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HomeMy WebLinkAboutAgenda - 02-15-2005-9bORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 15, 2005 Action Agen~da~ Item No. SUBJECT: Staff Update on Possible Acquisition of the Triangle SportsPlex DEPARTMENT: Manager/Purchasing/Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): None INFORMATION CONTACT: Rod Visser, ext 2300 Pam Jones, ext 2652 Ken Chavious, ext 2453 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To receive an update from staff on ongoing assessments related to a potential Orange County acquisition of the Triangle SportsPlex, with particular emphasis on considerations related to potential ownership structures; and to consider increasing by $10,000 the Board's appropriation for professional services needed to carry out the assessments, BACKGROUND: In Fall 2004, the Board of Commissioners directed staff to perform due diligence analysis regarding the County's potential interest in acquiring the Triangle SportsPlex property, The County's interests relate not only to recreation opportunities, but also to a proposal to construct the new Central Orange Senior Center in conjunction with an expansion of the SportsPlex. The SportsPlex is an 82,000 square foot facility in the Meadowlands Business Park in Hillsborough that provides a regulation ice rink, three swimming pools, fitness equipment, and other recreation amenities, The County operates a small senior center in rented space on property immediately adjacent to the SportsPlex property. The County has an existing ten-year facilities/service agreement under which the County provides payments of $400,000 a year to the SportsPlex to support the availability and affordability of the swimming pools, and other recreational opportunities to citizens of Orange County. The ten-year agreement expires at the end of March 2005, Staff have been working with the agent for the SportsPlex owners for several years to examine options upon the expiration of the ten-year agreement. Since early 2004, staff have been working to develop a proposal that would involve the construction of an expansion to the existing SportsPlex building. That expansion and a reallocation of some existing, underutilized square footage within the existing building would be used to provide 15,000 square feet of dedicated space for a Central Orange Senior Center to 2 be operated by the County's Department on Aging. Consideration may also be given to the development on the property of affordable housing. The due diligence analysis is in process, with particular attention focused on current and likely future financial performance of the SportsPlex operation (under a contract with the Blackman & Sloop CPA firm) and an assessment of the physical condition of the facility's infrastructure and equipment (under a contract with Corley Redfoot Zack architectural/engineering firm and its subcontractors). Staff will provide a verbal update at this February 15 meeting regarding the work in progress and the anticipated timeline for reporting on the analysis far BOCC decisions regarding whether to acquire the SportsPlex or not. At the December 14, 2004 meeting, the BOCC authorized the Manager and staff to develop an agreement with Blackman & Sloop, and to execute additional professional service contracts as needed. The total for all professional services to assist in the due diligence evaluation of a passible SportsPlex acquisition decision was established at an amount not to exceed $30,000. Staff indicated at the time that they would return to the Board later for additional spending authorization for professional services, if that seemed warranted. To date, the following work has been undertaken with financial obligations as noted; CONTRACTOR WORK FOCUS AMOUNT Linked Economic Development and Overall project management $2,000 Affordable Housing Foundation LEDAHF Blackman & Sloop Revenue & expense and other financial $13,000 anal sis Corley Redfoot Zack Facility and infrastructure inspection $11,300 (except for ice); concept drawing far combined S ortsPlex/Senior Center TOTAL $26,300 Staff recommends that the Board allocate additional funds to permit a detailed inspection and review of the physical plant associated with the ice rink. Corley Redfoot Zack would retain the services of a leading commercial refrigeration company that has some familiarity with the SportsPlex ice rink infrastructure, with the "not to exceed" amount of $9,000. Staff recommends that the Board increase the overall allocation for the due diligence analysis from $30,000 to $40,000, leaving several thousand dollars of additional authorization should the Manager determine in the coming weeks that additional elements should be added to the current scope of due diligence work. One decision point for the BOCC, should it ultimately decide that it wishes to acquire the SportsPlex and should the County reach accord with the current owner on the terms for an acquisition, is whether the County should own the property outright or through means of a non- profit organization.. An owning non-profit could be one created by the Board of Commissioners expressly for the purpose of owning and managing the SportsPlex, or it could be an existing non-profit with which the County would contract. Staff will outline at this February 15 meeting some of the pros, cons, and other implications of the various ownership structure options. Staff, the County Attorney, and the project manager, will be available to respond to questions the Commissioners may have about ownership structure, or any other elements of the conceptual plan for aSportsPlex/Senior Center combined facility. Other than consideration of the request to increase the appropriation for due diligence analysis by $10,000, the BOCC need not make any decisions related to the potential SportsPlex acquisition at this February 15 meeting. An acquisition decision will be considered by the Board at a later date, most likely in March 2005, following completion of the due diligence analysis. FINANCIAL IMPACT: If approved by the Board, the County allocation for due diligence analysis would increase from $30,000 to $40,000, As noted during the December 14, 2004 BOCC meeting, unobligated funding is available within the County's 2004-05 appropriation for the SpartsPlex. The County budgeted $400,000 for the SportsPlex for this fiscal year, but at this time is only obligated far payments of $300,000 through the expiration of the existing facilities/services agreement at the end of March 2005, There are no other direct financial impacts associated with this agenda item at this time. The agent for the owner of the SportsPlex has indicated that the owner would be amenable to accepting an offer from the County to purchase the SportsPlex property at a figure somewhere in the vicinity of $6 million, The ongoing analysis of the possible acquisition of the property will examine whether at this price, or at some other figure, it would further the County Commissioners' policy and program priorities to negotiate a detailed agreement to purchase the property from the owner, RECOMMENDATION(S): The Manager recommends that the Board authorize an additional $10,000 for due diligence analysis; receive and discuss the staff update; and provide direction to the Manager and staff on SportsPlex related questions or issues it would like to have staff address by the time the decision to acquire the property or not is placed before the Board for deliberation.