The Future of Parks and Recreation

You can see the September 18th board meeting where I discuss the proposal for a WASHINGTON Community Center.    Click on Sept 18 Presentation.  You can also read the FAQ sheet below which answers many questions.

 

The Washington Community Center - Frequently Asked Questions

 

  1. What is the opportunity regarding the Total Sports Complex?

Community members have voiced an interest in a community center for years. To that end, the township has entered into a purchase agreement with Total Sports for $11.5 million. The final purchase is contingent on voter approval of a millage at an election to be held November 5, 2019. The Total Sports Complex includes: a 117,700 square foot sports facility, several rental arrangements, equipment, 5 storage buildings, 1 existing home, 5 indoor volleyball courts, 24 outdoor soccer fields on 80 acres, 1 full indoor soccer field, and 4 activity spaces.  If the millage passes, Washington will begin transforming the facility into a community center with multiple sports and non-sport activities for people of all ages.  Activities to expect include baseball fields and batting cages, pickleball, basketball, walking trails, a fitness center, playscape, game room, splash pad, tennis, a senior activity room, etc. 

 

  1. How would the community center and recreation programs be funded?

Voters will be asked to approve a 20-year millage for up to 1 mil that will REPLACE the existing 0.72 millage for parks and recreation. (a $42 increase per year for a $300,000 home). General fund savings, proceeds from land sales, family membership fees and potential grants will also be utilized to transform the property from a sports facility to a community center.

 

  1. What is the impact on the Romeo/Bruce/Washington recreation arrangement?

The existing relationship would end.  Washington and Southern Romeo residents would be included in this new arrangement. Residents in the rest of Romeo, Bruce Township, and other neighboring towns are also welcome to take advantage of these amenities (that wouldn’t otherwise be available to them if not for this purchase) for a non-resident fee.  It is our intent to be more inclusive than ever.

 

  1. What would the millage cover?  Are current programs being eliminated?

We will merge three approaches to recreation under one roof.  Existing parks and recreation programs will be maintained including dance classes, exercise classes, recreation events, etc.   League play currently provided through Total Sports will be maintained (soccer, lacrosse, volleyball) and new sports will be added (baseball, basketball, pickle ball). There will also be “drop in” services such as the fitness center, senior activity area, splash pad, playscape, beach volleyball, tennis, pickleball, a game room, walking paths, batting cages, etc.).

 

  1. Why do we need a soccer facility? 

While Total Sports does have soccer fields, you are acquiring the facility to be repurposed to be much more.  Both the indoor and outdoor areas will be converted to serve residents of all ages with multiple sports and non-sport activities. It will NOT be simply a soccer facility.

 

  1. Will there be additional millage increases?

The amenities described above (other than a pool) can be funded and completed over the next several years with no other increases going forward.

 

  1. Will There Be a Pool?

No since Romeo Schools are improving theirs.  If that changes, the decision can be revisited. 

 

  1. Is the price fair or is this a bailout of a failing business?

While we understand Total’s business, their financials are not relevant to our purchase.  We are not buying their company, just the assets – the buildings and land and a couple of lucrative contracts.

 

This is a difficulty property to value due to its unique nature as a recreation type asset - there are few comparables in the area and NONE in our township.  We've seen appraisals from several years ago based on comps outside of the area which is difficult to rely on since we are limited to buying within our town’s borders. The rapidly changing nature of the area with the sewer plant and other amenities coming to fruition recently requires an understanding of current conditions, not 2 year old comps from other industries and towns. We've had a valuation based on the property being considered "industrial" but the value was discounted because the building was NOT built for industrial or planned to be used for that!  It also discounted value due to the sewer SAD debt but the comparables used are also subject to that debt so this was improper.  Because it is the only EXISTING building in our town that satisfies the criteria as a community center, a THEORETICAL valuation of buildings in OTHER towns was completely irrelevant. 

 

The complete lack of available buildings within our township that are in a suitable district, a suitable size, suitable condition and with suitable utilities means that we are faced with either buying Total or building new.  The theoretical value of imaginary buildings located in other towns is irrelevant when you are faced with those two limited choices.  WE ONLY HAVE THE TWO OPTIONS -BUY TOTAL OR BUILD NEW.  THEREFORE THE ONLY VALUE THAT MATTERED WAS THE COST OF BUYING VS THE COST OF BUILDING.  The board voted unanimously to proceed on this basis and approved the price unanimously on that basis.   Our rationale is shown below.  

 

Land in that district is valued at $50,000 per acre making the land alone worth $4 million.  There have been four recent sales in that 30/m53 sewer district that support this.  The remaining price equals $64/sf for the building which is far cheaper than building the same building today and a fraction of building a Macomb Township style building.  The ICC estimates a building of this type to cost $200 per square foot.  No one has accepted our challenge to replicate the building elsewhere for the $64/sf price we acquired it for.  In addition, we get 2 rental arrangements, 5 storage buildings, 1 home, equipment, and cancellation of a right of first refusal at no additional cost. 

 

Look at other centers.  The 90,000 square foot Macomb Center cost $22mm with a pool 15 years ago.  Inflation-adjusted cost today would be roughly double.  That does not include the land cost or development costs (roads, water, and sewer).  Their building is 30% smaller with less land.  Shelby acquired an older 25,000 sf building for a community center for $2.25 million plus $1.5 million in repairs.  Our cost per square foot is comparable to Shelby’s older facility even excluding their repair costs.  Shelby’s engineer says it would cost $250/sf to build their facility new (with no pool).  Social media critics of the township deal have complained that Total should proceed with a higher private sector offer that came in after they became bound to ours, but, if true, that proves the township made a fair deal that was less expensive than building new.  Note that in the 3 years since Total Sports bid the project out, construction costs have increased dramatically.

 

  1. Why not build new to get exactly what we want like Macomb Township did?

Buying a barely used building for $64/sf is far cheaper than building.  The ICC estimates this building as potentially costing $200/sf.  Macomb has 3 times more taxpayers than Washington and more industrial tax base.   Converting a used building gives us great but affordable, activities. 

 

  1. Is Total or their leadership or employees involved after the sale?

No decisions have been made on personnel.  We will select the best persons available to serve.

 

  1. Did we sell to Total 6 years ago for $500,000 and buy it back for $11.5 million?

In 2013, Total and Washington jointly acquired land, paying the same price per acre for our respective shares.     It was a planned three way deal.  We had sought out the property jointly and negotiated with the seller together and split the property 80 acres to them and 120 acres to us. To characterize this as if we acquired the property and foolishly sold it to them on the cheap is completely false.  They were involved in the purchase from day one and paid the same price per acre that we did. Massive changes occurred in the market and massive changes were made to the area including sewer, water, road paving, and the improved electrical grid.  Total then built a 117,700 block and steel structure with associated development (water lines, internal road, electrical, land balancing, road approach, retention, fields and irrigation, etc.).  They also built a client list.  Total did not simply sell us back the same earth that they bought.  They are selling us a greatly improved asset over the original purchase in a greatly improved market.  However, the purchase is still far less for us then our other option of building from scratch.

 

  1. Why buy a buying after giving Total tax subsidies to start up?

No tax subsidies were given to Total Sports, EVER.

 

13. Aren’t you going to make our taxes unbearable?

We have the 6th lowest millage rate in the County and still would after adding only 0.25 mils. In the end, you have to decide of the 0.25 is worth the impact to our community of having this amenity.

 

  1. Did you “look at the books” of Total before buying?

We are buying ASSETS of Total not the company or its liabilities.  You are acquiring their land and structures so you can re-purpose them to be a community center not to continue as they are today.  You bought a house, not the family in it.  You are REPURPOSING the “house” once you own it.

 

  1. Isn’t the assessed (SEV) value far lower than the purchase price?

This is common.  The SEV of ALL Washington commercial and industrial land sold in the last 2 years averaged 32% of the actual sales price.  Across northern Macomb County, the percent is just over one-third.  SEV is based on a 2-year lagging indicator which is less accurate in a town with rapid growth and newly added infrastructure.  Also, the County mandates the growth rates used in assessing which holds value down despite market and infrastructure changes.  Finally, value is impacted by Board of Review appeals based on prior point-in-time circumstances, not current conditions.  Total had previously received a reduction from the Board of Review based on first year operations being negatively impacted by construction delays.  Due to these system biases, it is TYPICAL that sales price exceeds SEV.   This is not limited to Total or Washington Township as proven by the publicly available data.

 

  1. Was there public input to the community center?

There were public master plan meetings, citizen committees, and board updates.  Future modifications will be the subject, of annual public budget meetings.  The upcoming vote is the ultimate opinion poll.

 

  1. Why was this property purchase kept secret?

The purchase of the Total facility was kept confidential per State law.  Public discussion of a land purchase would generate higher prices that YOU would have to pay and would harm Total’s customer relationships.  The deal only closes, however, if the vote goes through, leaving the options open to the public as to whether the amenity is acquired.

 

  1. Won’t it hurt local restaurants if private sector tournaments are no longer held?

We will continue league play and tournaments to help bring customers to local businesses and will be using the purchase to assist in housing new businesses as well. 

 

  1. Is this just a big barn?

This is a 117,700 square foot block and steel structure.  It is NOT a barn.  Please visit the site for yourself and watch the “What’s Up in Washington” video on WBRW for perspective.

 

  1. Why pull a private sector parcel into the public sector?

Whether we buy or build a community center, we lose private sector land to the public.  Washington will gain more taxable value than we are losing due to the impact of a new business we believe we will attract as a result of acquiring additional acreage. 

 

  1. What does this mean for senior transportation (STAR)?

This does not impact the availability of STAR transportation.

 

  1. Why is there so much misinformation regarding this deal?

This deal is opposed by Bruce politicians hoping to keep Washington bound to the current relationship with them where voting rights are 50/50 even though funding is mostly from Washington.  Also, Bruce politicians and business interests were competing with Washington for a major business that may locate in Washington if this land is acquired.  This business, which may absorb several acres of the purchase, is a major potential jobs contributor and tax base (therefore, this transaction is about far more than a community center).  Finally, there are business interests who wish to acquire Total for themselves.  Each have a vested financial interest in keeping this transaction from occurring. 

 

  1. How can I learn more?

A presentation is available at WWW.Washingtontownship.org outlining the proposal.  Three August meetigs as well as an interview with the township supervisor can be seen at WWW.WBRWTV.COM.  It is YOUR option to consider this proposal.  Be informed.  Vote on November 5th.