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HomeMy WebLinkAbout1992-06-23 - AGENDA REPORTS - FAMILY AMUSEMENT CENTER PROJ (2)_ AGENDA REPORT City Manager Appr Item to be presen CONSENT CALENDAR Lynn M. Harr DATE: June 23, 1992 SUBJECT: Status Report: Family Amusement Center Project DEPARTMENT: Community Development BACKGROUND r At the January 28, 1992 City Council Meeting, the City approved staff's recommendation to pursue Recreation Technologist's (Rec Tech) to work with staff towards a family entertainment. center development. This project was initiated in direct response to the Community Strategic Plan which calls out for the, construction of a teen center. The City Council has also approved staff to work with Mr. Richard Jewett of sports Canyon as a secondary resource if Rec Tech is. unable to complete the project. The following is an update on the progress of the report to date. RecTech has submitted a project feasibility memo to the Economic Development Division on June 5, 1992. The memo requests a meeting between Mr.'Hilkemeyer. and City staff to discuss further the needs assessment, scope of project options, land considerations, and the approach of public/private contributions. Additionally, RecTech has formed with Gortikov Enterprises to pursue the planning, construction and operation of a family amusement center. Sports Canyon has furnished staff with a prospectus (attached) detailing the company, its mission, market strategies, the competition and the target market. Mr. Richard Jewett has met with staff for a pre -application review to discuss his development. The proposed family amusement center would be located in the Santa Clarita Business Park of the Canyon Country area. Receive report and direct staff to continue discussion with RecTech and Sports Canyon. Direct staff to develop an agreement for Council action with the first party who can demonstrate control of a viable site for the project. 1. RecTech Feasibility Memo 2: Sports Canyon Prospectus LMH:MH:DDP:857 pvonQ Agerdaltxm:'_5. L 3ECREATION TECHNOLI �OGSTS, INC sa 6901 N. CaGrande,. - ' * TUCS09, AZ 85743 02-744-8488 • 602-749 • Fax 602-744-420 JUNE 2, 1992 = mv TO: MICHAEL HAVILAND CITY OF SANTA CLARITA FROM: JAMES GORTIKOV GORDIKOV ENTERPRISES, INC. JIM HILKEMEYER of SPORTSPARKS OF AMERICA SUBJECT: OUTDOOR RECREATION CENTER FEASIBILITY ECEVVE0 WN 0 5 1992 We have done preliminary work on the potential of the Santa Clarita Sportspark concept including three visits to the community by RecTech's staff, discussions with the city staff, and discussions from the local development perspective between Rectech and Mr. Gortikov. We have decided on a preliminary basis to Join forces, Gortikov and RecTech, in order to pursue the establishment of an appropriate recreation facility with the City of Santa Clarita. The purpose of this Memorandum is to communicate some Preliminary findings aimed at determining future direction for us and the staff of the City. The main discussion points Include: 1) Needs Assessment 2) Scope of Project Options 3) Land Considerations 4) Public/Private Approach NEEDS ASSESSMENT - The lack of sufficient recreation opportunities is apparent from even a cursory survey for all levels and age groups in the community. Sports fields for adults would be needed and would relieve Pressure from adults toward use of fields and make additional space for childrens activities. Unstructured play opportunities for all age children up to high school age are in great shortage. A focus point for other community activities would be a welcome addition to the community. The current population of 160,000 plus _t PUBLIC/PRIVATE APPROACH - The only way that I feel this type of project will work in this area is with a Public/Private partnership. The Public sector needs to help in at least three ways to some degree: 1) The City will have to subsidize the acquisition of a suitable piece of land in some way or another. This could be in cooperation with the Newhall Land and Farming Company as a similar situation dictated for us to do with a dominant land development company in another location. 2) The City will have to cooperate with planning and development considerations including offsite improvements, zoning, entitlements, assessments, and expedititing of processing. 3) The City will need to be involved to some degree in the financing. Typically we can fund 25% of the development costs and 75% will need to be financed. This can run a range of using the City's influence in helping with an external development bond authority or use of general obligation bonds or a few techniques in between. We would very much like to continue to be involved with this project. We feel that by combining our resources we can deliver a superior product that will have positve impact for the City. The needs for recreation in the area are obvious. The needs are only going to get bigger as the area grows. The needs are only going to get more costly. We think the efficient, cost effective, way to accomplish this task is to combine our companies with Newhall Land or some other public or private land holders and the City of Santa Clarita in a ,joint public/private partnership. We would like to meet at ,your earliest convenience to go into further detail on the above matters. those within a thirty minute drive time call for a much needed, closeby, well thoughtout, and usable facility. Additional effort needs to be expended to determine exactly what types of specific activities would be included, but the general need is so dramatic that we didn't have to spend too much time in this analysis. SCOPE OF PROJECT OPTIONS - We feel there are three ways to approach the diverse recreation needs from an analysis of suitable sites. 1) The synergism which we like to create for a Specialized Outdoor Facility such as we propose would dictate a site where the entire project would be a single site of between 25 and 50 acres. This would include all three aspects of a SPORTSPARK to be at the same site and allow the dynamics and efficiencies of our designs to be most effective. This would be the Sports part, the Family Amusement Center, and a Multi-purpose community meeting and activity structure. 2) The second site option would be to divide the facility into the different components. Each type of facility will stand on its own, if they are of sufficient size. While this is not desirable, it would be better than not doing the project if a large site is not available or economically feasible. 3) The third option would be to cut the overall scope of the project by addressing only a portion of the needs of theCityof Santa Clarita. This, for example. might mean to only build the Family Amusement Center at this time, because it can be done on a smaller piece and characteristically can support a more expensive site. LAND CONSIDERATIONS - It seems that we're not explaining something that everyone didn't know when approaching this project initially, land will be the single biggest obstacle to the feasibility of a SPORTSPARK In Santa Clarita. The problems are several. The value of the land in the area is high. The land in the area is costly to develop as large level fields. Offsite considerations are expensive. The City does not have a large inventory of land in place to use for this purpose. The values that the project can support are substantially different for the two major aspects of the project. Sports and Amusement. The 20 to 40 acres needed for Sports can only support annual payments for land of approximately $10,000.00 per acre per .year. The 5 to 10 acres needed for the Amusement area, can support land values of $6.00 to $10.00 per square foot, and the land can be hillside but a freeway location would be desirable. EXECUTIVE SUMMARY THE COMPANY SPORTS CANYON COMPLEX, INC. IS A CALIFORNIA BASED COMPANY PROVIDING SPORTS ORIENTATED FACILITIES AND SERVICES TO THE PEOPLE OF THE GREATER SANTA CLARITA, CALIFORNIA, AREA. RECREATION BASED ACTIVITIES AND SERVICES ARE AMONG THE FASTEST GROWING AND HEALTHIEST AREAS OF THE ECONOMY, AND SPORTS CANYON COMPLEX, INC. INTENDS TO CAPITALIZE ON THE OPPORTUNITIES IN THESE AREAS. THE COMPANY'S STOCK IS CURRENTLY HELD BY PRESIDENT RICHARD JEWETT, VICE PRESIDENT ALEX SOZA, TREASURER EDWIN TUCKER AND SECRETARY JIM DELAPENA. THE COMPANY'S MISSION SPORTS CANYON COMPLEX, INC. VIEWS ITS MISSION AS PROVIDING THE YOUTH, ADULT AND FAMILY COMMUNITY WITH HEALTHY, SECURE AND VARIED RECREATIONAL AND FAMILY ENTERTAINMENT FACILITIES. THE COMPANY IS DEDICATED TO LONG TERM RELATIONSHIPS WITH THE COMMUNITY AND THROUGH QUALITY FACILITIES AND ENTERTAINMENT WE WANT TO BE KNOWN AS THE PREMIERE FACILITY OF THIS KIND IN THE COUNTRY. THE GOAL IS STEADY EXPANSION AND PROFITABILITY BY THE SECOND YEAR. PRODUCTS AND SERVICES THE COMPANY PROVIDES VARIED RECREATIONAL AND ENTERTAINMENT SERVICES TARGETED TOWARDS THE ADULT AND FAMILY MARKET. THESE SERVICES TO INCLUDE SOFTBALL, GOLF DRIVING RANGE, NINE HOLE GOLF COURSE, MINIATURE GOLF COURSES, SAND VOLLEYBALL, GO KART TRACK, PRESCHOOL, CONCESSIONS AND CLUB HOUSE. ADDITIONALLY THERE WILL GOLF CLASSES, SOFTBALL LEAGUES AND TOURNAMENTS AND YOUTH ACTIVITIES OFFERED THROUGHOUT THE COMPLEX. MARKET AND SALES STRATEGY SPORTS CANYON COMPLEX, INC. DIFFERENTIATES ITSELF IN THE MARKET OF ENTERTAINMENT SERVICES BY AIMING TO SATISFY NOT ONLY ADULTS IN RECREATION PROGRAMS BUT ALSO YOUTH AND FAMILY PARTICIPATION EVENTS AND SERVICES. THE COMPANY DOES THIS BY OFFERING A FULL SERVICE COMPLEX THAT CATERS TO ALMOST EVERY NEED OF BOTH THE ADULT AND FAMILY ENTERTAINMENT NEEDS. THE COMPETITION NO MARKET LEADERS HAVE YET EMERGED IN THE ADULT OR FAMILY RECREATIONAL OR ENTERTAINMENT FIELD, AND COMPETITION IS LIMITED AND GEOGRAPHICALLY UNAVAILABLE, CREATING SUBSTANTIAL MARKET OPPORTUNITIES. SPORTS CANYON COMPLEX, INC. MAINTAINS THE FOLLOWING ADVANTAGES OVER EXISTING COMPETITION: ONGOING LOCAL SUPPORT FROM THE CITY COUNCIL, OVERWHELMING DEMAND FOR. FAMILY ACTIVITIES, GROWING POPULATION, QUALIFIED MANAGEMENT AND THE CENTRALLY LOCATED FACILITIES IN THE MIDDLE OF THE FOUR LOCAL COMMUNITIES. TARGET MARKET SPORTS CANYON COMPLEX, INC. OPERATES IN THE GREATER SANTA CLARITA AREA, TARGETING THE ENTIRE POPULATION OF BOTH ADULT AND YOUTH. SANTA CLARITA IS THE SIXTEENTH LARGEST CITY IN THE STATE OF CALIFORNIA WITH THE BIGGEST POPULATION GROWTH OVER THE LAST FIVE YEARS, THE CITY RANKS . AMONG THE HIGHEST ANNUAL INCOME PER CAPITA IN THE STATE AT AN AVERAGE OF 565,000.00 PER HOUSEHOLD. THE PRESENT POPULATION IN THE CITY LIMITS STANDS AT 175,000 AND 600,000 WITHIN A 6 MILE RADIUS OF THE CITY LIMITS. I0 MANAGEMENT PRESIDENT AND FOUNDER RICHARD C. JEWETT BRINGS SIGNIFICANT EXPERIENCE IN HUMAN SERVICES, FACILITY CONSTRUCTION AND BUSINESS MANAGEMENT TO HIS POSITION. IMMEDIATELY BEFORE COMING TO SPORTS CANYON COMPLEX, INC. MR. JEWETT BUILT AND OPERATED CANYON DRIVING RANGE IN CANYON COUNTRY, CALIFORNIA. MR. JEWETT ALSO SPENT EIGHT YEARS IN THE UNITED STATES AIR FORCE IN CHARGE OF THE HUMAN SERVICES DIVISION AT HICKAM AIR FORCE BASE, HAWAII, WHERE HE WAS IN CHARGE OF TWO GOLF COURSES, BASES SOFTBALL I+ PROGRAMS AND VARIOUS CONCESSION OUTLETS. EDWIN TUCKER, TREASURER, IS NOW A DEPARTMENT HEAD AT MERRILL LYNCH IN WESTWOOD. MR. TUCKER BRINGS EXPERIENCE IN THE FIELD OF ACCOUNTING, FINANCE AND DEPARTMENT MANAGEMENT. ALEX SOZA, VICE PRESIDENT, BRINGS HIS REAL ESTATE AND BUSINESS OPERATION EXPERIENCE TO THE DAILY OPERATIONS OF THE COMPLEX. JAMES DELAPENA, SECRETARY, IS A PGA GOLF PROFESSIONAL CLASS A. MR. DELAPENA BRINGS HIS TEN YEARS OF GOLF COURSE MANAGEMENT EXPERIENCE WITH HIM TO OPERATE AND MARKET THE GOLF COURSE AND DRIVING RANGE. MR. JERRY RAMSEY, FACILITIES MANAGER, BRINGS HIS FIFTEEN YEARS OF EXPERIENCE FROM THE UNITED STATES SLOWPITCH SOFTBALL ASSOCIATION (USSSA) TO THE MANAGING OF THE SOFTBALL PROGRAMS. OPERATIONS ON OCTOBER 1, 1991 SPORTS CANYON COMPLEX, INC. ACQUIRED OPERATIONS OF CANYON DRIVING RANGE IN CANYON COUNTRY, CALIFORNIA. AT THE TIME OF THEIR ACQUISITION OF CANYON DRIVING RANGE IT WAS PRODUCING REVENUES OF $ 8,000.0 PER MONTH. AFTER IMPROVEMENTS TO THE RANGE AND AN INFLUX OF FUNDS THE DRIVING RANGE HAS EXPANDED FROM 15 STALLS TO THIRTY STALLS, ADDED LIGHTS FOR NIGHT USE, CONSTRUCTING A CHIPPING AREA, ADDED NEW MATS AND BALLS AND ARE NOW DURING THE WINTER SEASON PRODUCING S 16,000.00 PER MONTH IN REVENUES AND PROJECT REVENUES FOR THE UPCOMING SUMMER SEASON TO COME • IN AROUND S 20,000.00 PER MONTH OR $ 240,000.00 ANNUALLY. FINANCIALS SPORTS CANYON COMPLEX, INC. FINANCIAL STRATEGY EMPHASIZES REINVESTMENT OF INCOME FOR GROWTH DURING THE FIRST FEW YEARS OF OPERATION, WITH THE COMPANY REACHING PROFITABILITY BY YEAR THREE. ANNUAL REVENUE PROJECTIONS FOR THE CURRENT YEAR ARE $ 240,000.00; FOR 1993 $5,000,000.00; AND FOR 1994,$ 7,000,000.00. FUNDS SOUGHT AND UTILIZATION THE COMPANY IS CURRENTLY SEEKING $ 10,000,000.00 FOR REAL ESTATE PURCHASE OF 40 ACRES, AND $ 3,500,000.00 FOR COMPLEX CONSTRUCTION COSTS. THESE FUNDS WILL BE USED FOR REAL ESTATE PURCHASE AND COMPLEX CONSTRUCTION. IN EXCHANGE WE ARE LOOKING FOR A FAVORABLE LONG TERM FINANCING AT A REASONABLE INTEREST RATE AND TIME FOR REPAYMENT WITH MINIMAL POINTS GIVEN AWAY, ALONG WITH THE TRUST DEED AS COLLATERAL FOR THE LOAN. WE WILL LOOK AT ALL PROPOSALS THAT ARE PRESENTED TO US, I• J TIME FRAME FOR CONSTRUCTION 08/92 TO 10/92 ESCROW PROPERTY 08/92 TO 10/92 ARCHITECTURE PLANS AND REVIEW • 10/92 TO 05/93 PLAN APPROVAL, CONDITIONAL USE PERMIT APPROVALS PULL BUILDING PERMITS AND PUBLIC HEARINGS 05/93 TO 06/93 GRADING FOR SOFTBALL FIELDS; GOLF COURSE DIG WELLS, SET SPRINKLER SYSTEMS, SEWER LINES ELECTRICAL SERVICE J I• 0 I0 07/93 TO 08/93 SET LIGHTS, FENCING FOR SOFTBALL FIELDS, PLANT GRASS FOR FIELDS AND GOLF COURSE. SET LIGHTS AND NETTING FOR GOLF COURSE. 09/93 TO 10/93 CONSTRUCT SPORTS CAFE, MINIATURE GOLF, GO-KART TRACK, PRE SCHOOL, CLUB HOUSE PARKING LOT 11/93 TO 12/93 FINISH LANDSCAPING FOR ALL PHASES OF COMPLEX, SETUP CONCESSIONS 01/94 OPEN COMPLEX FOR BUSINESS