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Agenda 02/23/2021 Item #11B (Great Wolf Resorts Feasibility Study)02/23/2021 EXECUTIVE SUMMARY Recommendation to accept a Market and Financial Feasibility Study from Hunden Strategic Partners, Inc. on a proposed development project involving Great Wolf Resorts, Inc., at the City Gate Commerce Park adjacent to the Paradise Coast Sports Complex, and authorize staff to negotiate a development agreement for subsequent Board consideration. OBJECTIVE: To accept a report from Hunden Strategic Partners, Inc., and provide staff direction on the negotiation of any future development agreement. CONSIDERATIONS: Great Wolf Resorts, Inc. (“Great Wolf”) operates the largest family of indoor water park resorts, with 17 locations across North America, the closest one to Collier County being in La Grange, Georgia. In addition to the water park, each resort features many other amenities. Recently, Great Wolf has been exploring an additional location in Florida, and has identified Collier County as a prime location, specifically collocated at the City Gate Commerce Park adjacent to the Paradise Coast S ports Complex (“PCSC”). Activity Center No. 9, which includes the City Gate Commerce Park, is a Mixed -Use Activity Center concept, designed to concentrate almost all new commercial zoning in locations where traffic impacts can readily be accommodated, to avoid strip and disorganized patterns of commercial development, and to create focal points within the community. The Board established the Interchange Activity No. 9 Innovation Zone in 2018, involving several hundred vacant and undeveloped acres in East Naples, around the commercial and industrial areas near the Interstate 75 and Collier Boulevard intersection. The aim of the Innovation Zone is to attract businesses driven by high future growth, stability, resource independency, diversification, and other positive economic impacts by offering flexible incentives and enhanced zoning overlays. Recently, Activity Center No. 9 has seen increased development activity, driven by the creation of the PCSC and other strategic land acquisitions of the County. This includes the acquisition and redevelopment of the former Golden Gate Golf Course, a one million square-foot Uline Corporation distribution center, the addition of a last-mile Amazon fulfillment center, and other prospective initiatives in development. The addition of a Great Wolf Resort in the area would continue the creation of a community focal point, enhance the offerings of the PCSC, and add a substantial number of jobs and new revenues to the County while diversifying our tourism offerings. Great Wolf is currently exploring locating a 550-room resort on an existing 20-acre site adjacent to the PCSC in the City Gate Commerce Park. The potential investment of the project is approximately $234 million in construction and development costs. Great Wolf has initiated discussions with County staff regarding the potential development of investments that are based on performance by the potential resort project to help close the financing gap of the project, estimated at $19.5 million. These include: • Impact and Building Fee deferrals • Tax Increment Financing (TIF) from the Innovation Zone Any investment provided would be contained only to the Great Wolf Resort property, based on performance goals developed in conjunction with the resort. Staff has examined likewise properties in other counties and municipalities that have included similar development investments for the company, as well as the annual sales and revenues generated by likewise projects. At the October 13, 2020 meeting, the Board entered a contract with Hunden Strategic Partners (HSP) for a Market and Financial Feasibility Study. Hunden completed this work over several milestones in January 11.B Packet Pg. 126 02/23/2021 2021. HSP found through the development of a 30-year proforma, that this development project would cost approximately $234 million. Based on the assumptions in this model, the net operating income in the pro forma would be able to support developer equity of $57 million and an additional $157.5 million in private debt. This leaves a funding gap of $19.5 million, including land costs, for the development of the hotel. HSP will attend the meeting to deliver a full presentation of their findings. FISCAL IMPACT: The cost of the consulting agreement with Hunden Strategic Partners is $40,000. The City Gate Commerce Park is within the Interchange Activity Center No. 9 Innovation Zone established by Ordinance 2018-39. According to the HSP study, locating this project in Collier County is expected to generate more than $5 billion in net new spending, $2.4 billion in net new earnings and more than 1,400 new full-time equivalent jobs over a 30-year project horizon. In addition, project driven increased Tourist Development, sales and County property tax collections are expected to total approximately $150 million over the same 30-year period. Based on the developer’s required internal rate of return the HSP study acknowledges that some level of County investment would be necessary. Great Wolf Lodge is requesting $15 to $20 million from the County to cover land, impact, and permit fees. Across the range of project driven increased tax collections, the requested investments would take 4 to 5 years to pay back. GROWTH MANAGEMENT IMPACT: This request is consistent with Objective 3 of the Economic Element of the Collier County Growth Management Plan which states: “Collier County will support programs which are designed to promote and encourage the recruitment of new industry as well as the expansion and retention of existing industries in order to diversify the County’s economic base.” LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, raises no legal issues at this time, and requires majority vote to accept the report. -JAK RECOMMENDATION: To accept a Market and Financial Feasibility Study from Hunden Strategic Partners, Inc. on a proposed development project involving Great Wolf Resorts, Inc., at the City Gate Commerce Park adjacent to the Paradise Coast Sports Complex, and authorize staff to negotiate a development agreement for subsequent Board consideration. Prepared By: Sean Callahan, Executive Director, Corporate Business Operations ATTACHMENT(S) 1. Great Wolf Final presentation (PDF) 11.B Packet Pg. 127 02/23/2021 COLLIER COUNTY Board of County Commissioners Item Number: 11.B Doc ID: 15072 Item Summary: Recommendation to accept a Market and Financial Feasibility Study from Hunden Strategic Partners, Inc. on a proposed development project involving Great Wolf Resorts, Inc., at the City Gate Commerce Park adjacent to the Paradise Coast Sports Complex, and authorize staff to negotiate a development agreement for subsequent Board consideration. (Sean Callahan, Executive Director, Corporate Business Operations) Meeting Date: 02/23/2021 Prepared by: Title: – Corporate Business Operations Name: Sean Callahan 02/15/2021 2:43 PM Submitted by: Title: County Manager – County Manager's Office Name: Leo E. Ochs 02/15/2021 2:43 PM Approved By: Review: Corporate Business Operations Sean Callahan Additional Reviewer Skipped 02/15/2021 7:48 PM Corporate Business Operations Sean Callahan Additional Reviewer Completed 02/15/2021 7:48 PM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 02/16/2021 8:58 AM Office of Management and Budget Laura Wells Level 3 OMB Gatekeeper Review Completed 02/16/2021 9:30 AM Budget and Management Office Ed Finn Additional Reviewer Completed 02/17/2021 10:06 AM County Manager's Office Dan Rodriguez Level 4 County Manager Review Completed 02/17/2021 11:22 AM Board of County Commissioners MaryJo Brock Meeting Pending 02/23/2021 9:00 AM 11.B Packet Pg. 128 11.B.1 Packet Pg. 129 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 130 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 131 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 132 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 133 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 134 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 135 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 136 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 137 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 138 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 139 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 140 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 141 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 142 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 143 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 144 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 145 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 146 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 147 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 148 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 149 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 150 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 151 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 152 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 153 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 154 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 155 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings) 11.B.1 Packet Pg. 156 Attachment: Great Wolf Final presentation (15072 : GWL Study Findings)