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Failed BSU events center commitment was non-binding

Whether BSU was given another 10 days or 30 days, it wouldn't have mattered, City Manager John Chattin said on Friday.

A day after Thursday night's council meeting during which the Bemidji City Council voted 6-1 to deny Bemidji State University President Jon Quistgaard's request for an extension on a potential events center commitment, Chattin said any commitment from BSU would have been non-binding anyway.

The council, too, struggled on Thursday to accept new wording in a proposed memorandum of understanding that was intended to commit the university to the events center project.

The most recent version reads as follows:

"The University commits to being the anchor tenant of the facility mentioned above by continuing to negotiate in good faith with the City and seeking the execution of a lease to be the anchor tenant of the Events Center, subject to the City's receipt of legislative funding and a final lease agreement being approved by the Board of Trustees and the City Council."

"It doesn't matter if (Quistgaard) signed it last night or 10 days from now or 9 months from now, it still allows BSU to drop out (of negotiations) at any time," Chattin said.

According to Chattin, the wording in the beginning of that paragraph had been changed from: "The University commits to being the anchor tenant of the facility mentioned above and will continue to negotiate in good faith with the city..."

Chattin said he had City Attorney Al Felix review the new wording Thursday morning, before the council meeting.

"He read it the same way I did," Chattin said.

Representatives from both the city and university have been meeting in recent weeks to develop a framework for a potential lease.

Chattin and BSU Vice President for Finance and Administration Bill Maki both served on the committee, and each said the lease committee left its Dec. 20 meeting with a potential framework, or memorandum of understanding, in hand.

Maki said on Friday that the changes were recommended by BSU's legal counsel, which works through the Minnesota State Colleges and Universities system.

"That's the way our process works," Maki said.

The local university has the authority to approve memorandums of agreements - but when it comes to leases that deal with long-term agreements and substantial amounts, they must be approved by the MnSCU board of trustees, he explained.

City Councilor Jerry Downs, a member of the lease committee, said he had wanted to deal with MnSCU on the potential lease from the beginning.

"We wasted two months of meetings," he said.

Downs, who was one of two councilors on Thursday who voiced support for giving Quistgaard additional time, said he still thinks BSU should sign the agreement.

Even if it does not provide for office space, practice facilities or training rooms, Downs said a smaller, $50 million arena would still offer advantages for the hockey teams - even if the men's team is not allowed admittance into the Western Collegiate Hockey Association.

"It's still a nice arena that would promote the vitality of the college and be nicer than the (John Glas Fieldhouse)," Downs said.

Downs added that the council might still be willing to partner with BSU on a potential facility - but the university would have to be willing to sign a commitment to the project similar to what was previously discussed.

The proposed memorandum of understanding specified the type of facility that would be constructed, how much to the amount that BSU would annually pay the city of Bemidji for the use of the building for hockey, and the distribution of revenue.

BSU would have paid the city $10,000 per men's game (adjusted annually for inflation) - and if the university would no longer sponsor intercollegiate hockey, it would pay $200,000 a year annually for the remainder of the lease (adjusted annually for inflation).

For revenue, BSU would have received all revenue from gate receipts, merchandise sold at games, temporary advertising and premium seating such as suites. The city would capture all revenue from ticket surcharges, parking and naming rights. Both would split, to varying degree, revenue from concessions (city 75 percent) and permanent advertising (city 90 percent).

The city would have covered all expenses for capital repairs and arena operations and the university would pay for all expenses for game days.

The proposed agreement had stipulated that the events center would seat 4,000 and have 25 private suites and about 250 club seats.