Grand Forks Growth Fund, A Jobs Development Authority Staff Report
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1 Grand Forks Growth Fund, A Jobs Development Authority Staff Report Growth Fund Committee October 17, 2016 JDA October 17, 2016 Agenda Item: Frost Fire Ski Area and Amphitheater Feasibility Study Submitted by: Meredith Richards, Planning & Community Development Deputy Director Staff Recommended Action: Hear request for $5000 contribution Committee Recommended Action: JDA Action: BACKGROUND: Attached is a request from the Red River Regional Council for funding to assess the feasibility of an acquisition/restoration project at the Frost Fire Ski Area and Amphitheater facility in the heart of the Pembina Gorge. The study is budgeted at $25,000 and would include a structural analysis and preliminary capital improvements plan, appraisal, and legal fees. Contributions of $5,000 are being sought from Walsh County JDA and the Growth Fund; the ND Parks and Recreation Dept. and Pembina and Cavalier County JDAs have already committed $5000 each. The study is foundational to a larger vision of purchasing and restoring the facility, and would help solidify a regional partnership to support tourism and recreation development in the northern Red River Valley. SUPPORT MATERIALS: Request from Dawn Keeley, Executive Director, Red River Regional Council
2 TO: PEMBINA COUNTY JOB DEVELOPMENT AUTHORITY CAVALIER COUNTY JOB DEVELOPMENT AUTHORITY WALSH COUNTY JOB DEVELOPMENT AUTHORITY GRAND FORKS GROWTH FUND ND PARKS AND RECREATION DEPARTMENT FROM: DAWN KEELEY, EXECUTIVE DIRECTOR DATE: SEPTEMBER 29, 2016 RE: FROST FIRE FEASIBILITY ANALYSIS We are developing a feasible and sustainable plan for a foundation to acquire, operate and expand amenities for the Frost Fire Ski Area and Summer Amphitheater located in the Pembina Gorge seven miles west of Walhalla in Cavalier County. Richard and Judith Johnson have owned and developed this property over the past 40+ years and unfortunately, Richard passed away in March 2016 and Judith is not able continue operations at this time. We risk losing this focal amenity to private owners without interest in operating the facility as a public amenity. A cornerstone of the business plan is the feasibility analysis to include engineering analysis (electrical, water, and structural) and capital improvements plan, legal counsel to establish the foundation, and an updated appraisal (last one was completed in 2012). The estimated budget for these tasks is $25,000. We are seeking contributions of $5,000 each from your organizations for this analysis as well as to solidify the beginnings of a regional partnership in northeastern North Dakota in implementing a grander vision for tourism and recreation development that strives to also stop population decline and serve as a workforce retention/expansion tool. Today, we are working closely with the Community Foundation of Grand Forks, East Grand Forks, and Region to assist in developing the business plan and funding. ND Parks and Recreation Department is a vital partner in this vision, as well as having completed their Master Plan for the Pembina Gorge State Recreation Area in late 2014 ( ND Parks and Recreation Department currently has committed more than $700,000 to continue the execution of their master plan in Tourism is the 3 rd largest industry in North Dakota and historically, Frost Fire s winter revenue is generated by 80% Canadian traffic. Pembina Gorge activities such as the annual fossil dig and adventure races attract people from throughout the United States. There are a number of additional events in the area which attract thousands of people throughout the year.
3 Frost Fire Ski Area and Summer Amphitheater Feasibility Analysis September 29, 2016 Seeking Partners on Feasibility Analysis This outline provides background and current information on completion of a feasibility analysis of the Frost Fire Ski and Amphitheater property located near Walhalla, ND. Needed analysis includes engineering, appraisal, and legal counsel with a total estimated budget of $25,000. Proposed funding partners include ND Parks and Recreation Department; Cavalier, Pembina, and Walsh County Job Development Authorities; and Grand Forks Growth Fund at $5,000 each. The goal is to establish a foundation to purchase, operate and expand amenities to both capitalize on a market of 1.2 million people within two hours radius as well as become a focal attraction in northeastern North Dakota to assist in workforce and population retention. Background The Frost Fire Ski Area resort is a four season amenity nestled in the Pembina Gorge approximately seven miles from Walhalla. The Frost Fire property is acres and includes: 1. Lodge. The lodge is approximately 9,600 square feet and provides space for gatherings, ski and snowboard rentals, sales, concessions, offices, changing facilities and restrooms. Lodge is two full stories and a small third floor of 330 square feet living quarters. The ND Parks and Recreation leased office space on the first level (ground level). 2. Downhill skiing and snowboarding. The ski hill offers 10 runs with two chair lifts (one triple and one double). Experience levels range from easiest to most difficult. There is also a winter terrain park available. The site has the ability to make snow. Ski and snowboard rentals available. 3. Tubing. There are three 600 ft chutes supported by a magic carpet. Tube rentals are available. 4. Cross country skiing. There is one Nordic cross country run available. 5. Summer theater. The summer theater offers about 14 performances during the month of July. The covered amphitheater offers seating for around 450 people. The property has been owned and developed by Richard and Judith Johnson over the past 40+ years. Their desire is to assure the property remains a public amenity attracting visitors from throughout the region and beyond. Richard passed away in March 2016 and there is a significant urgency of an ownership transition at this time. FROST FIRE FEASIBILITY ANALYSIS PROPOSAL 9/29/16 PAGE 1
4 The property is a vital amenity to the region which has far greater than currently realized potential. There are more than 1.2 million people living within two hours of the Pembina Gorge which equates to a strong market potential and a foundational piece to tourism and outdoor recreation in northeastern North Dakota. A small working group has been developing a feasible and sustainable transition plan. During spring/summer 2016, this group developed a private/public partnership proposal which would ve included a private purchase with a long-term lease to ND Parks and Recreation Department. This proposal was declined by the State of ND. An alternate proposal is underway to establish a foundation to own and operate the property. The historically tight operating margins on this business stress the need to further develop the property either through a nonprofit or public entity to reduce or eliminate debt service and seek partnerships, donations, and grant funds to support continued development. Feasibility Analysis As part of the business planning process for the proposed foundation, a few tasks need to be completed as outlined below with an estimated total cost of $25,000. The tasks associated with the feasibility analysis include: 1. Engineering Assessment: AE2S would complete an assessment of structures, electrical and water systems and develop a capital improvements plan with cost estimates. Estimated cost: up to $15, Appraisal: The last appraisal on the property was completed in December Tinjum Appraisal of Detroit Lakes completed the 2012 appraisal. The estimated cost to complete a review and update of the appraisal and business valuation is $5, Legal Counsel: There is an existing 501c3 nonprofit corporation (Red River Community Housing Development Organization) that could be utilized to expedite the process of establishing a foundation to purchase and develop the property. Darrel Larson of Grand Forks is currently reviewing the CHDO s legal documents to determine whether it is feasible to assume this nonprofit and identify and complete next steps to this process. Estimated cost for legal counsel is $5,000. Partners in the Feasibility Analysis Proposed funders to the feasibility analysis are as follows: ND Parks and Recreation Department $5,000 committed Pembina County Job Development Authority $5,000 Cavalier County Job Development Authority $5,000 Walsh County Job Development Authority $5,000 Grand Forks Growth Fund $5,000 TOTAL $25,000 Should expenses come in lower than the estimated costs, funding partners will be notified and costs will be shared pro rata. FROST FIRE FEASIBILITY ANALYSIS PROPOSAL 9/29/16 PAGE 2
5 New Investments Awaiting a Plan The ND Parks and Recreation Department has secured and committed over $500,000 in grant funds to be invested in the Pembina Gorge and the Frost Fire property. Two projects to be constructed in 2017 include a mountain bike terrain park and a connector trail from the Frost Fire trails to the ND Parks and Recreation Department 25+ mile trail system. In 2016, the Red River Regional Council partnered with ND Parks and Recreation Department and received funding from ND Tourism Division and the Pembina and Cavalier County Job Development Authorities to purchase 26 kayaks and 8 paddle boards for lease in the Pembina River and to be shared with Icelandic State Park. The following is a list of projects with funds secured for construction in 2017 by ND Parks and Recreation Department: Scenic overlook $40,000 Downhill mountain bike trails $250,000 Frost Fire to multi-use trail $231,250 Kayak/paddleboard rentals $19,600 (purchased equipment in June 2016) Land acquisition $200,000 TOTAL $740,850 These latest efforts build off a much larger vision for the Pembina Gorge which has a regional impact. Other related projects include: 2014 Master Plan for the Pembina Gorge State Recreation Area Scenic Backway designation Rest areas and overlooks Pembina and Walsh County Historic Preservation geo-caching project initiated in 2016 with 30 sites placed 25+ miles of motorized trails constructed for ATV, OHV, and dirt bike riders as well as hikers Annual fossil dig attracting visitors from throughout the US rare, new specimen found in 2016 Annual adventure races attracting elite racers from throughout the US Birding development Rendezvous Region Tourism Council currently being reestablished to have a regional focus FROST FIRE FEASIBILITY ANALYSIS PROPOSAL 9/29/16 PAGE 3
6 Pembina Gorge State Recreation Area (SRA) existing facilities and services Tetrault Woods Main Trailhead Feature/service Multi-Use Trail System Non-Motorized Trail System Canoe/Kayak Pembina River Snowmobile Trail System Scenic Byway Description A primitive natural area with hiking trails and parking area. This area serves as a great place for hiking, wildlife viewing and birding. This area serves as the main access point to the trail network within the SRA. Development of the multi-use trail system started in 2008 and has been gaining popularity ever since. The system is roughly 26 miles in length and is open to non-motorized and motorized trail uses. This area also holds an annual adventure race event that is seemingly growing in popularity. Development of the non-motorized trail system started in The system is around 4 miles in length and was constructed to help separate some of the motorized and non-motorized uses. There is roughly a 10.5-mile river float from Vang Bridge to Riverside Park in Walhalla. Vang Bridge, Brick Mine Bridge and Riverside Park offer floating dock systems. The largest snowmobile trail system in the state resides in this area with over 400 miles. Only a small portion of that is actually in the SRA but brings snowmobilers from surrounding communities to the SRA. A rural scenic route that starts east of Icelandic State Park and ends west of Frost Fire Ski Area. At 22 miles in length with numerous scenic overlooks along the way. The route is a mix of paved and unpaved surfaces. FROST FIRE FEASIBILITY ANALYSIS PROPOSAL 9/29/16 PAGE 4
7 Next Steps Additional next steps currently under development by staff with the Red River Regional Council / Pembina County Job Development Authority and the Community Foundation of Grand Forks, East Grand Forks, and Region have focused on creation of a foundation to purchase, own, and operate the Frost Fire property in partnership with ND Parks and Recreation. Medora has built a similar model with the Theodore Roosevelt Medora Foundation. Short term goal ( ) is to execute purchase of Frost Fire (FF) in fall 2016 to avoid closure for the upcoming winter season. This goal may be met by providing a contract for deed offer to the owner with a down payment and annual or biannual installment payments while the charitable funds are raised. Complete feasibility analysis. o Hire legal counsel to review Red River CHDO legal documents and recommend steps to adopt this nonprofit corporation. o Hire AE2S to complete assessment of water and electrical systems as well as facility condition to identify additional capital investment requirements. ND Parks and Recreation Department as well as Cavalier and Pembina County JDAs could assist in funding this assessment. o Hire Tinjum Appraisal to establish current market value and business valuation. Establish a founding Board of Directors to raise funds to complete purchase and make necessary capital investments; develop short and long term strategies for the property; etc. Develop list of potential lead donors and additional donors and pursue donations. Finalize business plan financial projections. Develop a formalized partnership with ND Parks and Recreation Department regarding visitors center, mountain bike terrain park, grounds keeping, land purchase with Land Water Conservation Funds ($200,000) to assist with FF purchase, etc. Develop offer to Judith Johnson to purchase FF. Secure $500,000 in grant funds from the Community Development Block Grant Program. Develop job descriptions, identify key personnel and complete hiring. Conduct strategic planning for the property during 2016/2017 winter. Partner with the Rendezvous Region Tourism Council (to be relaunched in early 2017) to develop cohesive marketing approach and leverage partners and resources to heighten marketing impact. FROST FIRE FEASIBILITY ANALYSIS PROPOSAL 9/29/16 PAGE 5
8 FROST FIRE FEASIBILITY ANALYSIS PROPOSAL 9/29/16 PAGE 6
9 FROST FIRE FEASIBILITY ANALYSIS PROPOSAL 9/29/16 PAGE 7
10 FROST FIRE FEASIBILITY ANALYSIS PROPOSAL 9/29/16 PAGE 8
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