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HomeMy WebLinkAbout1992-02-11; City Council; 11559; LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORTz li D 6 cz a uu 2 8 p 0 a =! 0 z 3 8 ,- CI OF CARLSBAD - AGEN@ BILL LAKE CALAVERA GOLF COURSE - E AB # /I; <?”p9 2 DEPT. H MTG. 2/W2 DEVELOPMENT STATUS REPORT CITY AT CITY Mil: DEPT, ENG:MP RECOMMENDED ACTION: Adopt Resolution No. 72-55 accepting a status report on the development of proposed Lake Calavera Golf Course project and directing staff regarding following pol icy positions and project recommendations: 1. Approval of the proposed golf course layout and overall project design 2. Directing staff to continue to pursue temporary access to the golf co project site within the City of Carlsbad. 3. Approval of an agreement with Lyon/Copl ey Carl sbad Associates regal temporary access to the golf course project site. 4. Adopting the position of utilizing non-potable water to irrigate the course and directing staff to continue to pursue non-potable water res( opportunities. Directing staff to temporarily defer processing of the Environmental I Report, Conditional Use Permit, Hi 11 side Devel opment Permit , and re project approvals until such time as involved Federal, State, Regional Local pub1 ic agencies have resolved all environmental policies requirements affecting this project including, but not limited to City‘s proposed Habitat Management Plan (HMP). 6. Directing staff to continue to pursue solutions to the pro; environmental impacts including the development of mitigation r programs, or other requirements as may be necessary to fulfill existir required Regulatory Agency conditions of approval for this project. 7. Approval of the position of constructing the proposed trails concurrent with the golf course project the cost of which shall be in1 as an element of the overall golf course project construction budget 8. Approval of Amendment No. 1 to an existing agreement with Naegl Associates for additional completed site work and facility design ser 9. Directing staff to temporarily defer additional design work on the pr golf course clubhouse until such time as additional economic analy compl eted. Approval of an indefinite time extension of the Lake Calavera Golf project schedule until such time as environmental impact miti requirements, temporary access, further economic analysis, and non-r water resource sol uti ons are ident i f i ed and resol ved. Directing staff to expend no further design funds other than those r to facilitate ongoing solutions to the environmental, water re access, and economic analysis issues. 5. 10. 11. , I - 0 /--* c- r Page 2 of Agenda Bill No. /I 52 / e I 12. Approving the following policy positions with respect to financing proposed go1 f course project: a. The City shall construct the golf course as a public works proje b. The City shall use tax exempt debt to fund the construction of golf course. c. The City shall limit the amount of General Fund contributions ta golf course to a maximum of $750,000 per year. d. The City shall select a private operator for the golf course pric construction. The City shall set greens fees that (1) reflect the market for sir golf courses in this market area, and (2) are sufficient to fun( operating and debt service costs not funded by the General Fund No General Fund monies shall be used to support operations of the course. g. The total project budget for this golf course is limited tc million. Staff is to return to the City Council immediately if estimates exceed this amount. h. Golf course construction and financing shall proceed as sol practical based on satisfying all design, fiscal, and environn concerns. e. f. General Fund support shall be limited to debt service payments ITEM EXPLANATION: The development of the proposed Lake Calavera Golf Course project is procc with several important aspects of the project currently underway. On Novembt 1990, the City Council received the latest status report on the golf course p and adopted Resolution No. 90-410 directing staff to proceed in several regardimg the development of the proposed golf course. At this time, staff \ to make another status report to the City Council updating the current sta the project and again seek policy direction regarding several key dl financing, and operational issues which have a direct impact upon both the p budget and schedul e. The attached memorandum, Exhibit 4, dated January 20, 1992 provides a more de status report on the numerous project issues and latest developments. FISCAL IMPACT: Attached Exhibit No. 3 summarizes the known and anticipated project costs, f.r sources, to develop the proposed Lake Calavera Golf Course project. The at memorandum, Exhibit 5, dated August 28, 1991 provides a more detailed anal) the numerous funding alternatives and series of pol icy recommendations re: financing of the proposed golf course project. L e 0 T Page 3 of Agenda Bill No. /I, 55’ ‘/7 EXHIBITS: 1. Location map. 2. Resolution No. ql??-ss the proposed Lake Calavera Golf Course project. 3. September 1991 Lake Calavera Golf Course budget summary. 4. January 20, 1992 memorandum from the Municipal Projects Manager regar project status. 5. August 28, 1991 memorandum from the Financial Management Director regal golf course funding alternatives. Amendment No. 1 to agreement between City and Naegle and Associates. Agreement with Lyon/Copl ey Carl sbad Associates regarding temporary ac approvals affecting the Lake Calavera Golf Course project. regarding the status report on the developmen 6. 7. 3072 OFFSITE IMPROVEMENT REQUIREMENTS c EXHIBIT 3 - 0 0 r d m o\ 4 w d m d t> c;il 0 a 9+! c k&g E cz * %E+ dmu w %2 E+ < 4zo 0 &a LQ 2 c 2 $4 020 & Dd 0 w 4 H E+ w m m 0 EXHIBIT I- January 20, 1992 TO: CITY MANAGER VIA: ASSISTANT CITY MANAGER FROM: Municipal Projects Manager LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT The following is a status report on several issues regarding the ongoing development of thc proposed Lake Calavera Golf Course project. GOLF COURSE ROUTING PLAN: Mr. Ted Robinson, a highly respected golf course architect and member of the Don Collett l Associates design team, completed the preliminary golf course routing plan in late 1990 whic was subsequently approved by the City Council appointed Golf Course Steering and Technic: Advisory Committee. As authorized in November of 1990, the final design drawings for th project have been recently completed by Mr. Robinson and the Collett design team to a 505 design level and have been submitted for review. Due to severe site constraints and influence heavily by a desire to avoid adverse environmental impacts, the golf course routing plan h2 been revised a total of eleven (1 1) times to date. The golf course routing plan, as reflected the 50% design drawings, represents a balance between providing a municipal golf course ( championship quality on an expensive and difficult site to develop with extreme sensitivity 1 potential adverse environmental impacts. During the course of final design, the golf course layout underwent several adjustments in i effort to continue to minimize adverse environmental impacts and reduce project developme costs. Preliminary grading plans were re-analyzed to reduce quantities, and therefore costs, grading the project site. Several water features and other proposed golf course amenitic appearing in the preliminary routing plan were either eliminated completely or substantia modified to reduce costs. As the design of the project continued, more complete and defint utility, drainage, circulation, parking, landscaping, irrigation, and building information Wi developed to assist the Steering and Technical Advisory Committee and the design team its in making more informed decisions regarding final design issues and projecting developmc costs. The result of these efforts has been a proposed municipal golf course which attempts strike a balance between equally important environmental and economic development interes The Golf Course Steering and Technical Advisory Committee has approved the proposed g course layout. RECOMMENDATION: Staff recommends the Citv Council formallv approve the proposed qolf course lavout and ove proiect desiqn. c 0 -- January 20, 1992 LAKE CAIAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 2 GOLF COURSE ACCESS: Permanent access to the proposed site will occur when the extension of Cannon Road from E Camino Real northeasterly to the City of Oceanside is constructed by private developers. Thi: is not expected to occur for at least five (5) years and potentially beyond this period. Thc proposed Lake Calavera Golf Course will become open for use prior to the construction o Cannon Road. In the interim, temporary access to the site must be identified, approval obtained, and construction completed. Because of the location of the overall project site in thl extreme northeastern portion of the Carlsbad city limits, temporary access to the site wa examined from both the City of Oceanside as well as from the southern and western portions c the site in the City of Carlsbad. Because of difficulties in obtaining approvals from adjacent private land owners along thl northern and eastern boundaries of the property within the City of Oceanside, the City Counc directed staff at the last golf course status report to focus upon temporary access to the gc course within the City of Carlsbad. Since that time, staff has reviewed in detail the three (: potentiartemporary access points within the City of Carlsbad which include: 1. Construction of a temporary access road extending easterly from the intersection ( Carlsbad Village Drive and Glasgow Street utilizing a portion of existing utility easemeni and then onto the golf course property. Construction of a temporary access road easterly from El Camino Real north of tt Rancho Carlsbad Mobile Home Park along an existing maintenance road and tha proceeding northerly onto the golf course property. Construction of a temporary access road easterly from the future extension of Tamarar Avenue which will be constructed by private developers and then onto the golf cour! property. 2. 3. Since the last project update, preliminary alignments have been identified, contacts a discussions with property owners have been made, draft temporary access agreements a exhibits have been prepared, and coordination with utility company and adjacent privc development has been undertaken. Although final details and negotiations with all of the affect property owners have not as yet been completed, it appears at this stage that arrangements \I be made to provide a temporary access route to the golf course solely within the City of Carlsb at a time consistent with golf course construction. The Lyon Company’s development of Calavera Hills Villages Q and T immediately west of 1 proposed golf course site in the northeastern portion of the City could potentially bel construction in 1992 and extend through 1993. This developer will be constructing additio circulation streets including the extension of Carlsbad Village Drive easterly from Glasg Avenue, the extension of Tamarack Avenue, and the connection of College Boulevard from i newly extended Carlsbad Village Drive through to the City of Oceanside. Staff has analyzed t @ a ^C January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 3 three (3) potential temporary access points identified above in relationship to the schedulec circulation street construction by the Lyon Company and has identified Alternative No. 3 abovc as the most accessible and economical approach to providing temporary access to the proposec Lake Calavera Golf Course project. Staff has been working very closely with the developers and their consultants in preparinc alignment alternatives, street grades and drainage solutions, as well as a number of othe preliminary design issues that would provide an "all weather" access road from the extendec Tamarack easterly to the golf course. The selected alignment will utilize for the most part existin! utility easements which will be required to be widened in some areas to accommodate thc proposed road beyond the limits of the requirements of the developer. These costs are 4 requirement of the golf course project and are included in the proposed project budget. Furthe to the east, the proposed access road crosses an adjacent privately owned parcel with nc current land use planning or other development submittals pending. Discussions with thes property owners are on-going. Costs to develop and construct the temporary access road t serve the golf course are a major element of the overall golf course project budget. Staff wishe to emphasize that because of the timing of the golf course project in relation to the unknown an uncertain development of surrounding properties in this area, providing temporary access an utility services to the project represent a major budget consideration. Attached for the City Council's review and approval is an agreement with Lyon/Copley Carlsba Associates granting temporary access to the golf course through the Lyon development. principal, this agreement provides Lyon with the City's permission to grade on the proposed g( course property in accordance with their approved grading plan and install certain drainage ar detention structures required of their development. These drainage facilities have also bec designed to benefit the golf course by providing storm water runoff to serve required ripari: mitigation areas on the golf course project site. In exchange, Lyon grants to the City permissic to utilize an existing utility easement and road to be constructed by Lyon and partially widenc by the City, which will provide temporary access to the golf course through the Lyon proper' Discussions are ongoing with representatives of the owners of the remaining property easte of Lyon required to facilitate the temporary access road. RECOMMENDATION: Staff recommends the Citv Council approve an aqreement with Lvon/Coplev Carlsbad Associat reqarding temporary access and related improvements affecting the proposed Lake Calavera G Course Proiect. WATER RESOURCES: In the last project update, the City Council received a report from the City's water resoui consultant, Mr. Linden Burzell, regarding his analysis and recommendations for three (3) poten water supplies for the golf course project which included: c 0 .- January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 4 1. The existing potable tri-agency water pipeline located less than 600 feet east of the go1 course property in the City of Carlsbad. Well water sources which may be developed on-site or off-site. Reclaimed water sources to be provided when available. 2. 3. Mr. Burzell’s report also identified several approaches to physically delivering reclaimed or we water to the golf course project when a source became available in the vicinity. Consequentl! the golf course design plans include the development of a piping and delivery system from a adjacent surplus Carlsbad Municipal Water District (CMWD) storage tank with adequate storag capabilities for the golf course. With respect to utilizing reclaimed water for irrigating the golf course, the reclaimed water mast< plan developed through the Carlsbad Municipal Water District in association with the Encina Joir Powers Authority will not make reclaimed water from the Encina facility available for several year: Contact has been made with surrounding reclaimed water producers in the area which indicate that a reclaimed water source of sufficient quantity to serve the golf course is not available in tt near term, however, discussions are continuing with these agencies. Additionally, opportunitic for utilizing existing and proposed delivery systems will need to be developed to take advantas of future sources of reclaimed water for this project as well as entire areas surrounding the g( course property scheduled for future private development. Following from Mr. Burzell’s recommendations regarding the development of well water source staff contracted with the Barrett Consulting Group to examine the City’s existing well rights in tt Cannon well fields immediately east of El Camino Real and north of the Rancho Carlsbad Mob’ Home Park. Barrett’s research indicates the potential for utilizing well water in this area equalii approximately 40% to 50% of the total daily quantity required for the proposed Lake Calavs Golf Course. Some investment will need to be made in rehabilitating the existing wells ai performing additional quantity and quality analysis. However, there does appear at this stal to be potential opportunities for the use of well water to provide a partial resource to irrigate t golf course. It is important to note that because of geologic conditions in this general area, mc well water contains very high levels of total dissolved solids (TDS) which will require blending w potable water or the construction of reverse osmosis systems to reduce the TDS levels acceptable limits for irrigating purposes. CMWD staff has taken the lead in developing well water resources for the golf course pro@ The larger drainage basin to the east which supplies water to Lake Calavera provides additioi opportunities for well water on the golf course site itself. Staff is continuing to investigate the opportunities and will be working closely with CMWD staff in this effort. I) 0 -- January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 5 CMWD staff will be exploring alternative financing opportunities for the development of both tes wells and product wells as well as required delivery systems to transfer well water resources fron the discharge point to the golf course water storage tank. The policy issue becomes thc question of whether the cost to develop well water resources to irrigate the golf course projec is an expense borne by service area-wide rate payers or, alternatively, a cost of the golf coursi project itself. Staff recommends the City Council consider the issue of the use of non-potable water resource' to irrigate the Lake Calavera Golf Course. Staff wishes to emphasize that the development of WE water opportunities for this project is not a certainty at this time but, rather, will continue to b explored as a resource to irrigate the golf course. With respect to reclaimed water opportunitie! staff also wishes to emphasize that reclaimed water will not be available in the near term t irrigate the golf course. However, CMWD staff is continuing to research the operations of othc reclaimed water producers in the area and investigate those potential opportunities. Althoug a storage and delivery system will be constructed within the project to utilize reclaimed watt when available, the development and delivery of reclaimed water to this project as well as th entire surrounding area of northern Carlsbad is several years away. Therefore, the lack f availability of non-potable water resources to irrigate the golf course may require the extensic of the overall project schedule if the City Council adopts the formal position of requiring no1 potable water resources for this project. For the last several years, research and technologies in experimenting with new types of grasse shrubs, and other landscaping materials have been developed at a number of universities ar privately funded research institutions throughout the United States. The thrust of this researc has been to develop new strains of grasses to be used on golf courses which are sturdier ar require less water and other maintenance supplements. The knowledge and technical experti of the City's golf course consulting team, in particular Ted Robinson and Don Collett, ha contributed significantly to recommending landscaping materials which represent the latc developments in this area and will require less water to irrigate and maintain. Similarly, the G Course Steering and Technical Advisory Committee has made several recommendatio regarding plantings in and around fairways, tees, greens, bunkers, and other areas of play tt will require less maintenance effort and therefore cost. All in all, the proposed layout of the La Calavera Golf Course and the landscaping and irrigation system components represent the latc technologies with particular sensitivity to maintenance and water conservation. RECOMMENDATION: Staff recommends the Citv Council adopt a position of utilizing non-potable water to irrigate 1 qolf course fairwavs. rough areas, and other associated proiect landscaping and direct staff continue to pursue non-potable water opportunities. Staff further recommends the Citv Cour take the position that costs associated with developing well water and reclaimed water resourc to be used for the Lake Calavera Golf Course Proiect are an expense to be borne bv the Drab budqet. P m L‘ January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 6 REGULATORY AGENCY PERMITS AND APPROVALS: The proposed Lake Calavera Golf Course Project requires the following agency permits anc approvals: - City of Carlsbad: Conditional Use Permit Grading Permit Building Permit Hillside Development Permit 1601 Development Permit State of California, Department of Fish & Game: County of San Diego Health Department: Permit for underground fuel storage and delivery systems. - United States Army Corps 404 Development Permit of Engineers: (Corps will consult with United States Fish & Wildlife Service) Utility Companies: Various electricity, gas, sewer, water, telephone, ar other utility approvals. The City has recently received the United States Army Corps of Engineer’s permit for t proposed Lake Calavera Golf Course project. This approval represents the accomplishment a major project milestone in the complex approval process for this project. The required 1601 Development Permit application with the State of California, Department Fish and Game, cannot be filed until the conclusion and certification of the projec Environmental Impact Report (EIR) which is currently underway. Staff anticipates forn submission of the State Fish and Game permit application immediately after EIR certification The Environmental Impact Report (EIR) for the project has undergone public review which clos on November 18, 1991. Written comments were received by the Planning Department bott- support and opposition to the project. The Planning Department’s environmental consultants i in the process of preparing written responses to the comments received on the EIR. Notic public hearings before the Planning Commission on the golf course EIR, Conditional Use Perr and Hillside Development Permit could begin in the near future. Assuming certification of the E the final permit application with the California Department of Fish and Game will be fi immediately thereafter. * 0 January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 7 City staff and the City’s environmental consultants developed a strategy very early in the go course project process of preparing a detailed on-site wetland and riparian mitigation plan 1 offset adverse impacts. Extensive environmental reconnaissance and on-site biological survel were undertaken at the very beginning of the project to assess potential impacts. The gc course layout was subsequently modified a total of eleven (1 1) times to accommodate anticipate Regulatory Agency mitigation requirements and with a general design philosophy of minimizin impacts on the site wherever possible. This effort resulted in the development of an on-sii mitigation plan which would meet the requirements of the Regulatory Agencies during tt- environmental and permit process and was subsequently cost-estimated as an element of tt- project budget. This strategy has, to date, proven successful since the project has receive approval from the United States Army Corps of Engineers, in consultation with the United Statc Fish and Wildlife Service. Further, the proposed on-site mitigation plan for wetland and ripari: impacts is anticipated to meet the requirements of both the City of Carlsbad’s environmeni review through the EIR process as well as subsequent review in the form of a 164 agreement/permit with the California Department of Fish and Game. In the last twelve (1 2) months, the national and regional focus upon the cumulative loss of Dieg: Coastal Sage Scrub primarily in Southern California, which is habitat for a number of specic including the California blacktailed gnatcatcher, has raised to a heightened level governme agency review of both public and private projects affecting this habitat. The proposed La1 Calavera Golf Course project, like all other public and private initiated projects with simil impacts, will be required to address and mitigate losses of this habitat. Because of the currc uncertainty of the status and timing of potential listing of the California blacktailed gnatcatct as an “endangered species” by the United States Fish and Wildlife Service and/or the Califorr Department of Fish and Game, the mitigation requirements and potential additional costs to t proposed golf course project are equally uncertain at this time. In the best case, the species L not be listed and mitigation not required thereby enabling sufficient findings be made to warri proceeding with the project as designed and under the current schedule. The golf course projc impacts twenty (20) acres of coastal sage scrub and could potentially require the off-s acquisition and mitigation at a 2:l ratio of forty (40) acres of comparable quality habi potentially valued at $8 million. This additional heretofore unforeseen and unbudgeted expen to the project would likely render the proposed Lake Calavera Golf Course project economic: infeasible. Accordingly, City staff of the various Community Development Departments have met a discussed potential options on how to deal with this situation in light of the current processi of the golf course project. At this meeting, City staff will update the Council on the status of 1 City’s proposed Habitat Management Plan (HMP) and its relationship to project processing applications with coastal sage scrub impacts such as the proposed golf course project. At this time, it appears the City Council has four (4) options with which to deal with the continL processing and schedule of the Lake Calavera Golf Course project in light of gnatcatcher imp issue: 0 0 < January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 8 1. Proceed with the current processing of the golf course project under the current schedulc and in line with the current projected budget. This approach would be accomplished b) adopting findings of overriding consideration which would eliminate the legal requiremen to mitigate the coastal sage scrub impacts. Staff wishes to emphasize that this approack is not consistent with the City's processing of other similarly impacted projects and it i: unlikely that the California Department of Fish and Game would issue the required 1601 permit to the City at this time with this approach. Proceed with the current processing of the golf course project under the current schedult and acquire off-site mitigation to balance the coastal sage scrub impacts. If City ownec land is used as the mitigation site, other high-priority City projects could be affected. privately owned land is acquired, the additional cost to the project is anticipated to bi considerable. Defer both the current Environmental Impact Report certification and project approvi indefinitely until such time as the California blacktailed gnatcatcher issue is resolved b the involved Federal and State Resource Agencies and policies regarding mitigatio requirements are established. This approach also relates to the Resource Agency acceptance of the Habitat Management Plan (HMP) which has yet to be finalized. Th schedule for this event is estimated to be September of 1992. Proceed to certify the Environmental Impact Report, issue the project Conditional U: Permit, Hillside Development Permit, and other local agency approvals in accordance wi the current schedule. This approach would complete the environmental phase of tt project, issue required local agency project permits and approvals, and condition tt project approval upon the development and acceptance of a workable mitigation plan 1 other appropriate and legally acceptable conditions of approval. 2. 3. 4. RECOMMENDATION: Staff recommends the Citv Council direct staff to pursue Option No. 3 above. This approa would temporarily defer processinq of the Environmental Impact Report, Conditional Use Perm Hillside Development Permit, and related project approvals until such time as involved Feder State, Regional, and Local public agencies have resolved all environmental policies ai reauirements affectinq this project including. but not limited to, the Citv's proposed Habi Manaqement Plan (HMP). Staff wishes to emphasize that the Lake Calavera Golf Course proif schedule will require an indefinite extension until such time as these issues are finalized, cc estimated, and remaining RequlatorV Aqencv permits and approvals are obtained. TRAILS: Staff has been working with local citizens comprising the "Friends of Lake Calavera" in an atten to incorporate a trails system around the golf course project site. A preliminary trails system k been developed which would fulfill the needs of providing a trails system, restroom facilities . * 0 January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 9 drinking water, staging areas, access to the western portion of the lake for potential picnic areas, parking, etc. This trails system would provide a major link with the overall master trails system for the City. At this Council meeting, staff will review the trails concept, components, and budge1 estimates as an element of the golf course project. At the last project status report, the City Council indicated the desire to include the constructior of the trails system with the final design package for the Lake Calavera Golf Course. Staf requests direction from the City Council regarding the financing of the trails system componen of the project. Among several options are: 1. Costs to be included within the Lake Calavera Golf Course financing plan which ma\ include tax exempt bond financing. As an independently budgeted General Capital Construction Fund expense. As an element of the City-wide trails system program to be funded by resources yet ti be determined. RECOMMENDATION: Staff recommends the City Council adopt a position of constructinq the proposed trails svstei concurrent with the qolf course project the cost of which is estimated at $200,000 and to 1: funded as an element of the overall Lake Calavera Golf Course proiect budget. CLUBHOUSE AND MAINTENANCE FACILITY DESIGN: Last November, the City Council approved a consultant agreement with the firm of Naegle Associates, Incorporated of San Diego, for the design of the proposed clubhouse, maintenanc facility, and'on-course restrooms. The design of these facilities will occur parallel with the desi< of the overall golf course project and is identified in the master project design schedule. To date, the programming and schematic design phases of the clubhouse and maintenan facility have been completed. The maintenance building is an approximately 5,000 square fc full service facility intended to provide for the maintenance needs of the entire project to inclu equipment storage, fuel storage and dispensing, maintenance headquarters, and relat maintenance requirements. The on-course clubhouse facility has been developed with three (3) different options: 1. 2. 3. I Install a 2,000 square foot temporary utility trailer. Under this approach, funding 8 construction of a permanent clubhouse building would occur at a later date. '. e a January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 10 2. Construct the first phase of a permanent clubhouse building which would include a 5,00( square foot ground-level golf cart storage facility, and an above-ground 7,000 square foo clubhouse building which would include the pro shop, restrooms, administrative offices starter's office, small grill and lounge area. In addition to constructing the above referenced first phase of the permanent clubhoust building (Option 2 above), construct an additional 5,000 square foot full service kitchei and combination diningheeting facility to seat 200 people. The total square footage c the completed clubhouse facility would include 5,000 square feet of ground-level golf cai storage and 12,000 square feet of clubhouse. 3. Staff will be reviewing information and drawings to date on the clubhouse and maintenanc facility design at this Council meeting, The Lake Calavera Golf Course Steering and Technic: Advisory Committee has formally endorsed the construction of Option 3 above which is th complete golf course clubhouse facility if financing opportunities are available at this time. TP Committee wishes to emphasize the income potential for the clubhouse operation, particular the pro shop, grill and lounge area, and kitchen/dining facility recommended to be administere by a private operator. Opportunities exist for a financial arrangement with a private golf cours operator and/or clubhouse concessionaire in which proceeds from the facility not only defc operations costs but also provide opportunities for the City and private operator to profit shari A clear financial picture of the clubhouse operation and its economic viability will be known aft( a private golf course operator/concessionaire is retained by the City and a more in-dep operations analysis completed. Attached for the City Council's review and approval is Amendment No. 1 to the existir consultant agreement between the City and Naegle and Associates required for the consulta to provide additional site planning and design analysis for the clubhouse facility. Additional si and topographic analysis was required beyond the original scope of work to effective coordinate the siting of the clubhouse, utility work, parking, grading impacts, and related si work on the extremely complicated and restricted site. Staff recommends approval of t amendment in the amount of $9,450. There is a sufficient balance of funds available in t project account to approve this amendment. RECOMMENDATION: Staff recommends approval of attached Amendment No. 1 for additional work associated w site desian with Naeqle and Associates in the amount of $9,450. The Lake Calavera Golf Course Steerinq and Technical Advisorv Committee has recommenc that Option 3 above be approved which would continue with the desiqn and construction of' complete clubhouse facilitv as an element of the overall aolf course project. Staff recommer that a decision on whether a temporarv or permanent clubhouse facilitv is constructed with - golf course be deferred until such time as additional economic analvsis is comsleted and a E course operator/concessionaire is identified. 1 e e January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 11 GOLF COURSE OPERATIONS & MAINTENANCE: City staff has met with three (3) of the largest golf course development, operations, at maintenance firms specializing in golf course development throughout the United States to revic the current status of the Lake Calavera Golf Course project. These firms included, American Gc Incorporated, Golf Corp, and California Muni Golf in association with Arnold Palmer Gc Incorporated. The purpose of these project reviews with independent firms was to ha professional golf course operators give a general overview of the project from an operations at maintenance standpoint as well as to determine, in a very preliminary sense, potential inter€ within this industry in the City’s golf course project. In general terms, it was the opinion of the three (3) firms interviewed that the Lake Calavera GI Course project provided a very attractive golf course opportunity in a demanding local mark for the type and style of golf course proposed. Further, although there were concerns express regarding the overall project complexity and preliminary development costs, all three (3) firr expressed the opinion that financing vehicles and approaches were available to fashion City/Operator agreement that would make the Lake Calavera Golf Course project economica viable within certain fee and operating structures. The City’s discussions with the three (3) firr did not proceed beyond general concepts and impressions of interest in the project nor w there the intent to investigate specific operational and financial issues. Staff would like to review potential City/Operator options with the City Council and receive poli direction regarding proceeding with soliciting formal golf course operator proposals. It is staf recommendation that the Lake Calavera Golf Course project be constructed as a City pub works construction contract and that a private golf course operator be retained to operate at maintain the golf course and all facilities therein. At this Council meeting, staff will be discussit in detail this subject and requesting Council direction regarding private operation of the gi course. RECOMMENDATION: Staff recommends the Citv Council defer the solicitation of qualifications and interest of priv.? golf course operator/concessionaires in operating the proposed Lake Calavera Golf Cour proiect until such time as the City receives all local and other Requlatory Agencv permits ai approvals for the project. OVERALL PROJECT SCHEDULE: The general complexity of the project coupled with the currently underway environmental revif has necessitated an extension of the overall project schedule through at least the beginning 1994 or beyond. Staff wishes to emphasize that even this date is tentative given curren outstanding issues of temporary access, water resource availability, environmental review ai permitting, financing, and potential private operator involvement. Staff will review the over project schedule at this meeting and update the Council on current development issues and th affect on the project schedule. - 9 e January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 12 RE C 0 M M E N D AT1 0 N : Staff recommends the Citv Council adopt a position of extendinq the Lake Calavera Golf Coui schedule until such time as environmental impact mitiqation requirements, identification additional project costs, temporaw access, and non-potable water resource availabilih i resolved. ADDITIONAL REQUIRED DESIGN SERVICES: Additional design work is required for off-site access, trails system, and water resour identification and delivery to the site. The design work associated with these off-s improvements required for the golf course project are not included in the existing design sco of work with Don Collett and Associates since they were unknown at the time of developing I preliminary golf course layout and other initial design considerations. Now that the design oft project has proceeded to the point of identifying final off-site requirements, additional desi work is required for these items of work. A scope of work and fee schedule have been prepar by Don Collett and Associates required for off-site access, trails system, and related projc design at a total estimated cost of $179,065, Depending upon final Regulatory Agency per1 requirements and a number of other potential final design factors, additional design costs a time are likely to be required to complete the construction documents for the golf course proje RECOMMENDATION: Staff recommends that no additional desiqn funds be exDended until such time as t Environmental'lmpact Report has been certified, proiect permits and approvals from all agenci are obtained, and final solutions to access, water resources, and environmental imp: requirements are finalized. PROJECT FINANCING ISSUES: Staff, working with the project design team, has spent considerable time and effort in prepari a detailed project budget which realistically reflects the known costs anticipated from the desi5 administration, and subsequent construction of this multi-faceted and highly complex proje Attached is Exhibit No. 3 which summarizes the known and anticipated project costs, from sources, to develop the proposed Lake Calavera Golf Course project. Staff wishes to emphasi that additional project costs related to environmental impact mitigation, development of wa resource opportunities, and other project development costs may be required for this projec Attached to the agenda bill is a memorandum identified as Exhibit No. 5 dated August 28, 19: from the Financial Management Director to the City Manager, regarding golf course fundi alternatives. At this Council meeting, staff will be reviewing potential funding alternativc preliminary budget, and a series of options regarding financing the project. 0 0 January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 13 Staff is recommending the City Council adopt the position stated below with regard to the fiscal issues facing this project: 1. Citv Constructs Golf Course The City should construct the golf course as a City public works project utilizing the input expertise, and experience of the City's consultant team and the Golf Course Steering anc Technical Advisory Committee to ensure accountability and quality control of the project Citv Issues Tax Exempt Debt The possibility of using tax exempt debt to finance all or part of the course provides thc City with a significant cost savings when compared to the taxable debt markets. Intere: savings over the life of the debt will amount to millions of dollars if a 2% to 3% intere: savings can be realized by issuing tax exempt debt. This reduction in interest cost allows the City to get more project constructed for each dollar of paid-in debt service. Limit General Fund Contributions to the Course to $750,000 Annually One of the risks to the City in entering into this project is that the General Fund potentially exposed to significant costs if controls are not put into place early. One of th most important controls is a limit on the amount of General Fund revenue that will b made available to support the course each year. The staff's recommendation is that th City Council should take an official position limiting the annual exposure to the Gener< Fund to a maximum of $750,000 per year. This limit forces the golf course to charge fee high enough to support operations and a portion of debt service, rather than dependir on the General Fund to make up any operating shortfall. Under the current cost estimates for the construction phase of the golf course ($15 million) the financing of the golf course is still within reach if the City Council commits provide some General Fund support, limited as stated above, and to "market rate" greer fees which would be increased as necessary to meet operating and debt servic demands. The issue of market rate greens fees is discussed below. The issue of limiting the General Fund contribution has been discussed in-depth with t Golf Course Steering and Technical Advisory Committee. In short the Committee do not fully agree with the staffs position for the following reasons: In June 1989 the voters of Carlsbad approved Proposition G which authorized the C: to spend more than $1 million of General Fund monies to construct a variety recreational facilities including golf courses. On the same ballot was Proposition F wh authorized a 2% point increase in the hotel Transient Occupancy Tax (TOT) to h support general City operations. The additional revenue from Prop F made it possi for the City to embark on the design and construction of the first of several recreatio facilities including the Lake Calavera Golf Course. 2. 3. & a 0 January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 14 Since the increased TOT revenue has provided additional income to the General Fund, the City Council, in the opinion of the Committee, should earmark most or all of this additional revenue for the golf course construction project. If the City Council were tc adopt this position the amount of General Fund revenue dedicated to the golf course would grow over the years to exceed the $750,000 limit proposed by staff. With a larger contribution from the General Fund golf course fees could be held to a minimum. At this time the 2% Prop F revenue equals approximately $640,000 annually. Tht $750,000 limit recommended by staff allows for some growth but does not commit al increased revenues to the golf course. The Committee's position is that the City Counci should allow all increased revenues created by Prop F to be dedicated to the golf course City Retains Private Golf Course Operator The City should retain a private operator for the golf course using a contract that meet the requirements of the 1986 Tax Reform Act. The use of a private operator to administc and maintain the golf course project allows the City to take advantage of lower labor an management costs when compared to other City operations. Several golf cours operators have expressed an interest in performing the management function for the Lak Calavera Golf Course under these restrictions. Citv Should Adopt a "Market Rate" Greens Fee Structure The greens fee structure for the Lake Calavera Golf Course must be market-driven 1 support required golf course revenues. The golf course must be able to debt servic approximately $7.5 million of debt and cover the cost of operation and maintenance fro all operating revenue sources. The higher the cost to build and operate the course, tt higher the greens fee structure will be required. According to the Economic Researc Associates (ERA) study, a greens fee structure averaging $22 to $25 (based upon a $' million construction cost estimate) per 18-hole round would be necessary. If constructic and administration costs are in excess of $1 4 million, the greens fee structure will requi an upward adjustment. A final greens fee structure has yet to be addressed and shou reflect final project costs which are estimated at this level of design to approach $ million. General Fund Support Should be Limited to Debt Service Pavments Onlv Staff is proposing that any General Fund support for this project be limited to paymc of debt service costs only. That is, no General Fund monies should be used to supp operations of the golf course. This position would force the golf course operators e the City to adopt an aggressive stance toward fees. 4. 5. 6. 0 0 January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 15 7. Set Official Budget Policv for the Golf Course Construction Proiect The construction cost of the golf course is driven by many things, some of which are controllable while others are uncontrollable. The golf course design, club house amenities, access, water, environmental mitigation, and other issues all affect the ultimate cost of the golf course. There is, however, a limit to the ability of the golf course tc support itself, and a risk to the General Fund if expectations are allowed to grow beyont the ability of greens fees and golf course revenues to fund operations. The present cost estimate for the golf course is about $1 8.8 million, including all desigr costs and potential amenities related to the full club house option. This cost i! supportable under the program that has been outlined by staff assuming that the go1 course receives the amount of play projected in the ERA study. Costs significantly ii excess of this amount will drive the greens fees well beyond the $25 or $30 averag anticipated in the study. The establishment of some limits on the golf course budget will allow the staff to weig competing demands such as timing of construction, cost of special features, and th needs of the community. At this time, staff has proceeded with the design of the go course and an implementation plan on the assumption that the golf course is to b constructed as soon as is reasonably possible. This approach has lead to the need t include plans for access, the provision of water, and other features that have added 1 the cost of the golf course. Staff recommends that the City Council set a limit of $19 million on the total golf cours construction project, and direct staff to return to the City Council if cost estimates chanc significantly from those shown in Exhibit 3 attached to this agenda bill. The City Council should understand that the cost for mitigation of environmental impact if any are required, have not been included in the current cost estimate. Timins of Construction and Financing Construction funds for the Lake Calavera Golf Course can be made available to me almost any construction schedule. Although there are many City Council actions to I taken prior to issuing bonds, the sale of bonds should be coordinated with the award a construction bid under any foreseeable schedule. 8. RECOMMENDATION Staff recommends the Citv Council adopt the following policv positions with respect to the q course proiect: 0 0 January 20, 1992 LAKE CALAVERA GOLF COURSE DEVELOPMENT STATUS REPORT Page 16 The Citv should construct the Rolf course as a public works project. The Citv should use tax exempt debt to fund the construction of the course. The Citv should limit the amount of General Fund contributions to the course a maximum of $750,000 per vear. The Citv should select a private operator for the golf course prior to constructic The Citv should set greens fees that (1) reflect the market for similar qolf cours in this market area, and (2) are sufficient to fund all operating and debt servi costs not funded bv the General Fund. General Fund support should be limited to debt service payments onlv. F General Fund monies will be used to support operations of the golf course. The total project budqet for this golf course should be limited to $1 9 million. St, is to return to the Citv Council immediatelv if cost estimates exceed this amoui Golf course construction and financing mav proceed as soon as Dractical basc on satisfying all desian, fiscal, and environmental concerns. CONTINUED ROLE OFTHE COUNCIL APPOINTED GOLF COURSE STEERING ANDTECHNlCi ADVISORY COMMllTEE The City Council appointed Golf Course Steering and Technical Advisory Committee has prow to be an invaluable resource to this project. The technical expertise and personal experience several Committee members in the areas of golf course construction, operations, ai maintenance have directly and beneficially shaped the project as it is currently designed. TI interaction of the Committee members with both City staff and the Ted Robinson/Don Collc design team has been particularly productive throughout the entire last eighteen (1 8) montk Although it is likely that the project schedule will be extended in order to resolve the complc issues facing this project, it is staff’s strongest recommendation that this Committee remain inta and continue to have the opportunity to provide the kind of positive contributions that it h: Municipal Projects Manager JJC:jkb - 0 c LL:-,y] - August 28, 1991 TO: CITY MANAGER FROM: Financial Management Director GOLF COURSE FUNDING AL.'I"ATIV€lS As we move closer to having a completed design for the Calavera Hills Golf Cor attention shifts to the question of how to finance the construction and operation of facility. Early in the life of the course, the City Council committed to provide a lirr level of funding to the project from the General Fund. However, our intention has all been to finance as much of the capital and operating costs from come revenue possible, leaving the General Fund in a position of filling in the gaps as necessary. expectation was, and remains, that the General Fund would not be exposed to costs be! a cap of $750,000 to $800,000 annually. We have prepared this memo to describe the various funding alternatives, and what mean for the City on a short and long term basis. We have found that there are sei viable alternatives for funding a come of this size that meet our need to limit risk exposure to the General Fund. The alternatives we will discuss include the following: 1. City Constructs and Operates 2. Public/Private Partnership A. City Builds - Private Operator - B. Public/Private partnership on all phases 3. Joint Powers Authorities (JPA) - Assumptions Before we look at the funding alternatives, it may be useful to understand some c basic assumptions used in this analysis. These assumptions have helped to solidif staff's position on certain aspects of the various alternatives. - Golf Course Construction Cost - $14 million including engineering, design, pe ktc> The amount of General Fund participation in the course is limited to $750,0( year - to support construction costs only. City prefers to have contract manager/operator City will not be required to contribute toward operating costs. - - - The corn provide sufficient revenue from fees and charges to fund all operations. e 0 - Tax exempt debt is preferred over taxable debt Issues such as the EIR, water, mitigation, or other unknowns will not significa Greens Fees will be set within a range of $10 (twilight - 9 holes) to $30 (weeke The financial proforma provided by Economics Research Associates (ERA) prov - increase the project costs 18 holes), averaging about $20 to $22 (in 1990 dollars) per round (excluding rentals) a reasonable approximation of the true operating revenues and costs of the co' - - Golf Course Costs The first and foremost factor that drives the feasibility of the golf course project is construction cost estimates. Early estimates of total construction cost placed the pnc about $7 to $8 million. These estimates have proven to be wide of the mark 1 significant margin. Current estimates place the price near $14 million on the low side $17 million at the upper end of the scale. For the purposes of this report we have assumed that the $14 million figure ca achieved by down sizing the clubhouse and/or other cost containment measures. L cost pushes toward the higher estimate funding the capital facilities will take an incre: share of the funds that would otherwise be earmarked for operations and maintena Limit on General Fund Particiuation When the voters authorized the Council to proceed with the construction of recre facilities, the assumption was that the General Fund would not be required to prc unlimited support to these' new projects. In fact, the Council made several staten indicating that the amount of the General Fund support would be limited to the an that could be reasonably raised from new revenue sources. At that same time, the 'v approved an increase in the Transient Occupancy Tax (TOT) rate of 2 percentage F which provided the General Fund with an estimated $650,000 to $700,000 of add3 revenue in the first year. This amount was expected to grow over the following two reaching the projected hit of $750,000. CaDital Funding Usinn General Fund Monies The amount of construction funds provided by $750,000 of General Fund revenu depend on both interest rates and the type of debt issued. The interest rates are out control of the City but play an important role in defining the amount of constn capital available for the project. The question of the type of debt used generally fall two camps - Taxable or Tax Exempt Debt. As figure 3 below shows tax exempt del generally provide more construction capital for the City because of the lower interesl available in this market. ' 2 Golf Course Revenues/ExDenses The ERA economic review of the feasibility of the golf course project provides an analysis of the revenues and expenses relaled to the operation of the course. ~h~ study reviews four alternate management and fee structures, all of which show that the course can be an economically viable entity if the City is willing to participate in the financing of a portion of the costs. According to their study, course 1 Golf Course Financing Revenue From Operations vs Required General Fund Contribution Revenue From Operations (Thousand $1 1800 1400 ..................................................... ~ __..__._..___..........___.. ,200 ~-~ _.....__._.,.._____.---.---- __..____.__-. .-..:..L -.,.,contrit I I I I 9 I 8 -. -_ -*. 0 14 18 18 20 22 24 26 28 30 Greens Fees (Avg) Qeneral Fund Support +- Revenue From Oper __-_ Bu.d On 70*000 roundr per y.rr Because the General Fund is exposed to a significant risk due to its participation iri this project, Council may want to consider adopting a policy stating the City's intent to maintain a market rate fee structure. This would maximize the revenue from the course operations and reduce the risk of demands on the General Fund for any operating or debt service indicating the Council's intent to the General Fund to no more shortfalls. In addition, a policy restrict the contribution from Figure 2 Golf Course Financing Required Annual Income Vs Construction Costs Required Annual Income (Million 0) 3.6 2.6 1.5 12 13 14 16 18 Construction Costs ' General Fund Support m Operating Revenue Taxable vs Tax Exempt Debt Any bond issue would have to pass several basic tests to be. generally aimed at ensuring that the issue is going to be used for a true public purpose. In order to pass these tests, one key element is the length of any management contract entered manager is paid. If the contract manager's compensation is based on a percentage of the course able to participate in the tax exempt markets. These tests are into by the City and how the is longer than 5 years, or the Golf Course Financing Maximum Amount of Debt Financed by General Fund - $750,00C Total Debt Issued (Million $1 ,2 ~ Tax-Exempt -Market Rate- ,o __ -- - / 7.5% - 8 ~-- ----------+----------*----------.----------+--- e" ---- - -- -+---rr ST--% - ~Z~~Lr~=~Rgte 10.5% 4 2- 0 -1.6% -1.0% -0.6% Market *0.6% +1.0% I I I I Interest Rate - Tax Exempt Issue -+- Taxable Issue 8m.d on $760.000 *vdlablo from (kn Fd - e W size to achieve the same level of expertise. In addition, the cost of labor, which represc a signsficant portion of the operating costs of the facility, can generally be reduced by UI a private operator. ERA Financial Analysis The market and economic review done by ERA has provided the City with a projectia fiscal realities of running the Calavera Hills golf course. The data included in the studj been reviewed by several firms who how the golf markets and have a good feel foi reasonableness of the numbers provided in the study. In general, the report appea provide a good guide to understanding the fiscal side of golf course operations, howt several sources have indicated that the study appears to be somewhat optimistic in se’ areas. For example, the study may provide an aggressive view on how quickly the ro played will build up to peak levels. Also, the operating costs may prove to be higher those projected in the report. These comments, combined with a natural tendency 1 conservative, lead staff to believe that the fiscal data is probably on the optimistic side should be treated as such when we review the numbers. Reimbursement for Prior Costs A recent change in the IRS des has altered the way reimbursements are handled thr bond issues. If the City is expecting to be reimbursed for any of the prior costs relat the course from bond proceeds, there may be some Council actions required to retai ability to do so. This issue can be reviewed with bond counsel as soon as we are cz that we are interested in reimbursing ourselves for prior costs. Construction and Financinn Alternatives The construction and operation of the golf course presents the City with a vark financing options. These range from total City involvement in every detail to contr: the entire development process to a private company. Each alternative has positiv negative attributes, and each could produce a viable project. The Council may w discuss the various alternatives in detail prior to selecting a financing alternative. 1. City Constructs and Operates Under this scenario the City would be the builder and operator of the course. The and Recreation Department would assume the ongoing duties of managing the facili maintaining the course using City staff. The Municipal Projects Division of the En@ Department would combine their efforts with other departments to provide constr management services. ‘This option provides the highest level of City participation project from the beginning. Financing under this option would be provided by revenue bonds issued by the Golf ’ Enterprise Fund backed by a pledge of revenues from the General Fund. The bond would depend on revenue from operation of the course as the primary source of i 5 e w used to repay the bonds, backed by a guarantee from the General Fund offering to cc any shortfall in revenues. The City could clearly use tax exempt financing under this option. The lack of pn~ participation in the project makes this a "public purpose'' issue with out any need to se: for safe harbors or loop holes. The involvement of City staff in the continuing operations of the course may contribut a higher than necessary annual operating cost, and therefore higher greens fees. Also, staff currently has no expertise in the operation and maintenance of a course of this t Gaining this in-house ability may be both expensive and time consuming. Although the concept of having the City fund the course construction is attractive, ar in fact the recommended funding method, staff recommends against making ( operations of the course a function performed by city staff. 2. Public/Private Partnerships The concept of public/private cooperation on projects is not new. In the field of course construction and management they have become quite common in two forms. first (Option 2A) is a combination where the City provides for the construction o course and then hires a manager to run the course. The second (Option 2B) bring ultimate manager into the picture earlier by including the private company's expertise some times money) in the construction phase of the project. The private company operates the course, usually on a long term contract. Option 2A is similar to Option 1 presented above where the City is fully responsible fc design and construction of the course. Revenue bonds (or Certificates of Particip: would be issued pledging the revenue from the course operations with a suppc guarantee from the General Fund. These bonds could be tax exempt if the ult contract with the private operator could be structured in such a way as to fall with guidelines of the 1986 Tax Reform Act rules governing private activity bonds. In ge this means that any contract with a course manager could not exceed 5 years in lf however, the contract could be renewable for additional 5 year terms. In addition t has rules on how the private operator may be compensated for performance und contract. Although these tax issues appear to unnecessarily complicate the process of hiring a I operator, all legal hurdles can easily be overcome by the City and a motivated opl The staff has met with several operators willing to enter into a contract that would c With all facets of the Tax Reform Act. These companies include American Golf a Phoenix Group, both of which are golf course operators and builders with consic experience in the field. The Phoenix Group has had some recent success with tax t Certificates of Participation for projects of this type. 6 w 6 ~ Under Option 2B, the City would attempt to bring in a builder/operator in the early sta; of course development. The process of designing and building a golf course is comp even for professionals. If the ultimate operator is involved early enough in the des phase, the City may be able to take advantage of the expert's ability to "value engineer" project. That is, the experienced developer may be able to provide suggestions modifications in design that will translate into lower maintenance costs later. For exam] the placement of irrigation system controls or the watering patterns could be improvet allow easier maintenance and a lower demand for water. In some cases, the prh company may be willing to bring money to the table to help fimd the course construci in exchange for a long term operating agreement. These agreements typically reach 21 50 years in length. Although contracts of this nature generally cause any debt issue tc taxable, they are certainly not unusual. There may be some financial advantage to brini a developer to the table who will be willing to fund a portion of the course developn cost even if it would mean the loss of the tax exempt status of the bonds. Sev companies have indicated an interest in participating in the construction of the co under these terms. Specifically CCA Silband, American Golf and Golf Centers Internati have addressed this option with the City. The staff is recommending that the Council pursue Option 24 since this appears to prc the most advantageous set of financing conditions for the City. There appears t adequate cash flow from the come operations and the General Fund contributions out: earlier in this memo to support the debt service demands. Also, eliminating requirement for a long term contract with a private operator provides the Coma greatest amount of control over the quality of maintenance and the greens fee struc 3. Jokt Powers Authorities The League of California Cities has teamed with Arnold Palmer to form a Joint PC Authority (JPA) specifically aimed at the golf course market. The Cal Muni Golf .JPL created by the League in an effort to address the problems of finding funding and on operating expertise for gslf courses state wide. The approach used by Cal Muni Golj take a site from the very beginning and carry out each step of the construction pi using their own team of architects, builders and operators. Their intent is to control aspect of the course development process to eliminate any unnecessary cost maintenance problems. Although the staff believes a deal could be struck with Cal Golf, their approach would be to totally redesign the course from the ground up. would be both a costly and time consuming process that staff believes is unnecessq City's project is believed to be "permitable" by the various controlling agencies. TI no guarantee that a redesigned course would reach this same stage in the near futl the City were just beginnkg the process of site selection Cal Muni Golf would be a option worthy of serious consideration. 7 (r w b Other Considerations Course Budget and Greens Fees As the Council considers the issues of financing, there are several points which need t stressed. First, Council should consider settling on a fixed budget for the project. V designing a project one of the key considerations is the use of limited resources. Ax this case the limited resource is money. Current cost estimates indicate that the prop course Will cost as much as $14 don. Even at this cost, the greens fee struc necessary to support debt service and operations may exceed the Council's expectat If the Council elects to continue with the current program, we will be committed to structure similar to the one used in this report. Without a clear understanding o budget limitations, we may find that we have committed to design features that we cannot afford to support through the anticipated fee structures. An underlying goal protect the General Fund and limit contributions to the assumed ceiling of $750,00 Council desires a lower greens fee structure, a lower construction cost is necessary. million reduction in construction costs represents a decrease of about $.70 in the avl greens fee. Design Features Another issues closely related to the budget decision include the various design fez that are yet to be defined. The ultimate choice of an access point will have a large be on the project cost. The availability of water on site, the use of reclaimed watei ability to proceed without a clear source of water are all issues that may increase th and delay the project until a satisfactory answer can be found. The ability to g( proposed project permitted by the various regulatory agencies will play a large role cost and calendar considerations of the Council. And finally a decision on the routin and the inclusion of a variety of special features will be necessary before ha estimates can be nailed down. Each of these issues will be addressed by the Municipal Projects Manager when he rf the project with Council in the near future. Summary of Recommendations Staff has made several recommendations in this report. They are summarized hc Council review and consideration. - Staff recommends that Council adopt the City Constructs/Private 01 The City should use tax exempt debt to finance the course construct The General Fund contribution to the course financing should be caI Greens Fee structures should be set at the level necessary to sup] approach for this course. - - a maximum of $750,000. operating costs and the portion of capital costs not covered by the ( - 8 v w e $ Fund contribution. Council may wish to consider adopting a Council Poli stating the need to maintain a market rate greens fee sufficient to cot capital and operating costs. The General Fund contribution will fund capital costs only. Council should establish a clearly defined maximum budget for the t project based on the Citfs willingness to set fees at the level necessary finance construction and operation costs. The City should entertain proposals from private operators who would interested in participating in this project under the City's terms E - - - F:\USERS\TGERF\WPDATA\mEMOS\GOLn.CM 9 c m -. L. -. 1 4 AGREEMENT FOR ACCESS TO LAKE CQLAVERA GOLF COURSE PROJECT NO. 3072 THIS AGREEMENT, made and entered into as of the /fG day of %.-. , 19z3y and between the CITY OF CARLSBAD, a municipal corporation, hereinafter referred to as "City", and LYON/COPLEY CARLSBAD ASSOCIATES, LP, a California Limited Partnership, hereinafter referred to as "Owner". RECITALS WHEREAS, the City desires to receive from Owner a street and utilities easement for access to the Lake Calavera Golf Course; and WHEREAS, the City proposes to construct street and utility improvements in coordination with Owner's improvement plans for Carlsbad Tract Number 85-1 9; and WHEREAS, the Owner's improvement plans for Carlsbad Tract Number 85-19 include the construction of a sanitary sewer, sewer pump station, and utility access road; and WHEREAS, in exchange for a street and utilities easement for access to the Lake Calavera Golf Course, the City has agreed to give the Owner permission to grade within the proposed golf course property as shown on the grading plan, Drawing 304-7. 1 Rev. 10/02/91 @ w . t NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein, City and Owner agree as follows: 1. Owner agrees to provide a street and utility easement for access to the Lake Calavera Golf Course. Alignments shall generally be as indicated on Exhibit A on file with the City Engineering Department and Owner. Easements shall be free and clear of encumbrances and shall be provided free of charge. , . 2. If City constructs street and utility improvements before Owner, Owner agrees to reimburse City for construction costs which would otherwise have incurred to Owner as shown on the improvement plans for Carlsbad Tract Number 85-19. 3. If City requires Owner to construct street and utility improvements for oversizing the road to accommodate access to the Lake Calavera Golf Course, then the City shall reimburse Owner for the oversizing portion of the road. 4. Costs for improvements shall be determined based upon actual unit bid prices plus ten percent (10%) to allow for construction administrative costs. Reimbursements to City or Owner shall be contingent upon receipt of certified copies of payments for work performed and in accordance with unit bid prices as approved by the City Engineer. Reimbursements shall be due within thirty (38) days of acceptance of the improvements by the City Engineer. 5. Improvements considered as "oversizing portions" shall be street improvements and utilities beyond sizes as indicated on the improvement plans for Carlsbad Tract Number 85-19. 6. This agreement does not change the duties and obligations of the Owner under the subdivision agreement or the conditions of approval for Carlsbad Tract Number 85-19. 2 Rev. 10/02/91 El L, e w ‘m IN WITNESS WHEREOF, the Agreement is accepted by the City of Carlsbad 1 acting by and through its City Manager, and by the Owner. Executed by Owner this 10th day of October , 1991. OWNER: CITY OF CARLSBAD, a municipal corporation of the State of California LYON/COPLEY, CARLSBAD ASSOCIATES, LP, (name of 0,wnej a California Limited Partne /- By: L%ci,{,,,! ))”. 6 fvAe- By \ i (sign fiere) GARY M. TARQUINIO (print name here) VICE PRFSIDFNT, I YON COMMIINTTTFS, INC. ATTEST: aJ-aL/L - ALETHA L. RAUTENKRANZ Corporation) City Clerk ROBIN STROMAN (Proper notarial acknowledgment of execution by OWNER must be attached.) (President or vice-president and secretary or assistant secretary must sign for corporations. If only one officer signs, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering that officer to bind the corporation.) APPROVED AS TO FORM: VINCENT F. BIONDO, JR. City Attorney BY O.!.Q* L +7/9 t Deputy City Attorney 3 Rev. 9/26/91 e v Ilk ACKNOWLEDGEMENT - PR2 3 47 STATE OF CALIFORNIA) SS. COUNTY OF SAN DIEGO) ON I, pq , BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLTC IN AND FOR SAID STATE, PERSONALLY APPEARED GARRY M. TARQUINIO AND ROBIN STROMAN, PERSONALLY KNOWN TO ME TO BE THE VICE PRESIDENT AND ASSISTANT SECRETARY, RESPECTIVELY, OF LYON COMMUNITIES, INC., THE CORPORATION THAT EXECUTED THE WITHIN INSTRUMENT ON BEHALF OF THE CORPORATION, SAID CORPORATION BEING PERSONALLY KNOWN TO ME TO BE THE MANAGING GENERAL PARTNER OF LYON/COPLEY CARLSBAD ASSOCIATES, L.P., SAID PARTNERSHIP BEING THE CALIFORNIA LIMITED PARTNERSHIP THAT EXECUTED THE WITHIN INSTRUMENT, AND ACKNOWLEDGED TO BE THAT SAID CORPORATION EXECUTED THE WITHIS INSTRUMENT AS SUCH PARTNER AND THAT SAID PARTNERSHIP EXECUTED THE SAME. WITNESS MY HAND AND OFFICIAL SEAL: e v .I ,,a AMENDMENT NO. 1 TO AGREEMENT BETWEEN THE CITY OF CARLSBAD AND NAEGLE ASSOCIATES INCORPORATED FOR .ADDITIONAL DESIGN SERVICES PROJECT NO. 3072 THIS AMENDMENT NO. 1, made and entered into as of the /pG day o %, , 1992jby and between the CITY OF CARLSBAD, a municipal corporation hereinafter referred to as WIY,'' and NAEGLE ASSOCIATES, INCORPORATED, hereinafte referred to as "CONSULTANT." RECITALS WHEREAS, the City Council of the City of Carlsbad and NAEGLE ASSOCIATE INCORPORATED have previously entered into an agreement on November 11, 1990, fc the Lake Calavera Golf Course clubhouse, maintenance facility and on-course restrooi design; and, WHEREAS, the parties to this agreement desire to expand the scope of work include additional preliminary site planning and design for the clubhouse area; and, WHEREAS, a supplemental scope of work and fee schedule have been negotiatt and agreed to between the parties hereto; and, WHEREAS, the Consultant possesses the necessary skills, abilities, qualificatio1 personnel, business and financial resources, and professional background to provide ss services to the City; and, WHEREAS, the City Council of the City of Carlsbad, by this amendment, finds necessary, desirable and in the public interest to proceed with this Amendment No. 1 said additional work. e v - 'f i,. 2 NOW, THEREFORE, in consideration of these recitals and the mutual covenants I contained herein, CITY and CONSULTANT hereby agree as follows: 1. CONSULTANT shall provide CITY additional design services for City ir accordance with the terms, conditions, and project scope of work as outlined in attachec Exhibit "A" which is hereby incorporated and made a part of this agreement. 2. CITY shall pay CONSULTANT in accordance with the fees and costs outliner in attached Exhibit "A" for a lump sum fee not to exceed $9,450.00 3. All of the provisions of the aforementioned agreement entered into 01 November 11,1990, between CITY and CONSULTANT shall remain in full force and effect This Amendment No. 1 to the aforementioned agreement between CITY ana 4. CONSULTANT shall be effective on and from the day first above written. IN WITNESS WHEREOF, we have hereunto set our hands and seals. CLAUDE A. LEWIS Title Mayor APPROVED AS TO FORM: ATTEST: &./2.L. c5Lktibk. LL-LJL- c\ City Clerk t4C 972 0 City Attorney . * a 'r I, * EXHIBIT "A" AMENDMENT NO. 1 TO AGREEMENT BETWEEN THE CITY OF CARLSBAD AND NAEGLE ASSOCIATES INCORPORATED 1. Two (2) site and topographic studies beyond those originally required: Site Plan #1 Architect - President 1 hr. @ 135 per hr. = $ 13 48 Architect - Manager 6 hr. @ 80 per hr. - Architect 14 hr. @ 60 per hr. = 84 Architect - Technical 1 11 hr. @ 50 per hr. = 55 Dahlin Group 36 hr. @ 100 per hr. = 3.60 SUBTOTAL $5,60 $3,40( - Site Plan #2 Architect - President 1 hr. @ 135 per hr. = $ 13 32 5L 4( - Architect - Manager 4 hr. @ 80 per hr. - Architect 9 hr. @ 60 per hr. - Architect - Technical 1 Dahlin Group 10 hr. @ 100 per hr. = 1,0( - - - 8 hr. @ 50 per hr. SUBTOTAL $2,3! 2. Site Study Model: $4 Architect - Manager 1 hr. @ 80 per hr. - 3r Architect 5 hr. @ 60 per hr. - Architect - Technical 1 14 hr. @ 45 per hr. = 6: Architect - Technical 2 11 hr. @ 40 per hr. = $e - - SUBTOTAL $1,4! TOTAL SERVICES $9,4 '7 ', , 1 2 3 4 5 6 7 8 g 10 11 12 13 14 15 16 17 18 19 0 0 RESOLUTION NO. 92-55 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ACCEPTING A STATUS REPORT ON THE PROPOSED LAKE CALAVERA GOLF COURSE PROJECT AND DIRECTING STAFF REGARDING PROJECT ISSUES WHEREAS, the City Council of the City of Carlsbad has appropriate for the design, development, and administration of the proposed Lake C Golf Course project; and WHEREAS, said project is currently proceeding through desi permitting; and WHEREAS, the City Council of the City of Carlsbad has received i report concerning said project and has directed staff regarding several issues. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ci California, as follows: 1. That the above recitations are true and correct. 2. That the City Council of the City of Carlsbad does herebj staff regarding the following project issues for the proposed Lake Calav Course project: A. PROJECT DESIGN I 20 21 22 23 24 25 26 27 28 1) Approval of the proposed golf course layout and project design. B. TEMPORARY ACCESS 1) Directing staff to continue to pursue temporar to the project site within the City of Carlsba 2) Approval of an agreement with Lyon/Copley Associates regarding temporary access required project. The Mayor and City Clerk are hereby aL and directed to execute said agreement. Follc : l, 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 18 19 e 0 execution of said agreement, the City Clerk i: authorized and directed to forward an executec said agreement to the William Lyon Companies, 2 Mr. George Havier, 4330 La Jolla Village Drii 130, San Diego, California, 92122, and the 1 Projects Department. C. WATER RESOURCES 1) Adopting the position of utilizing non-potable irrigate the golf course fairways, rough ar other associated project landscaping. 2) Staff is directed to continue to pursue no1 water resources including, but not limited water, reclaimed water, recycled water, or oi potable water resources to irrigate the go1 project. Expenses and costs required in this e authorized to be expended from existing appro] and within the project budget. 3) All expenses and costs associated with provic potable water resources for the golf course I 20 21 22 23 24 25 26 27 28 shall be considered expenses and costs to be the golf course project budget unless 0th funding, loans, special water resource pros other non-City General Fund resources are sec D. PROJECT PERMITS AND APPROVALS 1) Staff is directed to temporarily defer processi Environmental Impact Report, Conditional Us( Hi 1 sside Development Permit, and re1 ated approv such time as involved Federal, State, Regic "r b"" 9 t >< * 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 m e Local pub1 ic agencies have resolved all environr policies and requirements affecting this pi including, but not limited to, the City's pr Habitat Management P1 an (HMP) . Staff is directed to continue to pursue solutions and all required mitigation plans, programs, or requirements as may be necessary to fulfill con( of approval for any of the above referenced permits and approvals. 2) 3) All expenses and costs associated with the COI pursuit of the above referenced agency perm- approvals are authorized to be expended from e appropriations and within the current project b E. TRAILS 1) Approval of the position of constructing the \ trai 1 s system concurrent with go1 f course construction. 2) The cost of the trails system construction s included as an element of the overall golf project construction. F. CLUBHOUSE AND MAINTENANCE FACILITY DESIGN 1) Approval of Amendment No. 1 for additional requi related to clubhouse and maintenance facil design with Naegle and Associates. The Mayor Clerk are authorized and directed to exec amendment. Following the execution of said ar copies shall be forwarded to Naegle and As attention Mr. Dale Naegle, 2210 Avenida De La h c/ * F 81. 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0 0 Jolla, California, 92037, and the Municipal P Department. Staff is directed to defer further effort and exp clubhouse design until such time as additional e analysis is completed and the City Council takes action with respect’ to said project. Desic related to the proposed maintenance facility, or restrooms, and other ancillary facilities reqi the project shall be authorized to continue COI with the overall project status and schedule. 2) G. OVERALL PROJECT SCHEDULE 1) Approval of an indefinite extension of the Lake I Golf Course project schedule until such environmental impact mitigation requirements, ti access, further economic analysis, and non-potat resource solutions are identified and resolved H. ADDITIONAL REQUIRED DESIGN SERVICES 1) Staff is directed to expend no further desi other than those identified in sections C. 3) i above. Following certification of the Envir Impact Permit, securing of all permits and a! and final solutions to temporary access, nor water resources, and environmental impact m requirements are identified, staff is directe another status report to the City Counci proceeding with further project design ef expense. .. /// *a 1 ’- w -; I. 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 0 0 I. PROJECT FISCAL IMPACTS 1) Approval of the following positions regardin! project : a) The City shall construct the golf coursc public works project. b) The City shall use tax exempt debt to fu construction of the golf course. c) The City shall limit the amount of Gener; contributions to the golf course to a max- $750,000 per year. d) The City shall select a private operator 1 golf course prior to construction. e) The City shall set greens fees that (1) 1 the market for similar golf courses i market area, and (2) are sufficient to f operating and debt service costs not fui the General Fund. f) General Fund support shall be limited 1 service payments only. No General Fund shall be used to support operations of t course. g) The total project budget for this golf co limited to $19 million. Staff is to re the City Council immediately if cost es exceed this amount. /// /// /// r i: \* p r 3 1b c 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 20 w * h) Golf course construction and financing proceed as soon as practical based on sati all design, fiscal, and environmental con( PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbi Council held on the Uhday of February , 1992 by the followin to wit: AYES: Council Members Lewis, Kulchin, Larson and Stanton NOES: None ABSENT: Council Member Nygaard ATTEST: ALETHA L. RA (SEAL)