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Staff says racket‑facility pro forma understates long‑term capital costs; commission asks staff to study reallocating $5M
Summary
A consultant pro forma for a proposed regional racket facility shows positive near‑term EBITDA but does not include debt service or depreciation; commissioners expressed concern capital replacement and debt would require taxpayer subsidy and asked staff to study reallocating funds earmarked for the project.
Brentwood commissioners heard staff and consultants review a pro forma for a proposed racket (pickleball/tennis) facility and pressed for clearer accounting of long-term capital and replacement costs before committing further funds.
City staff and the Sports Facilities Advisory (SFA) consultant presented a model that showed positive operating cash flow (EBITDA) under certain assumptions, but commissioners and staff emphasized that EBITDA excludes depreciation, debt service and other capital costs that are essential to cover full life‑cycle expenses. Staff said that, under the pro forma assumptions, the facility might not provide funds to address major renewal and replacement needs until roughly years 8–12 and that unanticipated capital repairs could require occasional general‑fund subsidies.
The consultant’s materials presented a capital range for similar facilities and staff highlighted a $16.9 million to $20.4 million range in recent estimates; commissioners also noted a prior $5 million allocation in the city’s capital plan that had been set aside for a parks headquarters or related uses. Staff identified start‑up and pre‑opening expenses (the packet described a year‑before soft cost total of about $1,115,000 and other initial opening costs) that would be required regardless of operational model.
Parks Director Dave Unner and staff discussed operational models (city‑run enterprise fund versus contracted operator). Staff described tradeoffs: a privately managed facility may shift some start‑up risk but city taxpayers typically underwrite long‑term capital replacement whether the facility is city‑run or contracted. Commissioners asked about likely annual operating subsidies and recurring software and maintenance expenses; staff said many vendor software and maintenance fees are recurring costs.
After discussion, commissioners asked staff to study options for reallocating funds earmarked for the project and to present alternatives within the capital improvement planning process. That work will examine: (1) whether to continue planning for a regional tournament model versus a local/parks model; (2) long‑term funding for renewal and replacement; and (3) alternative uses of the $5 million currently shown in capital plans.
