Water Park Torpedoed by Elk Grove City Council, Keeps Swimming Pools Afloat

September 11, 2014 | Last night the Elk Grove City Council unanimously agreed to forgo plans for a water amusement park, but decide...



September 11, 2014 |

Last night the Elk Grove City Council unanimously agreed to forgo plans for a water amusement park, but decided to continue its pursuit of a $17 million dollar competitive swimming and diving center.

The decision came on the heels of the revelation that the contractor the city hired, P3 International, was in breach of contract having failed to assemble a financing plan for the combination competitive swimming-diving facility and water amusement park. P3, who was paid over $800,000 by the city, assembled design plans, but did not deliver financing specifics that an earlier feasibility study showed the entire facility would show a profit.

Assistant City Manager Rebecca Craig told council members during her presentation that P3 suggested that the city provide the financing and guarantee any construction costs overruns. Craig also said that the costs for construction of the competitive facility could be less as staff believes it was over-designed.

After hearing Craig's report, council members expressed indignation over P3's failure to get financing arranged. Council Member Pat Hume asked City Attorney Jonathon Hobbs what were the ramifications of P3 not delivering the financing plan.

"So what the contracts says is that these documents, including the financing plan, were due to the city by June 20, 2014, obviously we are pass that date," Hobbs said. "So under the terms of the contract, they are in material breach of the contract."  

There was no further council discussion on what actions the city might take against P3's alleged breach.

P3's principal, Jeroen Gerrese, was not invited to present before the council but during public comment tried to explain why a financing plan was not delivered. Gerrese said when his firm was contracted, approximately $38 million was allotted to the project, but their study determined more funding was needed, and the guarantees came at the requests of the unnamed private equity investor.

Gerrese also said private investors required a 12-percent return-on-investment, rather than 4-percent because the city would retain ownership of the land and facilities.  He said it was the inability of the city and the private equity investor to find a mutually agreeable return that scuttled any possible financing plan.

"When we started looking, it became very difficult," he said.

Aside from the inability to secure financing, the proposed site of the water park in a residential neighborhood and high traffic area proved to be unpopular. Elk Grove resident Rayfield Scott, who lives near the site, said he was concerned about traffic the water park would have put on Elk Grove Boulevard.

"The last thing I want to see from my bedroom window, is someone screaming going down an 80-foot slide," Scott said.

Elk Grove resident Yolanda Carrillo said she supports the competitive facility, but said when she thinks of a civic center she does not think of a commercial enterprise. She also said the water park would change the nature of the neighborhood.

"When we think of civic centers, I think of museums, libraries, cultural centers, " Carrillo said. "I don't think of water parks."

After their deliberations and approval of the project, Craig told the council that in the next four months or so staff would complete design specifications, put out a construction bid and present it to them. The contract could be executed in early 2015 with construction starting in early spring and completion of the project a year later.

"Clearly what's not going to happen now is a recreational aquatic complex," Elk Grove Mayor Gary Davis said. "I think we had a good plan, and a creative way to make them both happen, obviously it is not going to work."  















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30 comments

Anonymous said...

I'm pleased to see the aquatics complex moving forward w/o the water park. I told them this same thing many months ago during public comment. I said from what I can tell the community wants an aquatic park and not a water park especially in this confined location. Perhaps we could have saved a few hundred thousand by abandoning the water park months ago. Sigh.

It still remains to be seen if this aquatic park will operate at too large a deficit for the city to sustain.

Anonymous said...

"museums, libraries, cultural centers,"

Not in Elk Grove. All they think of in Elk Grove are youth and high school sports, fast food and chain restaurants. Just another sign of mediocrity.

Davis, Folsom, Roseville and even places like Fresno, Yuba City, Stockton and Modesto have museums, libraries, cultural centers and in the case of Fresno, Stockton and Modesto - professional sports teams.

Elk Grove has ... Can't think of anything other than strip centers, fast food joints, Big Box stores.

Sprawling rapidly growing blob.

Connie Conley said...

Jon Hobbs needs to purse getting some of our money back. I was told about $500,000 of the $700,000 is gone.

P3 needs to cut the city of Elk Grove a refund check of $200,000.

Anonymous said...

I agree this city council got snookered, again, but I doubt they will pursue it. Here's why.

If you can listen through the P3 guy's overuse of "at the end of the day", what he essentially is saying is that the reason he couldn't get financing is that the proposition was too risky. This is not unlike junk bond dealers who sell high risk bonds - the higher the risk, the higher the interest rate will be charged. The city council never was reality based in this whole boondoggle.

Listen carefully to everything that was said. Becky Craig said they thought it could be scaled back. Why?

As much as we may want more pools for our kids, at what cost will the taxpayer be burdened? Furthermore, do we really need a 10 meter diving platform for such a narrow population of athletes? That money would be better spent for a larger population of people than just one narrow segment. But I digress.

I have no sympathy for the P3 guy - but they can't seek a legal remedy less they further embarrass themselves, again. They set such unrealistic goals, that in the real world the financing could not be attained unless we paid 12% interest. A court will throw out any claims the city tries to pursue, and they know it. How else can you explain the city councilmens' show of disgust. Great stuff for the masses. P3 was a good scapegoat, but hey, he did get some nice dinners out of it!

Rodney said...

www.youtube.com/watch?v=rDMMYT3vkTk

J. W. Gilbert, Esquire said...

J. W. Gilbert, Esquire, says:
It is the object of banking to give facilities to trade, and whatever gives facilities to trade gives facilities to speculation. Trade and speculation are in some cases so nearly allied, that it is impossible to say at what precise point trade ends and speculation begins...Wherever there are banks [of deposit as opposed to banks of credit], capital is more readily obtained, and at a cheaper rate. The cheapness of capital gives facilities to speculation, just in the same way as the cheapness of beef and of beer gives facilities to gluttony and drunkenness.
--from The History and Principle of Banking, London, 1834

Anonymous said...

*Gilbart

SteveB6509 said...

This is pretty funny. The City Council has an idea for something that everyone knows has no chance of making money (the water park). Heck, the one in central Sacramento has trouble, how could one expect one in Elk Grove to be profitable? Then the company we contract with comes back and says the terms you need to get financing are absurd but here they are. After that Pat Hume (and others on the council?) are mad at P3. Face it, the City Council made a STUPID decision going down this road. They need to suck it up are realize that they cost the city any funds spent. Don't make P3 the scapegoat for your dumb decisions.

Dorie said...

So we, the tax paying citizens of Elk Grove will be paying $17 million plus for a swimming pool for the Elk Grove Piranha's. And let's be clear, that's what this is...a private pool for the Piranha's funded by the city. Piranha's will control scheduling and access. In the end, the tax payers are left holding an empty bag.

End this now.

Dorie said...

And what the heck is up with Detrick asking if they would like a second pool? We can't affort one let alone two!

Lynn said...

I spoke out against this from the beginning; I asked myself "would I want a sunsplash water park in my neighborhood? No. Would I do that to others? No Would I need to spend 700,000+ to study this? No. Did I need to see the schematics of this plan to determine the location was bad? No...only after the council approved the spending did some council members state this was not the best location. Sad but true. I am relieved for all the current and new homeowners that will not have the theme park in their neighborhood. Just wished we didn't loose so much money in this destination plan. Elk Grove residents have asked for soccer fields, ball fields, swimming pools, veteran's hall.....hmmm some day maybe residents will have leaders who truly represent them....maybe some day.....

SteveB6509 said...

I should clarify my remarks. One of our citizens pointed out to me (privately) that Pat has had difficulties with the water park aspect from the beginning. I wasn't at the meeting and didn't see the recording, so my statement about what was expressed is second-hand knowledge. I would say that for those Council-members who the water park head-first (pun not-intended), I still hope that P3 is not blamed for doing their job wrong.

One problem with economic development projects is trying to do something that has not been done somewhere else already. Although I would have liked to see a more thorough study, this may have some legs. I just hope we never hear anybody say we would have Olympic trials here. However, could hopefully foresee some lower-level competitions coming here.

Brenda Smart, Head Coach of the Elk Grove Piranhas said...

@Dorie...the pool is not being built for the Elk Grove Piranhas. While we hope to be one of the user groups, the pool will also be used for diving, water polo, USS swim, masters swim, synchronized swim, EGUSD high school water polo and swim teams, swim clinics, competitions, etc. Most of the above mentioned programs are not available in Elk Grove due to zero availability at Wackford. Wackford, our city's only competition pool, is not enough to support all we need in the Elk Grove Community and outlying areas. I know first hand of the shortage of pool space and programs as I experience it on a daily basis. The new aquatics complex will bring tremendous opportunities for our youth, adults and our city.

Anonymous said...

@Brenda ~ We do need more pools. EGUSD has failed to put even one pool on any of the district’s 9 High School campuses. Look around all the Sacramento area districts and about half the High Schools have pools. Interesting how this falls on the city to fix the districts problem since Mr. Trigg was the head of EGUSD for so many years.

However, I'm hesitant about the "need" for a 10M platform. The cost just doesn't seem to be justified. And as SteveB6509 has noted this isn't going to be an Olympic Trials level pool. Just build us a nice pool for our kids.

Connie Conley said...

Yes, Pat Hume was the voice of reason here from the very beginning, but the votes were there to include for the water park. Not to mention the many citizens who spoke up from the beginning that it wasn't necessary. For years now, we have been advocating for the city to finish one youth sports project.

At the town hall meeting we had back in 2011, Brenda Smart and others spoke up about the need for competition pool. No one mentioned a water park. So where that idea came from is beyond me. Why would we want giant plastic tubes in our “Downtown” anyway? Our civic center area should be classy and attractively designed.

Additionally, there were other representatives who were on the panel at the meeting including Debra Carlton, Elk Grove Youth Soccer League, Joe Matlen, Babe Ruth Baseball, Gayle Mooney, Elk Grove Youth Sports Assn. and Dan Woodward, Elk Grove Cal Ripken Baseball League, and many others in the audience, who were all advocating for their kids as well.

All echoed exactly the same message. “We desperately need youth sports complexes to draw the big tournaments.”

And now finally, we have one project that the council is going to finish. What they need to do with the 100 acres we just bought is to build a youth sports complex Mecca for soccer, baseball and softball. If they are all in one area, shared parking, shared amenities, one staff running it all, those complexes would be booked every weekend and watch the money flow into our local economy.

Want to bet the Howard Hughes Corporation would take notice and want to capture all of those people coming to Elk Grove for tournaments who would take the short drive over to the mall between games and eat and do some shopping. I would think so. Isn't that what all of us did when we went to Redding, Turlock and Cherry Island to name a few?

Thomas A. Anderson said...

Brenda, You are to be complimented for your work and advocacy for the youth you guide.

I don’t think people question the need of swimming facilities, but there are reasons why people are suspicious. As you point out, the Wackford Center is at maximum utilization. Why then is it incumbent on the city to build these facilities, if they are being constructed in large part to serve Elk Grove residents? Isn’t this the mission of the CCSD? Furthermore, do we really need a 30' diving platform?

Why is the CCSD not undertaking this, or even as was pointed out by Steve Detrick, not interested in taking over the facilities after the city complete construction. My guess is that they have been doing this a lot longer than the city and know a money hole when they see one.

Anonymous said...

Let me first state that I am certainly no expert in the building of Aquatics Pools, but I do know how to use "Search" on the internet. When the city is speaking of a 10m diving platform and a 17' pool depth, they are speaking of the Olympics. I believe if memory serves me, that was Mayor Davis' thoughts all along. When you enter that arena there are many Olympic rules in the building of the platform that must be followed. Otherwise you have a facility that can never be used for that and there would also be a hugh liability factor to consider should it be used by some inexperienced divers without proper guidance.

As Becky Craig mentioned.... "that the costs for construction of the competitive facility could be less as staff believes it was over-designed." I believe that is exactly what has happened and the city needs to take a serious look at that very problem and downsize the project. Give us an Aquatics Pool and leave the grandiose ideas to people with the money and expertise. We're in over our heads and this could prove to be very costly for the people.

David W said...

Ok Council members, a lot of good, well thought out comments here by people who care. Will you listen?

All along the majority of the council advocated for this project if just penciled out as "cost neutral" meaning that it would pay for itself with it's own generated income and not from taxpayer pockets, it was worthy of consideration.

Paying for the project via taxes or revenue bonds is unfair, esp those from "Glenbroke" which is exactly what you would do to those retired,tight-budgeted citizens if you taxed them for a facility they'd rarely if ever use. - This can't be built on revenue bonds or taxes. You need to find investors. When the plan pencils out as "cost-neutral" then proceed. Fact is, so many municipal pools all over the country are closed all summer because they are so expensive to staff & maintain. Do the research this time. Have staff do an objective research project on the cost / revenue projections of such a facility.

Ask Brenda Smart how much she and her club are willing to pay for daily / weekly use of the facility?
Ask her how many fund raisers she's willing to hold to help raise money for the facility?
How much capital can they put up? How much pressure can they put on the CSD and EGUSD to match their funding?

As for the Wackford. It's rarely open for recreational use and swim classes. The clubs and schools rein over public use. Always have.

The public should know what their expected cost is for using the pool recreationally during off meet days. $10 per person? $12? $20? - Very important factor. At some point the fee will determine usage.

The Olympic swimming /diving idea is all Gary Davis's idea to make Elk Grove his "destination city." It's all about him and a legacy he can leave, screw the taxpayers.

This plan is for a 50 meter pool. All the local high schools and colleges use 25 meter pools for competition. That's twice the costs for building and maintaining, for what? A pipedream of Davis's that the US national team of US Olympic team will come here to train or compete? Stanford is already set up for that with student housing, on-site eateries, classrooms, locker rooms, bleachers, etc.

Time to scale back to a 25 meter pool, like all are used to competing on and reduce costs substantially. Keep in mind that Southgate Parks and Rec is putting in a competition pool at Vintage Park and Waterman scheduled to open before this facility. Their funding is already in place, just waiting for the last approvals.

Mr. Anderson's comments above make a lot of sense.

Haven't seen this project is "cost-neutral." Looks like a money pit to me. The research, if done properly, will determine if this is worthy of our time and money spent.

D.J. said...

David is right.

Do an objective study re: the feasibility, costs/revenue data of a 25 meter pool v a 50 meter pool.
Time to take action and take care of our kids rather than try to make EG a "destination."
Time to build the best youth fields and pitches we can. Build facilities that we can be proud of. Let's take care of our own, let's look after our future generations, not be tunnel-visioned on making national news.
Yes, we need pools for our kids, but that should be up to our schools to fund the construction and the CSD to fund the staff and maintenance. If the city has discretionary funds to donate, that's great.
Time to pressure EGUSD for a couple of pools at our newer high schools. Everyone needs to have a vested interest in our future.

Connie said...

The Bee addresses the issue of the schools today. Apparently, cost and liability is why the answer is "No!"

http://www.sacbee.com/2014/09/11/6699256/its-thumbs-up-for-aquatic-center.html

Anonymous said...

The article mentioned above said the EGUSD cannot get involved in funding, building, maintaining, or staffing pools due high costs in construction and maintenance and liability.

Maybe the council should consider these issues as well before spending out tax money to benefit a few, to the potential detriment of the entire city.

I agree, a thorough, independent and objective research project needs to be completed to see if this project is beneficial to all of our citizens. Liability could be a huge factor, especially when dealing with multitudes of children in an enclosed space.

There are reasons why pools are closed during the summer. We need to make sure we don't make a million dollar mistake.

Lynn said...

Good comments above. It would be great if our city worked with EGUSD and CSD, however our city doesn't have a good reputation for being a regional player...look at the history. So with this said; how about our council attacking the school district for not building pools. This said following a presentation about adult illiteracy in our region and our own community. Personally with the limited monies of the school district I would like the focus to be education not sports. How about if all the individuals wanting sports venues for our children gather together and begin hosting fund raisers....Many did that for educational scholarships for our children and the program has grown. I am for sports, however I want an educated population and this is the first duty of our schools. Council attacking the school district doesn't build a community. Council making efforts to take over parks and reducing developer fees to build parks doesn't build community....I continue to be discouraged when I hear council attack our other government organizations. This is not working together. But then again our city leaders are about building destination city. Thankfully, we have many people who volunteer and whose efforts are building community and not destination. This my friends has been what has kept me here; not the traffic, crime, and the spending spree of council.

Anonymous said...

The aquatic center sounds like another train wreck in the making to go along with the vacant mall, abundance of high density low income housing projects, sister city with the Kingdom of Zamunda, $500,000 spent on a preliminary design for the civic center which looked like an octopus, Major League Soccer stadium when the only viable venue is the Sacramento Railyards.

What is with this city?

No culture, no museums, no performing arts centers, etc.

Just a bunch of jock type stuff for a "Joe Lunchbucket" type of resident.


Kate said...

That's what you get with a testosterone-filled city council with a bunch of over-the-hill wanna-bees.

Want change? Vote out all incumbents. Write in Lynn Wheat for mayor.

We're going down the road to bankruptcy faster than I ever imagined. For what? Olympic pools. MLS stadiums, world-class civic center?

Just make our city better for us, the ones who live here and pay taxes. Youth fields, culture centers, all solid investments in our future.

I don't want to live in a destination city. If I did, I'd live in San Francisco or LA.

Anonymous said...

One small problem with voting out the incumbants...They keep running unoppossed. Cooper & Detrick in 2012 and now Davis & Hume in 2014. Someday I would like to run but not yet.

As for the aquatics center the city hasn't voted on a final design. If staff scales this back (shorter pool, no 10M platform) it could be close to cost netural but lets see the details first.

EGUSD should be held accountable for not building a single pool. If they built just 2 or 3 pools for the 9 HS's in the district we wouldn't be discussing the need for an aquatics center.

Thomas A. Anderson said...

Two members of the council, Detrick and Cooper, are showing their age and some selective memory. Both went to high school in California when the funding mechanisms for public schools were different and far more generous than in today's post Prop 13 world. They went to school in what could be called the Golden Age of Public education in California. Surely they can see the difference.

Does any one recall when Elk Grove was the fastest growing city in the country? Well that distinction put enormous pressure on the school district to build schools as fast as possible. This growth was in part thanks to the votes Cooper made (and the county before him) to build house at any expense. Damn the overfilled schools, full speed ahead on those houses. For him to cry foul now is disingenuous. You reap what you sow and the rest of us are harvesting the seed of what they sowed years ago.

Anonymous said...

Thomas Anderson for Mayor!!!

C'mon, step up. Finally a voice of reason. Well thought out comments, articulate and accurate.

You may be too smart for this blog., but glad to see a flash of light in the darkness that has become Elk Grove.

Fish...no water said...

If this scheme doesn't succeed then the taxpayers of Elk Grove are going to end up paying and paying and payiing. Revenue bonds, anyone? Anyone? Or how about a sales tax increase?

Anonymous said...

I have little faith that our city council, in large part, have the knowledge to complete this project to accommodate the needs of the community. They just can't keep their personal desires, (Destination City) out of the project and work for the community at large. No doubt we will end up with a costly "Olympic" size facility, but with so many flaws in the design that it can never be used for Olympic events and will become a hugh liability for the cities taxpayers. It didn't start out as a well thought out project, placing it in the middle of residential, so why should we ever expect it to change at this stage in the game?

Deborah Richards said...

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