AR-Big League Dreams -construction of sports park

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Item #29 CITY OF COLTON AGENDA REPORT FOR CITY COUNCIL MEETING OF JULY 17, 2001 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: AL HOLLIMAN, ASSISTANT CITY MANAGE SUBJECT: AGREEMENTS WITH BIG LEAGUE DREAMS FOR CONSTRUCTION AND MANAGEMENT OF A COMMUNITY SPORTS PARK DATE: July 10, 2001 BACKGROUND At the January 12, 1999 City Council Workshop, the City Council identified a Community Sports Complex as one of their primary future goals. As a result, staff began exploring alternatives to achieve this goal and concluded, given limited staffing and funding, that contracting out the operation of a sports complex was the best solution. After researching firms that perform this service and checking with related cities, staff contacted Big League Dreams in September, 1999 and began discussions with them. DISCUSSION/ ANALYSIS Big League Dreams offers a unique proprietary product, which includes outfield facades for baseball stadiums that replicate major league baseball parks. Their parks also include other unique design characteristics. The combination of these features, licensing agreements, concession components, marketing programs, and national exposure creates a proprietary product, which results in a "sole source" situation. Before becoming aware of Big League Dreams and its proprietary nature, staff contacted the only other locally known provider of community sports parks who declined to explore the Colton opportunity. They were in negotiations with a neighboring city, which restricted them from constructing and operating a park within a defined radius. This possible competitor actually referred staff to Big League Dreams. The standard deal points of Big League Dreams agreements are relatively non-negotiable. They include the local government providing the land and constructing the park, using its own funds or debt. Big League Dreams leases and operates the park, assuming all maintenance costs and operating risk, and pays a percentage of gross revenue to the local government after the third year of operation. One of the primary selling points and benefits of a Big League Dreams relationship is absorption of the maintenance costs and operating risks. They contend if a local government wanted to build and operate a community sports park on its own, they would still have to provide land, pay for construction, and then pay for ongoing maintenance and any additional operating costs. While a Big League Dreams proprietary sports park costs approximately $2,000,000 more than a generic community park of like size and amenities, the absence of operating costs for the local government makes this an attractive economic alternative, even without a percentage of gross receipts. The projections for the Big League Dreams proposal and alternatives will be displayed and discussed momentarily. The primary reason it has taken staff so long to bring this matter forward for public action has been the process of locating and acquiring a suitable site. After much research and effort by staff, the site formerly known as Frontier Town and adjoining vacant parcels, involving three different owners, have been offered for acquisition by the Colton Redevelopment Agency. The site approximates 28 total acres. Portions of the aggregated site, including the section of Frontier Town Item #29