The Morgan Hill City Council recently approved the city
manager
’s recommendations to make the outdoor sports complex plan a
reality and told interested parties they must adhere to “dealt
points” to enter the joint venture with the city. The city council
will consider a proposal from the community’s youth sports groups
to operate and maintain the outside
grounds of the complex, but only if they form one entity. And if
the Coliseum Recreation Group (CRG) wants to be part of the new
facility, the company needs to accept the fact that the city can’t
contribute any more funds to the joint venture.
The Morgan Hill City Council recently approved the city manager’s recommendations to make the outdoor sports complex plan a reality and told interested parties they must adhere to “dealt points” to enter the joint venture with the city.
The city council will consider a proposal from the community’s youth sports groups to operate and maintain the outside grounds of the complex, but only if they form one entity. And if the Coliseum Recreation Group (CRG) wants to be part of the new facility, the company needs to accept the fact that the city can’t contribute any more funds to the joint venture.
Much of the discussion during a marathon council meeting on July 27 centered on the right formula for such a public-private partnership and “deal points” strategies recommended by the Parks and Recreation Commission and City Manager Ed Tewes.
The city wants the outdoor sports complex to serve organized community sports groups at an affordable cost. It also wants the facility to be available to the whole community.
The RDA has purchased 36 acres bordered by Condit, Murphy, Barret and San Pedro Avenues for $7.65 million. Construction of the project has an estimated total cost of $10.65 million. The city only has a budget of $2.5 million for the first phase of the project, which will include six existing soccer fields, four softball/baseball fields, one baseball field, a curb for sand volleyball courts, a restroom/concession building, and general work such as demolition, grading, irrigation and seeding of the fields.
Phase I is expected to be completed by the spring of 2007. The city wants to recover costs by the facility’s third year of operation. Phase II will need about $8 million to complete. Funding sources for this phase are yet unknown, according Tewes.
Julie Spears, special assistant to the city manager, said in order to begin Phase I, all parties have to agree on “deal points,” which outline details for an operations and maintenance agreement with a community-based nonprofit youth sports group, a ground lease with a private commercial group, and a parking agreement for all parties.
Spears told the council that four community youth groups are interested in forming their own nonprofit organization and want to operate and maintain the outdoor fields. The Morgan Hill Youth Sports Alliance (MHYSA) wants to do the same.
The city council supports the youth groups, but insisted that the groups form one entity.
“We want the outdoor sports complex to serve the youth of Morgan Hill. We should allow them to manage operations. (The outdoor sports complex) gives our youth the greatest opportunity to participate,” Councilman Mark Grzan stated.
The youth sports groups estimate operating and maintaining the fields would cost $150,000 annually, while MHYSA pegs costs at $127,000. The city, however, estimates costs at $273,000 a year. These costs will need to be reconciled when the sports groups form one entity.
The Coliseum Recreation Group is also interested in leasing at least a portion of the site. Its plan envisions indoor fields, fitness areas, a restaurant, locker rooms in a 86,000 sq. ft. building for Phase I of the project.
The CRG, however, can’t shoulder full costs for the development, according to CRG representative Doug Payne. He said there is a “gap” regarding fees and CRG wants the city to kick in more funds. He indicated CRG will not commit to bearing all financial risk and feels the “deal points” are set up for a “developer or one-way venture,” not a partnership.
“You’re asking a private party to assume majority of the risk,” he told the council.
City officials estimate the CRG proposal requires another $2.5 million subsidy from the city. That would double the city’s contribution to the project. The group is also proposing ground lease payments of $80,000 per year. Tewes’ recommendation sets the city’s target income for the first year at $150,000, which includes the CRG lease payment and maintenance fees for common areas like parking and landscaping.
Council members were not keen on devoting more money to the project.
“What he (Payne) says is true. We are unable to contribute dollars. I think we should stick to our guns in this budget, which is $2.5 million dollars. … The fund gap with the Coliseum proposal is the additional money which we don’t have. If we don’t have it, we don’t have it,” said Councilman Steve Tate.
In addition, the CRG wants the city to be flexible if it sub-leases the facility. The city manager wants subleases to be approved by the city since there is a concern the sports complex may compete with the indoor recreation center, which is slated to be completed in the spring of 2006.
With regard to the parking issue, all parties appeared to agree that there should be a shared parking facility that would serve the sports complex as well as the Aquatics Center, which is located adjacent to the site.
Maintenance, repair and replacement of parking facilities, however, still have to be finalized, since the youth sports groups may not be able to afford to maintain their portion of the parking facility, said Spears.
In the end, the council adopted the city manager’s recommendations of the “deal points,” regarding lease arrangements and responsibilities involving an operations and maintenance agreement with a community-based youth sports group, a ground lease with the CRG, and a parking agreement for all parties.
With regard to the section on fees, however, the council directed staff “to develop financing structures creatively within the deal points.”
The city is giving the CRG 30 days to decide whether to accept the “deal points.” The council also directed leaders of the sports groups to form one entity and come back no later than October with proposals to operate and maintain the fields alone, and in conjunction with a private group.
Councilman Larry Carr stressed, while the outdoor sports complex would be used by organized sports groups, it should also be recognized as being open to everyone in the community.
“The outdoor sports complex should accomplish the greatest need in number of Morgan Hill participants,” Carr said.
Rose Meily cover City Hall for the Morgan Hill Times. Reach her at 779-4106 ext. 203 or rm****@*************es.com.
