Council hears Marina ownership change, lease assignment and breakwater concerns

Community and Economic Development Director Michelle Grunewell briefed the council on a pending change in majority ownership of the Mile High Marina and three related applications the council will consider in February: assignment of the current city lease, consent to a leasehold mortgage/deed of trust, and an estoppel certificate.

Grunewell said marina owners Sam and Kelly Worley have entered an agreement with Resilient Capital Partners, LLC, which would become the majority interest owner while Sam and Kelly would remain minority owners and continue to operate the marina. "This transaction is a way to provide the funding necessary to complete both the breakwater and the expansion itself," Grunewell said, and staff will return in February with the documents for council review and action.

Council members queried specific lease provisions that may merit reconsideration at renewal. One council member noted the current annual gross rent formula is 4 percent and asked whether the city's increased cost to serve the expanded facility might warrant a higher percentage at renewal. City attorney and staff replied that the appropriate time to negotiate changes to rent or other terms is at lease renewal, not at the assignment stage, and that the 4 percent figure represented an increase from a prior 3 percent term.

Council members also focussed on language about replacing the existing breakwater with "a breakwater of similar size and dimension." Staff explained that the 2017 lease language distinguished simple replacement of an existing breakwater (which would not trigger new approvals) from an expansion, which required council approval via conditional use permit (CUP). Because the marina owner applied for and received a CUP for the expansion, the expansion is subject to the CUP conditions. "If they were gonna do any kind of an expansion, they had to come forward and get approval, which is what they did last year," staff said.

Members raised concerns about mitigation for impacts to Legacy Park and public access; staff said those issues and any new data on lake impacts would be appropriate topics during lease renewal negotiations. Staff reiterated that the assignment and mortgage consent being considered initially are intended to finalize the investor participation and that renewal and renegotiation would be a later, separate step.

No formal council action was taken on the marina item at this meeting; staff said the relevant documents would be brought back to council in February for formal review and vote.