By A.C. Hall
At a special meeting on Tuesday night the White Settlement City Council voted unanimously to approve the construction agreement and the ground lease and operating agreement with Hawaiian Falls for a water and adventure park to be built in White Settlement. The park will be constructed on the roughly 14 acres of city owned land behind Veterans Park.
Council also unanimously adopted a resolution directing publication of notice of intention to issue certificates of obligation for the project. This is the first step in the city issuing a $12.5 million certificate of obligation that will be used for the construction of the Hawaiian Falls water and adventure park. Hawaiian Falls will contribute $1.5 million towards the construction, and will also be required to make the debt payment on the City’s $12.5 million certificate of obligation.
Unlike a bond, certificates of obligation do not require citizen approval to be issued. The council is tentatively scheduled to finalize the issuance of the $12.5 million at a meeting on Sept. 24.
The final agreements between the City and Hawaiian Falls show no major changes from early agreement parameters that were reported during the negotiations. Getting construction underway as soon as possible remains a priority as Hawaiian Falls has set May 24, 2014 as their opening day.
“Let’s start turning dirt just as soon as we can,” Mayor Jerry Burns said.
The length of the lease agreement is set at forty years. After that, Hawaiian Falls has four additional options they can exercise. Each of these options is for an extra five years, setting the maximum life of the current agreement at sixty years. One hundred percent of the sales tax the city earns from Hawaiian Falls will be put into an escrow account. This account will be used to fund the City’s fifty percent share for capital improvements and structural replacements for Hawaiian Falls. These improvements and replacements will be submitted annually to the city and if both sides agree to move forward with them then the city’s half will be paid out of the sales tax escrow account.
If the city does not approve the request, Hawaiian Falls may ask to be allowed to move forward with the request anyways with their company paying one hundred percent of the cost.
In addition to this yearly improvement and replacement plan, Hawaiian Falls also commits to expend no less than $500,000 during the first five years of the park on capital improvements and structural replacements. The city is not required to participate in this.
For the length of the $12.5 million certificate of obligation, the lease payment paid annually by Hawaiian Falls will be equal to the annual debt service payment the city has outstanding for that certificate of obligation. Once the certificate of obligation is paid off, Hawaiian Falls’ annual lease payment will become five percent of their gross revenues for the year.
While the certificate of obligation debt is still outstanding, Hawaiian Falls will also receive a credit to use towards the overall certificate balance. This credit will be equal to the amount of Hotel Occupancy Tax the city collects from the first five hotels constructed within the city after the first day Hawaiian Falls is open to the public. The agreement specifies that this will include any hotel, motel, inn, lodge or similar facility with more than forty rooms for lodging.
The agreement states that the hotel currently under construction at 7801 Scott Street and the hotel soon to be constructed at 8110 West Freeway will be exceptions to the Hotel Occupancy Tax agreement with Hawaiian Falls.
Also addressed in the agreement is discounted admissions. White Settlement residents, current White Settlement Independent School District students and employees of the City of White Settlement will receive twenty five percent off tickets and season passes. This discount can be obtained by showing proof of residence in the city, a current student WSISD photo ID, or proof of employment by the City.
White Settlement will have an annual obligation to help advertise, promote and otherwise market Hawaiian Falls. The city is required to allocate $35,000 each year to this purpose and will work with Hawaiian Falls on marketing strategies and campaigns.
At the close of the meeting, Mayor Burns thanked everyone in the city who has helped bring this project to fruition.