To: Parks and Recreation Commission Members and Staff
From: Jeff Brauer, Director of Parks and Recreation
Title
Memorandum of Understanding with Confluence Companies, LLC, to Develop the Town of Castle Rock Sports Development Center
Body
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Executive Summary
Staff will soon seek Town Council approval by Resolution of a Memorandum of Understanding between the Town of Castle Rock and Confluence Companies, LLC (Confluence) to develop a Sports Development Center.
Developing a sports center is consistent with the Council-approved Parks and Recreation Master Plan and Strategic Plan. Since its inception, the department has thoughtfully planned, implemented and maintained public recreation facilities enhancing active lifestyles, health and wellness, youth development and multi-generational social interaction. The overwhelming success of both the Castle Rock Community Recreation Center and the Miller Activity Complex can be described as innovative and far reaching, continuing to have a positive impact on the quality of life in Castle Rock. Castle Rock is now uniquely positioned to continue to maintain quality of life expectations for a growing community as we transition from a population of approximately 76,000 to over 100,000. The Town will need to expand its commitment to meet increased recreation needs.
To prepare for growing demand, staff worked with architectural firm Barker Rinker Seacat (BRS) to complete an Indoor Recreation Feasibility Study throughout 2021. The purpose of the study was to assess community programming needs, development costs and operational impact, and set a general timeline for the next indoor recreation facility.
While the study confirmed the Town’s financial ability to develop and operate the first phase a new recreation facility, it also identified that the Town has limited site options. All undeveloped park properties that could accommodate a future recreation facility are located within residential areas. Castle Rock residents often object to traffic generating facilities so close to home. The proposed project budget also does not include land acquisition, so Parks and Recreation issued a Request For Proposals (RFP) to seek potential partners to contribute land or other value to the project. Confluence answered the RFP and provided a proposal to provide the land, financing and construction services to advance the project. Confluence proposed to build the Sports Development Center at the site of the former Acme Brick facility on Prairie Hawk Drive as part of an overall mixed-use development (the Brickyard) that would clean up a blighted industrial property and energize the area.
The Sports Development Center concept was then presented to the Parks and Recreation Commission and to Town Council in May 2022. Staff introduced the proposed facility, a general financing framework and the RFP response by Confluence to provide land and construction assistance. Council directed staff to seek public feedback on concept and location.
The Town hosted an open house in June and posted an online questionnaire, which received 639 responses. Public feedback indicated that:
• 87% of respondents agree with the need for a new recreation center, given other parks and recreation and Town priorities
• 76% of respondents believed the proposed concept addresses the current shortage of gymnasium and aquatic space within Castle Rock
• 81% of respondents agreed with the concept of the facility as proposed
• 83% agreed with the location of the facility as proposed
• 76% believe the proposed partnership with Confluence Companies accomplishes complementary funding strategies identified by the Parks and Recreation Department to maximize the use of alternative funding sources and place an increased emphasis on seeking opportunities for local and regional cooperation
The potential partnership with Confluence would offer a number of advantages. First, the proposal would provide over 11-acres of land located a short distance from two I-25 interchanges, providing easy access for most Castle Rock residents. The project will clean up a blighted former industrial site and the proposed facility would be supported by a hotel, restaurant and retail uses. The partnership with Confluence could take advantage of private financing if desired and the proposed Urban Redevelopment Authority, if approved, could reduce the Town’s site development cost. Confluence would also provide regional stormwater detention to maximize development of Town facilities. The partnership would allow for shared parking and provide construction assistance. Lastly, the Town does not have other suitable sites at this time.
Town staff and Confluence have developed a draft Memorandum of Understanding (MOU) (Attachment A). The MOU defines the relationship between the two entities and outlines the terms of an agreement to begin site planning and to work toward a formal lease agreement. If the MOU is approved by Town Council, staff will present a schematic design contract between the Town and project architect Barker Rinker Seacat (BRS) under a separate resolution. BRS would then fully define programming and phasing for the facility with more refined cost estimates. This schematic design process would run concurrently with the rezoning process of the Acme Brick property for the Brickyard project. If approved, staff would eventually present a formal lease agreement with Confluence that would finalize the agreement between the parties and initiate the funding mechanisms required to move to final design development and the preparation of construction documents after the rezoning of the property is approved.
Discussion
The next proposed recreation facility is a Sports Development Center that would complement the youth based Miller Activity Complex and traditional recreation options available at the Castle Rock Community Recreation Center, providing new opportunities for league play, developmental programming and drop-in use. The Town has not constructed a new gymnasium or competitive pool since 1988. By the time a new facility is developed, the Town is projected to have approximately 90,000 residents. The first phase of the proposed Sports Development Center would support demand with four to five indoor courts to accommodate basketball, volleyball and pickleball, as well as additional uses such as wrestling, other court sports and fitness. Tournament uses could also provide and economic driver showcasing Castle Rock’s commitment to active lifestyles and competition. The proposed facility includes a 25 x 25-meter competition pool allowing for (10) 25-yard lanes and a 3-4 lane warm-up pool with spectator seating elevated above the pool deck. Deeper water for diving will also be considered. An indoor adventure track, fitness and sports training areas, group fitness, meeting areas, team rooms and locker rooms are also included with space for future expansion.
Memorandum of Understanding
Town staff is proposing that Town Council consider entering into a Memorandum of Understanding with Confluence Companies, LLC to further define the potential partnership with the intent of designing and constructing the Sports Development Center at the Brickyard.
MOU Summary and Major Points
• Approval for both the Sports Development Center and the Brickyard would be pursued concurrently
• Confluence will dedicate approximately 11 acres of land to the Town for recreation facility construction
• The Town will ground lease the property back to Confluence to construct the facility
• The Town will fully control the facility’s operation and will make lease payments until the facility debt is retired
• Confluence will dedicate the facility to the Town when the final lease payment is made
Other Potential Advantages
• Confluence will function as the Construction Manager / General Contractor and provide Owner’s Representative Services
• The Town will retain authority over all decisions related to facility, its programs, finishes and other design and construction details
• The Town will have access to Confluence’s private financing if desired, which would not encumber Town collateral needed to issue COP’s
• Confluence may be able to cover some of the site costs as part of the URA, allowing more of The Town’s funding to go towards the recreation facility
• The site would utilize Confluence stormwater facilities, maximizing resources available for the facility
If Town Council chooses to enter into a Memorandum of Understanding with Confluence Companies, an amendment to the existing services agreement with project designer, Barker Rinker Seacat (BRS) for schematic design will also be presented for consideration. Schematic design is the first phase of the design process and is intended to identify the final facility programming and the spatial relationship between components; it will identify initial cost estimates, regulatory requirements and will include a site plan, floor plans, elevations and renderings.
Schematic design will form the basis of decision making regarding the final facility program and financing structure. It is anticipated that this process will be complete at the same time that Council will consider the Brickyard zoning. If approved, staff would eventually present a formal lease agreement with Confluence that would finalize the details between the parties and initiate the funding mechanisms required to move to final design development and the preparation of construction documents after rezoning of the property is approved. Much of the schematic design phase may be applied to another site if Council should choose not to move forward at that time.
Notification and Outreach Efforts
The Parks and Recreation Department hosted an open house to introduce the proposal to Town residents and share conceptual facility plans on Tuesday, June 14 at the Millhouse at Philip S. Miller Park. In addition, an online questionnaire was posted for 35 days on the Town’s website seeking feedback related to the Sports Development Center concept and proposed location. Of the 639 responses received, representing over 20 neighborhoods, 81% of respondents agreed with the concept of the facility as proposed, 83% agreed with the location as proposed and 87% agreed with the need for a new recreation center given other parks and recreation and Town priorities. In addition, 76% believe the proposed partnership with Confluence Companies accomplishes funding strategies identified by the Parks and Recreation Department. Demand for other indoor recreation facilities were also included in questionnaire responses. Support for tennis was mentioned in 26% of responses and ice was mentioned in 14% of responses. Other common responses included desire for a 50-meter pool, a diving well, open space, baseball facilities and indoor turf.
History of Past Town Council, Boards & Commissions, or other Discussions
Staff presented a Sports Development Center discussion / direction item to Parks and Recreation Commission and Town Council in May 2022. At the Council meeting, staff received direction to obtain public feedback on the proposal through an online questionnaire and open house held June 14, 2022 at the Millhouse at Philip S. Miller Park.
Budget Impact
There is no budget impact directly associated with this MOU proposed by resolution. Staff will present a contract amendment with BRS for Schematic Design through a separate resolution.
In general, the Castle Rock community supports Town-operated indoor recreation and has for over 30 years with the first project, the Castle Rock Community Recreation Center, which was initially developed in 1988 (population 10,000) through a voter-supported bond initiative.
Impact fees were later adopted to provide new community recreation facilities to ensure growth helped pay for growth related impacts, funding expansion of the Castle Rock Community Center in 2006 and establishing the Miller Activity Complex in 2014. Town Council reaffirmed growth-funded community recreation and parks through the adoption of fees. The final phases of the Community Recreation Center and the MAC were developed through the use of Certificates of Participation (COP’s) paid through impact fees.
The Town will pay off MAC COP’s in 2023, 10 years earlier than planned, freeing up resources to combine new COP’s and impact fee fund balance to provide the estimated $63-$67 million needed to begin construction of the proposed Sports Development Center by 2024. 330 new residential units constructed annually would cover COP payments of $2.6 million, leaving about $3 million each year for park development based on a conservative estimated growth rate of 700 residential units per year.
Along with the proposed Sports Development Center, the proposed 5-year Parks and Recreation capital budget includes the completion of Plum Creek North Park, Metzler Family Open Space trails and parking, development of Cobblestone Macanta Open Space, completion of the Colorado Front Range Trail through Castle Rock and the Butterfield Park and Mitchell Gulch Park renovation projects.
Proposed Motion
No motion is required at this time. This agenda item is intended to be informational only.
Attachments
Attachment A - Draft Memorandum of Understanding
Attachment B - Questionnaire Results