HomeMy WebLinkAboutAgenda - 09-21-1993 - VIII-B 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item No UTTI - 2
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 21, 1993
SUBJECT: Swimming Pool Financing
DEPARTMENT County Manager PUBLIC HEARING YES NO x
ATTACHMENT(S) INFORMATION CONTACT
To be provided under separate cover Rod Visser, ext 2300
on 9/17/93 Ted Abernathy, ext 2325
TELEPHONE NUMBER
Hillsborough 732-8181
Chapel Hill 968-4501
Mebane 227-2031
Durham 688-7331
PURPOSE: To continue discussion of a proposal by the Municipal
Financial Group, Inc. (MFG) , in conjunction with the Triangle Youth
Hockey Association (TYHA) , to finance a swimming pool/ice rink facility
at the Meadowlands Business Park.
BACKGROUND: At their regular meeting on August 4 , 1993 , the Board of
Commissioners received a report on a proposal for financing a swimming
pool to be located at the Meadowlands. The Board posed a number of
questions and concerns about the County' s roles and responsibilities in
such an arrangement. Staff and representatives of MFG, TYHA, and other
interested parties were requested to come back to the Board with
additional information that responds to the Board' s questions and
concerns. The Board also directed the Manager and staff to pursue
negotiations that would lead to production of final financing and
facility management agreements for the Board to consider at a future
meeting. Those negotiations are ongoing at this time.
The Manager will make a presentation that provides additional
information about the proposed construction, operation, and financing
of the proposed swimming pool/ice rink facility. Staff and
representatives of TYHA, MFG, the Small Business Development and
Technology Center, and Hock Development will be available to answer
questions from Commissioners . Staff will review their understanding of
what the Board considers essential elements of any financing and
operational agreements to be presented for consideration at a
subsequent Commissioners ' meeting.
RECOMMENDATION: The Manager recommends that the Board receive
the presentation, identify additional points needing clarification or
resolution, and confirm the parameters under which the County would
enter into an agreement for TYHA to construct the proposed facility and
operate the swimming pool on behalf of Orange County.
Triangle Community Activity
Center
Construction Phase
Municipal Financial
Orange County Group
(Lender - $7.55M)
Agreement Loan
Board Reps
$4M
Meadowlands
Triangle Youth Georqe Horton
o sever of land
Hockey y Assoc
Borrower of $7.55M 16 acres-$450,000
Owner of Facility
63-20 Entity
Don Phillips
Development
Services
Triangle Community Activity
Center
Operations
Municipal Financial
Orange County Group
(Lender - $7.55M)
Triangle Youth Hockey Association
Board of Directors 13 members
► County appoints 5-6 members
Revenue
From County ($400,000)
From Ice Rink,
Pool, Concessions,
Building, Arcade,etc.
Expenditures
Debt Service ($866,000)
Operations
WHY WOULD MUNICIPAL FINANCIAL GROUP FUND
THE PROJECT WHEN NO BANKS WERE INTERESTED?
• 63 - 20 financing produces non-taxable income flow
more valuable to investors
• MFG more familiar with project financing risk and
less concerned with collateral
• Bank regulatory climate discourages long-term
ventures with limited security
FINANCIAL COMMITMENT TO
TRIANGLE COMMUNITY ACTIVITY CENTER
(FIRST DAY OF OPERATION )
Orange County Triangle Youth Hockey Association
• $400,000 Payment (Qtrly) • $300,000 Invested
• 4 Million Total Commitment • $7.55 Million Borrowed
(Over 10 years)
$13 Million Committed to
debt service
(Over 15 years)
COUNTY EXPENDITURES
TYHA VERSUS COUNTY OPTION
Millions
e /
[[[ 4
k
2
1 2 3 4 5 6 ] 8 9 10
Years
�
Cum. TYHA Cum. County Pool
County Cost to Build and Operate Pool Only
Pool Costs = $3.5M (including land)
Year 1 2 3 4 5 6 7 8 1 9 10 1 Total
Debt Service Payment** 560,000 539,000 518,000 497,000 476,000 455,000 434,000 �j 3,000 392,000 371,000 4,655,000
Net Operating Costs*** 200,000 208,000 216,000 225,000 234,000 243,000 253,000 263,000 274,000 285,000 2,401,000
Total Annual Cost 760,000 747,000 734,000 722,000 710,000 698,000 687,000 676,000 666,000 656,000 7,056,000
TYAA 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 4,000,000
Difference 360,000 347,000 334,000 322,000 310,000 298,000 287,000 276,000 266,000 256,000 3,056,000
m:\sal ly�poolcom 7.wk3
*Pool based on 50 meter pool comparable to TYHA planned facility.Pool is based on$3.2 m. Land based on 12 acres at$25,000 per acre.
**Debt Service assumes debt is financed for 10 years at an interest rate of 6%.
***Future years calculated at 4%increase each year.
TRIANGLE COMMUNITY ACTIVITY
CENTER
REVENUE SOURCES
County county
27% 19%
IceRink
IceRini< ActivityClx 58% Activit"
52% 6% 6%
Pool Pool
15% 17%
YearOne CumulativeYears1-15
1992-93 REVENUE SOURCES
DANIEL BOONE ICE RINK
L
Hockey
24%
PublicSkating
43%
FigureSkating
10°/a
Other* Concession Stand
ProShop 10%
*Private, Rentals, Skate Sharpening,
Arcade
ESTIMATED POOL USAGE
77 , 039 ANNUAL SWIMMERS
PLUS SCHOOL USAGE
Youth
Adults
Sr , Citizens
Ey
F'ti
COMPARISON OF
FEE SCHEDULES
Our Proposed Raleigh Chapel Hill
5 & Under Free Free Free
Children (6-17) $1 .25 $1 .75 (6-15) $1 .00 (6-13)
Adults (18-61 ) $2.00 $2.00 (16-61 ) $1 .30 (14-17)
Seniors (62+) $1 .25 $1 .00 (62+) $2.00 (17+)
Highlights
• Free use for schools - 8:30 to 12:30 Monday through Friday
and 1 :00 to 2:00 Tuesday and Thursday
• Present revenue projections includes no fees for
summer camps
special olympics
special populations
swim teams
AGREEMENT POINTS
BETWEEN ORANGE COUNTY AND TYHA
• Orange County liability to be limited to our total
management fee, $4,000,000
• Orange County would take title to property when all debt
is repaid, approximately 15 years
• TYHA would construct a facility as described in our
current documents and in the location described
• Triangle Community Activity Center (TCAC) would operate
pool in accordance with Recreation and Parks scheduling
and fee structure
• Orange County will have significant on
TCAC Board of Directors
• TCAC insures itself and is solely liable for claims
against the facility