Rocklin council wants Quarry Park Adventures' lease agreement

Rocklin City Council approved phasing out the support program put in place to assist businesses during the COVID-19 pandemic. In other actions at Tuesday's session, council members agreed on moving ahead with negotiations to switch from an operating agreement to a lease for Adventure Operations LLC — operator of Quarry Park Adventures — and approved a site for constructing a bicycle pump track. The Business Support Program, launched in May 2020 and extended twice, has five elements: non-enforcement of the city's sign ordinance, business license late-fee waivers, massage establishment permit fee deadline extensions, permit relaxation for temporary outdoor dining operations and spending for a "Shop Local" campaign that the Rocklin Chamber of Commerce administered. In an overview of the program, city management analyst Michael Young said that participation in the sign aspect has decreased since the end of the state's Blueprint for a Safer Economy in June but some Rocklin businesses still have signs that are not in compliance. For the business license late fee waivers, there were 416 participants totaling $6,000 in waived fees, but with nearly no change in annual business permit revenue from fiscal year 2019-20 to 2020-21, Young said. "So business activity has stayed high and businesses did end up paying their license fees," he said. No Rocklin massage establishments requested deadline extensions for payment of the permit fee. Approximately 40 restaurants and a few other types of businesses implemented an outdoor operation. Twenty of those have ceased with the full reopening of the economy in June, Young said. Issues cited in discussion of the outdoor operations include the use of space heaters during cold weather — a safety concern — and that many tents in use are designed for special events and not for permanency. The council decision includes a 90-day notice to businesses for removal of temporary structures. In addition, city staff will create a streamlined process to permit applicants for permanent outdoor expansion in compliance with building and safety codes. And American Rescue Plan Act funds will be available to assist in permitting costs, Young said. The Shop Local — We're Open— campaign gave businesses tool kits, posters, window decals, lawn signs and other materials to help them operate during COVID-19. The city dispensed $149,952 in Coronavirus Aid, Relief, and Economic Security (CARES) Act funding to nearly 50 Rocklin eateries. Another $170,000 in CARES Act money went to 175 hard-hit businesses in the spring 2021 Keep the Lights on Program. "Currently, we don't see the need for any 'We're Open' funding or spending from the city's standpoint in this section," he said. According to Young, staff is developing strategies, including business support, for use of the nearly $7 million coming to Rocklin in federal American Rescue Plan Act funds and will present those strategies to City Council for discussion in late August or early September. Quarry Park Adventures Rocklin City Manager Aly Zimmermann presented a term sheet as a starting point of discussion to move the current operating agreement with Adventure Operations LLC to a lease agreement. According to accompanying documentation, under the current operating agreement, "the city is responsible for non-routine maintenance and repairs exceeding normal wear and tear, inspection fees and utilities (sewer, water, electricity and gas). The city also pays annual management fees of $141,120 to Adventure Operations and splits revenue in excess of expenses 50/50 (not including the management fees)." That agreement began March 12, 2019 and runs through Dec. 31, 2022. The city currently has about $175,000 in direct cost for operations, Zimmermann said. A lease agreement would put the city in more of a landlord-tenant relationship, she explained. The city would be responsible for major maintenance repair while Adventure Operations would be responsible for day-to-day operations. Instead of contributing on a monthly basis standard expenditures and seeing at the end if there's revenue to split, the city would get a percentage of gross revenue that could be set aside for operating and ongoing costs as a landlord. That would allow the city to begin building up a reserve for potential major repair/replacement and even possibly eventual expansion of the park, Zimmermann said. "Right now, those costs would be on us regardless, but we are not setting aside for it in any specific way," she said. "So that's the goal I have that as part of this transition, we do move into an arrangement where we are able to set money aside for the future and to deal with any emergencies as they arise." The terms of the lease agreement proposed as a starting point at Tuesday's session would give Adventure Operations a six-year lease with two additional two-year extensions. The city would cease paying the management fees and Adventure Operations would pay monthly the city lease revenue of eight percent of gross receipts. The equipment used for the park would be transferred over to the lessor and the premises would be slightly larger than they operate now. During the presentation, Adventure Operations owner and managing partner Dylan Burt said even with a difficult 2019 and 2020, the park has processed approximately 66,000 guests — 33,223 of those in 2021. Year-to-date as of June, the park saw a gross profit of $1.557 million and a net profit of $650,000, he said. About 12 percent of the guests were Rocklin residents, who receive a 20-percent discount. At the council's request, he agreed to increase the discount for residents to 25 percent. Council members unanimously supported moving to a lease agreement but requested a more in-depth look at the parameters. "I am thrilled that we get out of that management fee. I'm thrilled to get into a lease agreement. I think those are really important pieces," Mayor Jill Gayaldo said. "I also believe that the citizens of Rocklin benefit from the sales tax that we're going to get from the businesses for those 66,000 visitors. So as long as we are covering our costs and able to bring some money to set aside to make improvements when they're needed and do our deferred maintenance, it has to happen. I'm in a very comfortable position there." The next step is putting together a new term sheet. "I did count at least three council members asking for a term sheet to come back. So we will do that," Zimmermann said. "We will try to be expeditious about it — set some lofty goals for ourselves in terms of negotiations meetings so we can bring something back early in the fall and move into a lease agreement — if we're there — for Jan. 1." Bike pump track Based on an evaluation of four potential site locations, the council gave the go-ahead for the next phase of planning for pump track construction with Whitney Community Park as the preferred location. In addition to Whitney, the Parks and Recreation Department looked at Twin Oaks, Margaret Azevedo and Johnson Springview community parks. The report, presented by Parks and Recreation deputy director Kevin Huntzinger, covered build-ready availability (two acres of land to support the track and amenities), visibility (enhancing park users' comfort and security), existing amenity access (nearby restrooms, water fountains and parking), parking (adequate for visitors and possible large events), funding and bike access (proximity to bike paths and bike lanes). Whitney offers the undeveloped space, funding source through the NW Rocklin Community Park Fund, safe bike access and visibility and safety, Huntzinger said. However the site does not have close proximity to restrooms or water fountains and lacks parking for periods of high demand. "I do support this and I think it's one of those unique kinds of experiences and I see that there's been a lot of support and a lot of demand that I'd like to see it happen," Gayaldo said. The project will move forward in compliance with the public bidding requirements and public project laws, Zimmermann said. "What we would be doing next in terms of the city's next step would be to issue an RFP (Request for Proposal) for design services and to have it incorporate the parking because we do know that parking should be a part of this project at this location," she said. "We could also ask for some design elements that could be alternative bid items should council have the funding or the interest to include restrooms or water fountains or other amenities. When the project is bid out, then that could be included as alternative bid items and if we can afford it, we can afford it. And if we can't, we can't. And part of that design service would be to provide us with cost estimates along the way so we should have a better sense … It's something we will put at the top of our priority list and get started right away." In other business The council approved a five-year renewal of the Rocklin Area Chamber of Commerce's lease of train station building offices at 3700 Rocklin Road, with an option for five more years. The initial monthly rent is $1,050, increasing by $25 annually. The chamber has leased the space since 2006. Council also authorized the city manager to execute a one-year economic development agreement with the Greater Sacramento Economic Council. Cost is $27,700. In a presentation on the Placer County redistricting process, Placer County Assistant Executive Officer Jane Christenson emphasized the tight timeline because of the delay in receiving census data, which won't be received until September. "In the past, we've had seven months to execute the process. This year, we have seven weeks," she said. For more information on the redistricting process in Placer County, sign up for updates and to take the online survey, visit placer.ca.gov/redistricting.