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Town Council Work Session Present: Mayor Ernie McAlister, Mayor Pro Tem Jack Smith, Council Members Marla Dorrel, Jennifer Robinson, Julie Robison and Nels Roseland Mayor McAlister called the meeting to order at 5:08 p.m. Parks, Recreation and Cultural Resources Director Mary Henderson stated that staff was given direction to explore a partnership with the Triangle Aquatics Center (TAC) and whether a national venue would work at the TAC site. She said that a national venue would not fit on the site because of the construction currently underway. She said that the walls cannot be moved and the seating capacity is set. Mike Curran, TAC president, participated in the work session via conference call. Consultant Scott Hunsaker of Councilman Hunsaker & Associates in St. Louis reviewed the TAC project and other aquatic facility options. (A copy of Mr. Hunsaker's PowerPoint Presentation is attached to and incorporated herein as Exhibit A.) Mr. Hunsaker stated that the entrance to the TAC facility is on the west side of the building and the outdoor short course pool is on the opposite side. The needs of the Town program included an indoor leisure pool and an enclosed short course pool; an additional entrance would be needed on the TAC site to accommodate the short course pool. Also, turning the pool into a diving pool would cost around $2 million and would include a tower, enclosing the space, raising the height of the ceiling, and increasing the depth. Mrs. Henderson said the cost estimate with the partnership concept does not include the diving well. Ms. Dorrel asked about the diving well. Mr. Hunsaker responded that the diving well is platform diving. He said the ceiling of the building would need to be raised to about 60 feet and the pool deepened to about 17 feet, which would provide all deep water lap lanes. He said the current 25x25 yard pool has four feet of water depth and is ideal for lesson programming and teaching. Mr. Hunsaker said that the concept also provides additional parking for additional amenities. The third component of the Town's program was an outdoor recreational pool which would have its own support space for changing rooms and a modest administration area. He said that since it is adjacent but not connected to the facility there isn't an opportunity to transition between the two, but it would bundle the amenities on one site providing opportunities for shared use. He said the ability also exists to consider access to Cary Towne Boulevard which would add to the attractiveness of the site for venue and accessibility, although DOT has not approved that access. Several members asked for clarity regarding TAC's contribution to the partnership, whether it was $9 million or $7 million and what the total included. Mr. Hunsaker responded that TAC has invested $9 million of which $4 million was allocated for land costs based upon appraisal. Mr. Curran added that assuming the land cost based on the appraisal there is $9 million invested into the project as it is today. He said with the partnership TAC would get back $2 million cash to use on project number two, leaving a net contribution from TAC of $7 million. Mayor McAlister stated that the costs associated with TAC are $4 million for the land, $2 million for the design, and $1 million for engineering which brings the total to $7 million. He asked about the other $2 million. Mrs. Henderson stated that it is costs toward building the facility. Mr. Roseland asked if the debt service with the three partner funding is related to the hotel/motel/food/beverage tax revenues. Mrs. Henderson said it includes $500,000 cash; $9.5 million would be financed and as well as $10 million of the Town's $15 million. Mr. Roseland asked if the debt could be reduced if looking at a $10 million general fund cash appropriation. Mrs. Henderson responded yes; she said that $5 million is in a Town savings account appropriated for an aquatics project. Mr. Roseland asked about the assumption of the $19 million for the Cary regional venue. Mr. Hunsaker said with the regional venue concept financing was not assumed for the $10 million contribution from hotel/motel/food/beverage tax revenues because the Town would not qualify for it. Mrs. Henderson added that $5 million is cash and the rest is financed. Mr. Coleman said $19 million would include all of the facilities for the community center concept, but they do not all have to be included; if aquatics were the only thing included the cost might be different. He said the community center concept is advantageous because it spreads aquatic facilities out geographically in the community providing better access and more training opportunities for the general public. Mr. Roseland asked if the bid could be split with a base bid related only to the aquatics component of community center concept and an additional bid alternative for the $6 million community center. Mr. Coleman said it could be done that way. Mrs. Robinson asked if the TAC partnership would negates the interest of the Town for a community center concept. Mr. Coleman responded that it would not. Mayor McAlister asked about the possibility of the Town buying out the commitments made to Wake County Public Schools, Cardinal Gibbons High School, and the Raleigh Swim Association. Mr. Curran said that it is not something they would consider at this point. He said that those groups made a significant commitment to TAC which allowed them to move the project forward. Mayor McAlister asked if partnering with TAC an honoring their commitment to the other groups would meet program needs for the community at large. Mr. Hunsaker said that additional capacity exists to accommodate other users in the community because the current commitment has 14 lanes between the facilities and there are approximately 28 available, not including the leisure pool. Ms. Dorrel said that most of the information provided is new and she would like an opportunity to digest it before figuring out limitations and possibilities. Mayor McAlister commended staff for their efforts and stated that the possibility of a partnership bears further consideration and negotiation. In further discussing TAC's $7 million contribution, Budget Director Scott Fogleman said that the bulk of the $7 million is the current market value for the land; none of it is for debt service, it is the value coming to the table. Mrs. Robison asked about the purchase price of the land. Mrs. Henderson said that although the Town did not independently appraised the property and staff did not reviewed TAC's appraisal, the land was appraised for TAC at over $4 million. She was told by TAC stated that they purchased the land for $1 million when the project began in October 2003. Carol Davis, a TAC Board member, said that an independent appraisal was done to secure financing. She said that the seller provided a significant portion of the value as a donation. Mrs. Robison said asked who pays for the building. Mrs. Henderson said that staff looked at the total costs and TAC's contribution toward the partnership. They did not separately look at the building issue because it is very complex. Mrs. Robison asked if the Town would actually pay TAC $2 million. Mrs. Henderson said that TAC's interest is to have cash money to begin another project toward their mission of providing aquatics throughout Wake County. Mrs. Robison asked when the building gets built. Mrs. Henderson said that staff would have to work out the building details. Mr. McAlister asked if the Town would have control of the construction of the facility. Mrs. Henderson said the Town would expect to get involved quickly, look at the changes needed, and determine how to move forward with the existing construction, including adding design and construction of a new facility. Mrs. Robinson asked where construction of the TAC facility stands. Mrs. Henderson responded that they've begun construction on the indoor facility; the walls cannot be moved and the pools cannot be changed. She said the interiors could be changed and reprogrammed, and the 25 yard outdoor pool could see some changes. Ms. Dorrel stated that the project cost for the partnership is $2 million more. Mr. Hunsaker said that the indoor space for the 25 yard pool makes the difference between the regional venue and the Town's project . He said the Town doesn't have the efficiencies of designing the entire space at one time. Mrs. Robinson asked about the possibility of outdoor pool being adjacent to the indoor pool on the TAC site. Mr. Hunsaker said that the Town would not get the efficiencies of the shared space because it would be creating a lineal relationship with lots of walking space. Also, the outdoor pool would be in the shade which is not where an outdoor leisure pool should be. Ms. Dorrel asked about overflow parking. Mrs. Henderson said the current agreement with TAC is a dedicated 69 spaces with the ability to use more as overflow. She said they can also include parking below the space. Mrs. Robison asked about the current ingress and egress into the main parking lot from Cary Towne Boulevard and whether the Town would be required to provide upgrades. Mr. Coleman added that DOT probably would not allow the Town to have an entrance on that side. Council members expressed concern with the naming rights, including the meaning for "home of," the possibility of a time limit for the naming rights, the facilities that might be covered, the importance of treating everyone in the community fairly, and ownership and control of the facility. They also asked about the nature and flexibility of the agreements with the other groups and whether those contracts could be bought out. Mrs. Henderson said the naming rights in the partnership would be for the Curran foundation's contributions toward the facility; it would be a family name, such as the "Curran Family," or something of that nature; they are not selling those rights. Mayor McAlister asked whether council agreed that the partnership bears further consideration. Mr. Roseland said that the Town's financial risk is minimized with the regional venue and community center concept and he suggested focusing on those venues. He said there is merit in a TAC partnership but he is concerned about naming rights and tying a catholic school to the Town. He asked if naming rights revenue has been considered. Mr. Hunsaker said that the cash flow crunch should decrease if naming rights revenues are considered. Mayor Pro Tem Smith said that he is willing to continue to explore the partnership, but it is counter-intuitive for the naming rights to stay with the other groups and the project is publicly funded between the Town and hotel/motel/food/beverage tax revenues. Mrs. Robison said that the partnership was supposed to reduce the estimated net annual operating cash flow. She said the cost is much higher than expected and will possibly go higher. Additionally, she would like to understand within the TAC partnership who builds the actual facility and at what cost. Mayor McAlister said that the funding for the building comes from Cary's contribution and the interlocal funds. Mr. Roseland said that with the TAC concept already under way the Town's ability to delve into the construction details is limited and there is a high likelihood that the Town will be responsible for final bill. Mrs. Robinson said the Town is not getting the efficiencies they hoped to achieve. They save the money that would be spent to include an outdoor pool and put the funds into a community center. She said the two basic needs to be met in the community are recreation and training. She said it is worth pursuing the partnership if TAC is open to pursuing those issues and investigating the efficiencies. Ms. Dorrel asked if the aquatics community can support an independent TAC facility and the Cary regional concept. Mr. Hunsaker responded yes. He said that the $10 million funding source influences the decision for a regional venue. Mayor McAlister asked about the length of time it would take staff to work through the council's concerns. Mrs. Henderson responded that staff can work quickly through the contract naming rights. She said it would take some time to work out the details of the construction because of legal and contracting issues. Mr. Roseland asked how long it would take to design and provide bid proposals to council if they were to move forward on the regional community concept venue. Mr. Hunsaker said that assuming the RFP and selection processes are 90-120 days, once the concept is designed it would probably take 8-9 month to prepare the construction document, going out to bid would probably be another 2 months, all of the reviews would take about 15 months, and it would probably take up to a year to construct the facility depending on when they started the project. Mrs. Henderson said they also have to determine if the North Cary site is where the facility would be built. Mr. Hunsaker added that it would take about 8-9 months to design and they need to build on the front and back parts. Mayor McAlister asked about the amount of time they have before starting to loose efficiencies. Mr. Hunsaker said that it is happening now; everyday is a lost opportunity and becomes more expensive. Mr. Coleman said that staff can address most of council's concerns in a 2-3 week period, particularly those relating to negotiations between the Town and TAC. He said the legal and contractual issues are more complicated as they relate to construction. He said the issue is whether it's possible given the legal constraints, the fact that construction has started, and the financing. He said they may not be able to specifically answer all of those questions until we get into the project. Ms. Dorrel said the bottom line is the benefit of everyone getting use of the facility sooner. If council were to decide on the regional venue today the decision would immediately be streamlined and Town would see a potential savings of $150,000 a year. Mrs. Robison added that with that plan the Town would have naming rights and wouldn't have the costs associated with the $2 million. Mayor McAlister suggested the council reconvene in three weeks to determine whether to pursue the TAC partnership. Staff should provide council with information as it is received. Mayor Pro Tem stated that two weeks is a reasonable amount of time considering the need to get to the heart of the concerns quickly. Mrs. Robison expressed concern about taxing the staff with such short turn-around time in which to provide information. Mrs. Henderson said that staff can easily get answers within the two-week period to whether TAC would be willing to negotiate on certain issues, such as the naming rights and the agreements. Afterwards, they can then focus on the concept of dealing with the construct issues and getting the facility built to meet that model, although they will not be able to bring back a contract. ACTION: Mayor Pro Tem Smith moved that council direct staff to bring the requested information back to them in two weeks with a frame of reference about the regional venue. Mayor McAlister provided the second, and council granted unanimous approval. Mayor McAlister directed staff to provide council with information as it is received throughout the two weeks so that when they meet again they can make a decision.
Mayor McAlister adjourned the meeting at 6:31 p.m.
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