2003 04 01 RDARedevelopment Agency Agendas are
available on the City's Web Page
@ www.la-quinta.org
Redevelopment Agency
Agenda
CITY COUNCIL CHAMBERS
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
Tuesday, April 1, 2003 - 2:00 P.M.
Beginning Res. No. RA 2003-06
CALL TO ORDER
Roll Call:
Agency Board Members: Adolph, Osborne, Perkins, Sniff, Chairperson Henderson
PUBLIC COMMENT
At this time, members of the public may address the Redevelopment Agency on any
matter not listed on the agenda. Please complete a "request to speak" form and limit
your comments to three minutes. Please watch the timing device on the podium.
CLOSED SESSION
NOTE: Time permitting, the Redevelopment Agency Board may conduct Closed Session
discussions during the dinner recess. In addition, when the Agency is considering
acquisition of property, persons identified as negotiating parties are not invited into the
Closed Session Meeting.
1. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS,
PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING
POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION
OF REAL PROPERTY LOCATED AT THE NORTHWEST CORNER OF AVENUE 52
AND JEFFERSON STREET (APN 772-220-007). PROPERTY OWNER/
NEGOTIATOR: SUSAN HARVEY.
Redevelopment Agency Agenda
April 1, 2003
Too
2. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS,
PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING
POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION
OF REAL PROPERTY LOCATED NORTHWEST OF THE WASHINGTON STREET
AND AVENUE 48 INTERSECTION (APN 643-090-024). PROPERTY OWNER/
NEGOTIATOR: CHRISTI SALAMONE, LA QUINTA ARTS FOUNDATION.
RECONVENE AT 3:00 PM
IV. PUBLIC COMMENT
At this time members of the public may address the Agency Board on items that appear
within the Consent Calendar or matters that are not listed on the agenda. Please
complete a "request to speak" form and limit your comments to three minutes. When
you are called to speak, please come forward and state your name for the record.
Please watch the timing device on the podium.
For all Agency Business Session matters or Public Hearings on the agenda, a completed
"request to speak" form should be filed with the City Clerk prior to the Agency
beginning consideration of that item.
V. CONFIRMATION OF AGENDA
VI. APPROVAL OF MINUTES
1. APPROVAL OF MINUTES OF MARCH 18, 2003.
VII. CONSENT CALENDAR
Note: Consent Calendar items are considered to be routine in nature and' will be
approved by one motion.
1. APPROVAL OF DEMAND REGISTER FOR APRIL 1, 2003.
2. APPROVAL OF: 1) LOAN FROM THE GENERAL FUND TO LA QUINTA
REDEVELOPMENT AGENCY PROJECT AREA NO. 1; AND 2) ADOPT A
RESOLUTION MAKING FINDINGS PURSUANT TO HEALTH AND SAFETY
SECTION 33445.
Redevelopment Agency Agenda -2- April 1, 2003
009W
VIII. BUSINESS SESSION
1. CONSIDERATION OF A PROFESSIONAL SERVICES AGREEMENT WITH MDS
CONSULTING FOR PRELIMINARY ENGINEERING FOR THE RANCH PROJECT.
A. MINUTE ORDER ACTION
IX. STUDY SESSION
1. DISCUSSION OF FUNDING SOURCES, COSTS, AND REVENUES ASSOCIATED
WITH THE LA QUINTA GOLF AND RESORT.PROJECT.
X. CHAIR AND BOARD MEMBERS' ITEMS - NONE
XI. PUBLIC HEARINGS - NONE
XII. ADJOURNMENT
Adjourn to a regularly scheduled meeting of the Redevelopment Agency to be held on
April 15, 2003, commencing with closed session at 2:00 p.m. and open session at the
conclusion of the 3:00 p.m. City Council business session in the City Council
Chambers, 78-495 Calle Tampico, La Quinta, CA 92253.
DECLARATION OF POSTING
I, June S. Greek, City Clerk of the City of La Quinta, do hereby declare that the foregoing
agenda for the La Quinta Redevelopment Agency meeting of Tuesday, April 1, 2003, was
posted on the outside entry to the Council Chamber, 78-495 Calle Tampico and on the bulletin
board at the La Quinta Chamber of Commerce and at Stater Bros. 78-630 Highway 111, on
Friday, March 28, 2003.
DATED: March 28, 2003
JUNE . GREEK, CMC, Ity Clerk
City of La Quinta, California
Redevelopment Agency Agenda -3- April 1, 2003
C
COUNCIL/RDA MEETING DATE: APRIL 1, 2003
ITEM TITLE:
Demand Register Dated April 1, 2003
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
AGENDA CATEGORY:
BUSINESS SESSION
CONSENT CALENDAR
STUDY SESSION
PUBLIC HEARING
Receive and File the Demand Register Dated April 1, 2003 of which $580,071.34
represents Redevelopment Agency Expenditures.
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
COUNCIL/RDA MEETING DATE: April 1, 2003
Approval of: 1) Loan from the General Fund
To La Quinta Redevelopment Agency Project
Area No. 1; 2) Resolution Making Findings Pursuant
To Health and Safety Code Section 33445
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Adopt a Resolution of the La Quinta Redevelopment Agency approving a loan from
the City of La Quinta to the La Quinta Redevelopment Agency and making certain
findings pursuant to Health and Safety Code Section 33445(a).
FISCAL IMPLICATIONS:
Funds to be loaned from the General Fund to the Redevelopment Agency total $6
million. The loan will accrue interest at 7% annually. Project Area No. 1 has the
financial capacity to repay existing bond debt, existing General Fund loans, and this
loan. These General Fund loans would encompass revenue that remains after the
Emergency and Cash Flow reserves.
BACKGROUND AND OVERVIEW:
The La Quinta City Council approved the Mid -Year Budget Report on February 18,
2003, which contained staff's recommendation for a loan of $6 million from the
General Fund to the Redevelopment Agency, for Capital Improvements in Project
Area No. 1. These projects include: library construction ($4.3 million), the La
Fonda Street improvements ($767,000) and the design of future Eisenhower bridge
improvements ($886,550).
Attached for your consideration is Resolution 2003-_, A Resolution of the La Quinta
Redevelopment Agency of the City of La Quinta Accepting a Loan from the City of La
Quinta to the La Quinta Redevelopment Agency and Making Certain Findings Pursuant
to Health and Safety Code Section 33445(a). The proposed resolution provides for the
following:
oe,
• Approves a Promissory Note with a repayment date of November 29, 2033 and an
interest rate of 7 %, between the City and the Redevelopment Agency, in an amount
of $6 million; and
• Makes certain findings pursuant to Health and Safety Code Section 33445(a).
FINDINGS AND ALTERNATIVES:
The alternatives available to the Redevelopment Agency Board include:
1. Adopt a Resolution of the La Quinta Redevelopment Agency approving a loan
from the City of La Quinta to the La Quinta Redevelopment Agency and making
certain findings pursuant to Health and Safety Code Section 33445(a); or,
2. Do not adopt a Resolution of the La Quinta Redevelopment Agency approving a
loan from the City of La Quinta to the La Quinta Redevelopment Agency and
making certain findings pursuant to Health and Safety Code Section 33445(a);
o r,
3. Provide staff with alternative direction.
6d(-�Restfully submitt d,
Fa co er, Finance Director
Approved for Submission by:
Thomas P. Genovese, Executive Director
Irk
RESOLUTION NO. 2003 -
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY
ACCEPTING A LOAN FROM THE CITY OF LA QUINTA TO THE
LA QUINTA REDEVELOPMENT AGENCY, AND MAKING CERTAIN
FINDINGS PURSUANT TO HEALTH AND SAFETY CODE
SECTION 33445(a)
WHEREAS, the activities of the La Quinta Redevelopment Agency (the "Agency")
Project Area No. 1 cause improvements to be done that are beneficial to both the City
of La Quinta (the "City) and the Agency: and
WHEREAS, current Agency Project Area No. 1 revenues are of a limited nature,
although additional future revenues will be forthcoming as development continues; and
WHEREAS, the City desires that the Agency Project Area No. 1 continues with such
mutually beneficial improvements and particularly with the publicly owned Capital
Improvement projects, including library construction, the La Fonda Street
improvements, and the design of future Eisenhower bridge improvements ("the
Projects"); and
WHEREAS, the City has authority to provide a loan to the Agency as an investment
under Government Code Section 53601(d); and
WHEREAS, these projects are in the best interest of the public, are located within the
La Quinta Redevelopment Agency's Project Area No. 1, and will enhance the public' s
use of Project No. 1; and
NOW, THEREFORE, BE IT RESOLVED by the La Quinta Redevelopment Agency of the
City of La Quinta, California as follows:
1. The Projects to be funded with Agency funds are of benefit to Project Area No. 1
and no other reasonable means of financing such benefits are available to the
community at this time.
2. The attached Promissory Note with no specified repayment date and an interest
rate of 7%, between the City and the Agency be approved in an amount of $6
million.
3. Pursuant to Health and Safety Code Section 33445(a), the Agency Board Members
find:
(a) That the Projects will be of benefit to the Agency's Project Area No. 1.
(b) That no other reasonable means of financing the Projects are available to the
community at this time.
(c) That the payment of funds for the Projects will assist in the elimination of one
or more blighting conditions in the project area and is consistent with the
implementation plan adopted pursuant to Section 33490.
aC►7
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Resolution No. RA 2003-
Loans/City to RDA
RDA Project Area 1
Adopted:
Page 2
PASSED, APPROVED and ADOPTED this 1 st day of April, 2003, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Terry Henderson, Chairperson
ATTEST:
JUNE S. GREEK, CMC, City Clerk
City of. La Quinta, California
(City Seal)
APPROVED AS TO FORM:
M. KATHERINE JENSON, City Attorney
City of La Quinta, California
La Quinta Redevelopment Agency
Project Area No. 1
PROMISSORY NOTE
La Quinta, California
April 1, 2003
FOR VALUE RECEIVED, the undersigned promises to pay to the order of -the City of La
Quinta, a municipal corporation, in lawful money of the United States of America, the principal sum
of Six Million dollars ($6,000,000) together with interest per annum on the principal balance from
time to time outstanding after the date hereof until paid in full.
1. Maturity: The principal amount of this Promissory Note, together with any accrued
but unpaid interest, shall be due and payable by November 29, 2033.
2. Interest: Interest on the unpaid principal balance hereof from time to time
outstanding shall accrue at the rate of seven percent (7%) per annum, commencing
on the date hereof.
3. Prepayment: The undersigned, at its option, shall have the right to prepay this
Promissory Note, in whole or in part, at any time and from time to time, without
penalty, provided that such optional prepayment shall be credited first to accrued
interest, if any, and then to unpaid principal.
4. Miscellaneous:
4_1 The undersigned hereby waives presentment, protest, notice of protest, notice
of dishonor, and notice of nonpayment on this Promissory Note.
4_2 The undersigned promises to pay cost of collection, including attorney's fees,
whether or not suit is filed under any instrument or obligations evidenced by
this Promissory Note, upon the occurrence of a default hereunder.
4_3 The undersigned promises to perform and comply with each of the obligations
of any and all of the undersigned set forth in every instrument evidencing this
Promissory Note.
4_4 This Promissory Note shall be governed by and construed according to the
laws of California.
4_5 The repayment of the loan principal and accrued interest by Agency shall be
junior and subordinate to (i) all existing and future Agency tax allocation bonds
or other direct long-term indebtedness of Agency, (ii) all existing and future
pledges by Agency of tax increments for tax allocation bonds or other direct
long-term indebtedness of Agency, (iii) existing and future Agency financial
agreements and other contractual obligations of Agency, and (iv) any
contingent obligations of Agency.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Promissory
Note effective as to the day and year first written above.
REDEVELOPMENT AGENCY OF THE CITY OF LA QUINTA,
A public body, corporate and politic of the State of California
By: Terry Henderson
Its: Chairperson
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c&t�v 4 44P QuiKr4ry
COUNCIL/RDA MEETING DATE: April 1, 2003
ITEM TITLE: Consideration of a Professional Service
Agreement with MDS Consulting for Preliminary
Engineering for The Ranch Project
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION: +
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
To approve a Professional Service Agreement (PSA) with MDS Consulting to
perform preliminary engineering in the amount of $57,200 for the Ranch Project.
FISCAL IMPLICATIONS:
FY 2002-03 Capital Improvement Program includes a project entitled Municipal Golf
Course - Phase I including $2.5 million for contractual services related to planned
engineering and property management services. Adequate funding is available in
Account 401-723-609-000, The Ranch Contract Services/Technical, to pay for
work under this PSA.
BACKGROUND AND OVERVIEW:
In completing the Master Plan and Concept Plans for The Ranch Project, it has
become apparent that certain engineering studies, permits, and extinguishment of
easements need to be performed now prior to beginning construction of the project
by the end of this year. MDS Consulting is the most qualified engineering firm for
this work, having performed numerous technical studies of The Ranch property in
connection with this project, as well as other previously proposed development
projects for this site.
Additionally, if the Agency desires to expedite widening of Avenue 52 and
installing the required water line improvements to this site, this PSA provides for
the design of both improvements as optional tasks. These offsite improvements
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will be necessary regardless of the onsite layout. Therefore, staff recommends
moving forward with the design and construction of these improvements now
rather than later.
A. Chapter 3.30 Public Works Contract pertains to the procedures for awarding
these types of contracts. Staff is requesting an exception to the formal
bidding procedures as outlined in 3.30.070 (C) as follows: The city council
may authorize the award and execution of contracts for public works
projects without competitive bidding provided that such award is in the best
interest of the city or of the public health, safety and welfare.
B. Chapter 3.32 Service Contract pertains to the procedures for awarding these
types of contracts. Staff is requesting an exception to the formal bidding
procedures as outlined in 3.32.050 (C) as follows: The city council may
authorize award and execution of service contracts with no competitive
proposals where experience with the proposed service provider has
demonstrated competence and satisfactory performance or in the renewal or
renegotiation of existing contracts for continuing services.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency include:
1. Approve a Professional Service Agreement with MDS Consulting in the
amount of $52,700 for preliminary engineering for The Ranch project,
including design of the Avenue 52 road widening and waterline
improvements; or
2. Approve a Professional Service Agreement with' MDS Consulting in an
amount not to exceed $34,800 for preliminary engineering for The Ranch
project, excluding design of the Avenue 52 road widening and waterline
improvements; or
3. Do not approve a Professional Service Agreement with MDS Consulting for
the preliminary engineering for The Ranch project; or
4. Provide staff with alternative direction.
Respectfully submitted,
- 2
Timothy R.
on, Public Works Director
TAPWDEPT\Council\2003\030401 RDA.doc
2
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachments: 1 . Professional Service Agreement (PSA)
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TAPWDEPT\Council\2003\030401 RDA.doc
PROFESSIONAL SERVICES AGREEMENT
THIS AGREEMENT FOR CONTRACT SERVICES (the "Agreement") is made and entered into
by and between the CITY OF LA QUINTA, ("City"), a California municipal corporation, and MDS
Consulting ("Consultant"). The parties hereto agree as follows:
1.0 SERVICES OF CONSULTANT
1.1 Scope of Services. In compliance with all terms and conditions of this Agreement,
Consultant shall provide those services related to preliminary engineering for The Ranch project
as specified in the "Scope of Services" attached hereto as Exhibit "A" and incorporated herein by
this reference (the "services" or "work"). Consultant warrants that all services will be performed
in a competent, professional and satisfactory manner in accordance with the standards prevalent
in the industry for such services.
1.2 Compliance with Law. All services rendered hereunder shall be provided in accordance
with all ordinances, resolutions, statutes, rules, regulations and laws of the City of La Quinta and
any Federal, State or local governmental agency of competent jurisdiction.
1.3 Licenses, Permits, Fees and Assessments. Except as otherwise specified herein,
Consultant shall obtain at its sole cost and expense such licenses, permits and approvals as may
be required by law for the performance of the services required by this Agreement. Consultant
shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties
and interest, which may be imposed by law and arise from or are necessary for the performance
of the services required by this Agreement.
1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that (a) it
has thoroughly investigated and considered the work to be performed, (b) it has investigated the
site of the work and fully acquainted itself with the conditions there existing, (c) it has carefully
considered how the work should be performed, and (d) it fully understands the facilities, difficulties
and restrictions attending performance of the work under this Agreement. Should Consultant
discover any latent or unknown conditions materially differing from those inherent in the work or
as represented by City, it shall immediately inform City of such fact and shall not proceed except
at Consultant's risk until written instructions are received from the Contract Officer (as defined in
Section 4.2 hereof).
1.5 Care of Work. Consultant shall adopt reasonable methods during the life of the
Agreement to furnish continuous protection to the work performed by Consultant, and the
equipment, materials, papers and other components thereof to prevent losses or damages, and
shall be responsible for all such damages, to persons or property, until acceptance of the work by
City, except such losses or damages as may be caused by City's own negligence. The
performance of services by Consultant shall not relieve Consultant from any obligation to correct
any incomplete, inaccurate or defective work at no further cost to City, when such inaccuracies
are due to the negligence of Consultant.
1.6 Additional Services. In accordance with the terms and conditions of this Agreement,
Consultant shall perform services in addition to those specified in the Scope of Services when
directed to do so by the Contract Officer, provided that Consultant shall not be required to perform
any additional services without compensation. Any addition in compensation not exceeding five
percent (5%) of the Contract Sum may be approved by the Contract Officer. Any greater increase
must be approved by the City Council.
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1.7 Special Requirements. Additional terms and conditions of this Agreement, if any,
which are made a part hereof are set forth in Exhibit "D" (the "Special Requirements"). In the
event of a conflict between the provisions of the Special Requirements and any other provisions
of this Agreement, the provisions of the Special Requirements shall govern.
2.0 COMPENSATION
2.1 Contract Sum. For the services rendered pursuant to this Agreement, Consultant shall
be compensated in accordance with Exhibit "B" (the "Schedule of Compensation") in a total
amount not to exceed Fifty Seven Thousand Two Hundred Dollars ($ 57,200.00) (the "Contract
Sum"), except as provided in Section 1.6. The method of compensation set forth in the Schedule
of Compensation may include a lump, sum payment upon completion, payment in accordance with
the percentage of completion of the services, payment for time and materials based upon
Consultant's rate schedule, but not exceeding the Contract Sum, or such other methods as may
be specified in the Schedule of Compensation. Compensation may include reimbursement for
actual and necessary expenditures for reproduction costs, transportation expense, telephone
expense, and similar costs and expenses when and if specified in the Schedule of Compensation.
2.2 Method of Payment. Any month in which Consultant wishes to receive payment,
Consultant shall submit to City no later than the tenth (10th) working day of such month, in the
form approved by City's Finance Director, an invoice for services rendered prior to the date of the
invoice. Such invoice shall (1) describe in detail the services provided, including time and
materials, and (2) specify each staff member who has provided services and the number of hours
assigned to each such staff member. Such invoice shall contain a certification by a principal
member of Consultant specifying that the payment requested is for work performed in accordance
with the terms of this Agreement. City will pay Consultant for all expenses stated thereon which
are approved by City pursuant to this Agreement no later than the last working day of the month.
3.0 PERFORMANCE SCHEDULE
3.1 Time of Essence. Time is of the essence in the performance of this Agreement.
3.2 Schedule of Performance. All services rendered pursuant to this Agreement shall be
performed diligently and within the time period established in Exhibit "C" (the "Schedule of
Performance"). Extensions to the time period specified in the Schedule of Performance may be
approved in writing by the Contract Officer.
3.3 Force Maieure. The time period specified in the Schedule of Performance for
performance of the services rendered pursuant to this Agreement shall be extended because of any
delays due to unforeseeable causes beyond the control and without the fault or negligence of
Consultant, including, but not restricted to, acts of God or of the public enemy, fires, earthquakes,
floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, acts of any
governmental agency other than City, and unusually severe weather, if Consultant shall within ten
(10) days of the commencement of such delay notify the Contract Officer in writing of the causes
of the delay. The Contract Officer shall ascertain the facts and the extent of delay, and extend
the time for performing the services for the period of the forced delay when and if in his or her
judgement such delay is justified, and the Contract Officer's determination shall be final and
conclusive upon the parties to this Agreement.
3.4 Term. Unless earlier terminated in accordance with Sections 7.7 or 7.8 of this
Agreement, this Agreement shall continue in full force and effect until completion of the services,
except as otherwise provided in the Schedule of Performance. 014
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4.0 COORDINATION OF WORK
4.1 Representative of Consultant. The following principals of Consultant are hereby
designated as being the principals and representatives of Consultant authorized to act in its behalf
with respect to the work specified herein and make all decisions in connection therewith:
Chris J. Bergh - Vice President & Office Manager
It is expressly understood that the experience, knowledge, capability, and reputation of the
foregoing principals were a substantial inducement for City to enter into this Agreement.
Therefore, the foregoing principals shall be responsible during the term of this Agreement for
directing all activities of Consultant and devoting sufficient time to personally supervise the
services hereunder.
The foregoing principals may not be changed by Consultant and no other personnel may be
assigned to perform the service required hereunder without the express written approval of City.
4.2 Contract Officer. The Contract Officer shall be Tim Jonasson, Public Works
Director/City Engineer or such other person as may be designated by the City Manager of City.
It shall be Consultant's responsibility to assure that the Contract Officer is kept informed of the
progress of the performance of the services and Consultant shall refer any decisions which must
be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City
required hereunder shall mean the approval of the Contract Officer.
4.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge,
capability and reputation of Consultant, its principals and employees were a substantial inducement
for City to enter into this Agreement. Except as set forth in this Agreement, Consultant shall not
contract with any other entity to perform in whole or in part the services required hereunder
without the express written approval of City. In addition, neither this Agreement nor any interest
herein may be assigned or transferred, voluntarily or by operation of law, without the prior written
approval of City.
4.4 Independent Contractor. Neither City nor any of its employees shall have any control
over the manner, mode or means by which Consultant, its agents or employees, perform the
services required herein, except as otherwise set forth. Consultant shall perform all services
required herein as an independent contractor of City and shall remain at all times as to City a
wholly independent contractor with only such obligations as are consistent with that role.
Consultant shall not at any time or in any manner represent that it or any of its agents or
employees are agents or employees of City.
4.5 City Cooperation. City shall provide Consultant with any plans, publications, reports,
statistics, records or other data or information pertinent to services to be performed hereunder
which are reasonably available to Consultant only from or through action by City.
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5.0 INSURANCE, INDEMNIFICATION AND BONDS.
5.1 Insurance. Consultant shall procure and maintain, at its cost, and submit concurrently
with its execution of this Agreement, personal and public liability and property damage insurance
against all claims for injuries against persons or damages to property resulting from Consultant's
acts or omissions rising out of or related to Consultant's performance under this Agreement. The
insurance policy shall contain a severability of interest clause providing that the coverage shall be
primary for losses arising out of Consultant's performance hereunder and neither City nor its
insurers shall be required to contribute to any such loss. A certificate evidencing the foregoing and
naming City and its officers and employees as additional insured shall be delivered to and approved
by City prior to commencement of the services hereunder.
The amount of insurance required hereunder shall be determined by the Contract Sum in
accordance with the following table:
Contract Sum Personal Iniury/Property Damage Coverage
Less than $50,000 $100,000 per individual; $300,000 per occurrence
$50,000 - $300,000 $250,000 per individual; $500,000 per occurrence
Over $300,000 $500,000 per individual; $1,000,000 per occurrence
Consultant shall carry automobile liability insurance of $1,000,000 per accident against all
claims for injuries against persons or damages to property arising out of the use of any automobile
by Consultant, its officers, any person directly or indirectly employed by Consultant, any
subcontractor or agent, or anyone for whose acts any of them may be liable, arising directly or
indirectly out of or related to Consultant's performance under this Agreement. The term
"automobile" includes, but is not limited to, a land motor vehicle, trailer or semi -trailer designed
for travel on public roads. The automobile insurance policy shall contain a severability of interest
clause providing that coverage shall be primary for losses arising out of Consultant's performance
hereunder and neither City nor its insurers shall be required to contribute to such loss. A
certificate evidencing the foregoing and naming City and its officers and employees as additional
insured shall be delivered to and approved by City prior to commencement of the services
hereunder.
Consultant shall carry Workers' Compensation Insurance in accordance with State Worker's
Compensation laws.
Consultant shall procure professional errors and omissions liability insurance in an amount
acceptable to City.
All insurance required by this Section shall be kept in effect during the term of this Agreement and
shall not be cancelable without thirty (30) days written notice to City of proposed cancellation.
The procuring of such insurance or the delivery of policies or certificates evidencing the same shall
not be construed as a limitation of Consultant's obligation to indemnify City, its officers,
employees, contractors, subcontractors, or agents.
5.2 Indemnification. The Consultant shall defend, indemnify and hold harmless the City,
its officers, officials, employees, representatives and agents, "City indemnitees," from and against
any and all actions, suits, proceedings, claims, demands, losses, costs, and expenses, including
legal costs and attorneys' fees, for injury to or death of person(s), for damage to property
(including property owned by the City) ("claims") and for errors and omissions committed by
Consultant, its officers, anyone directly or indirectly employed by Consultant, any subcontractor,
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TAMDEPT\PROJECTS\2000 Prjcts\Ranch.wpd
and agents or anyone for whose acts any of them may be liable, arising directly or indirectly out
of or related to Consultant's performance under this Agreement, except to the extent of such loss
as may be caused by City's own negligence, sole negligence or willful misconduct, or that of its
officers or employees.
In the event the City indemnitees are made a party to any action, lawsuit, or other adversarial
proceeding in any way involving such claims, Consultant shall provide a defense to the City
indemnitees, or at the City's option, reimburse the City indemnitees their costs of defense,
including reasonable attorney's fees, incurred in defense of such claim. In addition, Consultant
shall be obligated to promptly pay any final judgement or portion thereof rendered against the City
indemnitees.
5.3 Remedies. In addition to any other remedies City may have if Consultant fails to
provide or maintain any insurance policies or policy endorsements to the extent and within the time
herein required, City may, at its sole option:
a. Obtain such insurance and deduct and retain the amount of the premiums for
such insurance from any sums due under this Agreement.
b. Order Consultant to stop work under this Agreement and/or withhold any
payment(s) which become due to Consultant hereunder until Consultant
demonstrates compliance with the requirements hereof.
C. Terminate this Agreement.
Exercise of any of the above remedies, however, is an alternative to any other remedies City
may have. The above remedies are not the exclusive remedies for Consultant's failure to maintain
or secure appropriate policies or endorsements. Nothing herein contained shall be construed as
limiting in any way the extent to which Consultant may be held responsible for payments of
damages to persons or property resulting from Consultant's or its subcontractors' performance of
work under this Agreement.
6.0 RECORDS AND REPORTS.
6.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer such
reports concerning Consultant's performance of the services required by this Agreement as the
Contract Officer shall require.
6.2 Records. Consultant shall keep such books and records as shall be necessary to
perform the services required by this Agreement and enable the Contract Officer to evaluate the
cost and the performance of such services. Books and records pertaining to costs shall be kept
and prepared in accordance with generally accepted accounting principals. The Contract Officer
shall have full and free access to such books and records at all reasonable times, including the
right to inspect, copy, audit, and make records and transcripts from such records.
6.3 Ownership of Documents. Originals of all drawings, specifications, reports, records,
documents and other materials, whether in hard copy or electronic form, which are prepared by
Consultant, its employees, subcontractors and agents in the performance of this Agreement, shall
be the property of City and shall be delivered to City upon termination of this Agreement or upon
the earlier request of the Contract Officer, and Consultant shall have no claim for further
employment or additional compensation as a result of the exercise by City of its full rights of
ownership of the documents and materials hereunder. Consultant shall cause all subcontractors
TAMDEPT\PROJECTS\2000 Prjcts\Ranch.wN ' ! l 7
to assign to City any documents or materials prepared by them, and in the event Consultant fails
to secure such assignment, Consultant shall indemnify City for all damages suffered thereby.
In the event City or any person, firm or corporation authorized by City reuses said documents
and materials without written verification or adaptation by Consultant for the specific purpose
intended and causes to be made or makes any changes or alterations in said documents and
materials, City hereby releases, discharges, and exonerates Consultant from liability resulting from
said change. The provisions of this clause shall survive the completion of this Contract and shall
thereafter remain in full force and effect.
6.4 Release of Documents. The drawings, specifications, reports, records, documents and
other materials prepared by Consultant in the performance of services under this Agreement shall
not be released publicly without the prior written approval of the Contract Officer or as required
by law. Consultant shall not disclose to any other entity or person any information regarding the
activities of City, except as required by law or as authorized by City.
7.0 ENFORCEMENT OF AGREEMENT.
7.1 California Law. This Agreement shall be construed and interpreted both as to validity
and to performance of the parties in accordance with the laws of the State of California. Legal
actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall
be instituted in the Superior Court of the County of Riverside, State of California, or any other
appropriate court in such county, and Consultant covenants and agrees to submit to the personal
jurisdiction of such court in the event of such action.
7.2 Disputes. In the event of any dispute arising under this Agreement, the injured party
shall notify the injuring party in writing of its contentions by submitting a claim therefor. The
injured party shall continue performing its obligations hereunder so long as the injuring party
commences to cure such default within ten (10) days of service of such notice and completes the
cure of such default within forty-five (45) days after service of the notice, or such longer period
as may be permitted by the Contract Officer; provided that if the default is an immediate danger
to the health, safety and general welfare, City may take such immediate action as City deems
warranted. Compliance with the provisions of this section shall be a condition precedent to
termination of this Agreement for cause and to any legal action, and such compliance shall not be
a waiver of any party's right to take legal action in the event that the dispute is not cured,
provided that nothing herein shall limit City's right to terminate this Agreement without cause
pursuant to Section 7.8.
7.3 Retention of Funds. City may withhold from any monies payable to Consultant
sufficient funds to compensate City for any losses, costs, liabilities, or damages it reasonably
believes were suffered by City due to the default of Consultant in the performance of the services
required by this Agreement.
7.4 Waiver. No delay or omission in the exercise of any right or remedy of a non defaulting
party on any default shall impair such right or remedy or be construed as a waiver. City's consent
or approval of any act by Consultant requiring City's consent or approval shall not be deemed to
waive or render unnecessary City's consent to or approval of any subsequent act of Consultant.
Any waiver by either party of any default must be in writing and shall not be a waiver of any other
default concerning the same or any other provision of this Agreement.
7.5 Rights and Remedies are Cumulative. Except with respect to rights and remedies
expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are 018
TAMDEPT\PROJECTS\2000 Prjcts\Ranch.wpd
cumulative and the exercise by either party of one or more of such rights or remedies shall not
preclude the exercise by it, at the same or different times, of any other rights or remedies for the
same default or any other default by the other party.
7.6 Legal Action. In addition to any other rights or remedies, either party may take legal
action, at law or at equity, to cure, correct or remedy any default, to recover damages for any
default, to compel specific performance of this Agreement, to obtain injunctive relief, or to obtain
any other remedy consistent with the purposes of this Agreement.
7.7 Termination Prior To Expiration Of Term. This section shall govern any termination of
this Agreement, except as specifically provided in the following Section 7.8 for termination for
cause. City reserves the right to terminate this Agreement at any time, with or without cause,
upon thirty (30) days' written notice to Consultant. Upon receipt of any notice of termination,
Consultant shall immediately cease all services hereunder except such as may be specifically
approved by the Contract Officer. Consultant shall be entitled to compensation for all services
rendered prior to receipt of the notice of termination and for any services authorized by the
Contract Officer thereafter in accordance with the Schedule of Compensation or such as may be
approved by the Contract Officer, except as provided in Section 7.3.
7.8 Termination For Default of Consultant. If termination is due to the failure of Consultant
to fulfill its obligations under this Agreement, City may, after compliance with the provisions of .
Section 7.2, take over work and prosecute the same to completion by contract or otherwise, and
Consultant shall be liable to the extent that the total cost for completion of the services required
hereunder exceeds the compensation herein stipulated (provided that City shall use reasonable
efforts to mitigate such damages), and City may withhold any payments to Consultant for the
purpose of setoff or partial payment of the amounts owed City as previously stated in Section 7.3.
7.9 Attorneys' Fees. If either party commences an action against the other party arising
out of or in connection with this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and costs of suit from the losing party.
8.0 CITY OFFICERS AND EMPLOYEES; NONDISCRIMINATION.
8.1 Non -liability of City Officers and Employees. No officer or employee of City shall be
personally liable to Consultant, or any successor in interest, in the event or any default or breach
by City or for any amount which may become due to Consultant or to its successor, or for breach
of any obligation of the terms of this Agreement.
8.2 Conflict of Interest. No officer or employee of City shall have any personal interest,
direct or indirect, in this Agreement nor shall any such officer or employee participate in any
decision relating to the Agreement which affects his or her personal interest or the interest of any
corporation, partnership or association in which she or he is, directly or indirectly, interested, in
violation of any State statute or regulation. Consultant warrants that it has not paid or given and
will not pay or give any third party any money or general consideration for obtaining this
Agreement.
8.3 Covenant against Discrimination. Consultant covenants that, by and for itself, its heirs,
executors, assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of persons on account of race, color,
creed, religion, sex, marital status, national origin or ancestry in the performance of this
Agreement. Consultant shall take affirmative action to insure that applicants are employed and
TAPWDEPT\PROJECTS\2000 Prjcts\Ranch.wpd �� 1
j. 10
that employees are treated during employment without regard to their race, color, creed, religion,
sex, marital status, national origin or ancestry.
9.0 MISCELLANEOUS PROVISIONS
9.1 Notice. Any notice, demand, request, consent, approval, communication either party
desires or is required to give the other party or any other person shall be in writing and either
served personally or sent by prepaid, first-class mail to the address set forth below. Either party
may change its address by notifying the other party of the change of address in writing. Notice
shall be deemed communicated forty-eight (48) hours from the time of mailing if mailed as
provided in this section.
To City:
CITY OF LA QUINTA
Attention: Thomas P. Genovese
City Manager
78-495 Calle Tampico
P.O. Box 1504
La Quinta, California 92253
To Consultant:
MDS Consulting
Attention: Chris Bergh
79-7999 Old Avenue 52
La Quinta, CA 92253
9.2 Integrated Agreement. This Agreement contains all of the agreements of the parties
and all previous understanding, negotiations and agreements are integrated into and superseded
by this Agreement.
9.3 Amendment. This Agreement may be amended at any time by the mutual consent of
the parties by an instrument in writing signed by both parties.
9.4 Severability. In the event that any one or more of the phrases, sentences, clauses,
paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by
a valid judgement or decree of a court of competent jurisdiction, such invalidity or unenforceability
shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this
Agreement which are hereby declared as severable and shall be interpreted to carry out the intent
of the parties hereunder.
9.5 Authority. The persons executing this Agreement on behalf of the parties hereto
warrant that they are duly authorized to execute this Agreement on behalf of said parties and that
by so executing this Agreement the parties hereto are formally bound to the provisions of this
Agreement.
020
TAPWDEPT\PROJECTS\20W Prjcts\Ranch.wN 11
IN WITNESS .WHEREOF, the parties have executed this Agreement as of the dates stated
below.
CITY OF LA QUINTA a California municipal corporation
Don Adolph, Mayor
ATTEST:
June Greek, City Clerk
APPROVED AS TO FORM:
M. Katherine Jenson, City Attorney
CONSULTANT-MDS Consulting
By:
Name: Stan Morse
Title: Principal
Date:
Date:
021
TAPWDEPT\PROJECTS\2WO Prjcts\Ranch.wpd 9
Exhibit A
Scope of Services
MDS Consulting will perform the following tasks as part of the preliminary engineering for The
Ranch project:
Task 1 Offsite Hydrology Report
Prepared a drainage report analyzing the offsite tributary drainage areas for review and
approval by the City Engineer. This report shall contain a Hydrology map and shall be
prepared in accordance with the standards of the City of La Quinta and Coachella
Valley Water District. This report will become the basis for developing adequate
provisions to accept offsite flow's from the Santa Rosa mountains, as well as the
offsite flows which currently enter the two exiting onsite retention basins. This report
will identify the location in which offsite flows are concentrated, and will allow us to
offer suggestions to the golf course architect for acceptance of these flows. This
report will also be the basis for obtaining the necessary approvals from the State of
California Department of Fish and Game.
Task 2 Streambed Alteration Permit
• Based upon the offsite hydrology report and preliminary site plans, we will prepare
and submit a request for the Streambed Alteration Permit in accordance with the
State of California Department of Fish and Game code section [ 16031. Base upon our
previous and current work, including several site meetings with the Department of
Fish and Game, The Ranch project will not substantially alter any streambeds as
defined by the Department of Fish and Game, however, an agreement and permit shall
be obtained.
Task 3 Bureau of Reclamation Easements
Prepare and process applications and exhibits for the ultimate abandonment of
existing Bureau of Reclamation Easements within The Ranch project.
At the City's written request MDS will perform the following additional tasks:
Task 4 Avenue 52 Improvements
• Prepare and process through the City of La Quinta, Street Improvement plans
for the ultimate improvement of Avenue 52. This item includes field surveying,
as required to prepare existing surface cross sections at 50-foot intervals. Also
included is the notification and request of reference plans from Utility
companies. All existing utilities of record will be shown on the proposed street
improvement plans. No potholing of utilities is included in this proposal. The
plans shall include pavement widening, curb and gutter and grading of the
ultimate right-of-way. No sidewalk would be proposed at this time, as the
sidewalk and perimeter fencing should be coordinated and designed with the
golf course project. Improvement plans will include signing and striping plans.
The improvement plans will exclude approximately 200 linear feet of curb and
gutter at the future project entry.
022
Task 5 Avenue 52 Watermain
• Prepare and process through the Coachella Valley Water District, Water
Improvement plans for an 18" watermain extension planned within the Avenue
52 right-of-way. The watermain extension included within this item would be
from the projects westerly boundary (Tradition) to the proposed project entry at
Cetrino (Citrus), being approximately 1320 feet. The watermain would then be
stubbed southerly for future onsite extension.
14
Exhibit B
Schedule of Compensation
Payment shall be in full at the rates listed in the Schedule of Billing Rates attached herewith for
the actual hours submitted in conformance with Section 2.2 of the Agreement. Total
compensation for all work under this contract shall not exceed Fifty Seven Thousand Two Hundred
Dollars ($57,200.00) except as specified in Section 1.6 - Additional Services of the Agreement.
Fee Schedule
Task 1. Offsite Hydrology Report $20,000
Task 2. Streambed Alteration Permit $ 5,000
Task 3. Bureau of Reclamation $ 4,800
Reimbursable $ 5,000
Subtotal $34,800
Optional Tasks:
Task 4. Avenue 52 - Street Improvement Plans $16,000
Task 5. Avenue 52 - Water Improvement Plans $ 6,400
Subtotal $22,400
Total Not -to -Exceed $57,200
Schedule of Billing Rates
Consultant shall be compensated for all authorized contract extension or additional work not
included in the Scope of Services heretofore stated at the hourly rates below.
PRINCIPAL
$
140.00 PER HOUR
PROJECT MANAGER
$
125.00 PER HOUR
SENIOR PLANNER
$
125.00 PER HOUR
LICENSED LAND SURVEYOR
$
110.00 PER HOUR
REGISTERED CIVIL ENGINEER
$
110.00 PER HOUR
DESIGNER
$
105.00 PER HOUR
PLANNER
$
105.00 PER HOUR
DRAFTSPERSON
$
75.00 PER HOUR
PLAN PROCESSOR
$
75.00 PER HOUR
TWO -MAN SURVEY PARTY
$
175.00 PER HOUR
THREE-MAN SURVEY PARTY
$
210.00 PER HOUR
FIELD SUPERVISOR
$
110.00 PER HOUR
1.�
Exhibit C
Schedule of Performance
Consultant shall complete all services within One Hundred Eighty (180) days of the date of this
Agreement.
025
1.F
Exhibit D
Special Requirements
None.
026
17
COUNCIL/RDA MEETING DATE: April 1, 2003
Discussion of Funding Sources, Costs and
Revenues Associated With the La Quinta
Golf Resort Project
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION: L
PUBLIC HEARING:
As deemed appropriate by the Redevelopment Agency Board.
FISCAL IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
Since 1994 the La Quinta Redevelopment Agency has been working to implement
the City's Economic Development Plan that calls for:
• Enhancing City General Fund revenue by attracting retail and hospitality uses
to La Quinta.
• Increasing recreation opportunities for La Quinta residents through
purchasing and developing property that may be used for pubic golf and
other recreation uses.
• Preserving landforms and natural features that enhance La Quinta's unique
environment.
The Agency elected to pursue these activities because:
• Two market studies (commissioned by the Agency) identified retail, resort
and visitor serving uses as La Quinta's "industry" and indicate that attracting
these uses should be the prime focus of the City's economic development
initiatives.
027
• The City relies on transient occupancy tax (hotel bed tax revenue) and sales
tax revenue to fund 40% of General Fund operating costs; at build out these
two revenue sources are projected to fund 53% of General Fund operating
costs. In order to increase service levels for La Quinta residents, these
revenue sources must continue to grow by attracting additional retail and
resort uses to La Quinta.
• Agency efforts to attract hotel and resort developers/operators have been
impacted by the lack of golf opportunities that could provide tee times to
hotel/resort patrons. Adjoining cities that have public golf courses are
offering tee times to entice hotel and resorts to their communities as part of
their economic development incentives. The City of La Quinta does not have
access to golf courses within the community to offer tee times or otherwise
provide incentive packages similar to the adjoining communities.
• Most all of the golf courses with public access in La Quinta have been
developed as part of private golf communities. Once memberships have
been secured in these communities, access by La Quinta residents who are
not members of a golf club will be limited or foreclosed.
• Development is rapidly encumbering the remaining larger parcels within the
community, and in particular, properties that have direct access to the
mountains. When all of these properties are privately developed, public
access and views to the mountains that are unique to La Quinta will be
diminished.
Starting in 1995, the Agency evaluated purchasing property that could be
developed with golf, resort and passive recreation uses. The vision was to create a
world -class golf venue that would attract high -end resorts, offer reasonably priced
golf for La Quinta residents, and preserve, in the public domain, unique property
that embraced La Quinta's signature natural features. After numerous properties
were considered, the Agency elected to purchase The Ranch in June 2002.
However, before authorizing the purchase, the Agency evaluated various economic
assessments that detailed:
• How the property purchase and development would be funded
• The anticipated costs to develop The Ranch property
• The revenues and expenses associated with golf and resort uses.
This report presents the information that addresses these issues.
N
Purchase and Development Funding
Annually, the City and Agency evaluates revenues and expenses for each
City/Agency fund (the Midyear Financial Management Revenue) and reviews cash
flow forecasts to identify each entity's capacity to fund operations, capital
improvement projects, and economic development initiatives. In 1999, this effort
identified that Redevelopment Project No. 1 had the capacity to fund
$300,000,000 of new redevelopment and economic development projects during a
33-year period or from 2000 to 2033 (the year this Project expires). If this income
stream was discounted to today's value, Project No. 1 had the capacity to
undertake $100,000,000 in new non -housing projects and programs.
This revenue was based upon the assumption that the assessed value of all
property within Project Area No. 1 would increase at a rate of 3% per annum, and
accounted for all existing bond, contract and housing obligations. In comparison,
when Project No. 1 was established in December 1983 the total assessed value
was $199,398,233. Twenty years later or in fiscal year 2002-2003, the total
assessed value was $2,702,712,644 representing a 1,255% increase over the
base year value. This represents an annual average growth rate of 63%.
Certainly, future annual assessed value growth will not achieve these historic
growth rates as the Project Area is built out and development subsides, but a 3%
growth rate is a reasonable expectation given property sales, the annual
Proposition 13 inflation adjustment, and economic uncertainties.
Based upon these revenue forecasts and the fact that if the Agency did not elect
to encumber this revenue it would otherwise be distributed to the State and other
local non -City agencies, the Agency Board directed staff to craft a strategy that
allocated funds to needed capital improvement and public facility projects, to
underwrite a public golf development initiative, and to maintain current economic
development efforts. In February 2002, when the Agency Board considered the
purchase option for The Ranch property, staff outlined in the 2001-2002 Midyear
Financial Management Review that the City/Agency had $19.1 million in cash for
capital improvement projects, $6.3 million in cash to fund economic development
initiatives, and $20.0 million in cash plus an additional $46.0 million in Project No.
1 bond capacity to underwrite the purchase and development of The Ranch
property. Based upon this information, the decision was made to proceed with
property purchase activities and to sell the Series 2002 Project No. 1 Tax
Allocation Bonds.
Subsequent to purchasing The Ranch and issuing the Series 2002 Bonds, staff
updated the Project No. 1 revenue projections to forecast future capacity. Table 1
presents a summary of the revenue projections. Based upon a 3% per annum
growth in Project Area No. 1 assessed values, and accounting for all bond debt
service and contract obligations, Project No. 1 has the projected capacity to
029
3
underwrite $73.2 million of new projects (in net present value dollars) during the
coming 30 years. This revenue would support an additional $37.5 million in bond
financing during the next 48 months, with the capacity to issue $12.3 million in
bonds during the next 6 months. Finally, as presented in the Fiscal Year 2003-04
Capital Improvement Program, the Agency has reserved a total of $22.3 million in
cash to fund the Phase 1 improvements to The Ranch.
Table 1
Project No. 1 Tax Increment Revenue Projections
2002-03 to
2032-33
Year
Gross Tax
Housing Set
Taxing
Nonhousing
Senior Lien
Net
Increment
Aside
Agency
Bond Debt
Reimbursements
Nonhousing
Deposits
Payments
Service
& Contract Svcs
Revenue
2002-03
25,033,144
5,006,629
9,580,679
3,697,867
485,304
6,262,666
2003-04
25,839,764
5,167,953
9,880,858
7,887,768
495,921
2,407,264
2004-05
26,670,582
5,334,116
10,189,903
7,887,065
506,609
2,752,889
2005-06
27,526,325
5,505,265
10,508,077
7,886,665
517,369
3,108,949
2006-07
28,407,740
5,681,548
10,835,651
7,887,438
528,203
3,474,900
2007-08
29,315,598
5,863,120
12,817,650
7,887,356
539,073
2,208,399
2008-09
30,250,691
6,050,138
13,229,294
7,887,260
551,114
2,532,886
2009-10
31,213,838
6,242,768
13,653,133
7,890,371
563,102
2,864,465
2010-11
32,205,878
6,441,176
14,089,530
7,885,796
575,083
3,214,294
2011-12
33,227,680
6,645,536
14,538,859
7,888,080
588,312
3,566,893
2012-13
34,280,136
6,856,027
14,571,913
7,887,924
601,603
4,362,669
2613-14
35,364,165
7,072,833
14,610,088
7,888,521
614,967
5,177,757
2014-15
36,480,716
7,296,143
15,083,210
7,885,961
629,548
5,585,853
2015-16
37,630,763
7,526,153
15,570,527
7,886,081
644,161
6,003,841
2016-17
38,815,311
7,763,062
16,072,462
7,888,381
658,819
6,432,587
2017-18
40,035,396
8,007,079
17,160,437
7,887,351
673,534
6,306,995
2018-19
41,292,083
8,258,417
17,724,373
7,887,751
689,452
6,732,090
2019-20
42,586,471
8,517,294
18,305,227
7,889,061
550,167
7,324,721
2020-21
43,919,691
8,783,938
18,903,507
7,885,781
567,068
7,779,396
2021-22
45,292,907
9,058,581
19,019,701
7,887,661
584,470
8,742,493
2022-23
46,707,319
9,341,464
19,638,801
7,888,941
602,387
9,235,726
2023-24
48,164,165
9,632,833
20,276,474
7,886,691
620,835
9,747,332
2024-25
49,664,715
9,932,943
20,933,277
7,886,281
639,830
10,272,384
2025-26
51,210,282
10,242,056
21,609,784
7,888,306
659,387
10,810,749
2026-27
52,802,216
10,560,443
22,306,586
7,886,995
679,524
11,368,668
2027-28
54,441,908
10,888,382
23,024,292
7,886,838
700,257
11,942,139
2028-29
56,130,790
11,226,158
23,763,530
7,887,064
721,605
12,532,433
2029-30
57,870,339
11,574,068
24,524,944
7,886,901
678,101
13,206,326
2030-31
59,662,075
11,932,415
25,309,201
7,886,688
699,095
13,834,675
2031-32
61,507,563
12,301,513
26,116,986
7,889,605
720,720
14,478,739
2032-33
63,408,415
12,681,683
26,949,004
7,889,631
742,994
15,145,103
1,286,958,666
257,391,733
540,797,958
240,324,080
19,028,614
229,416,280
NPV @ 6.5%
471,089,093
94,217,819
195,836,516
100,186,059
7,654,620
73,194,079
Estimated Development Costs
As part of the Master Planning process, GMA International, in conjunction with
MDS Consulting and Chapman Golf Development, prepared cost estimates related
4 030
to building the Phase 1 improvements, and infrastructure cost estimates for the
Phase 2 improvements (see Attachment 1). The Phase 1 estimates include design
services, a golf course, driving range, a temporary clubhouse and on- and off -site
infrastructure improvements. The design services entail costs for the development
coordinator, golf architect and related services, and civil engineering. The golf
course and driving range costs encompass building a tournament course adjacent
to the mountains and a driving range that will serve both courses, plus grading the
main lake and the hotel/commercial pads. The Ahmanson Ranch house is
envisioned as the temporary clubhouse. Finally, the infrastructure improvements
involve on- and off -site sewer, water, electric, gas, telephone and cable utilities
required to service Phase 1, street improvements related to Avenue 52 and the
internal street system, and the well sites required by the Coachella Valley Water
District. These estimates have been reviewed and confirmed by the City
engineering staff. Table 2 below summarizes these costs and also presents
estimated costs for the Phase 2 improvements.
Table 2
Phase 1/Phase 2 Costs Estimates
Design Services
$ 1,500,00.0
$ 1,500,000
On -and Off -Site Improvements
5,693,500
10,377,900
Golf Course/Driving Range
10,373,750
10,000,000
Temporary Clubhouse
909,000
Permanent Clubhouse
8,750,000
Contingency @ 10%
1,847,625
2,187,790
Total $ 20,323,875 $ 32,815,690
The Draft Fiscal Year 2003-2004 Capital Improvement Program reflects an
allocation of $22.3 million for The Ranch Project —sufficient for Phase I activities.
Golf Course and Resort Expenses and Revenues
In conjunction with the property due diligence activities that occurred during the
spring of 2002, the Agency retained Economic Research Associates (ERA) to
evaluate the market demand, operating costs and potential revenue from two golf
courses on The Ranch. ERA has a national reputation for preparing golf feasibility
studies, and intimate knowledge of the Coachella Valley golf market. The May
2002 study concluded that it would be financially feasible to develop and operate
two golf courses at The Ranch, in particular, because the operations income did not
have to support debt service costs related to land acquisition and course
development. Project No. 1 tax increment revenue would fund these debt service
costs. The ERA report concluded that the Phase 1 golf course would generate
$766,000 in net operating income with both the Phase 1 and Phase 2 courses
5
generating $1,455,000 in net operating income (see ERA summary —Attachment
2). Based upon their review of the market absorption for two courses, ERA
anticipated that the second course would come on-line 5 years after the first
course went into operation. Tables 3 and 4 present the assumptions ERA used
regarding annual play and green fees. Table 5 presents the operations revenues
and expenditures forecast.
Table 3
Estimated Annual Rounds of Play
Annual •.
Market Source 18-Holes 36-Holes
La Quinta Residents 12,000 12,000
On -Site Hotel Residents 20,000 38,000
Other Valley Residents/Visitors 12,000 20,000
Total 44,000 70,000
Average Green/Cart Fees * $ 67.31 $ 72.18
* Constant 2002 dollars
Source: Economic Research Associates (ERA)
36-Hole Municipal Golf Complex Study
May 2002
Table 4
Estimated Green and Cart Fees
18-Hole Green Fees (including
Resident
Season Weekday Weekend
Cart)
Non -Resident
Weekday Weekend
Peak $ 45
$ 45
$ 115
$ 135
Shoulder $ 45
$ 45
$ 75
$ 95
Off -Season $ 45
$ 45
$ 55
$ 65
Source: Economic Research Associates (ERA)
36-Hole Municipal Golf Complex Study
May 2002
032
6
Table 5
Anticipated Revenues and Expenditures
18-Hole 36-Hole
Phase I Complex
Gross Revenue
greens/carts/driving range $ 2,962,000 $ 5,052,000
merchandise 553,000 1,142,000
food and beverage 478,000 1,038,000
other 50,000 100,000
Total $ 4,043,000 $ 7,332,000
Less: Cost of Sales
merchandise 304,000 628,000
food and beverage 158,000 342,000
Total $ 462,000 $ 970,000
Net Revenue
Less: Operating Costs
$ 3,581,000 $ 6,362,000
course maintenance
1,125,000
2,025,000
golf operations
515,000
875,000
food and beverage operations
215,000
467,000
clubhouse costs
150,000
300,000
general & administrative
710,000
1,040,000
capital reserve
100,000
200,000
Total $
2,815,000
$ 4,907,000
Net Operating Income $
766,000
$ 1,455,000
* Constant 2002 dollars
Source: Economic Research Associates (ERA)
36-Hole Municipal Golf Complex Study
May 2002
In addition to the ERA analysis, the Agency's economic and redevelopment
consultant analyzed the potential revenue the City may obtain from the hospitality
and retail uses. These uses would yield a combination of transient occupancy tax,
sales tax and tax increment revenue. Regarding the transient occupancy tax
revenue, RSG assumed that the total hospitality development would entail the
number of rooms allotted per the property purchase conditions with KSL
Recreation. These limit the hospitality development, for the first seven years of
Agency ownership, to 250 hotel rooms and 300 condominium hotel units that may
have 500 keys, for a total of 750 keys or rooms that would generate transient
033
occupancy tax income. Further, a 65 % annual occupancy rate was used, with an
average daily rate of $1 15.00. Using these assumptions, the 750 hotel rooms
would annually generate $2.0 million in transient occupancy tax revenue. RSG has
also analyzed the sales .tax and property tax increment potential of the project.
Annual sales tax revenue from the golf, retail and restaurant operations would
range from $70,000 to $250,000 per year. These estimates are based upon
25,000 to 100,000 square feet of sales tax generating uses, generating an annual
sales volume of $200.00 per square foot of leaseable area, and the City's current
1 % sales tax rate.
At build out, the taxable private uses would annually generate $529,250 to
$572,750 of tax increment revenue. This represents both non -housing and
housing fund revenue. These estimates were based on a scenario wherein the
property was sold to the private users for $1.00 (assuming the restrictions imposed
by the tax exempt bond proceeds used to purchase the private development sites),
the hotel and condominium hotel units were developed at a cost of $125,000 per
unit, the 25,000 to 100,000 of retail use was developed at a cost of $100.00 per
square foot, and the Agency retains 58% of all future tax increment revenue (the
remaining 42% is paid to the other taxing agencies).
Finally; the Agency 1) has entered into an agreement with GMA International for
planning services (contract amount = $234,650); 2) has authorized staff to
negotiate a contract for development coordinator services (a six-month contract
with an estimated value of $100,000); and 3) has authorized distribution of an RFP
for golf architectural services (budget to be determined) . The Development
Coordinator, once selected, will be asked to assist in the development of
scheduling and budget tracking for the project on a whole. Staff is available to
address specific questions that the Agency may have.
Respectfully submitted,
Mark Weiss
Assistant Executive Director
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachments: 1. Cost estimates
2. ERA summary
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MDS CONSULTING PLANNING, ENGINEERING, SURVEYING IRVINEAA QUINTA, CA
THE RANCH - PHASE 1
MASTER SITE INFRASTRUCTURE
CITY OF LA QUINTA REDEVELOPMENT AGENCY
PREPARED: MAR. 3, 2003
ITEM QUANTITY UNIT UNIT COST COST
ROADIMPROMEMENTS
AVENUE 52 (1/4 WIDTH
STREET IMPROVEMENTS 6,200 LF
PARKWAY LANDSCAPING (24' WIDTH) 148,800 SF
18' MEDIAN LANDSCAPING 0 SF
PERIMETER FENCE 6,200 LF
8' MEANDERING SIDEWALK 49,600 SF
CLUBHOUSE DRIVE (100' RW)
STREET IMPROVEMENTS
PARKWAY LANDSCAPING (24' EA. SIDE)
MEDIAN LANDSCAPING
8' MEANDERING SIDEWALK
ONSITE COLLECTOR (66' RW)
STREET IMPROVEMENTS
PARKWAY LANDSCAPING (6' EA. SIDE)
MEDIAN LANDSCAPING
6' MEANDERING SIDEWALK
TRAFFIC SIGNALS
AVE 52 @ CITRUS
1,500
72,000
6,000
24,000
800
9,600
1,200
9,600
LF
SF
SF
SF
LF
SF
SF
SF
0.5 EA
$ 50.00
$ 4.50
$ 4.50
$ 45.00
$ 3.00
SUBTOTAL
$ 150.00
$ 4.50
$ 4.50
$ 3.00
SUBTOTAL
$ 100.00
$ 4.50
$ 4.50
$ 3.00
SUBTOTAL
$ 310,000
$ 669,600
$ 279,000
$ 148,800
$ 1,407,400
$ 225,000
$ 324,000
$ 27,000
$ 72,000
$ 648,000
$ 80,000
$ 43,200
$ 5,400
$ 28,800
$ 157,400
$ 180,000.00 $ 90,000
SUBTOTAL $ 90,000
TOTAL ROAD IMPROVMENTS
CITY OF LA QUINTA THE RANCH MSI
REDVELOPMENT AGENCY PAGE 1 OF 2
$ 2,302,800
0 s)V
10
FI LE:5650010EST1MSI-PHASE 1.xis
MDS CONSULTING
PLANNING, ENGINEERING, SURVEYING
IRVINE/LA QUINTA, CA
8" VCP SEWER
WELL SITES (OFFSITE)
18" DIP WATER MAIN
12" DIP WATER MAIN
IRRIGATION LINES
IRRIGATION LATERAL RELOCATION (1601)
IRRIGATION LATERAL RELOCATION (54")
12RY UTILITIES
TELEPHONE - OLD AVENUE 52 RELOCATION
GAS - AVENUE 52
C NAL FENCING
CANAL ENHANCED FENCE
EES
CONSULTANTS, PERMITS, FEES
AND CONTINGENCIES @ 25%
CITY OF LA QUINTA
REDVELOPMENT AGENCY
3,400 LF
$
40.00
$
136,000
TOTAL SEWER
$
136,000
4 EA
$
150,000.00
$
600,000
3,000 LF
$
72.00
$
216,000
800 LF
$
48.00
$
38,400
TOTAL WATER
$
854,400
4,000 LF
$
45.00
$
180,000
1,800 LF
$
85.00
$ 153,000
TOTAL WATER
$
333,000
1 LS
$
630,000.00
$
630,000
6,200 LF
$
15.00
$
93,000
TOTAL DRY UTILITIES
$
723,000
8,800 LF
$
20.00
$
176,000
TOTAL CANAL FENCING
$
176,000
1 EA $ 1,131,300.00 $ 1,131,300
TOTAL FEES $ 1,131,300
TOTAL ESTIMATED AMOUNT $ 5,656,500
THE RANCH MSI
PAGE 2OF2
0%27
FILE:56500\CEST\MSI-PHASE1.xls
MDS CONSULTING PLANNING, ENGINEERING, SURVEYING IRVINE/LA QUINTA, CA
THE RANCH - PHASE 2
MASTER SITE INFRASTRUCTURE
CITY OF LA QUINTA REDEVELOPMENT AGENCY
PREPARED: MAR. 3, 2003
ITEM QUANTITY UNIT UNIT COST COST
JEFFERSON STREET (1/2 WIDTH
STREET IMPROVEMENTS 5,280 LF
PARKWAY LANDSCAPING (24' WIDTH) 126,720 SF
PERIMETER FENCE 5,280 LF
8' MEANDERING SIDEWALK 42,240 SF
AVENUE 54 (1/2 WIDTH
STREET IMPROVEMENTS
3,200
LF
PARKWAY LANDSCAPING (23' WIDTH)
73,600
SF
PERIMETER FENCE
3,200
LF
MEDIAN LANDSCAPING
0
SF
8' MEANDERING SIDEWALK
25,600
SF
HOTEL DRIVE (100' RW
STREET IMPROVEMENTS
2,000
LF
PARKWAY LANDSCAPING (24' WIDTH EA. SIDE
96,000
SF
MEDIAN LANDSCAPING
24,000
SF
8' MEANDERING SIDEWALK
32,000
SF
BRIDGE CROSSING CANAL
1
LS
ONSITE COLLECTOR_(66'_RW
STREET IMPROVEMENTS 3,600 LF
PARKWAY LANDSCAPING (6' WIDTH EA. SIDE) 43,200 SF
MEDIAN LANDSCAPING 9,600 SF
6' MEANDERING SIDEWALK 43,200 SF
ONSITE LOCAL (60' RW)
STREET IMPROVEMENTS
PARKWAY LANDSCAPING (12' WIDTH)
TRAFFIC SIGNALS
JEFFERSON @ AVENUE 53
6,000 LF
144,000 SF
0.5 EA
$ 4.50
$ 45.00
$ 3.00
SUBTOTAL
$ 100.00
$ 4.50
$ 45.00
$ 4.50
$ 3.00
SUBTOTAL
$ 150.00
$ 4.50
$ 4.50
$ 3.00
$ 500,000.00
SUBTOTAL
$ 100.00
$ 4.50
$ 4.50
$ 3.00
SUBTOTAL
$ 80.00
$ 4.50
SUBTOTAL
$ 180,000.00
SUBTOTAL
TOTAL ROAD IMPROVMENTS
$ 570,240
$ 237,600
$ 126,720
$ 934,560
$ 320,000
$ 331,200
$ 144,000
$ 76,800
$ 872,000
$ 300,000
$ 432,000
$ 108,000
$ 96,000
$ 500,000
$ 1,436,000
$ 360,000
$ 194,400
$ 43,200
$ 129,600
$ 727,200
$ 480,000
$ 648,000
$ 1,128, 000
$ 90,000
$ 90,000
$ 4,379,920
ors
12
CITY OF LA QUINTA THE RANCH MSI
REDVELOPMENT AGENCY PAGE 1 OF 2 FILE:56500\CEST\MSI-PHASE2.xls
MDS CONSULTING PLANNING, ENGINEERING, SURVEYING
IRVINE/LA QUINTA, CA
SEER
24" VCP SEWER (AVE. 53 TO AVE. 52)
8" VCP SEWER
WATER
WELL CONSTRUCTION
WELL SITES (OFFSITE)
PRESURE REDUCING STATION
18" DIP WATER MAIN
12" DIP WATER MAIN
DRY UTILITIES
ELECTRICAL - JEFFERSON ST. BACKBONE
CANAL FENCING
CANAL ENHANCED FENCE
CONSULTANTS, PERMITS, FEES
AND CONTINGENCIES @ 25%
4,800 LF
$
100.00
$
480,000
7,800 LF
$
40.00
$
312,000
TOTAL SEWER
$
792,000
1 EA
$
750,000.00
$
750,000
3 EA
$
150,000.00
$
450,000
1 EA
$
600,000.00
$
600,000
9,000 LF
$
72.00
$
648,000
4,600 LF
$
48.00
$
220,800
TOTAL WATER
$
2,668,800
5,280 LF $
TOTAL DRY UTILITIES
4,600 LF $
TOTAL CANAL FENCING
70.00 $
369,600
$
369,600
20.00 $
92,000
$
92,000
1 EA $ 2,075,580.00 $ 2,075,580
TOTAL FEES $ 2,075,580
TOTAL ESTIMATED AMOUNT $ 10,377,900
J -
FILE:56500\CEST\MSI-PHASE2.xis
CITY OF LA QUINTA
REDVELOPMENT AGENCY
THE RANCH MSI
PAGE 2OF2
MCMAPMAN'
GOLF DEVELOPMENT
TUC RANCH -- TUC MONNTAIN ae1111109e
Construction Estimate
I. Bonding
A. Bonding 1
LS $100,000.00 =
$100,000
Bonding Total
=
$100,000
II. Layout and Staking
A. Layout and Staking 1
LS $60,000.00 =
$60,000
Layout and Staking Total
=
$60,000
III. Mobilization
A. Contractor Mobilization 1
LS $150,000.00 =
$150,000
Erosion Control Total
=
$150,000
IV. Erosion Control
A. Erosion Control & Dust control 1
LS $250,000.00 =
$250,000
Erosion Control Total
=
$250,000
V. Site Preparation
A.
Site Preparation
150
AC
$300.00
= $45,000
Clearing Total
= $45,000
VI.
Earthwork
A.
Topsoil
75,000
CY
$1.50
= $112,500
B.
Compacted Fill
CY
$2.30
= $0
C.
Excavation
1,200,000
CY
$1.25
= $1,500,000
D.
Bulk Dirt (Dozer Excavation)
25,000
CY
$1.10
= $27,500
Earthwork Total
= $1,640,000
VII.
Shaping
A.
Rough Shaping
1
LS
$400,000.00
= $400,000
B.
Finish Shaping
1
LS
$200,000.00
= $200,000
Shaping Total
= $600,000
Chapman Golf 040
78505 Old Avenue 52 760-564 3355 14
La Quinta, CA 92253 760-564 2356 Subm ited Feb.10, 2003
VIII. Drainage
A. 4" Solid Pipe
B.
4" Perf Pipe (DR Tee)
C.
6" Solid Pipe
D.
8" Solid Pipe
E.
10" Solid Pipe
F.
12" Solid Pipe
G.
18" Solid Pipe
H.
36" Solid Pipe
I.
48" Solid Pipe
J.
12" Cast Iron Grate Inlets
K.
Headwalls
L.
3" Conduit
Drainage Total
IX. Features Construction
0 LF
$4.00 =
$0
0 LF
$5.50 =
$0
0 LF
$6.00 =
$0
0 LF
$8.00 =
$0
0 LF
$10.00 =
$0
0 LF
$12.00 =
$0
0 LF
$24.00 =
$0
0 LF
$45.00 =
$0
0 LF
$75.00 =
$0
0 EA
$225.00 =
$0
0 EA
$750.00 =
$0
0 LF
$6.00 =
$0
ALLOWANCE
_
a"NAA AAA
A. Tees with on -site sand 200,000 SF $0.55 = $110,000
B. USGA Greens 140,000 SF $3.50 = $490,000
C. Bunkers (w/ pipe & sand) 125,000 SF $2.00 = $250,000
Features Construction Total = $850,000
X. Seedbed Preparation
A. Seedbed Preparation 180.00 AC $950.00 = $171,000
B. Seedbed Prep Native 0.0 AC $0.00 = $0
Seedbed Preparation Total = $171,000
04j
Chapman Golf
78505 Old Avenue 52 760-564 3355
La Quinta, CA 92253 760-564 2356 Subm tted Feb.10, 2003 1
XI. Grassing
A.
Tees
200,000
SF
$0.20 =
$40,000
B.
Greens--Tif Dwarf
140,000
SF
$0.30 =
$42,000
C.
Fairways
60.0
AC
$2,000.00 =
$120,000
D.
Rough
50.0
AC
$2,000.00 =
$100,000
E.
Native grass areas
40.00
AC
$800.00 =
$32,000
F
Decomposed Granite Areas
10.0
$8,000.00
$80,000
G.
Sod-419 Bermuda
435,000
SF
$0.35 =
$152,250
H.
Erosion Control Mat
0
SF
$0.00 =
$0
Grassing Total
=
$566,250
XII. Hardscape
A.
Cart Bridges
3
EA
$60,000.00
= $180,000
B.
Foot Bridges
0
LF
$0.00
= $0
C.
Cart Path (8'-0")
22,000
LF
$14.00
= $308,000
D.
Cart Path (10'-0")
7,000
LF
$17.50
= $122,500
E.
Cart Path (12'-0")
1,000
LF
$21.00
= $21,000
F.
Cart Path (16'-0")
0
LF
$28.00
= $0
G.
Curbs
20,000
LF
$4.25
= $85,000
H.
Landscaping Allowance
1
LF
$1,500,000
= $1,500,000
I.
Water Features Allowance
1
LS
$1,000,000
= $1,000,000
Hardscape Total
= $3,216,500
XIII. Irrigation
A. Irrigation
Irrigation Total
XIV. Contingency Allowance
A. Allowance
Irrigation Total
TOTAL ALL
Chapman Golf
78505 Old Avenue 52
La Quinta, CA 92253
1 LS $1,800,000 = $1,800,000
1 AL $500,000 = $500,000
760364 3355
760-564 2356
$1,800,000
$10,148,750
042
Subm ited Feb.10, 2003 16
TOTAL CONSTRUCTION ESTIMATE
1
Bonding
2
Layout and Staking
3
Mobilization
4
Erosion Control
5
Clearing / Site Preparation
6
Earthmoving
7
Shaping
8
Drainage
9
Features Construction
10
Seedbed Preparation
11
Grassing
12
Hardscape
13
Irrigation
14
Contingency
TOTAL ESTIMATE
$100,000
$60,000
$150,000
$250,000
$45,000
$1,640,000
$600,000
$200,000
$850,000
$171,000
$566,250
$3,216,500
$1,800,000
$500,000
$1091489750
043
Chapman Golf
78505 Old Avenue 52 760364 3355
La Quinta, CA 92253 760364 2356 Subm 3ted Feb.10, 2003
1'7
ATTACHMENT 2
Section I
INTRODUCTION
The City of La Quinta is evaluating the potential acquisition of the undeveloped
525-acre Ahmanson Ranch property located between 52nd Avenue and 54th Avenue, xvest of
Jefferson Street in La Quinta, California. As proposed, the property would be developed with
resort and recreation land uses. The preliminary concept plan calls for development of two
18-hole regulation length golf courses and various resort lodging products with a combined
total of up to 750 rooms (keys).
The City retained Economics Research Associates (ERA) to analyze golf
development potentials for the property. The golf courses would serve three specific market
segments — City residents, on -site hotel guests, and off -site I visitors/nonresidents. The
following report assesses the depth and character of these market segments, and presents pro
forma operating financial projections for the golf element of the development program.
Every reasonable effort has been made in order that the data contained in this
stud}, reflect the most accurate and timely information possible at of May 2002, the date
1A,hen primary research was collected for this study, and it is believed to be reliable. This
study is based on estimates, assumptions, and other information developed by ERA from its
independent research effort, general knowledge of the industry, and consultations with
representatives of the golf industry. No responsibility is assumed for inaccuracies in
reporting by the client, its agents and representatives, or any other data source used in
preparing this study. No warranty or representation is made by ERA that any of the projected
values or results contained in this study will actually be achieved.
044
Economics Research Associates La QuintaAhmanson Rands
ERA Project No. 14592 Page 1-1 18
Section II
SUMMARY OF FINDINGS
The following highlights principal findings and conclusions with respect to
municipal golf course development potentials for the 525-acre Ahmanson Ranch property.
located in La Quinta, California.
PROJECT DESCRIPTION
• The subject 525-acre Ahmanson Ranch property is among the most desirable
remaining undeveloped large parcels in the Coachella Valley. The property
benefits by its prestigious location adjoining the PGA West development in
La Quinta, and proximity to other high profile golf -oriented communities in
the area.
• Situated between Washington and Jefferson, south of Avenue 52. the site
enjoys excellent access and visibility.
• The property has minimal topography and sandy soils which should reduce
land development costs. As well, the site abuts the base of the Coral Reef
Mountains creating interest and drama in the setting. and should distinguish
the golf courses from most others in the region.
19 Development on the property will have access to significantly less costly
utilities. Irrigation water will be diverted from the All American Canal. which
traverses the property, at only $15 per acre foot. Electricity will be provided
through the Imperial Irrigation District at approximately two-thirds the cost
charged to Southern California Edison customers in the Coachella Valley.
PROJECT CONCEPT
• The preliminary landuse plan calls for two 18-hole regulation length golf
courses a 250-room resort hotel, and a 300-unit (500 keys) condominium
hotel.
Economics Research Associates
ERA Project No. 14592
La Quinta Ahmai:son Ranch
Page 11-1
045
u
• This level of development represents the maximum allowed through 2010, a
condition imposed by the seller of the property. Additional development
could commence following this seven-year restricted period.
• The golf courses are envisioned as high -quality resort -style facilities serving
on -site hotel guests, residents of La Quinta and other Coachella Valley cities,
and other visitors staying in the area. It is anticipated that La Quinta residents
would have access to the golf courses at a substantially discounted rate.
GOLF MARKET OVERVIEW
• With over 100 golf courses, the Coachella Valley is one of the most renowned
and largest golf destinations in the country. La Quinta, with the PGA West,
La Quinta Hotel, and other high -quality facilities, provides some of the most
prominent golf courses in the world.
• The Coachella Valley public golf market has been very strong over the past
20-30 years, with most public access courses historically maintaining annual
play levels in the range of 40,000-45,000 rounds. Greens fee increases, a good
barometer of market strength, have substantially exceeded the general cost of
living over this period.
• The high -end Coachella Valley public golf market peaked in 1997-1998. At
that time, the inventory of high -quality regulation length public courses totaled
12. Since 1997, however, 8 competitive courses have entered the market,
resulting in considerable softening of the market, as evidenced by a significant
decline in annual play at many courses and significant discounting which has
sharply reduced the average effective greens fee at all courses.
• The Coachella Valley public golf market is expected to firm over the next 3-5
years as additional resort and residential development occurs in the region,
and the rate at which new public access golf courses enter the market.
• Accelerating this anticipated golf market recovery is the transition of
numerous golf properties competing in the current market. These include full
conversion of the PGA West Stadium and Nicklaus Tournament courses to
exclusive private member use, and reduced public play capacity at Shadow
Ridge, Desert Willow, Sun City and Heritage Palms as on -site development
continues at those projects.
Economics Research Associates
ERA Project No. 14592
La Quinta Ahmanson Ranch
Page 11-2
nos
20
• While the pace of new public course development has slowed, private golf
courses developed in conjunction with master -planned communities will
continue to develop, with many offering public play in early residential sales
years.
POTENTIALS FOR LA QUINTA MUNICIPAL COURSES
• The proposed La Quinta Municipal courses will derive support from three
principal market segments — La Quinta residents, on -site hotel guests, and
other Valley residents/visitors, particularly those staying at independent hotels
in La Quinta and other east valley cities.
• Based on . the concept of offering discounted greens fees for La Quinta
residents, and applying the experience at other Coachella Valley high -end
municipal courses, resident generated play is projected at 12,000 rounds
annually, with an average greens fee, including cart, of about $45.
• On -site hotel guest play will depend on the specific characteristics of the
overnight facilities and guest profile. An average of about .25 rounds per
occupied room for traditional hotels and .15 for condo hotels is projected.
With the full 750 rooms in -place, annual play from on -site guests, at
stabilization, is projected at 38,000 rounds.
• The proposed courses will compete for off -site resident and visitor play with
the numerous other facilities serving the eastern Coachella Valley. Priced
competitively, the subject courses are expected to capture about 20,000 rounds
annually, equal to approximately 2 percent of the high -end play currently
accommodated at the existing public access courses.
• At full on -site buildout, projected annual play on the proposed La Quinta
courses is summarized as follows:
Annual
Market Source
Play
La Quinta Residents
12,000
On -Site Hotel Guests
38,000
Other Valley Residents/Visitors
20,000
Total
70,000
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Economics Research Associates La Quinta Ahmanson Ranch
ERA Project No. 14592 Page 11-3 21
DEVELOPMENT PHASING
• One option is to develop both 18-hole La Quinta golf courses, along with a
permanent clubhouse concurrently, at an estimated cost in the range of $25
million. There are clearly construction economies associated with developing
both courses at once, estimated at approximately $142 million compared with
development of each course independently.
• However, given the current softness in the Coachella Vallee golf market. and
the possibility that it will require several years to fully develop the on -site
lodging facilities, it is prudent to consider phasing the golf courses. Not only
would the risk related to development of two courses at once be averted
through phasing, the existing Ahmanson Ranch House appears sufficient in
size and quality to adequately service one 18-hole course. It is expected that
the second course, along with a permanent clubhouse, would be developed 3-5
years after the initial 18-hole course.
• Under a phasing scenario, the turnkey cost (excluding land) of the initial 18-
hole course, assuming renovation and use of the existing Ahmanson Ranch
House, is estimated in the range of $13 million, with the permanent clubhouse
and second 18-hole course costing an additional $13414 million.
• Along with a first phase 18-hole regulation length course, continuation of the
existing Pelz Golf School or construction of a new golf academy on the
property, and potential development of a "short" 9-hole course. would be
complementary. Income from the academy and short course would fund
operating and maintenance expenses. and partially amortize the $1.041.5
million cost of developing these facilities.
PRO FORMA FINANCIAL PROJECTIONS
• Projections for the initial 18-hole course and the full 36-hole complex are
presented below. These pro forma estimates are based on the following
utilization and rate assumptions:
048
Economics Research Associates La Quinra Ahnianson Ranch
ERA Project No. 14592 Page 11-4
22
Market Source
Annual Play
18-Hole 36-Hole
La Quinta Residents
12,000
12,000
On -Site Hotel Guests
20,000
38,000
Other Valley Residents/Visitors
12.000
20.000
Total
44,000
70,000
Average Greens Cart Fee
$67.31
$72.18
*Constant 2002 dollars.
18-Hole Greens Fee (including cart)
Resident Nonresident
Season
Weekday
Weekend
Weekday
Weekend
Peak
$45
$45
$115
$135
Shoulder
45
45
75
95
Off
45
45
55
65
• Other operating revenue and expense assumptions and factors are documented
in the body of the report.
• Stable -year net operating income, expressed in constant 2002 dollars, for the
18-hole Phase I and 36-hole full -development options, is projected as follows:
Stable -Year Amount
(thousands
of
constant 2002 dollars)
18-Hole
36-Hole
Phase l
Complex
Gross Revenue
Greens/Carts/Range
$2,962
$5,052
Merchandise
553
1,142
Food and Beverage
478
1,038
Other
50
100
Total
$4,043
$7,332
Less: Cost of Sales
Merchandise
304
628
Food and Beverage
158
342
Total
$ 462
$ 970
Net Revenue
$3,581
$6,362
Less:
Course Maintenance
$1,125
$2,025
Golf Operations
515
875
F&B Operating Expenses
215
467
Clubhouse Undistributed
150
300
General & Administrative
710
1,040
Capital Reserve
100
200
"Total
$2,815
$4,907
Net Operating Income
$ 766
$1,455
Economics Research Associates
ERA Project No. 14592
n.4g
La Quinta Ahmanson Ranch
Page it-5
2Ic
Net operating income is projected before income taxes, depreciation,
amortization on debt service, but does include an allowance for a management
fee and capital improvement replacement reserve
• Applying appropriate valuation criteria to the projected annual income stream
which reflects the use of low -interest rate public financing yields an overall
value estimate. Under both scenarios, the cost of development exceeds the
value of the course at construction completion by about $10 million.
Operating revenues in both cases is sufficient to fund all operating expenses
and amortize approximately 60 percent of the development cost.
• The golf academy and short 9-hole course would add about $1.0 million in
value, compared with the $1.041.5 million development cost.
)0
Economics Research Associates La Quinta Ahmanson Ranch
ERA Project No. 14592 Page 11-6
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