Information from the City of Winter Haven staff below:
In the Spring of 2015, the Polk County Tourist Development Council (TDC) began work on a long-range capital strategic plan with the intent of better positioning Polk county for the recruitment of athletic and tourism related events through the expansion of existing facilities and the development of new venues. The TDC identified the 4th and 5th Penny revenues of the Tourist Development Tax (TDT) as the funding source for the County’s financial contribution. This effort resulted in the County committing TDT funding for four projects:
The Winter Haven project is intended to be a multi-functional facility capable of hosting large scale indoor athletic events (i.e. basketball, volleyball, gymnastics, martial arts, dance, etc.), as well as tradeshows, exhibitions, conferences and non-athletic events.
In 2016, City and County staff began developing an Interlocal Agreement specific to the Winter Haven project and the County’s financial contribution. Shortly thereafter, the County began separate negotiations with the Orlando Magic for the relocation of the teams NBA Development League team to Polk County, specifically The Lakeland Center. Part of that effort included the need for practice facilities for the Developmental League team, which was ultimately incorporated into the proposed Interlocal Agreement for the Winter Haven project. The Agreement being recommended of an approximately 86,500 square foot facility suitable for hosting the aforementioned athletic and tourism based events at an estimated cost of $21,775,000, with the County contributing 50% of the cost up to $10,000,000, plus an additional $1,000,000 should their Agreement with the Orlando Magic be finalized, resulting in the use of the facility as a practice venue.
The following is a summary of the Agreement.
In 2016, the City entered into a Services Agreement with Envisors/Penonni for master planning services specific to Chain of Lakes Park. As part of that effort, the design tea focused on a phased development, with the first phase consisting of the proposed Arena & Conference Center (a/k/a Fieldhouse) along with the necessary site work (parking, storm water management, ingress/egress, lighting, etc.) The final master plan includes a design and construction estimate of $21,775,000 for Phase I based on projected 2018 costs.
The County will pay the City amounts equal to semi-annual principal and interest payments on a total principal amount of $9,000,000 of debt to be incurred by the City over a 20-year term at a maximum true interest cost of 4.5%. In addition, the County will make an initial payment of $1,000,000 to help offset planning, engineering and design costs. (The master plan work completed by Envisors in the approximate amount of $275,000 will be paid from this initial payment.) If the County enters into an agreement for the Orlando Magic Development League team and the facility becomes a practice venue for the team, the County will increase their semi-annual principal and interest payments to cover a principal amount of $10,000,000.
The City is responsible for the balance of the design and construction of the facility, along with the ongoing operational and maintenance costs. Based on the Phase 1 cost estimate provided within the master plan, the City’s portion of the design and construction is anticipated to be approximately $12,000,000. This amount could be reduced to approximately $11,000,000, pending the use of the facility by the Orlando Magic Developmental League’s team. It is important to note that if the City incurs debt for amount equal to 50% of the actual cost. In this scenario, the City could potentially assume responsibility for a greater portion of the initial indebtedness.
The master plan included an economic component to help estimate the long-term operation and maintenance costs of the facility. Pursuant to the report, the net annual operation expenses are estimated to range from $723,000 to $884,000, and net annual operating revenues are estimated to range from $581,000 to $717,000 in a stabilized year of operation. This results in an additional annual cost to the City to $142,000-$167,000. The City will begin to incur operation and maintenance costs once the facility is complete; thus, this will have to be factored into the FY 2019/20 Budget.
The development of the proposed facility will have a significant impact on the facility inventory deficiencies for Winter Haven and eastern Polk County. At present time there does not exist a venue of comparable size and/or specific function within Polk County. Such development would create new recreational opportunities for Winter Haven residents, while at the same time further expand Winter Haven’s reach with respect to athletic and tourism based events. The facility is expected to have a significant economic impact on area hotels, restaurants, retail businesses, and their respective employees. The economic research conducted during the master plan forecasts the annual spending within Polk County in association with this facility to be between $18,000,000 and $23,000,000.
Given the design and construction cost, it is unlikely a project of this magnitude could be considered by the City alone. The financial partnership with County along with the ongoing marketing and promotion cooperation between the City and Polk County Tourism & Sports Marketing make the project significantly more feasible. The City Attorney and staff have worked diligently to negotiate an Agreement that both are comfortable presenting to the City Commission for consideration. If the Commission is agreeable to the terms and conditions, the next area of focus must be on how to fund the City’s portion of the design and construction costs.