Beleaguered water park plan resurfaces in fourth bid to build Temecula project
Friday, July 18th, 2014
Issue 29, Volume 18.
Temecula council members warily joined the process on July 8. They agreed to give the Redondo Beach firm exclusive rights to negotiate the possible purchase of a city site that the water park developers have been eyeing since 2009.
A brief report by city staff was followed by a flurry of questions and statements from council members who may have been gripped by a sense of déjà vu over the project. Councilman Mike Naggar, one of the earliest proponents of a water park in the city, quickly interjected a string of questions.
"The Council wants a water park," said Naggar, who then segued into a point-blank question regarding the status of the developer’s potential financing. Other council members pressed for answers on that topic as well as the project’s anticipated development timeline.
Councilman Jeff Comerchero took pains to note that the panel was "not pointing any fingers" as to why the past water park development bids had evaporated before the eyes of frustrated residents and city leaders.
"We just want to avoid a repeat," Comerchero said.
The council agreed to proceed with the exclusive negotiations after the developer’s representative, Mike Riedel, answered the questions.
Riedel described the project’s investors as "very capable and very committed." If a purchase deal is consummated soon and soil engineering concerns are overcome, it’s possible that construction could unfold over an eight-month period or less, he explained.
"We’re actually in pretty good position," Riedel told the council. "We’re pretty much locked and loaded and ready to go."
He pegged the anticipated development costs at more than $30 million.The council decision was set against a backdrop of failed development attempts on the 32-acre tract that is owned by the city at the north end of Diaz Road.
It also unfolded amid a change in the potential project’s competitive edge in the region. Since the last time the Temecula water park came up for review, Riverside County has opened a $24 million water park on 12 acres that flank the cities of Menifee and Perris.
The Temecula water park plan, as well as the publicly-owned site, is at the hub of one of the most colorful and problem-laced development sagas in the 25-year history of the fast-growing city.
For decades, the site was the home of tractor races and other community events and fundraisers. The city purchased the 32-acre site in 1992 for $3.8 million with the aim to build affordable housing and possibly other related uses there.
In January 2000, then-Councilman Karel Lindemans urged the council to proceed with a so-called Field of Dreams baseball complex there. But the council rejected a developer’s $8.5 million proposal, saying that cost was more than twice the amount the city had available then to build its second sports park.
At that time, Temecula’s budget surpluses and its ability to leverage redevelopment revenues combined to make the city a regional leader in constructing public buildings, parks, museums and other recreational amenities.
An apartment developer subsequently proposed a project at the Diaz Road site that would be anchored by a joint-use college complex. That project called for the construction of classroom towers, conference and research centers, retail stores, a child care center and an apartment complex with affordable units.
Progress lagged when that education project became hampered by soil compaction and grading problems, the discovery of Indian cultural sites, earthquake fault requirements and leasing and financing questions.
Those difficulties prompted Temecula council members to terminate a development deal with that developer. Council members blamed the project’s collapse on the developer, saying he failed to obtain the financing needed to close escrow and take other steps to move the project forward.
The developer, however, blamed many of the delays on city-mandated changes and the stiff obstacles that the project had to overcome. The developer countered that he had obtained financing for the project. The developer abandoned that site and instead focused on a Murrieta parcel as the proposed site of the college facility.
Clearwater Waterpark Development then entered the scene. Clearwater initially wanted to build its water park on a site wedged between Ynez Road and Interstate 15, and it won city approvals to proceed there. But a lawsuit by a neighboring commercial property owner prompted Clearwater to look elsewhere.
Clearwater then targeted the Diaz Road parcel, and the city agreed in 2009 to sell a 20-acre chunk of that site for $6.7 million.
Based in Orange County, Clearwater ran the Wild Rivers water park in Irvine before it closed in September 2011 to clear the way for the construction of apartments at that location.
Clearwater’s Splash Canyon won approval from Temecula’s Planning Commission for the Diaz Road site in 2009. But the deal fizzled a year later after Clearwater couldn’t secure construction financing.
Temecula had expected to net $5.7 million after the land sale because it earmarked about $1 million to mitigate existing soil conditions.
By then, Temecula’s prowess as a redevelopment pioneer had begun to fade, and in 2012 the
county opened a Big League Dreams baseball and softball complex in the unincorporated community of Romoland. That site, which is on the cusp of Menifee and Perris, is adjacent to the Eastern Municipal Water District headquarters.
In May 2012, Temecula council agreed to sell the 20-acre site to Wild Rivers Temecula LLC, which included some Clearwater executives, for $2.34 million.
The sharp drop in the land’s value was questioned by a city resident at the time of the sale. City staff and council members defended the lower price by citing the recession-fueled drop in real estate values and a declining demand for industrial and commercial land.
At that time, the water park was expected to cost more than $20 million to develop. It was expected to attract about 286,000 customers a year and employ 500 or more teens and adults on a seasonal basis.
But the escrow deadline passed and construction never began. The development plan’s approval was extended, and it will remain in effect until January 2015. If needed, another extension could be granted, according to city planning staff.
Riedel, who was involved in the previous Wild Rivers bid, said the partnership plans to update its feasibility study and determine the amount of soil preparation work that will be needed before construction can begin on the new project.
The agreement approved by the council on July 8 sets a one-month negotiation deadline. It also permits a one-month extension if needed to seal the deal or hold any necessary hearings. The negotiations will be held behind closed doors, but a sale agreement must return to the council for approval in an open session.
The years lost due to financing problems may have blunted some of the project’s competitive edge in the region.
In May, the county opened its $24 million Drop Zone Waterpark along Trumble Road adjacent to the Big Leagues baseball complex. That water park opened as the newest county parks facility, and its opening attracted an estimated 750 people.
The park features an aviation and skydiving theme. It has a capacity of about 1,800 visitors, and was built with redevelopment funds that were set aside by county supervisors in March 2011. That county action took place a few months before California lawmakers abolished all redevelopment programs throughout the state.
The county water park features an Olympic-size pool that is available to area swim clubs and high school teams. It also includes two large water slides, a "lazy river" ride, a hydroplane "flowrider," sand volleyball courts, a snack bar, covered eating area and other amenities.
Daily admission prices range from $9 for tots to $18 for adults. Season passes can be purchased and discounts are available for seniors and swim-only customers.
In a brief interview following the Temecula council meeting, Riedel said he does not believe the Drop Zone will draw many customers away from Temecula, Murrieta, Winchester and northern San Diego County.
"I doubt that (water park) will affect us," Riedel said. "We’re talking about building ours on a grander scale than that."
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