Collier County Commission approves new infusion of money for sports complex as construction costs mount

Collier County commissioners have approved nearly $33 million in new funding to continue the construction of a state-of-the-art sports complex that has run over budget.

At a board meeting Dec. 8, commissioners unanimously voted in favor of a fresh infusion of money, with little discussion.

Commissioner Penny Taylor motioned to approve the funding, with a quick second coming from Andy Solis.

The money is needed to continue the second phase of construction for the new Paradise Coast Sports Complex in East Naples, sitting off Collier Boulevard near Interstate 75.

The amateur sports complex has come in millions of dollars over budget for a handful of reasons — and the county will tap reserve funds to keep the project going, avoiding the cost of getting new financing.

The work covered by the reserves will include: adding lakes, processing and spreading fill, extending City Gate Boulevard, making internal road improvements and building more parking.

The new money will also pay for the construction of five more fields and an overnight campground.

The work will set the county up to complete the second phase, but more money will be needed down the road to finish it, Nick Casalanguida, deputy county manager, told commissioners. 

He estimated those additional costs at $20 million to $22 million. That would include the money needed for more parking and utility improvements, as well as additional fields more suited for baseball and softball, but not a field house that would also serve as a hurricane shelter, which remains unfunded.

The original plans called for 19 fields for a multitude of sports from soccer and lacrosse to football and baseball. Just five of them are open, with five more now funded by reserves.

In case you missed it:Paradise Coast Sports Complex shows off new public fitness, dining areas

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Pay as you go

Other parts of phase two could be done in "tranches" on a "pay-go" basis, as more revenue becomes available for the project, including proceeds from future tourist taxes and naming rights, which are expected to come through soon, Casalanguida said.

Naming rights could generate $6 million to $8 million.

Casalanguida recommended the commission revisit how it wants to fund the remainder of the second phase in mid-2021, which would include building more fields in pods, with each grouping of three costing $4 million to $5 million to build.

County commissioners have agreed to tap three sources of available funding to continue construction: impact fee reserves and reserves set aside for future beach park and beach renourishment, or renewal, projects.

The construction budget for the first and second phases of the project initially came in at roughly $80.7 million. The price tag is now at $104.5 million.

Despite efforts to cut costs by modifying and reconfiguring the development plans, the county has faced a growing funding shortfall.

In 2017, commissioners raised the county's tourism tax — or so-called bed tax charged on stays at hotels and other short-term rentals — from 4% to 5% to help pay for the complex.

At the time, the tax hike was expected to raise an estimated $5.25 million a year, but commissioners capped the annual amount that could go toward paying off the project's bond debt at $3.75 million.

The county issued more than $65 million in bonds for the complex, but spent most of that money during the first phase of construction. 

In fiscal 2020, tourist tax collections fell by nearly 14.6% over the year, reflecting the impacts of COVID-19 on travel.

"That loss of revenue has not impacted our ability to pay the bond debt on the new Paradise Coast Sports Complex. We have sufficient funds in revenue and back up reserves to pay for that debt service," said Jack Wert, the county's tourism director, in an email. 

More:Collier County to push forward plans for sports complex east of Naples

Mounting costs

Project costs have grown for several reasons, including a 20% rise in construction pricing since its inception in 2016, a low estimate from the general contractor, a greater-than-expected amount of earthwork, a larger requirement for fill dirt and a change in scope by the county to include additional outdoor features, from an amphitheater to a workout center to a food truck pavilion.

Based on the latest budgetary changes for phase two:

• Up to $7.3 million would come from beach park reserves to advance the project. The reserves were earmarked for a parking garage that's not expected to be built for some time.
• As much as $9.9 million would come from the beach renourishment fund — and up to $6.8 million from the county's capital funds for tourism-related projects — for the continuation of the second phase.

The funds sitting in reserves for beach renourishment and beach park improvements come from a share of the county's tourist tax.

County staff recommended and commissioners agreed to pay back the beach renourishment money within 15 years, if not sooner, using future tourist taxes. If a catastrophic natural disaster should hit in the meantime, the county could tap whatever reserves are still left in the fund to restore beaches, supplementing them with general reserves if necessary.

The reserve fund for beach renourishment will still have $40.8 million in it after money is borrowed for the sports complex.

While the county may use all of the money set aside for a new beach parking garage for the stadium, Casalanguida said an alternative source of funding may be found for the garage if it "becomes a reality" anytime soon.

The new funding for the sports complex includes $9 million in impact fees for the construction of a circular road that's considered to be of "regional significance," because it will support a venue that has a local, regional, national and international draw and serve neighboring county buildings.

The county charges impact fees on new construction to help pay for new streets, water and sewer systems and other critical infrastructure needed to support growth. The fund for projects in the eastern stretches of Collier County and Marco Island would still have $4.2 million in reserves in it after money is tapped for the sports complex.

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Impact felt

Manhattan Construction is building the sports complex, which has opened in bits and pieces since July — and has already hosted a handful of large sporting events, as well as attracted local residents and visitors for recreation and entertainment daily.

From its opening through November, the venue hosted more than 9,400 athletes and nearly 58,000 guests, generating more than 3,100 room nights for area hotels, said Brian Storm, president and CEO of Sports Force Parks, which manages the complex for the county.

He estimated the economic impact to the county at $2.2 million — before this week’s high-profile FBU National Championships, which brought in dozens of youth football teams plus 70 of the most talented freshmen football players in the country, with all games played at the complex this year.

Storm raved about the sports park, describing it as the best in the country, due to the county's vision to include much more than just fields and a stadium.

"We have way beyond a sports park. We have an entertainment facility," he said.

The added amenities increased the park's costs by about $5 million, but Casalanguida said the investment will be worth it.

He described visitors' responses to the upgrades as "extremely positive," saying not only do they enhance the experiences at the park, but they will drive higher attendance and revenues over time. 

In fact, he said, county staff plans to look at how it can bring similar improvements to other county-owned parks, as a way to boost revenues and reduce operating costs, saving taxpayer dollars.

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