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HomeMy WebLinkAbout6 TDPRD Workshop Agenda Item # 6 r TRUCKEE DONNERPublic Utility District SPECIAL BUSINESS To: Board of Directors From: Kathy Neus Date: April 02, 2008 Subject: Workshop Presentation by Truckee Donner Park & Recreation District. 1. WHY THIS MATTER IS BEFORE THE BOARD Leasing of property or amending an existing property lease is an action reserved to the Board. 2. HISTORY On December 6, 1966, the Truckee Donner Recreation and Park District (Park District) and the Truckee Donner Public e Park DDtrict through Resoeution 1966-21strict (PUD) enterd into a act for the lease of PUD owned land to On March 3, 2008, the Park District sent a letter to the PUD requesting that the existing land use contract between the two districts be amended to allow for a permanent ice rink to be installed at 10695 Brockway Road (Rodeo grounds). The existing land use contract with the Park District allows for recreational use of the subject property, but does not allow for sub-leasing the property. 3. NEW INFORMATION The PUD sent a letter to the Truckee Donner Park and Recreation District asking for additional information on specific questions and requesting a presentation to the Board concerning the proposed ice rink (letter and response attached). Steve Randall will be present to answer any of the Boards questions and concerns on the proposed ice rink. 4. FISCAL IMPACT There is no direct fiscal impact. 5. RECOMMENDATION Review and comment on the presentation. nnichnpl D. Hollev, General Manager Truckee Donner Public Utility District Directors Joseph R. Aguera J. Ron Hemig Patricia S. Sutton Tim Taylor March 20, 2008 Bill Thomason General Manager Michael D. Halley Steve Randall General Manager Truckee Donner Recreation and Park District 10046 Church Street Truckee, CA 96161 Re: TDPUD property leased to the TDRPD Dear Mr. Randall: On March 3, 2008 the Truckee Donner Recreation and Park District (TDRPD) sent a letter to the District requesting that the TDRPD be allowed to use the rodeo arena parking area for a public/private ice rink. During the Board's discussion of this matter, they realized that they were in need of further information in order to make a decision. Therefore, the Board is requesting he developer, Mr.Mrr John Hugomational , ouation on this next Board matter from the TDRPD staff and/orP meeting on April 2, 2008, at 6:00pm. Some areas of concern that the Board would like addressed are: • Parking and other potential conflicts with use of the rodeo grounds • Status of Town of Truckee approval for the project • Potential conflicts with the Truckee Tahoe Airport • Proposed time line • Ownership of the enterprise • Indemnification for the District The Board is looking forward to having an open dialog with the TDRPD staff and Mr. Hugo on this issue. Should at 530) 582 3922 orlease contact me at (530) 582a3916n Neus, Technical Programs Administrator Thank you, Michael D. Holley General Manager P.O.Box 309—Truckee,CA 96160—Phone 530-587-3896—www.tdpud.org Truckee Donner Recreation and Park District 10046 Church Street, Truckee, California 96161 General Manager TRUIIE-DONNER PHONE:(530)582-7720 • FAX(530)582-7724 Steve Randall RECREATION&PARE DISTRICT March 25, 2008 File# 030811 Michael Holley General Manager Truckee Donner Public Utility District P.O. Box 309 Truckee, CA 96160 Dear Michael, I will be at the Truckee Donner Public Utility District Board of Directors meeting on April 2, 2008 to provide further information on our request to use the rodeo parking area for a public/private ice rink. In your letter dated March 20, 2008, you stated some concerns of your board on this proposal. At this point the rink is in the conceptual stage. In order to move forward with this proposal the land has to be secured or at least committed to in good faith. The Truckee Donner Recreation&Park District Board of Directors has the same concerns as your board,but in order for the developer to start spending money on the project and answering these questions, he needs to have some commitment on the land. If your board were to approve this concept, then TDRPD would sign a memorandum of understanding on the land subject to the details being worked out, such as parking and conflicts with the rodeo grounds, Town of Truckee approval, and conflicts with the airport land use plan. The timeline would be based on approvals by local agencies,but the developer is hoping to have the rink on line within about one and one half years. The ownership of the business would be with the developer,but the land would remain in the ownership of the TDPUD. The TDRPD would be given rink time at a discounted rate, for programming and general public use in return for the use of the land. Indemnification for both District's would be part of the agreement. Mr. Hugo will also be at your board meeting to answer questions from your board. In summary, to get this project going, conceptual agreement on the land needs to be obtained. TDRPD is basically asking TDPUD to amend our current lease to allow for this type of use. Sincerely, / P4,� Steve Randall General Manager ,`-t THE IGLOO ICE RINK Truckee, CA. Business Plan 1.) The basic business Strategy of The Igloo is to rent ice time to ice hockey and figure skating groups on an hourly and seasonal basis and to offer regular public skating sessions. A hypothetical template for ice rentals is attached in Appendix A. For reference, a copy of the income and expense results and projections for the City of South Lake Tahoe Ice Arena (SLT Rink) for the fiscal year ended 9/30/07 and the budget for the following fiscal year(9/30/08) are attached as Exhibit B. The initial goal for The Igloo is to model its operations after the SLT Rink, but with the potential for improved results on the cost side due to The Igloo's private operation, lower personnel costs and greater energy efficiency. If The Igloo can open by October 2009, it stands a good chance of establishing itself and generating seasonal pre-sales commitments. On the other hand, it would be pointless to open in February, or other mid-season date, after skaters have made commitments for the season. Time is of the essence to The Igloo's success! 2.) A Construction Cost Budget is attached as Exhibit C that is based on current cost,estimates for a similar facility to be located in Temecula, CA. A large. factor in terms of costs is the type of structure that can be approved,which will affect capitalization (see below). Because working drawings for The Igloo are not completed, it is not possible to determine final cost estimates. Excluding land and site specific costs, similar size community rinks in North America typically cost about $100 per sq. ft., suggesting a cost in the neighborhood of$3.5 million. The base budget for The Igloo is $3.375 million, but it could be$4.5 million if an equally functional but more expensive structure is required by the Town. 3.) Cash Flow Proiections for the first three years are based on the SLT Rink budget of approximately $800,000 per year at stabilization and assume 80% utilization in year one, 90% utilization in year two and 100% utilization by year three. Revenue shortfalls are anticipated to be approximately $240,000 in the first three years. Break-even financial operation is expected in year three depending on market response (demand) for public skating, ice hockey and figure skating, etc. In addition,there may be an opportunity to serve the meetings market for small groups during the shoulder season (April 15-June 15 (approximately), but that possibility is not currently included in the projiections. Demographic information for the market area is attached as Exhibit D. 1 4.) Personnel needed to operate The Igloo will include approximately five (5) full-time employees that will be drawn from the ice rink industry. Key personnel include the rink general manager, assistant general manager, mechanic/ice systems specialist, retail/ticket/food sales and maintenance person/vendor. Additional part-time employees will account for approximately five (5) full time employees. A hockey director,figure skating director and other free lance coaches are typically filled by volunteers and professional instructors that are paid by their students and are not on the rink payroll. The sponsor has had turn-key management discussions with Canlan Ice Sports of Vancouver,BC. Canlan will be invited to make a management proposal once the approvals are in place. Canlan operates more than 30 rink facilities in Canada and the United States. 5.) Capitalization will consist of a variety of private and public sources depending on timing and competitive factors. State of California Community Development funds related to job creation will be sought. State of California Parks & Recreation funds from Proposition 84 ($400 million)will be applied for. Tourism related funds from TOT taxes will be applied for, as well as donations from private and public sources. Advertising rentals/sales, sponsorships, grants and loans will be solicited. Please refer to the attached December 2007 proposal to the TDPRD for additional background. 2 THE IGLOO ICE SKATING RINK Truckee, CA. CONCEPT: The concept is to build a new, state-of-the-art community ice skating rink facility for the North Lake Tahoe market. OPERATION: 12 months per year; 365 days; up to 18 hours per day. LOCATION: Truckee, CA; possibly at the rodeo grounds parking lot on Estates Drive at Brockway Road, or at the new Community Center on Highway 89. Other locations will be considered as well. LAND AREA: Approximately three acres are needed in order to satisfy the airport zone density requirements for 300 people. PHASE 1 BUILDING SIZE: Approximately 265' long x 135' wide; Footprint of 35,575 sq. ft. in several "pods", including the 220' x 105' ice area (23,100 sq. ft.) and related lower profile ancillary areas of approximately 12,675 sq. ft. PHASE 1 ICE RINK SIZE• 85' x 200' = 17,000 sq. ft. NHL size. Phase 2 may be Olympic size. 1 INTERIOR IMPROVEMENTS: Phase 1 interior improvements total approximately 12,000 sq. ft. and will include a lobby, retail store, snack bar, ticket office, two bathrooms, heated seating area, four locker rooms with two baths and showers, coaches' and referees' locker rooms and baths, practice area, party rooms, skate rental room, janitor's closet, storage rooms, workout circuit/lounge, administrative offices, music room, drying room, mechanical, electrical and equipment rooms for refrigeration and the ice re-surfacer. A preliminary sketch of a potential floor plan is attached. Handicapped access and fire sprinklers, etc.will be provided. DELIVERY DATE: Fall 2009; it is important to be open for the 2009-2010 season. BUILDING FEATURES: The building alternatives include: A.) a 220' x 110' pre-engineered building for the ice area plus attached lower profile lean-to "pods" for the ancillary spaces. Examples include a Cover-All or Sprung Structures building covered with DuPont "Tedlar" and a multi-layered architectural membrane fabric with excellent insulating capability. Buildings of this type have been used at the Denver International Airport, numerous skating rinks and many ski areas with heavy snowfall. The advantages of a pre-engineered building include costs savings, rapid construction time, versatility, re-use, environmental 2 conservation, and excellent snow- sheeting properties. B.) an alternative building system is a rigid steel frame of 220' x 105' for the ice area plus lower profile, lean-to "pods" for the ancillary spaces. OPERATION: The Sponsor will operate The Igloo on an annual basis and be responsible for all design, construction, scheduling, sales, maintenance, management, and financial operations. ANALOGIES: The South Lake Tahoe (SLT) Ice Arena is similar in certain respects to The Igloo, in terms of area demographics and population, the number of school-age children and roadway traffic counts. The SLT rink was opened about five years ago and currently operates on a break-even basis. It is owned by the City of South Lake Tahoe and was funded, in part, by $3.8 million in voter-approved Measure "S" bond funds, as well as other sources of about $1,000,000. The rink cost approximately $4.8 million to build on city-owned land and currently operates on an annual budget of about $800,000. The SLT rink has been well- received and is an anchor for the community and its recreation programs. The Igloo would be operated privately in close cooperation with The Town of Truckee, Nevada County and the Truckee-Donner Recreation & Park District. 3 PARKING: Parking requirements for skating rinks of this size in Truckee are approximately one space per 400 sq. ft. of GFA, or about 90 spaces for 35,000 sq. ft. EXPANSION OPTION: Phase II; a second sheet of ice in a contiguous, multi-purpose building is anticipated, provided that demand for ice time is sufficient. POTENTIAL USES: Principally public skating, figure skating, ice hockey, curling, broomball, bumper cars, and special events/birthday parties. An option would be to allow for the conversion of the ice pad(s) to a dry floor for indoor soccer, tennis, batting cages, convention space and other temporary uses and events. VENTURE FORMAT: The Sponsor proposes a public/private venture whereby the Truckee-Donner Recreation & Park District would contribute the land, subject to a 50-99 year ground lease at a nominal annual rate, plus an operating agreement that would provide the Recreation & Park District with sufficient discounted ice time to continue to operate its skating programs. After the initial lease term, the building and all improvements, operating fixtures and equipment would revert to the Truckee- Donner Recreation & Park District. Other potential contributions by relevant entities such as tax abatement, park fee 4 exemption, etc. are to be determined. FUNDINGBUDGET: The Sponsor will provide all funds necessary to build and operate The Igloo. It is anticipated that the construction cost budget will be approximately [$3,000,000) (subject to confirmation by contractors) plus up to $1,000,000 in additional capital for operations until the facility reaches break- even and can support itself. Funding sources are expected to include equity, sponsorships, donations, sale of advertising, loans, grants, and other sources of capital. REGIONAL COOPERATION: If agreed to by the Truckee- Donner Recreation & Park District, participation by other interested parks and recreation departments in Incline Village, Kings Beach, Tahoe City, et. al. will be encouraged. SPONSORSHIP: The Igloo is proposed by John H. Hugo and Steve Weiss. Mr. Hugo is a life-long skater and sports enthusiast. He is a real estate financier and entrepreneur living in Truckee and Los Angeles, CA. Mr. Hugo was educated and played varsity ice hockey at Kent School and Dartmouth College in the 1970s and earned his MBA in finance at UCLA in 1984. He worked in real estate finance on Wall St. for 12 years at Salomon Brothers, Sutro & Company and Bank of America. He was a 5 consultant with Coopers & Lybrand and has operated his own consulting and real estate business since 1994. His development and construction experience includes single family house construction since 1970, and warehouse/office development with Lincoln Property Company in the San Francisco Bay Area, Los Angeles, CA, Portland, OR and Phoenix, AZ. As a consultant, Mr. Hugo worked on two ice skating rinks in the Los Angeles, CA. area. Mr. Hugo's son has played hockey at the South Lake Tahoe rink for the past three years and Mr. Hugo is active in STAHA and NORCAL hockey programs. Steve Weiss was the Superintendent of the South Lake Tahoe Parks and Recreation Dept. for eight years. He was the principal officer for the City of South Lake Tahoe and led the effort to conceive of, finance, build and operate the South Lake Tahoe Ice Arena from 2001 until his retirement in 2006. Mr. Weiss opened the SLT rink in 2002 and worked for the SLT Parks and Recreation Dept. for 32 years; he has a wealth of experience in recreation program management, operations, personnel, and public service. Mr. Weiss is a strong supporter of a new ice rink facility for the North Lake Tahoe area and can provide invaluable real-time experience and professional guidance to The Igloo Ice Rink in Truckee. 6 Mr. Hugo and Mr. Weiss will be assisted by ice skating industry professionals and organizations such as "STAR" (Serving The American Rinks), an alliance between USA Hockey and USA Figure Skating, the International Ice Hockey Federation, the U. S. Olympic Committee for Reno/Tahoe and Canlan Ice Sports, a commercial owner and operator of approximately 30 ice rinks and two swimming pools in North America. Canlan is, or has been, a consultant to the cities of Pasadena, CA., Ft. Wayne, Indiana, Montreal, Quebec and North Vancouver, British Columbia in ventures similar to the one proposed herein. Canlan's headquarters is located in Vancouver,B.C. In addition, the Sponsor expects to cooperate with ice rink proponents and operators in Roseville, Sacramento, South Lake Tahoe, Reno, Incline Village, Tahoe City, Squaw Valley, Carson City, NorthStar at Tahoe and other regional locations in Northern California and Nevada. A critical mass of regional ice skating facilities and interests is anticipated by the Sponsor in coming years, which will add to the success of The Igloo in Truckee. 7 COMMUNITY BENEFITS: The Igloo will benefit Nevada and Placer Counties, the Town of Truckee and the Truckee —Donner Recreation & Park District in several ways: 1.) It will provide a state- of-the-art, Wi-Fi - equipped, climate- controlled, year-round ice skating facility for elite athletes and recreational skaters of all ages, visitors and residents alike. 2.) It will generate economic benefits from sales taxes, lodging taxes, and restaurant sales, etc. that currently leak from the community. 3.) It will provide memorable, fun-filled, experiences year round for Nevada and Placer Counties, the North Lake Tahoe community and the Town of Truckee. 4.) It will be a visitor- serving destination and entertainment attraction. 5.) It will provide a good place for teens to congregate, study, meet 8 and pass time in a safe, active and fun way. CRITICAL PATH: If preliminarily approved in concept by the Town of Truckee and the Truckee-Donner Recreation & Park District Board,the next steps are anticipated to include: a.) The formation of a working group/task force in order to begin to implement The Igloo Ice Skating Rink concept. b.) The Truckee Building& Planning Dept. would be approached to set a pre-development meeting in order to scope out the project and determine initial feasibility. c.) An architect, an engineer and a general contractor would be retained. d.) Funding would be secured by the Sponsor. e.) The TDRPD would determine which building sites may be appropriate. f.) Ground breaking could occur in late spring 2009. g.) The Igloo would open in Truckee in 9 approximately September 2009. SPONSOR CONTACTS: John H.Hugo10917 Cinnabar Way#3 Truckee, CA. 96161 530-386-7385 310-259-8707 John.Hugo@att.blackberry .net. Steve Weiss 2926 Oakland Ave S. Lake Tahoe, CA. 96150 530-541-1862 530-318-0860 Weiss@sbcglobal.net Attachments: Sketch—Rigid Steel Frame Building Preliminary Floor Plan Preliminary Cover-All Building Floor Plan and Cross-Section 10 i i i c c � >�lg. 0 �8gg�g r-e• e L ------ ----- -- --- ------- :. I ' Ruai b ® LOCKER LOCKER I uECH,EQUIP. X n I I anRn aARTY io°Uac iocQUK TH ®�—" � , IN E.I IN R ® I x,Al IWN Do >e. I j 1 T 1 I I I -- Il - -------- ----__—_ — — — — n[xaauK Fl I I VESTIBUL I I 11W I �A��TIE11.NpLA� �� \ OFFICEI � © OFFICE I / / ��N wwis'wamK�a�+r uu mm. 1-apt. A-x ® I sw• plc w:oe. Y I I xm•-r.Aa ro.Aa ar oAvrA ewsos I I IQ K 's I ,.,� murlrA I rwa.a-r R COINII�EP I I b Ioxe I I I I C.9 ,oxA I P�®L3I35�- IAA — — -- — — x w STOR M —— — Q oo n' w om W g I " wmaAws C.) s 1aA I FIRFCIDF ROOM ——————J V31 o8_19-97 J.A.K. 7-11-97 1 .,.a FLOOR PLAN SCALE R� ,•-�• A-1 p 8.iwY a Z$S!!s Eli i a ® b W V � J OL � rwP_ 1V1S/� �% 1V2 aliloe TO M5me p e/5en/�leS 2 BUILpING GR03°5`,EOTION 0 ARENA Al THE IGLOO ICE RINK Truckee,CA. CAPITAL COST SUMMARY $ Cost 1.) Land Acquisition/Lease Costs 0 2.) Site Work Allowance 200,000 3.) Building Shell 325,000 a.) Sprung Alternative(3-year lease/option) [1,500,000] b.)Rigid Steel Frame Alternative 4.) Interior Tenant Improvements 550,000 5.) Refrigeration System/Rink Floor Piping 825,000 6.) Accessory Items Specific To Rink Operation 1,000,000 a.)New (assumed) 810,0001 b.)Used ($100,000 -$250,000 possible savings) 450,000 c.) Contingent Purchase Items 7.) Infrastructure Stub Systems 50,000 a.)Plumbing(water, sewer,baths) 50,000 b.)Electrical(lighting,mech., equip.) 100,000 c.) Fire Sprinklers (dry system) Included d.) Security (sensors, cameras, alarms) 75,000 e.)HVAC (lockers,lobby, offices,etc.) 100,000 f.)Elevator (used) 100,000 g.)Perimeter Concrete/Foundation BASE BUDGET: $3,375.000 Plus: Contingent Purchases 450,000 ,000 Total Budget- Sprung Structures Building: $3,$4,825825,000 Total Budget -Rigid Steel Frame Building: 1 Workshop Item # 6 Truckee Donner Recreation & Park District Proposed Ice Rink April 2, 2008 Truckee Donner Recreation & Park District Proposed Ice Rink BACKGROUND/HISTORY • Letter from Recreation & Park District • Follow up letter from Truckee Donner PUD Recreation and Park District's Response caner.: Truckee Donner z a Parks anc! Recreafiion � . a� e e x w x • ti� W �i x� hf r �� •• & wt<.a.�w � � c e_ l ' a_. �I 11 +� it Truckee Donner Recreation & Park District Proposed Ice Rink NEW INFORMATION • Mr. Randall, Truckee Donner Recreation and Park District. h+ 'd Owrier: Truckee Donner a • y ` Parks and Re � reation , son 77 A- soon I� J y s - �W Rya a ^� �` ��"`°s..�, T�'tea r� '.� ,.�". '� : •;. �i� �� i _ � Y � F L ^ a_t �. -. r LAW WhIm 7 1 AR : WALT x w i its J) ICY r j •� �yl w� y � r sue. ka k 04, M " �� . \ x;