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HomeMy WebLinkAboutPackets - Council Packets (138)Council Meeting Regular Session December 17, 2014 1 2 Meetings are subject to change. Check the Town website for meeting status. Announcements December 23 Board of Adjustment MEETING CANCELLED December 18 at 4 p.m. Hopi Conference Room Stormwater Utility Commission January 5 at 5 p.m. Hopi Conference Room Historic Preservation Commission January 7 at 6 p.m. Council Chambers Town Council Regular Session January 6 at 6 p.m. Council Chambers Planning & Zoning Commission 3 Town of Oro Valley Town of Oro Valley offices, including the Police Department lobby, will be closed December 24 – 25, 2014 AND December 31, 2014 – January 1, 2015 for the Christmas and New Year’s holidays Announcements Continued 4 5 Acquisition Proposal El Conquistador Country Club December 17, 2014 Town of Oro Valley 6 The Property - Review 31,475 sq ft building (La Cañada) 5,600 sq ft building (Hilton location) 324 acres of land 31 lighted tennis courts 2 heated swimming pools 45 holes of golf Town of Oro Valley 7 Ownership and Management Plan Town of Oro Valley Acquisition $1M – cash paid over three years Parks & Recreation Department Community & Recreation Center 15 tennis courts 2 swimming pools Troon contract to include Golf course (45-holes) Restaurant 16 tennis courts (hotel) Town of Oro Valley 8 Due Diligence Thorough inspections of buildings at both locations Thorough inspections of the golf courses, tennis courts, kitchen, and swimming pools Draft operations and maintenance budget Extensive title/zoning research Development of a 10 year CIP Complete financial analysis Property appraisal $3.25M market value $42M replacement value Town of Oro Valley 9 Town of Oro Valley 10 Town of Oro Valley 11 Current Zoning and Entitlements El Conquistador Planned Area Development Area Designations Town of Oro Valley Naranja Drive Lambert Ln. La Cholla Blvd. La Canada Blvd. 12 Current Zoning Hilton Resort and El Conquistador Patio Home Zoning Town of Oro Valley Oracle Rd. 13 Current Zoning Small retail shops, Restaurants, Cocktail lounges with live music and/or patron dancing, Day nursery, Game center, health studio or fitness center, Satellite receiving earth station, Stable and equestrian facilities an exhibition arena. Town of Oro Valley Summary of Permitted Uses over the 36 holes within the El Conquistador P.A.D. (Dependent on the sub-areas) Residential dwelling units and accessory structures, Commercial and public offices, Service retail uses, Religious institution, Restaurants, Recreational facilities, Social center buildings, Hotel, Golf course, Clubhouse and related golf course facilities. Office and retail uses may include, with the exception of hotels, those uses permitted in the C-2 Commercial District of the OVZCR. Equestrian and stable facilities Resort hotels and Western Town with equestrian activities Permitted appurtenant uses include: 14 Current Zoning El Conquistador P.A.D. Continued Town of Oro Valley Summary of allowed Conditional Uses pending approval of a C.U.P. A use is designated as a “convenience use” if the method of operation includes one (1) or more of the following characteristics: Gas Station. The primary business is the sale of food or drink for consumption, either on or off premises, over a counter, or from an outdoor service window or automobile service window. Of the food and drink sold, at least 20 percent is in disposable or carry out containers. Drive-in and drive-through restaurants. Stores less than 7,500 square feet where food and drink, which may include packaged alcoholic beverages, are sold. Such items are sold primarily for consumption off premises. All other drive-through uses including drive-through liquor store, drive-through laundry/dry cleaners and drive-through video stores. Delicatessens. 15 Current Zoning Model homes, New utility poles and above ground wires, Boarding house or lodging house, Short term rental properties, Time share units Major communication facilities. Town of Oro Valley Summary of Permitted Uses over the 9 holes by the Hilton Resort Regular Oro Valley Zoning Code – R-4R Zoning(Resort District) Community residence, Home occupation, Single-family dwelling having either party walls or walled courtyards, Temporary real-estate office, Private garages, Religious institutions, Guest ranches, Hotels, Motels, Resorts, Antennas, Minor communication facilities, Accessory uses (i.e. golf course and other resort amenities). Uses permitted with an approved Conditional Use Permit: 16 2005 General Plan Elements 8 & 9 8.0 PARKS AND RECREATION FACILITIES AND ACTIVITIES Oro Valley’s population is growing and the demographics are changing, with various age families moving into the community. Existing parks and recreational amenities within the Town of Oro Valley do not currently meet the needs of its residents. The following facilities have been mentioned: Town of Oro Valley Recreation centers Neighborhood parks Mini parks Pet parks Playing fields (soccer, baseball, and basketball) Picnic areas Swimming pools Facilities for children Mandatory parks in new housing developments Recreational and fitness trail facilities in open or park space, and Possibly a public golf course 17 2005 General Plan 8.3.5 The Town shall encourage public gatherings in Town parks for social, educational and other community events and to design new parks to accommodate these gatherings. 8.6.1 The Town shall cooperate with other jurisdictions, resource management agencies, school districts, and private organizations to develop joint-use and multiple-use facilities that benefit and address the recreational and social needs of the community. (See also Policy 6.2.5.) 9. ARTS AND CULTURE KEY POLICY ISSUES: ARTS AS A BRIDGE There is an opportunity to use the arts as a bridge to all segments of the community through festivals, concerts, and local cultural events that bring people together. To this end, land and/or facilities for community arts gathering places are needed. Town of Oro Valley 18 Community Outreach and Input El Conquistador Club Membership Meeting Oro Valley Chamber of Commerce Board Meeting Sun City Oro Valley Board Meeting 200+ Community email/social media/walk-in visitors/phone calls On-line resources Troon financial projections FAQ and project overview Press releases Dec. 3 presentation Town of Oro Valley 19 Organizational Input Town of Oro Valley Parks & Recreation Advisory Board 2 yes, 1 no, 3 abstentions, 1 absent Oro Valley Chamber of Commerce Board Supports acquisition Visit Tucson Supports acquisition 20 AZ Community Recreation Centers by the numbers Town of Oro Valley 21 Estimated Revenue and Expenses Community & Recreation Center Town of Oro Valley 22 Capital Improvements – Facilities 5-year forecast Town of Oro Valley 23 Troon Operating Projections Golf, Food/Beverage, Tennis Town of Oro Valley 24 Capital Improvements - Golf 10-year forecast Town of Oro Valley 25 Capital Improvements - Golf 10-year forecast (continued) Town of Oro Valley 26 Financing Recommendation – Acquisition, Operations, Capital Town of Oro Valley 27 Community Center Cost Comparison - Purchase El Conquistador Country Club vs. New Build @ $20M 28 Implementation Strategy Implementation Timeline Mayor and council meeting Dec 17 If approved, property transfer of ownership March 1, 2015   Town of Oro Valley 29 Questions Town of Oro Valley 30 31 El Conquistador Country Club December 2014 32 Troon Background Founded in 1990 by CEO, Dana Garmany, Troon, headquartered in Scottsdale, has grown to the world’s largest third-party management company centered around golf and golf-related hospitality, operating 230 courses globally in 28 countries with 29 of the courses located in Arizona and 5 of those located in Oro Valley market About Us 33 33 Value Proposition Member Satisfaction/ Retention Financial Stability Empowered and Energized Workforce Exceptional Guest Experience Increased Facility Value Operational Excellence Implementation of Standards Customer hospitality training Sales & Marketing/Brand Brand strength Player database Affinity and yield management programs Tools and program management Operating Efficiencies Global procurement programs Benchmarking standards Centralized Services Professional labor management Premier insurance program at lower cost Providing operational excellence and problem solving at facilities while improving financial stability through increased revenue and/or reduced operating costs Staffing with the best industry talent Agronomic conditioning 34 34 Operational Efficiencies Leveraging Troon Platform Illustrative Examples – Troon Value Proposition Delivery Engagement of Troon’s operating platform creates multiple operating efficiencies, many of which have zero impact on the guest/member experience. Potential Savings Opportunities: Merchandise (Hard & Soft Goods): 5% – 30% savings off wholesale Course Maintenance Supplies: 10% – 15% savings & favorable delivery terms Course Maintenance Equipment: 10% - 30% savings Property & Casualty Insurance: 15% savings 35 35 Troon manages golf at more than 30 resort properties, which includes working with the following brands to drive business: Troon’s Experience Within the Hospitality Industry Proven Success Partnering with Top Resort Brands 36 36 37 Public Agency Clients Troon Successfully Manages Golf for Public Agencies 37 Aged facilities, golf courses and diminished market reputation Ability to leverage platform revenue opportunities and efficiencies Access to people, expertise and resources to drive results Creating a focal point of the Community to drive resident satisfaction and brand awareness Key Challenges Facing Town 38 38 Department Expertise Clubhouse & Golf Course Renovation Support Ron Despain VP, Golf Course Development Cindy Anderson VP, Clubhouse Design & Development Jeff Poling Director, Golf Course Construction 39 39 Troon Impact on Renovations at BallenIsles Golf Course Renovations East Course (Pre-Troon): $9M North Course (Troon): $5.3M Similar scope as East Course, completed on-time and within budget Clubhouse Renovation Scope of project included interior redesign of front and back of house $5M budget approved for scope of work Project completed on-time for < $3M Project management support covered by management fee 40 40 Three-pronged approach Capitalize on Town’s ownership and resort relationship Build brand of El Conquistador Country Club Leverage resources, vast distribution channels and Troon brand (as appropriate) Troon Card Troon Rewards Facility App Troon Advantage Troon Golf Vacations Reservation Center TroonGolfAZ Co-op Team Troon (national referral program) Value Proposition Sales & Marketing Strategy 41 41 Troon Tennis Today Troon operates 44 tennis facilities with 239 courts under management, including the Kapalua Tennis Garden, BallenIsles Country Club, The Phoenician Tennis Garden, St. James Planation and more! 42 42 43 43 44 44 Troon supports local First Tee chapters and promotes instructional opportunities via First Tee at Troon facilities. Recent clinic above conducted by Tim Mahoney First Tee Programming / Troon 45 45 Troon Golf is leading the way with introducing juniors to the world’s greatest game. The offer is simple and affordable: Juniors golf for free after 3 p.m. when playing with a paying adult Juniors enjoy complimentary Callaway Rental Clubs Juniors receive complimentary instruction with a paying adult 90+ participating facilities 46 46 Troon is dedicated to growing the game with Junior Golfers, which is why a new program was created called Troon Junior Club (TJC). Juniors ages 17 and younger are able to join for a small fee and receive: Access to preferred Junior rates at participating Troon facilities TJC hat and bag tag Practice facility access Quarterly Junior golf clinics Discounts on summer golf camps Exclusive access to TJC social media And more! 47 47 Troon’s Player Development Month Program to introduce juniors & beginners to the game in a fun & educational setting, while encouraging participation in future Get Golf Ready lessons. May 2014 Clinics 74 participating facilities More than 2,645 golfers were introduced to the game! Planning Clinics in May 2015 48 48 Troon facilities utilize SNAG (Starting New At Golf) to introduce new golfers (From Juniors, to women to Seniors) to the game in a fun / engaging way. We will integrate SNAG at your facility and within schools 49 49 SNAG is utilized at Troon facilities and in the community! Left: Royal Golf Club teaching staff introducing the game to kids on tennis courts. Right: Troon AZ professionals bringing Golf into Phoenix Children’s Hospital 50 50 Women On Course Troon supports and hosts multiple Women On Course instructional and social events that bring new women to the game and to our facilities 51 51 Active duty U.S. military personnel and severely injured U.S. combat veterans receive the following benefits at participating Troon Golf facilities: Preferred Troon Card rates (Up to 50% off standard golf fees) 50% off Callaway rental golf clubs 10% off merchandise at golf shops 10% off at golf course restaurants 52 52 Program committed to elevating the fitness and healthy lifestyle for our associates and guests Walk with Troon initiative to promote walking instead of riding in a golf cart Promoting the use of our facilities for non-golf related fitness activities Incorporating nutritional offerings at Troon-managed facilities 53 53 Troon facilities are not afraid to be different…to grow the game and drive your business…hosting glow putting, big cup events, par three events, golf bikes, golf boards and more! Being Different 54 54 Success Story of Indian Wells Golf Resort 55 55 Overview Owned by City of Indian Wells, which is home to approximately 5,000 full time residents Managed by American Golf up until 2006 Managed by OB Sports from 2006 until June 2009 Approximately $80M renovation to both courses and clubhouse in 2008 City partnered with Troon in June 2009 to improve financials, course conditions, service, processes, food & beverage experience, etc. Troon’s Impact Reorganized staffing model to improve structure & efficiencies with accounting, human resources, payroll, sales & marketing and more Significantly enhanced course conditions, service levels, F&B and sales Achieved financial success in the midst of The Great Recession The Story 56 56 Significant Improvements from FY 2009 (Pre-Troon) to FY 2013 Metric FY 2009 FY 2013 Change (%)___ Total Revenues $10.5M $12.1M +$1.6M (15%) Gross Operating Expenses $12.8M $11.7M +$1.1M (9%) Gross Operating Profit ($2.3M) $404K +$2.7M (117%) Net Operating Income ($2.7M) $72K +$2.8M (104%) Total Rounds 69,308 82,712 +13,404 (19%) Financial Impacts 57 57 Creation of a multi-faceted Community Center Creation of unique community programming around sports Creation of world-class junior programs for golf, tennis and fitness Formula for Success Key Benefits for Oro Valley 58 59 Public Hearing - Tax Code Amendment Proposed 0.5% Transaction Privilege Tax (TPT) Increase December 17, 2014 60 Importance of Additional Revenue Source New facility with significant operating, programming and capital needs Key to success in order to not compete with existing programs/services in General Fund Will be dedicated for costs associated with Community & Recreation Center, golf, food and beverage, and tennis Operating, capital, possible future debt service 61 What revenue source is being recommended? Recommend a 0.5% transaction privilege tax (TPT) increase, raising the Town’s current TPT tax rate from 2% to 2.5% TPT increase would generate approximately $2.0 million annually Recommend no sunset provision 62 What other revenue sources were considered? 63 Impact of TPT Tax Increase 0.5% TPT tax increase would generate approximately $2.0 million annually Paid by both residents and non-residents Approximately 2/3 of local tax revenues are generated by Town residents $1.3 million of the total increase of $2.0 million Approximately $2.60 per person per month, based on estimated population of 42,000 residents 64 Implementation Timeline December 17, 2014 Public Hearing Tax Code Amendment Ordinance January - February, 2015 Arizona Department of Revenue notifies businesses and updates monthly tax forms Minimum 60 days required for this process March 1, 2015 Tax rate increase becomes effective Town assumes facility operations 65 Questions? 66 67