Consideration and Approval of Lease of City-Owned Property:  Snow play recreational area on the northeast portion of McMillan Mesa.

(1) Approve the Lease Agreement with D&C Maintenance and Snow Plowing, L.L.C., for an annual lease fee of $3,000 for the winter season of operation; revenue share, based on gross revenue less sales tax, of 5.5% up to $400,000; 7.5% from $400,001 to $600,000; and 9.5% from $600,001 and higher; with an initial term of ten (10) years and an option for two 5-year extensions upon mutual written agreement between both parties; and
(2) Authorize the City Manager to execute the necessary documents.

Award of this Lease Agreement will provide for a public snow play recreational area within the City of Flagstaff. 

D&C will pay the City an annual Lease fee of $3,000 and revenue share (gross revenue, less sales tax) of 5.5% up to $400,000; 7.5% from $400,001 to $600K and 9.5% from $600,001 and higher for an initial ten (10) year period. The City will provide a fifty (50%) credit towards the construction and landscaping expenditures of $132,122 paid for by D&C specifically for the West side parking area.  The fifty (50%) credit equates to $66,061, which will be payable in the form of a credit, to the Lessee, in the amount of $22,020, per year for the first three (3) years. This credit of $22,020 that will be deducted from the annual Lessor’s revenue share for the first three (3) years.

Livability through good neighborhoods, affordable housing and varied recreational activities. This initiative will provide for a public snow play recreational area within the City of Flagstaff.  This snow play recreational area is a first-time amenity for all residents in the community. It represents a requested winter recreation outlet for the Flagstaff area residents, as well as a significant winter attraction for out of town guests, drawing tourism dollars to the area. This was a Council priority in last year's goals.

Yes. The lease of this City owned property on McMillan Mesa was discussed at the Council work session on May 8, 2012. Also, in November of 2009, a  snow play park was proposed for City-owned property located at the east side detention basin located to the north of the Country Club, East Route 66 intersection.  

Option A:  Approve the recommended Lease Agreement with D&C Maintenance and Snow Plowing, L.L.C.; 
Option B:  Amend the Lease Agreement with D&C Maintenance and Snow Plowing, L.L.C.;
Option C:  Not approve the Lease Agreement with D&C Maintenance and Snow Plowing, L.L.C., and direct City staff to re-solicit the Request For Proposals for a snow play recreation area;
Option D:  Not approve the Lease Agreement with D&C Maintenance and Snow Plowing, L.L.C., and not provide or operate a snow play recreation area.

The Proposed McMillan Mesa Snow Play recreation area is located on a portion of City-owned property. The area is located approximately one mile from downtown Flagstaff. The proposed snow play lease area consists of +/- fourteen (14) acres within a fourty-three (43) acre piece of City owned property on the northeast portion of the Mesa. The area retains a portion of the north face of the Mesa escarpment with an elevation change of approximately 160 vertical feet. The City of Flagstaff operated a small ski recreational park in the same location approximately 20 years during the period of 1950-1970.  Subsequently after closing the area, the location and other City-owned property locations became popular free lance sledding hills without on-site management/supervision. The lack of direct management and supervision can create numerous problems, including illegal parking, littering, and sanitation issues. This proposed lease is for the daily operation and management of a snow play recreational area.  .  The Regional Land Use and Transportation Plan provides a land use designation for this parcel as a proposed park and recreation area and this proposed snow play recreation area would be in compliance with the plan.

The snow play park area is bounded on the north by Forest Avenue (4 lane arterial), on the east by Coconino High School, on the south by Gemini Street (2 lanes) and open space owned by the City, and the West by the USGS campus. Vehicle access to the property is provided by the intersection of Forest Avenue and Gemini Street. Pedestrian access is provided by the Flagstaff Urban Trail System and the sidewalk along the public streets. Bus access is provided by stops located at the intersection of Forest Avenue and Gemini Streets.  The snow play park site is further supplied with 8 inch reclaimed water and 8 inch potable water lines. Sanitation sewer lines are located off-site in front of Coconino High School. Electric power can be supplied by the APS sub-station located adjacent to the lease area.
 
The Flagstaff Zoning Code classifies this snow play recreation area as an outdoor commercial recreation site and use of this site is permitted subject to a Conditional Use Permit (“CUP”) to be reviewed and approved by the Planning and Zoning Commission.  The Lease Agreement for this snow play recreation area shall be contingent upon approval of the CUP.
 
The only proposer to submit a proposal response, Recreation Resource Management (“RRM”), withdrew its proposal during a regular City Council meeting when a recommended action was made to award the Lease Agreement to RRM.  City Council verbalized its continued interest in a snow play park and directed staff to find another location and consider proposals through a Request for Proposals (“RFP”) process. A Request for Proposals was issued on June 20, 2011 for snow play area operations and management services and corresponding lease.One proposal was received from D&C.This lease will be for an initial ten (10)-year period, with the option for two, five (5)-year extensions upon mutual written agreement between both parties.
 
The evaluation/selection committee was comprised of six (6) City employees representing the following areas: Purchasing, Capital Improvements, Planning, Recreation, and Public Works.  The proposal evaluation process consisted of reviewing the written proposal as submitted, as well as formal discussions with D&C. The evaluation criteria consisted of:

• Qualifications and experience of the proposed company (weighted 15%)
• Qualifications and experience of the proposed manager assigned to the management of the snow play area (weighted 15%)
• Presented approach (weighted 35%)
• Schedule and timeline of complete operational setup (weighted 25%)
• Lease fee and revenue share (weighted 10%)

 
Based on the evaluation criteria, and formal discussions, the evaluation/selection committee recommends awarding the lease agreement to D&C.

This snow play recreational area on McMillan Mesa is a recreational and economic opportunity for all stakeholders in the community. It represents a prime winter recreation outlet for the Flagstaff area residents, as well as a significant winter attraction for out of town guests, bringing tourism dollars and tax revenue to the City of Flagstaff and fulfills a Council priority. .

• The Contract period will be for an initial ten (10)-year period with the option to extend for an additional two (2), five (5)-year periods based on the mutual agreement of the City and D&C.
• D&C is on an aggressive timeline and accelerated schedule in order to meet an opening of this snow play recreational area for the next winter season starting in November of 2013.  D&C will need to obtain a conditional use permit and order necessary equipment, conduct site preparation and construct parking lots, recruit and hire staff, and marketing the snow play recreational area.
• This site has been impacted when it was originally dedicated as a snow play/sledding area.
• The Lease Agreement is contingent upon the approval of a Conditional Use Permit.

The Flagstaff community will benefit from the following:

There is a need for a professionally managed snow play recreation area within the City of Flagstaff for use by the public.  Our geography and climate lend itself to this outdoor recreation activity.  This City-owned McMillan Mesa property, as the recommended site for a snow play recreational area, is within the City limits and will be managed and supervised by a professional company to help ensure the safety of those who will use this snow play recreation area.  It represents a prime winter recreation outlet for the Flagstaff area residents as well as a significant winter attraction for out of town guests, bringing tourism dollars and tax revenue to the City of Flagstaff.

Public Participation Goals of INFORM, CONSULT and INVOLVE were used.  D&C, in conjunction with the City, has conducted community outreach efforts  that   included   two (2)  public  forums  to  assess  the  needs  and interests  of  the  Flagstaff community for a snow play recreational area.  These public forums also included a rendering of an engineering drawing of a site plan that included information regarding site preparation, sledding hill design, parking, equipment, ticket prices and snow making, which engaged further input and feedback from community members, as well as many patrons who are in favor of the snow play recreational area.

In addition to the two public meetings the proposal was also shared with various commissions (Attachments include the minutes from the various commission meetings). On August 24, 2011 the proposal was presented to the Planning and Zoning Commission in preparation for discussions regarding the Conditional Use Permit. During the months of October and November of 2011 staff presented the proposal to the following commissions; Parks and Recreation, Tourism, Open Space, and the Water Commission. The intent was to provide general information about the snow play recreation area.  Any feedback given by the Commissions, that may be reflected in the attached minutes, were then provided to the Proposer. solicit feedback which was then shared with the proposer. Additionally snow play has been a standing discussion item at the Parks and Recreation Commission meetings throughout 2011 and into 2012.

Option B:  Approve the recommended action to award the lease agreement with an amendment that allows for a lump sum of $48,000, based on a sub-contractor's quotation and validated as a reasonable Engineer's estimate, to be put in an escrow account for restoration of the snow play recreation area in lieu of a performance bond.

09/04/2012 - EAB

Motion to amend lease to remove all references to hours of operation and lights - passed 4-2
Motion to approve lease as amended - passed 4-2