The Weekly Newspaper of El Segundo Herald Publications - El Segundo, Torrance, Manhattan Beach, Hawthorne, Lawndale, & Inglewood Community Newspapers Since 1911 - (310) 322-1830 - Vol. 104, No. 19 - May 7, 2015 Inside This Issue Certified & Licensed Professionals.....................14 Classifieds............................4 Crossword/Sudoku.............4 Film Review..........................4 Legals............................ 12,13 Obituaries.............................2 Police Reports.....................3 Real Estate.....................9-11 School Spotlight..................3 Sports.................................5,6 Weekend Forecast The Eagles softball team celebrates their 2015 El Segundo Tournament championship. It was the first time in the 30-year tournament the Eagles had won it back to back. See story and more photos, page 5. Photo by Gregg McMullin. Friday Showers 63˚/56˚ Saturday Partly Cloudy 64˚/55˚ Sunday Sunny 69˚/57˚ El Segundo Softball Team Sets ES Tournament Record City Council to Move Forward With TopGolf Partnership By Brian Simon By a 3-2 margin, the El Segundo City Council on Tuesday night opted to re-enter into negotiations to bring a TopGolf facility to town. Mayor Pro Tem Carl Jacobson, who sided against TopGolf in the past, proved to be the pivotal vote by agreeing to move forward with the project rather than launch a competitive bid process to consider other potential golf course operators. “I have not been for an RFP [request for proposal] from the beginning,” Jacobson said, adding that he still had concerns about the course layout and contract terms that would need to be ironed out in the final negotiations. While TopGolf will only operate the driving range portion of The Lakes at El Segundo, it will have to revamp about half of the existing nine-hole course (that will still be operated by the City, though TopGolf will invest $2.5 million in renovations). Council members Dave Atkinson and Marie Fellhauer also voted in favor of TopGolf on Tuesday. Since their initial proposal, TopGolf and developer CenterCal sent two unsolicited revised offers—the latest just over a week ago--to sweeten the deal. Among the highlights, the group increased the ground lease rent by $100,000 to $525,000 per year with a two percent per year escalation until year five followed by a 10 percent increase every five years thereafter. TopGolf will also provide $400,000 towards lighting the golf course, provide the City a three percent revenue share on gross receipt of beverage sales beginning in year three of operation, offer to hire up to two golf professionals full-time during the construction period to support junior programs currently at The Lakes, waive the potentially available sales tax credit on its future business license tax, and commit direct marketing dollars to the golf course. TopGolf also agreed to look to self-fund the development to eliminate a third entity middle man guarantor on the project—a key provision for Jacobson who was uncomfortable with the prior relationship between the parties involved. On Tuesday, Gene Krekorian from ProForma Advisors, LLC summarized the results of his firm’s financial analysis and comparison of The Lakes with the TopGolf proposal. The Council selected ProForma to get to the bottom of the financial numbers after earlier projections from City staff varied markedly from that of Councilmember Mike Dugan (whose own study indicated TopGolf would lose money). Looking at all factors (revenues, capital expenditures, administrative costs, insurance, etc.), Krekorian reported that the net annual cost benefit for TopGolf’s original proposal would be only marginal better than the existing course ($205,500 versus $162,800). However after sending the two revised proposals, TopGolf’s current offer now projects to yield a $604,500 annual cost benefit—a significant uptick for the City. Additionally, Krekorian listed several indirect impacts that would move those numbers even higher—including the creation of 400 jobs through TopGolf and the “multiplier effect” resulting from re-spending initial dollars injected into the economy with the potential of $40 million in regional gross product (a small percentage of which El Segundo residents and businesses would capture). Atkinson suggested that even at just four percent of this total, El Segundo could realize another $1.6 million annually. Other potential benefits noted include another $25,000 to $35,000 in transient occupancy tax revenues from local hotel stays related to TopGolf corporate business and a $400,000 annual marketing budget to promote the facility. Looking at possible project issues, Krekorian noted that the risk of default on the ground lease payment is relatively minor. However, he stressed the importance of bringing in a golf course architect to ensure that the reconfigured nine-hole course will at least maintain its current yardage and par rating. Atkinson noted that the course would not only keep its two par-four holes, but may even be able to add a third. Krekorian also pointed to the need to continue junior programs and instruction as they currently are. Fellhauer later said that she was disappointed with ProForma and didn’t think the analysis was completely unbiased because at a prior meeting Krekorian indicated that he “shared concerns” about the junior programs. “He injected his personal opinion,” Fellhauer explained. In addition to Krekorian’s presentation, Recreation and Parks Director Meredith Petit detailed the results of a community survey undertaken by The Lakes Vision Committee formed in February to identify criteria to be used in a possible RFP process. The survey generated 879 responses, with 40 percent from El Segundo, 20 percent from Manhattan Beach, 11 percent from Redondo Beach, seven percent from Torrance, six percent from each of Hermosa Beach and Los Angeles, and the rest divvied up between several other communities. The respondents weighed in on what parts of The Lakes they use the most, perceived condition of amenities, and what needs improvement. See City Council, page 14
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