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Home My WebLink About _ 9.6(a)--Adopt Budget Resolution for Court Project Study CITY OF REDDING REPORT TO THE CITY COUNCIL Recommendation Authorize and approve the following: (1) Authorize staff to hire a consultant to prepare a Multi-Court Facility Market Opportunity Analysis Feasibility Report including a pro-forma and economic impact analysis. This would be Option 2 described in the background of this report; and (2) Adopt Resolution adopting and approving the 15th Amendment to Budget Resolution No. 2023-060 appropriating $63,500 for the Market Analysis and Project Cost Report for the Multi-Court Facility from the City of Redding Parks Development Fund. Fiscal Impact The cost for the full report, including market opportunities analysis, pro forma, economic impact analysis, and feasibility report, plus an estimated $5,000 for travel expenses, is $63,500. The funding will come from the Park Development Fund collected from park impact fees. Alternative Action The City Council (Council) could decline to adopt the resolution which will pause any additional work on this project. Or, the Council could provide staff with alternate direction. Background At the March 21, 2023, City Council (Council) meeting, Council Member Munns suggested and a consensus of the Council directed the Community Services Director to create a strategy/feasibility study for an eight-court basketball facility similar to the Hardwood Palace in Rocklin at/or adjacent to Big League Dreams for consideration at a future Council meeting. The Council encouraged utilizing community members to assist in the development of the study. MEETING DATE: October 2, 2023 ITEM NO. 9.6(a) FROM: ***APPROVED BY*** kniemer@cityofredding.org kniemer@cityofredding.org SUBJECT: 9.6(a)--Consider hiring Consultant and adopting Resolution appropriating funds for a Market Analysis and Project Cost Report for a Multi-Court Facility in the City of Redding. Kim Niemer, Community Services Director Report to Redding City Council September 27, 2023 Re: 9.6(a)--Adopt Budget Resolution for Court Project Study Page 2 On May 9, 2023, a meeting was convened with several community members active in court sports and construction, which included Rob Barr of Gifford Construction, Allen Knott of K2 Development, Brody Angley, Todd Franklin, Michael Gray, and Louis Volpe. Council Member Munns, CSAC Chair James Finck, Community Services Director Kim Niemer, Recreation Superintendent Teresa Urricelqui, and Recreation Supervisor Tori Hughes were also present. There was a strong consensus among the group that the community currently needs more indoor courts. Some of the participants have explored constructing private facilities. Others voiced support for the City to build a facility to support youth sports more broadly. On July 6, 2023, a subset of the committee toured two indoor court facilities: The Roebbelen Center @ the Grounds (Roebbelen Center) in Roseville and the Hardwood Palace in Rocklin. The Roebbelen Center was opened in February 2020 in the Placer County Fairgrounds and is operated by Placer Valley Tourism. Hardwood Palace opened in 2008 and is under private ownership, housed in a commercial warehouse complex. The Roebbelen Center has 49-foot ceilings and 250 feet of column-free spans that provide for a wide variety of activities, including athletic tournaments, trade shows, festivals, and graduations. The 160,000-square-foot (sf) event center can seat up to 6,000 people, accommodating 12 basketball courts or 24 volleyball courts. The Roebbelen Center also includes a 10,000-sf lobby, flexible meeting rooms, offices, a training room, and a loading dock serving 12,000-sf of storage. The project cost approximately $34 million. Additional information can be found on their website at: https://www.atthegrounds.com/facilities/roebbelen-center/. Placer Valley Tourism (PVT) is a Business Improvement District (BID) including the cities of Roseville, Rocklin, and Lincoln. PVT exists to market the three-city region as a tourism destination to generate incremental room nights in hotels in the cities. Each hotel property within the footprint pays a $6.50 assessment into the BID for each paid room night in the respective hotel. This assessment, plus operating revenues, funds the operation of @ The Grounds, a 60- acre campus with nearly a dozen completely unique venue rentals, that includes the Roebbelen Center and other tourism marketing efforts. The Hardwood Palace is a 70,000-sf basketball and sports facility with eight hardwood courts. The courts can be converted for volleyball, futsal, pickleball, or other court sports. The facility also includes meeting rooms, a snack bar, and a second-floor viewing area. The facility is privately owned and operated, making financial data unavailable. Additional information can be found on their website at: https://www.hardwoodpalace.com. After touring both facilities, the group recommended the City engage a consultant to assist with a market opportunity analysis. Staff obtained two proposals from Sports Facilities Companies to complete the next step in evaluating the feasibility of a project. Option 1 is limited to a Market Opportunity Analysis, while Option 2 would expand into construction costs, operational costs, revenue projections, economic impact, etc. Option 3 is to complete Option 1 and then decide to complete the remaining components. The cost for the Market Opportunities Analysis is $18,000 plus $2,000 in travel expenses, a total of $20,000. The cost of the Full Report contracted at once is $58,500 plus an estimated $5,000 for travel expenses, a total of $63,500. The cost for the Market Opportunities Analysis with a go - no-go option to complete the second phase is $75,000. There is a penalty of almost $12,000 for selecting Option 3 over Option 2 due to some redundancy and inefficiency. The resulting reports are the same. Report to Redding City Council September 27, 2023 Re: 9.6(a)--Adopt Budget Resolution for Court Project Study Page 3 Option 1: Market Opportunity Analysis to expand on the vision, define the parameters of the project, and refine the plan that provides the City with the most likely path forward, including: • A business model that best meets the City's definitions of success; • Identifying the market the facility will serve, including characteristics of potential customer participation rates for featured activities and the competition the facility will face; • The programs (spaces and sizes) that best meet the vision capitalize on opportunities and mitigate challenges; • The cost of constructing the recommended facility; and • The performance of comparable facilities based on national industry benchmarks. COST: $18,000 plus $2,000 in travel expenses, a total of $20,000. Option 2: Option 1 Market Opportunity Analysis plus Pro Forma, Economic Impact Analysis and Feasibility Report. The Pro Forma will provide the City with detailed financial projections based on: • The ideal business model; • Realistic and/or recommended debt-to-equity mix and debt service; • Right-sized program spaces and space requirements; • Construction and start-up costs based on recent, comparable projects; • Recommended Parking; • Revenue by product/program; • Direct/variable costs (Cost of Goods Sold); • Facility and operating expenses; • Management and staffing model; and • Utilization projections. The Economic Impact Analysis will project the economic impact of the facility on an annual basis. The economic impact is defined as new off-site spending that will occur in the market as a result of tournaments and events held at the facility. This information is used to project economic activity from out-of-town visitors who would not be in the events held at the facility. The Feasibility Report will include the following sections: • Executive Summary; • Market Overview; • Facility Overview; • Programs, Products, and Services; • Financial Performance Overview; and • Conclusion and Next Steps. COST: $63,500, including travel expenses. Report to Redding City Council September 27, 2023 Re: 9.6(a)--Adopt Budget Resolution for Court Project Study Page 4 Option 3: Proceed with Option 1 and then decide to continue with the remainder of the work in Option 2. COST: $75,000, including travel expenses. Environmental Review While the development of a court facility is a project under the guidelines of the California Environmental Quality Act (CEQA), the feasibility study is not a project under CEQA. Therefore, no further action is required at this time. Council Priority/City Manager Goals • Communication and Transparency – “Improve the quality of communication with the public and City employees to enhance knowledge and increase transparency to improve public trust.” • Government of the 21st Century – “Be relevant and proactive to the opportunities and challenges of today’s residents and workforce. Anticipate the future to make better decisions today.” • Economic Development – “Facilitate and become a catalyst for economic development in Redding to create jobs, retain current businesses and attract new ones, and encourage investment in the community.” Attachments ^Resolution RESOLUTION NO. 2023-___ A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE 15TH AMENDMENT TO CITY BUDGET RESOLUTION NO. 2023-060 APPROPRIATING $63,500 FOR MARKET ANALYSIS AND PROJECT COST REPORT FOR MULTI-COURT FACILITY FROM THE PARKS DEVELOPMENT FUND FOR FISCAL YEAR 2023-2024 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDDING THAT Budget Resolution No. 2023-060 be and is hereby amended as follows: FUND DIVISION DESCRIPTION INCREASE DECREASE 151 1796 Parks Impact Fees $64,060 THAT account titles and numbers requiring adjustments by this Resolution are as follows: USE SOURCE OF FUNDS OF FUNDS Decrease (Increase) Fund Balance 151-1796-2910000-00000 Fund Balance 63,500$ Increase Expenditures 151-1796-6900107-00000 Parks Studies 63,500$ Total 63,500$ 63,500$ THAT the purpose is to appropriate $63,500 for market analysis and project cost report for multi- court facility from the Parks development fund the fiscal year 2023-2024. I HEREBY CERTIFY that the foregoing resolution was introduced at a special meeting of the City Council of the City of Redding on the 2nd day of October, 2023, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: MICHAEL DACQUISTO, Mayor ATTEST: FORM APPROVAL: SHARLENE TIPTON, City Clerk BARRY E. DeWALT, City Attorney