Loading...
HomeMy WebLinkAboutAgenda Packet - CC - 2017.03.21City Council City of Burlingame Meeting Agenda - Final BURLINGAME CITY HALL 501 PRIMROSE ROAD BURLINGAME, CA 94010 Council Chambers6:30 PMTuesday, March 21, 2017 Special Meeting Note: Public comment is permitted on all action items as noted on the agenda below and in the non-agenda public comment provided for in item 4. Speakers are asked to fill out a "request to speak" card located on the table by the door and hand it to staff, although the provision of a name, address or other identifying information is optional. Speakers are limited to three minutes each; the Mayor may adjust the time limit in light of the number of anticipated speakers. All votes are unanimous unless separately noted for the record. 1. CALL TO ORDER - 6:30 p.m. - Council Chambers 2. PLEDGE OF ALLEGIANCE TO THE FLAG 3. ROLL CALL 4. PUBLIC COMMENTS, NON-AGENDA Members of the public may speak about any item not on the agenda. Members of the public wishing to suggest an item for a future Council agenda may do so during this public comment period. The Ralph M . Brown Act (the State local agency open meeting law) prohibits the City Council from acting on any matter that is not on the agenda. 5. GOLF CENTER SITE STUDY SESSION Study Session Regarding the Management of the Golf Center Sitea. Staff Report Exhibit A Exhibit B Exhibit C Attachments: 6. ADJOURNMENT Page 1 City of Burlingame Printed on 3/17/2017 March 21, 2017City Council Meeting Agenda - Final Notice: Any attendees wishing accommodations for disabilities please contact the City Clerk at (650)558-7203 at least 24 hours before the meeting. A copy of the Agenda Packet is available for public review at the City Clerk's office, City Hall, 501 Primrose Road, from 8:00 a.m. to 5:00 p.m. before the meeting and at the meeting. Visit the City's website at www.burlingame.org. Agendas and minutes are available at this site. NEXT CITY COUNCIL MEETING - Next regular City Council Meeting - Monday, April 3, 2017 VIEW REGULAR COUNCIL MEETING ONLINE AT WWW.BURLINGAME.ORG - GO TO "CITY COUNCIL VIDEOS" Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at the Water Office counter at City Hall at 501 Primrose Road during normal business hours. Page 2 City of Burlingame Printed on 3/17/2017 1 STAFF REPORT AGENDA NO: 5a MEETING DATE: March 21, 2017 To: Honorable Mayor and City Council Date: March 21, 2017 From: Lisa K. Goldman, City Manager – (650) 558-7243 Margaret Glomstad, Parks and Recreation Director – (650) 558-7307 Subject: Study Session Regarding the Management of the Golf Center Site RECOMMENDATION Staff recommends that the City Council review the additional information submitted by Topgolf and the US Badminton Center Group in response to the City Council’s questions about the proposals and provide direction to begin negotiations with one of the two applicants. BACKGROUND On June 20, 2016, the City Council requested that staff issue a Request for Proposals (RFP) for the lease management of the Golf Center site for the operation of golf or other recreational or entertainment activities that would be open to the public. The RFP was issued on October 12, 2016; US Badminton Center Group (USBC), Mid-Peninsula Ice Rink Foundation (MIRF), and Topgolf International submitted responses. US Badminton Center Group: The USBC proposal includes building a facility that would contain 20-50 badminton courts, a 10,000-20,000 sq. ft. Wellness Center, an outdoor training facility, a food court, a pro shop, and supporting spaces. Under this proposal, 20-25 of the Golf Center bays would remain for use by golfers. The facility would be built on the existing parking lot and the short game and driving range area. The facility would offer memberships and drop-in options for a variety of badminton and health/fitness programs for all ages including yoga, senior fitness, personal training, massage therapy, sports leagues, tournaments, and youth camps. Mid-Peninsula Ice Rink Foundation: The MIRF proposal includes building two new indoor ice rinks with supporting services (locker/restrooms, restaurant, pro shop and a meeting space) on the existing parking lot, short range game area, and golf bays at the Golf Center site. The facility would offer a variety of programming for all ages including figure skating, hockey, broomball, curling, adaptive ice sports, leagues, and tournaments. Topgolf International: The Topgolf proposal includes building a 65,000 sq. ft. LEED Silver- certified facility with 102 hitting bays, 3,000 sq. ft. of event space, a full-service restaurant and bar, a rooftop terrace, pool tables, shuffle board, and supporting areas. The facility, which would be built on the existing Golf Center site, would offer general entertainment, food and music, golf lessons for all ages, summer camps, tournaments, and leagues. Study Session Regarding the Management of the Golf Center Site March 21, 2017 2 A committee comprised of Councilmember Donna Colson, Parks and Recreation Commissioner Joe Dito, City Manager Lisa Goldman, Finance Director Carol Augustine, Public Works Director Syed Murtuza, and Parks and Recreation Director Margaret Glomstad reviewed the proposals and invited all applicants to present their proposals in person on December 4, 2016. On January 17, 2017, the City Council considered the committee’s recommendation to begin negotiations with Topgolf (Exhibit A). After a lengthy public comment period and robust City Council discussion, the Council determined that it needed additional information from each applicant in order to make an informed decision. Staff was directed to gather this additional information, including answers to questions submitted by the City Council after the January 17 meeting, and schedule the matter for a future study session. On Friday, March 10, 2017, staff received an email from Michael Strambi, Tim Hennessey, and Ray Miolla, directors of the Mid-peninsula Ice Rink Foundation, stating that they were withdrawing their proposal from the Burlingame Golf Center Request for Proposals process. DISCUSSION At the January 17 City Council meeting, the City Council and members of the public raised various concerns and issues regarding the three proposals, including: 1. The changes made to the proposals after the submission date; 2. The financial benefits to the City; 3. The financial viability of the proposals; 4. The liabilities to the City; and 5. The serving of alcohol. Subsequent to the January 17 meeting, staff sent a comprehensive list of questions to each of the applicants (Exhibit B) in order to clarify some of these matters and provide additional information for the City Council’s consideration. The questions were sent to the applicants on January 26, 2017, with responses due by close of business on March 16, 2017. The responses to the supplemental questions from the applicants, which are contained in Exhibit C, note the changes each applicant is proposing as compared to its original submission. The Topgolf proposal includes the following changes: 1. Minimum annual rental increased from $500,000 to $550,000; 2. $50,000 annual rent, paid in monthly installments, during construction; and 3. $250,000 upfront public amenity contribution to be used for demolition and repurpose of playground on adjacent site, grading of Murray Field, and/or turfing of Murray Field USBC did not submit timely responses to the questions. Instead, they submitted the attached email dated March 16, 2017, which noted that they “can match or do better than Topgolf on rent subject to having the whole site.” It is unclear what USBC means by this statement. The email also says that USBC “will offer community amenities that would be open to the public.” As of the Study Session Regarding the Management of the Golf Center Site March 21, 2017 3 writing of this staff report, USBC has provided no additional information about their revised proposal. Since some Councilmembers and members of the public seemed interested in combining more than one use on the site, staff explored whether or not such an arrangement was feasible. Due to the unique requirements of each proposal and the corresponding parking requirements, however, staff believes that the site does not have sufficient space to accommodate more than one of the proposed uses. In addition, both proposals may affect the landfill clay cap. Any excavation on the site and/or structural foundations will very likely impact the clay cap and the subsurface systems, requiring mitigations and future maintenance costs for the operator. In addition, the Burlingame Police Department researched the impact of Topgolf upon local municipalities, as this was an issue raised at the January 17 City Council meeting. The following agencies responded to Burlingame Police Department inquiries: Roseville, CA, Gilbert, AZ, and Midvale, UT (Salt Lake City). All three agencies reported that they do not consider the Topgolf facility a problem. The calls for service are not above the norm for an establishment of that nature and size, and there have been no reported violent crimes. The Roseville Police Department noted that there were initial complaints about traffic and noise, and Topgolf staff was very receptive and cooperative in resolving the issues. The Gilbert Police Department noted that there were initial complaints by neighbors about the outdoor driving range lights, and Topgolf staff resolved the issue by redirecting the lights. The Midvale Police Department told staff that there were initial complaints from nearby condo residents regarding noise from music at the outdoor range portion of the complex, and Topgolf staff lowered the music. FISCAL IMPACT Under the Topgolf proposal, the City would receive $50,000 annual rent, paid in monthly installments, during construction, and a minimum annual rent of $550,000 upon opening. In addition, Topgolf would contribute $250,000 to the City for use on the Murray Field site. All of these monies would accrue to the General Fund. It is unclear what the fiscal impact of the USBC proposal is. Exhibits: • January 17, 2017 Staff Report • Supplemental Questions • Responses to Supplemental Questions Burlingame Golf Center RFP – Supplemental Questions 2017 Page 1 of 4 General Questions 1. Confirm that you are aware that prevailing wages will have to be paid for construction of the project and that a competitive bidding process will be required for the selected contractor. 2. Confirm the items in the original proposal that remain. Identify any changes and the reasoning behind the changes. 3. Describe the corporate structure of your organization – include both the development partner(s) and the operations partner(s). 4. Do you (and/or any proposed partners) have any pending lit igation? What is the nature of the litigation and the status? 5. Confirm your anticipated visitors assumptions, including a breakdown by age and gender - a) On what is this based? Substantiate your numbers by past performance or similar performance in similarly-sized facilities and locations. b) Assuming the number of anticipated visitors is at full capacity, what is the time frame to reach full capacity? 6. What are the expected environmental impacts of your fa cility? This answer does not require a fully-scoped environmental review, but instead should note the generally anticipatable effects of your proposed facility. Are there any chemicals used by your proposed function that require special mitigation or handling? 7. How would you design the parking lot for your facility in a way that carefully protects the safety of athletes (many of whom are kids) walking through the parking lots for Murray soccer field? 8. Regarding the cost of the facility – a) How did you assess the additional cost of development on a closed landfill site? b) Were prevailing wages assumed in your cost estimate? c) Does the proposal anticipate the payment of property transfer taxes? (If the term of the lease is 35 years or more - including extension option periods - documentary transfer taxes will be payable.) d) What are the expected electricity consumption, greenhouse gas emissions and water usage for your proposal? e) What specific examples of green building standards do you plan to use? 9. Financial statement - a) Provide detailed pro forma projections or a sample of the actual operational pro forma of a similar facility. Include a detailed breakdown of revenue projections (by attendance and activity, food/beverage, rentals, etc. as separate line items) as well as a detailed breakdown of expenses (lease payments, other performance payments, etc. as separate line items). b) Provide a balance sheet for your organization. Burlingame Golf Center RFP – Supplemental Questions 2017 Page 2 of 4 c) How are revenues substantiated? d) Do operating expense projections include annual property taxes? (The selected entity will be required to pay possessory interest property taxes on assessed value of the land and improvements.) e) What % of total capital assets is represented by annual capital reserve funding? f) Provide detail of the level of salaries, benefits (healthcare, 401K, etc.) and other important information regarding future employees. 10. Have you had any crime/nuisance problems with your facilities in other communities (or facilities like yours)? 11. Describe the food and beverage service you propose to provide. Is a liquor license needed to sell alcohol? Do your other facilities (or similar facilities with the same operator) offer similar food and beverage services? If proposed, what are the likely hours of operation of the food and beverage service? 12. Who will be responsible for performing and paying for routine maintenance? What is the anticipated annual expense? 13. Who will be responsible for large capital upkeep items? What is the anticipated annual expense? 14. In order to fully evaluate the proposals, the City needs to determine the reasonable amount of “lead” time that is needed for each proposal. (Lease payments will start at a negotiated time.) a) Confirm the anticipated length of the constru ction period for your proposal. b) Estimate the amount of time needed to obtain committed funding of the initial investment (at least 55% of total project costs) by credible partners and/or escrow prior to beginning construction. 15. Provide sound justifications and calculation regarding your project ’s parking needs with examples of actual conditions with similar facilities in a similar setting. 16. Provide sound justifications and basis for the estimated costs related to dealing with building the proposed project on the landfill site. This information should include your assumptions regarding type of foundation, depth of foundation, amount of clay cap that would be anticipated to be removed and disturbed, and underground systems to be affected and modified by the project. 17. Provide information and basis of assumption regarding how much capital is going to be set aside for the ongoing maintenance and operations of the modified landfill on an annual basis in the context of the proposed project. It is understandable that this information may not be readily available, as the project is not designed yet. However, you can utilize information from past projects regarding building on other landfills, and use it to base your assumptions, and provide information regarding your financial reserves and ability to operate and maintain landfill systems. 18. Provide information to demonstrate your ability to provide labor and material bonds in the amount of not less than 100% of the total construction costs of the proposed project. Burlingame Golf Center RFP – Supplemental Questions 2017 Page 3 of 4 19. Are you able to provide a minimum of two years of financial reserves for operating and maintaining the proposed project facility to demonstrate your solvency in the event of delayed returns on investment, and your ability to continue business operations? 20. Are you able to deposit the necessary bonds with the City in the amount equal to the cost of restoring the landfill site to its original condition, in case the proposed business plan does not materialize as intended ? Specific to Topgolf 1. In your long range plan, how many Topgolf’s would be envisioned in the Bay Area as a whole? (Bay Area consists of San Jose to Marin, East Bay to Milpitas.) 2. What city has the coldest climate in which Topgolf currently has a location? 3. Provide a list of all cities in which Topgolf operates and when the use was approved by the local government. 4. Describe any recent changes in your ownership structure. 5. Is your Letter of Credit or any debt recourse back to our specific facility? 6. Have you defaulted on any of your d ebt or financial obligations? 7. Do you hold “Top Golf” tournaments that require you to shut down a major part of the facility to the public? If so, how many times per year? Do you anticipate that these patrons stay in hotels? 8. Have you worked with the FAA to make sure that Topgolf does not interfere with the airport? 9. During public comment, a resident inquired about realistic number of annual visitors. The proposal suggests 500,000. Your online Dallas location fact sheet says 223,000 visits in one yea r. Miami just opened in 2016 and estimates 450,000 visits annually. Can you share why Burlingame would bring 500,000 annually? 10. Tell us more about the question that came up during public comment: has your company re - incorporated multiple times? If so, why? 11. How will the outside lights impact the local neighborhoods? Added 1/30/17 1. What is the distance from the driving bays to the farthest away net? 2. How tall will the nets be? How do we ensure that golf balls will not penetrate the nets onto Murray Field? Burlingame Golf Center RFP – Supplemental Questions 2017 Page 4 of 4 3. It has been mentioned that the old driving range had to orient its flood lights NOT to shine at SFO, per SFO insistence. Has Topgolf consulted SFO about lights? Added 2/21/17 1. Will there be any additional public amenities in your land use proposal that will provide community benefit? Specific to USBG 1. Please provide greater precision on the building format and cost. 2. Details are needed on the fundraising strategy. How do you propose to finance? Would you set up a separate corporate or other entity? 3. Who would run the day-to-day operations of the USBC and the Wellness Center? 4. Who would manage the development of the facility? 5. Do you anticipate putting a loan on this project and if so, how much and what would be the collateral? 6. Would you prioritize Burlingame residents for membership and would they receive any type of discount? 7. What would be your walk-in hours? 8. How many tournaments do you anticipate in the facility each year? How many people would you serve per year including tourn ament patrons and what is the breakdown of those participants? (Age, gender, location) 9. What is your track record of bringing a facility like this online; track record in other developments; or working together before? Added 2/21/17 1. Will there be any add itional public amenities in your land use proposal that will provide community benefit?