iheir stays. This could have substantial impact on the City through
raising shopping, entertainment and lodging revenues over what they would have otherwise been.
Enhancing the attracriveness of the region to tourists
This third eIement is really a benefit to the Twin Cities and the State, which wili have some
additional effect of St, Paul. The proposed new Science Museum will helg to create a critical
mass of child-centered cultural and entertainment attractions which will make Minnesota and the
Twin Cities the destination for more families. In combination with the Mmnesota Zoo, the new
Children's Museum, and the planned aquarium, the expanded Science Museum would produce an
"educationaUedutainment" component to a family trip to Minnesota, which would effectively
complement the sporting events and "power shopping" currently available. Tn short, it would
increase the region's drawing power on families who travel for recreation. The majority of this
benefit probably accrues to the Twin Ciries and to Minnesota as a whole.
Taken as a whole, the non-quantifiabie benefits from the proposed Science Museum are
substantial, in our view. The planned Museum reinforces iwo key elements of the City's overalt
plan for e�cpanded economic activity, the River&ont and the Civic Center and cbntributes
substantially to tourism interest in the metropolitan area and the State..
COSTS 'VERSUS BENEFTTS FOR THE CTTY
We understand that the City of Saint Paul is being asked to make a public commitment to the
Science Museum of between $14 million and $17 million. To produce quantitative avatuations of
public investment projects, ii is common to compare the costs and benefits of those projects. We
have calculated a benefitJcost ratio for the new Science Museum.
95=6p�
We calculated the ratio by dividing the present value of stream of direct spending during the firsi
ten years of the project by the assumed public cost in year one. Under e3rtremely conservative
discounting assumptions, we calcutate a benefitJcost ratio of between 7.8Q and 9.47, depending on
the exact Ievel of the City's commitment. (The details of tfus calculation aze incIuded in an
addendum to tlus letter.)
While we have made conservative choices of assumptions whenever possible, it should be noted
that this ratio actuaily includes the benefits to the 7-county Metro Area and the benefits accruing
directly to Saint Paul woutd be accordingly smaller.
Nevertheless, this benefiticost ratio is quite high and indicates, in our view, that the Science
Museum will have a positive economic impact high enough to justify public investment at the level
being discussed. The induced economic benefits and the non-quantifiable benefits discussed
above tip the scales even further in favor of the project. It should also be noted that the non-
quantiSable benefits are more tightly focused on the C'sty of Saint Paul than are some of the direct
benefits discussed.
Even if the Science Museum were only able to increase its attendance by 50% of what is now
befieved to be achievabie, the range for the benefidcost ratio would stiIl be from 5.49 to 6.67, a
ratio which would cause us to recommend ttvs investment. The benefit/cost ratio does not
include any assessment ofthe feasibility ofthe project, including whether the museum will be able
to meet debt service requirements if it fails to achieve projected attendance, membership and/or
donations.
COST VERSUS BENEFITS FOR TOTAL REGIONAL PUBLIC INVESTMENT
We understand that a further commitment of public funds may be sought by the Science Museum,
the additional funds to come from the State of Minnesota. If the State funds were beiween $30
million and $35 million, the total public investment would be in the range of $44 million to
$55 million. Based on this assumed level of support, it is possibie to caiculate a benefit/cost ratio
for overall public investment. T'he ratio of the present value of direct benefits to totai pubic cost
would range from 2.55 to 3.01. TEus is a very favorable ratio for overall public investment.
These ratios aze an especially good measure for regional analysis because virtually ail of the
benefits would be reaiized inside the State.
It should also be remembered that these calcutations include only direct non-construc6on
spending as benefits. If the impact of the planned $89 million of construction spending and an
estimate of induced economic activity were included in such a caiculation, the benefidcost ratio
for overal( regional public investment would exceed 7.00, a very attractive level.
su�x�
95-604
ffthe proposed Science Museum can produce the planned increases in attendance and increase its
direct spending by the projected $18.9 million, a City commiunent of between $14 mi3lion and
$17 million is reasonable based on the projecteti direct benefit/cost ratio of between 7.80 and
9.47.
Sincerely yours,
�� ���
Paul A Antoq
Principal
List of Materials Reviewed
95-60
Baxter, Shelley S., Science Museum of Iv�innesota 7-County Regional Economic Impact
Assessment, Feb., 1994.
BaYter, 5helley S., Science Museum ofMinnesota 7-County Regional Economic Impact
Assessment 1994, 1995.
Science Museum ofIvl�nnesota, Facilities Oprions Analysis, Phase One, Executive Summary,
undated.
Science Museum of Ivfinnesota, Facilities Options Analysis, Phase Two, May, 1993.
ScienceMuseumofIvTinnesota, AnnualReporis, 1991-92, 1992-93, 1993-94.
Ernst & Young, Science Museum of Minnesota, Financial Statements and Other Financial
Information, Yeazs ended June 30, 1992; 7une 30, 1993; 7une 30, 1994.
Morey & Associates, Science Museum of Minnesota �sitor Survey Report, Summer 1994,
Sections 1 and 2, September, 1994.
Bugbee, Anton Associates, inc.
Science kiuseum, Benefil7Cost caicutations
Case 'E: According to pian, net gains
Year
Case 2: Growth in attendance is half estimated amowt
Year
1
2
3
4
5
s
�
8
8
16
1
2
3
4
5
6
7
8
9
i0
Dired Construdion
41,083,000
d8,241,000
18,952,000
18,952,000
'18,952,090
9 8,952,0�0
18,952,000
18,852,000
18,952,000
'18,952,000
Direct Construction
' 41,083,000
48,24i
14,483,400
14,083,000
14,083,000
14,083,000
14,063,000
14,083,000
14,083,000
14,083,000
Related Total
4f,083,000
d8,244,000
3,874,000 22,628,000
3,674,000 22,626,000
3,674,000 22,828,000
3,674,000 2?,626,OD0
3,674,000 22,826,000
3,874,000 22,828,000
3,674,000 22,626,000
3,674,Q�0 22,626,000
Related Totai
41,083,Q00
' 48,249,000
5,837,400 15,920,000
i,837,000 15,920,000
1,537,000 15, 920,000
1,837 i5,920,000
t,837,000 15,920,000
1,837,000 15,920,000
i,837,000 i5,920,000
1,837,000 i5,920,000
95
PV Cc� 5% Nonconst PV 5°h
215,523,&30 0 932,&4�.954
0
-- 22,828,OOQ
22,62fi
22.828,000
22,626,000
22.626.000
22,828,000
22,626,d00
22,828,000
PV (� 5% Noncoast PV � 5°l0
f7&,210,882 0 93,328,208
0
15,920,460
15,920,000
15,920,000
15,920,000
15,920,000
15,920,000
15,920,fl00
15,920,000
Page i
��-' U \
,
1��� C �, ; � f�E"�� "� 1
`' /�` /} � -- � ,( � i xmr � u� cenran�es � f ,
1 � �'�/ � _ ` `'_ / i . � L��' '� � �,j
� � � 1 �� �
�� /
: � ���� /� � �__ ___��� e�cEaun�
I
\ � / � �, 7 �
/ /� enowar I
���, ��i ; �!
�
�h� � ���� _.v�c c6�+T5H r �
// \\\ � \ �
J � _ � ' �A . N4�
� \
' v �
ti �
S �
4� t� �
�B S
% S
�\� .
;��
� �.
� � ��
� �
�
sis
[ivlc cfiXTEn QxrnNi�cµ
� -�"'�J= c�
56 vL,QVTPO �
{�
{ MiYNC[oi
c�oo I �
� 1 I?I
r-�, ;< <E��. ; � �
� ,-- -- —�y , �
t
31 .1N% laERIIbE twi%j
/
___EllTU.PE"� -
r
�J
� �� GELEBFAi�ery
R J�nxq
9�
e
t? k._ � �
�
� �
Y/N
\ c
47i
���� �
/C
9�
�
� � �I
�
�
�
[3:ENOEO �fV°�`
i �
� �
Pq!/c �
� U //
H.i {>` /
� /
%/ py3
J
ct
o �`- t �ei
G �E
0
ApW 1�
OS _ �
�� 55+�: � � o � 6f v £A
I ( .j. GE� . ian ct_P^+R � �
1 �a
S �
�. .
�i SCIENCE HU3E•JM at M�ANE3o?q �
' _ COtJCEf'TUP.L S�tT$�RLAh,'
. . , ::wY �99s
�a�
t
JP
6o Vl.
y 0
G�
w e�
�.rEY
r%�� ����
e ceN�� ��� �
�hle:
\ \�� �
a 0
1�
�
�
� v
� ��i
� � / I'-
ri A f` t I �, :$ L A Y 0
\ �S
NwvT �t�a