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HomeMy WebLinkAboutCity Council Item No. 6C ITY OF LADELSI110P\_E DREAM EXTREME- REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: JUNE 9, 2009 SUBJECT: CAMPGROUND AND BOAT LAUNCH FACILITY STATUS REPORT Background Two separate, but interrelated projects are in the development process for the City's Campground. The City plans to rehabilitate the dilapidated boat launch facility at the Campground by providing a new six lane boat ramp, paved parking lot with 270 spaces, restroom facilities and elevating the site to function at a wide range of Lake levels. More importantly, the aquatic safety for shoreline users will be greatly improved. The second project is the transformation of the Campground into a five star RV resort by a private developer. The City signed an agreement with the private development firm, Destination RV Resorts, to invest $17- million of improvements in the Campground in exchange for the long -term (40 -55 year) concession rights. If both the projects are brought to fruition, then it's estimated more than $25- million will be invested in improving the City's Campground. The City received ownership of the 40 year old Campground from the State of California in 1992. In December 2001, the City entered into a concessions agreement with Pyramid Enterprises Inc. to manage the Lake Elsinore Campground. The intent of this agreement was to turnover daily operations and maintenance of the facility to Pyramid Enterprises. No significant capital improvements were contemplated under this agreement. However, until the rehabilitation projects are implemented, the Campground should be maintained by the Concessionaire in the best condition possible, despite the poor state of the existing infrastructure. Discussion The main hurdles for Destination RV Resorts to complete the development have been past difficulties in securing financing, as well as technical and financing issues related to relocating the sewer lift station on Riverside Drive. There hasn't been any significant change in Destination RV Resorts financial status since the March 24 City Council meeting. CC June 9, 2009 Item No. 6 Page 1 of 3 Campground & BLF Project Status Report June 9, 2009 Page 2 This is an exceedingly difficult project to obtain conventional financing, because the City must always retain ownership of the property. Typically, lenders require the land to be owned by developers, so that the lender can hold a collateralized interest in the property. According to the Managing Member of Destination RV Resorts, the Company has received commitment letters from private investors and is close to obtaining commercial financing necessary to fund the project. Furthermore, City Staff has been informed that financing will be forthcoming once the City has awarded the bid for construction of the Boat Launch Facility Project. The second development hurdle occurred when Cal -Trans required the project to widen Hwy -74 and provide a deceleration lane for patrons entering the newly redeveloped Campground Facility at the intersection of Lincoln Avenue and Hwy -74. This requirement caused a domino effect that subsequently requires the relocation of EVMWD's sewer lift station along Hwy -74. Building a new sewer lift station is estimated to cost $2.5 million. In addition, water and sewer connection fees are estimated at $2.1 million. Destination RV Resorts and their prospective lender claim this is too high a capital cost and is literally, money down the drain. In late March, EVMWD agreed to pay its share of the capital cost for a new sewer lift station, equivalent to the off -site effluent volume. The City's Boat Launch Facility Improvement Project is nearing completion of the environmental permitting process. The City received a Clean Water Act 401 Permit Certification from the Santa Ana Regional Water Quality Control Board on September 24, 2008. Concurrent with this Status Report, City Staff is seeking Council's approval of a Streambed Alteration Agreement with the California Department of Fish & Game. The final permit required for the project is a Clean Water Act 404 Permit from the U.S. Army Corps of Engineers (USACE). City Staff anticipates receiving a Final DRAFT of the requirements for the "Habitat Mitigation & Monitoring Plan (HMMP)" from the Corps by the end of next week. If the HMMP requirements are reasonable, then Staff will seek Cit Council's approval of the property mitigation requirements at the June 23` or July 14 meeting. Considering that Destination RV Resort's Project has been delayed, the City will need to fill the void for a number of improvements, which includes re- paving the entrance roadway, install shoreline visitor safety fencing and sewer conveyance system. The repaving of the entrance roadway and safety fencing will be fairly easy to incorporated into the existing Project Plans and Specifications; however, preparing alternative sewer plans for the new restroom facilities are more technically involved. Staff reviewed an old (1976) "Sanitary System Site Plan" from the LERA Campground and correlated all existing above ground infrastructure in the field. It appears an 8 -inch PVC sewer connection to EVMWD's main line along Riverside Drive remains functional and currently in use for the Campground RV dump station. City Staff directed the design engineering firm, Noble Consultants Inc. (NCI), to perform a preliminary analysis, CC June 9, 2009 Item No. 6 Page 2 of 3 Campground & BLF Project Status Report June 9, 2009 Page 3 including gravity flow or small lift station (forced main), to direct effluent from the new restroom facility to the existing sewer line connection. After NCI reviewed and considered the scope of the sewer system requirements, it was mutually agreed that the City should contract separately with an engineering firm having specific expertise in the area of sanitary sewer systems. Subsequently, City Staff has been in discussions with such an experienced engineering firm, RBF Consulting, and plans to obtain a detailed proposal in the coming weeks. Staff intends to discuss past, present and future sewage disposal connections, capacity and fees with EVMWD, once a preliminary analysis is completed. Preparing alternative plans and specifications for the sewer system connection for the new restrooms will be the main obstacle in finalizing the Boat Launch Facility Improvement Project Plans and Specifications prior to advertising for public bid. Staff's best estimate is to advertise for public bid in early August 2009. On March 25 City Staff inspected the Campground and prepared a punch list of maintenance tasks to be addressed by the Concessionaire in a timely manner to bring the Campground maintenance into compliance with the concession agreement. The Concessionaire quickly addressed many of the tasks on the list, as well as other self - imposed maintenance tasks. City Staff is reasonably satisfied with the response by the Concessionaire. A few maintenance tasks are recurring and require constant attention, such as weed trimming. As of this writing, the tasks are scheduled to be fully completed by June 5th To put the state of the Campground in perspective, the Concessionaire inherited a 40 year old facility that had been flooded several times in the past. The Campground has no irrigation system, inadequate restroom & shower facilities, a crumbling road system and no access to the Lake. The state of disrepair of the underlying infrastructure will continue to undermine the daily maintenance efforts, profitability and customer satisfaction. Fiscal Impact None related to this Status Report. Recommendation Receive and file. Prepared by: Pat Kilroy Director of Lake and Aquatic Resources Approved by: Robert A. Brady i City Manager t CC June 9, 2009 Item No. 6 Page 3 of 3