HomeMy WebLinkAbout2016/02/23 Item 11 - Additional InformationSubject: FW: Agenda Item €11
Orieinal messa e --------
From: Susan Watn
Date: OZ/2Z/2016 3:] P 4 (G?9T-08:00)
To: ?9arv Salas <f qSalas(ci.chula-isia.ca.us>, Patricia Aeuilaz <P.Aeuilazfa chulavistaca.eo>,
Ste e ?hiesen <smiesen(ilchula istaca.so>. Pamela Bensoussan
PBensoussan(r chula•istaca.eo•>. John McCann <jmccann(o chula°istaca.00°>
Cc: Garv Halben <GHalbertnchula istaca.o>. Kelle Bacon <KBacon(a chulavistaca.eo>
Subject: Aeenda Item =1 i
Deaz Council ?9embers:
At m first readine. the "Core A2reement" seems to contain all the restrictions on the use of
the OTC b the Citv as the MOU did (except for no allo in the Cit to use the retail
space). You .rill recalL that in response to those n40U restrictions; JIA4 Spons consultants
concluded that 94% of the revenue +ould have to be supplied b° the LJ. S. and/or Intemationa]
Ol mpic Committees -- onl} 6% -- onh• 6% -- could be 'eamed' b•the Cit.
I see nothin in the "Core A reement" that ould chanee that assessment.
Bacon said the aereement H th Point Loma Trust ould be strucrured «ith terms to protect the
cirv and its eeneral fund. •hich could be used if the deal falls short. althoueh that ould be a
last reson."yU tion-Tribune Februon IS, ?0l6 (bold n=pe mine)
You should not assume that this is soine o be a 7n-a in situation for the cit of Chula Visia --
ti hich has one of the lo vest; if not rl e lo est, amount spent per resident in the General Fund of
an cin in San Dieso Count.
Peter 11'atn
i
Subject: FW: Olympic Gold or Foo('s Gold?
From: Elva Mellor
Sent: Tuesday, February 09, 2016 3:28 PM
To: Patricia Aguilar
Subject: Fwd: Olympic Gold or Fool's Gold?
Beein fonti arded messaee:
From: ElvaMellor
Subject: Re: Olympic Gold or Fool's Gold?
Date: February 9, 2016 ai 3:14:00 PM PST
To: Susan Watry
Than}: pou! A4 thouehts ezactl. 'hy get im oh ed in things rhich cost taxpa ers monev hen our est side
siree[s
aze in ureent need of repair? Vhen I asked wh the east ti as eettine sen iced hen the sveets are ne ver, etc. the
ans er
t as that it is cheaper to maintain the east and to expensi e to repair the H est??? So do onlv east side residents
pay taxes?
li e in the east but am appalled at ho mone oets spent on other projects rather than helping maintain our
cirv in top
condition.
e stud on the universih did not impress me. Hopefull° the are still orl:ine ithin the same bud et to
come up
ith much bener information and solutions.
Spending mone thout settine firm guidelines and lons term oals is foolish and disrespectCul to the citizens
ho
elected the counci] members.
Eh a Mellor
On Feb 9. 2016: at 11:28 AM, Susan \Yatry 7ote:
Counes: Focus on Chula V ista)
Need Crocery Stor=_, Noi ?romises
Improving ih= Process to Fill Coundl S_ats—
Olympic Gold or Fool's Gold?
ros?=_d or Ociob r 7_2055by Chula Vs Issu s
ools-2old.pns>
i
UPDATE: On Tuesda}, Februan 9, the Chula Vista Cit}Council n ll discuss going
forH•ard ith this unique enture. Here is the background material for the Council
meeting:
Ol mnic OTC Legislation Text
VJhat is ne+ is the addition of a third-part= operator called, "Point Loma Trust." No
information is gi en on this m}sterious organization.that, apparently, as just created
since it doesn't seem to exist on the Internet. Is this organization financiall}'iable? Who
is on its board? Where are the guarantees that the Genera] Fund n211 ne er be used?
Who +ould be responsibie for new infrastructure? This creates many more questions.
Original post:
I.eYs be honest, the Ol npic Training Center ("OTC") ne er achie>ed its desired
potential. People thought it +-ou]d help bring tourism to the area and to be a great
communit= partner to the cin vhere it is located — Chula Vista. On both counts, the
center fell short of achieving those goals. Although, located in Chula Vista, the center
vas never a er}good communit partner (according to City Hall insiders) and it didn't
generate enough public e ents to help much rith tourism.
This is because the OTC is, and fore er rill be, a center to train athletes. No more, no
ess. It's not there to be a tourist magnet, nor is it there to host community e ents or
meetings. There is nothing +rong ith that but it's important to keep that in mind. If
you ant to take a tour, you are +elcome to do a self-guided tour. If you want to have a
meeting or communit event on the premises, your call 1] not get ans ered or the
request+ll be denied.
At the moment, it seems that the U.S. O]ympic Committee ("USOC") ould like to get
out of the business of managing training centers which vould mean either c]osing do vn
the site or]etting someone else manage it. Enter the City of Chula Vista to the rescue.
The Cit} and the USOC joint]y hired JMI Partners to come up vith a plan to keep the
site open. The Cit also put one of its highest lieutenants (a Deput}=Cit= Manager) in
charge of the due diligence. Their job is to find a vay to keep the doors open hile
keeping the OTC financialh iable.
LeYs take a step back and see how we got here. Originally named the ARCO Training
Center, at a cost of$Si million (double its projected cost to build), the OTC opened in
June of iqq;. Throughout the ears, some spo ts have ]eft and some ne v ones ha e
z
started. The OTC currend supports the follo.ing sports: archen, BM3; field hocke;
ro ing; rugb; tennis, some track and fie1d, and vol]e}ball. The Center has four natural
turf soccer fields; six sand olle-hal1 courts, and three BD4 i tracl-s.
In D4a°of 2oi4, the liSOC sent a letter to the Cih Ietting them l:no that it no ionger
anted to operate the Center. This is -hat got the ball started to see if the Cih could
take o er the OTC. It currentl-costs S8 million per year to maintain the facilities open.
The USOC has promised to pa S3 million per ear for four}ears for use of the facilities.
The rest is supposed to come from inno ati e and creati e solutions from hoe>er the
Cih hires to maintain the faciliri. If those solutions fail, the Cih .ill be left -ith the bill.
It ill ha=e to use general funds to maintain the Center. This point cannot be
o eremphasized: General Funds are at risk.
So mam important questions remain to be ans-ered.
First of all, in the best case scenario and the center is sta-s profitable, hat vould the
Cin gain from tal:ing on this en risl. r-enture? The honor to host an OTC?A]audable
goal, granted, but at hat gain? The OTC °ill remain as separate from the Cit} as it e er
has as far as e ents go. Your l:ids scecer team .ill ne er ha e the chance to pla on those
beautiful fields. Nor ill -ou e er .•atch the ,l'olos plap on those fields. The OTC.-i11
remain, as it al•a s has been; a training center for Ol rnpic athletes. Period.
Second, .•ho ill pa for an ne infrastructure [hat is needed?9 potential agreement
to increase re enue depends on briaging in high performance athletes to train at the
center and those athletes ill need state-of-the-art equipment. For example; the new
archen°center that il] open this month cost Si4 million and took up ii acres. So, vho
ill pa° for am ne°facilities? Will the Cit go begging to alread stretched thin
corponte sponsors? tiil] the Cih foot the bill? It ob-iousl .on't be the USOC ho ill
pro ide the mone because the're alreadp committed to a stated amount.
Third, °ho i11 corer the costs of construction o erruns or center budget deficits. Nill
the cih s general funds be at risk here? Could this turn into a financial black hole?
Assurances that e enthine is being done to a.oid using genera] funds is the same thing
as sa-ing the securih door is on1-a little open but -e're safe.
Finall, -hat is the dri°er here? tihat are the options if the Cih does not proceed?
Those are perhaps the most important questions and hopefull questions that the Citi
Council -ill ask from staff about this seemingh risl. enture.
The Cih ma need a reminder that it has had its experiences ith losin-entures.
3
V hen the SRi25 Toll Road as first proposed, the Citp (briefl) considered being a
partner-ith the toll road de eloper perhaps because the der•eloper was wnvincing the
Cih that it +ould be profitable for the Cit. Well, +e kno ho that turned out. Another
example was+hen the Cit had control of the Nature Center. After pa}-ing $i million per
ear, in 2009, the Cih made the decision to separate itself from the Center.
The people tasked +th getting this deal done are doing a colossal effort to come up.-ith
a plan that +ill keep the OTC open and financially sound. Their efforts are to be
commended as they seem to be turning ever}- stone to make sure tbey have the best deal
possib]e. But that doesn't a]ter the question of hy take on the risk in the first place.
If the USOC is basicall saying, ,=e're losing money and ve want to get out of this
business, +h} is the Cit+illing to take on that risk? The USOC rill continue to get use
of the faciliri „hile letting the Cit take on the financia] risk. Sounds like a great deal —
for them.
httns//focusonchulavista.n ordoress.com/201/10/1 1/oh mpio-old-or-foo]s-old/
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