Monroe council approves new negotiations for wakeboard park

H3O Development was back before the Monroe City Council on Tuesday, Aug. 25, in hopes of discussing contract amendments to allow them to move forward with the proposed cable wakeboard park at Lake Tye.

Propullsion Cablepark has been in the planning phases since 2012, after the city entered into a contractual agreement with H3O to establish a new recreational activity in the city of Monroe. The contract allowed for a formal public-private partnership between the city and H3O, and established a schedule of rental payments set to increase incrementally over time. The city would receive 2 percent of the park's gross sales under the contract, along with the rental fees associated with using the space at Lake Tye.

Construction funding shortfalls led H3O managing partners Greg Dick, Brad Smith and Chris Hogan to revise their strategy. After falling behind on their monthly rental payments, they came before the council in January to request a contract amendment that would give them relief from the payments.

H3O complied with a council requisite that they catch up on their past due rental payments before a contract amendment would be considered. They returned to the city in March, asking the council to consider a two-phase construction approach.

Dick said the updated plans for a phased approach are feasible.

"It's going to improve the existing park, and it's going to give another great activity to the community of Monroe and bring a lot of people from outside the city,GÇ¥ Dick said. "I really want to stress that.GÇ¥

Cable wakeboarding parks are a way for wakeboarders and water-skiers to enjoy their sport without the use of a boat.

Riders are pulled by a system of mechanized cables suspended from towers approximately 30 feet above the water's surface. Once hooked to the system, riders are pulled up and away from a dock and propelled around the lake.

Propullsion Cablepark is proposed to feature a five-tower cable system along with a smaller, two-tower cable system for beginners. The park would be installed at the south end of Lake Tye, a 42-acre manmade lake that is approximately 30 feet deep. According to H3O, the cable-riding area would take up 30 percent of Lake Tye's water surface and cause no disruption to current events held at the lake, such as swimming and triathlons.

The firm's initial plans included a parking lot and 2,500-square-foot multipurpose pro shop, featuring men's and women's changing rooms, a retail sales area, a rental space for large events and vending machines.

H3O would install the tower system and defer construction of the building in the phased approach. That way, it can get the facility up and running, and begin earning the revenue necessary to fund the rest of the project.

"I just want to reassure the city that we have raised funds for a phased approach,GÇ¥ Dick said. "If this phased approach is approved, we're ready to break ground and start with the project.GÇ¥

Councilmember Jason Gamble pointed out that H3O has again fallen behind in its rental payments since January. With H3O currently in arrears by $15,500, Gamble had reservations about moving forward with any sort of negotiations without the contract being in good standing. He also had concerns about rent relief ' since the gifting of public funds is illegal.-á

Gamble said another issue is with the security bond. H3O was required to obtain a security bond within 10 days of the effective date of the contract. The money was to be set aside for the city to engage in site restoration should H3O default on the contract. Gamble recalled previous discussion on the matter and had understood the bond was in place.

City Administrator Gene Brazel confirmed there is no bond.

"That, I have to say, concerns me,GÇ¥ Gamble said. He recalled asking H3O about the bond during a previous council meeting, and being told that it was already in place. "We can go back and listen to the tapes on that.GÇ¥-á -á -á

Gamble said permitting is another issue with the phased construction approach, with several of H3O's permits on the verge of expiration or expired, including the city building permit and the city grading permit. Other permits currently in place include the U.S. Army Corps of Engineers permit, which expires on March 18, 2017, with one possible extension that would push the date out to March 18, 2018.

Both the Shoreline Conditional Use Permit, which will expire on Dec. 11, 2017, and the Shoreline Substantial Development Permit, which expires on Dec. 11, 2017, are eligible for extension pending a decision by the hearing examiner.

Councilmember Patsy Cudaback echoed concerns about the unpaid rent and the lack of a bond. She requested additional information about H3O's investor, asking if they could provide proof.

"I heard tonight that you have financing,GÇ¥ Cudaback said. "I think it's appropriate for us to get some idea of who that is.GÇ¥

H3O was invited to the podium during the discussion to answer council's questions and address concerns. Smith tackled the bond issue right away, saying both the city and H3O overlooked that section of the contract.-á -á

"It was a surprise to everyone,GÇ¥ Smith said. "No one caught the language, and we were not notified within 10 days we had to have this bond set up.GÇ¥

The $15,500 in unpaid rent also was discussed. Hogan said since H3O became current on the rent in January, it assumed further rent could be withheld until contract amendments were in place. At this point, he said some type of legal mechanism for rent deferral needs to be included in the contract amendments, because H30 does not have $15,500 immediately available to bring the contract into good standing.

Historically, Councilmembers Gamble, Kurt Goering, Kevin Hanford and Jim Kamp have voted in favor of the wakeboard park. Councilmembers Cudaback, Rasmussen and Davis have voted against it, though Davis recently reversed his opinion and stated he was willing to give it a try.

Rasmussen emphasized the past-due rent and asked H3O how they were going to remedy that.

Smith was frustrated that the $15,500 in back rent was being made into a roadblock. He maintained that H3O thought it could withhold rent until the contract amendments were agreed upon, as Hogan said earlier.

"No one came out and said, "You don't need to pay rent,' but it was agreed upon verbally that until we could discuss the options on what might be available to us, that we could withhold it,GÇ¥ Smith said.

He said he recalled during initial contract negotiations with former Economic Development Director Jeff Sax that he never wanted to be in a situation where they were paying rent for something that wasn't yet operational.-á

"It was directly implied to us that it would never be enforced for us to pay rent at all, until we broke ground on this thing. I argued with (Sax) over and over about putting a date on the contract; he said, "No we have to do this, but we won't force you to do it until we break ground,' GÇ¥ Smith said. "I explicitly told him I don't want to be in a contract situation where we're paying rent for something that we do not have completely approved and funded.GÇ¥-á

If the council were to approve the amended contract, construction could start this fall and the park could be operational by next summer.

Goering made a motion to direct city staff to enter into negotiations with H3O for a phased approach. The negotiations should be completed, with an amended contract back before council by the end of September. Davis seconded the motion, which passed 4-2, with Cudaback and Rasmussen dissenting. Councilmember Kamp was absent.