The Strand @ Gilbert has undergone an ownership change and may soon come under a name change as well.
Gilbert Town Council approved the change in tenant to the new operating group, ACA Arizona LLC, for the public-private partnership at its Sept. 21 meeting by a 5-1 vote with Council Member Laurin Hendrix dissenting. Council Member Aimee Yentes was absent.
A new timeline for construction and opening was part of the agreement, pushing the opening date back to April 2024.
While the name remains The Strand @ Gilbert for now, President Jeff Crane said in an email the new ownership group will be working through a process of branding
and marketing the facility and as part of that process, the facility’s name may be modified, but final decisions will be announced in coming months.
"We are back," Crane said. "Actually, we never left. Our new team is stronger than ever. The project is now under new ownership, and we are excited to make this dream a reality for our community."
The amended agreement documents with the town refer to ACA Arizona LLC and Cactus Surf Park LLC, the latter of which the town calls The Strand @ Gilbert's successor as the tenant.
The Strand @ Gilbert’s development stalled in the past year as company officials said in January they had trouble getting necessary funding in the coronavirus pandemic environment and would not meet its February deadline to start construction.
The water park project is set on a 25-acre site in Gilbert Regional Park. Crane estimated the cost of the project at $60 million-$70 million. Original construction estimates were $35 million. Under the original proposal, the park was to have a surf lagoon, a cable wake park, an aqua park water obstacle course, a floating stage, sand beach, cabanas and other amenities.
The park, which Crane described as a skills-based water sports complex, largely will remain the same in concept, but there will be design changes that are subject to public review, Crane and Gilbert officials said. Crane said he expects other amenities, which he described as fun, will be unveiled in the coming months.
Under the original agreement approved in 2019, the town will bear no costs in construction, maintenance or operations.
The company and town agreed to a 50-year lease with options for three 10-year extensions. Gilbert would be paid a lease and a percentage of gross sales from a revenue-sharing program.
Gilbert would receive a minimum annual payment of $253,191.24, excluding the revenue share, for which it anticipates receiving between $450,000 and $750,000 annually, according to projections from the town made at the time of the original agreement in 2019.
That projection is based on getting 3% of the gross revenue of between $15 million and $25 million annually.
Crane said Gilbert's Office of Economic Development estimated the 10-year revenue for the town at $6.5 million, of which $5.6 million would come from direct revenue and another $900,000 from indirect revenue. He also said estimated economic impact from the park is $317 million.
Park operators were to secure their own water source as part of the agreement.
The amended agreement with Crane's ownership group as the tenant includes those provisions, but the water credits involved were the source of Hendrix’s objections to the agreement.
Hendrix questioned if Gilbert were forced into water restrictions from the drought, who would suffer cuts first—citizens or the private business owner who had a lease agreement with the town?
Interim Water Resources Manager Lauren Hixson said once the company acquires the 10,000 acre-feet of water credits required in the agreement, the water is turned over to Gilbert and becomes part of Gilbert’s water portfolio.
She further explained that the water would be groundwater stored in aquifers and not part of the town’s Colorado River supply, which is the subject of current cuts under the seven-state drought contingency plan.
Furthermore, the impact of any cuts to end users in future years would be spread across the different kinds of users and would be a council decision at that time.
Hixson told council the expected 200 acre-feet of expected water use of the park is about the same as 400 homes or a hotel resort and less than half of a golf course.
Crane said he expects the park's water use to fall between 150 and 200 acre-feet per year and the owners were looking to reduce the amount of water needed.
“Although we are approved for 200 acre-feet per year, we are selecting specific wave generation technology and lagoon designs which will utilize less water than other technologies and designs currently available in this market sector,” Crane said.
In August 2020, council approved a contract revision with the Strand @ Gilbert that would delay the deadline to start construction from that month to Feb. 21, 2021. The deadline for opening was then set at Aug. 21, 2022.
Under the newly amended agreement with Crane's group, the water rights are to be secured by April 30, 2022. Construction is to start June 30, 2022, and be finished by Dec. 31, 2023. The deadline for the park to open is set at April 15, 2024, though Crane indicated it could come sooner.
"A few dedicated team members kept the dream alive and sacrificed much for almost two years, working to create a path forward to bring surf to the desert," he said. "These delays have been tough for our team as well as the community, but we thank our supporters who have stuck by us through the past several months. We are very excited to bring this experience to Gilbert.”