Excerpts of Blue Water Discussion
The FDRPC Board discussed the Grassdale sale and the Blue Water agreement at 16 meetings from March 13, 2019 to October 13, 2021. The excerpts below are quoted from the meeting minutes. Links are provided for the complete minutes of these meetings.
D. Grass Dale Campground – The developers who have expressed interest in developing a campground at Grass Dale will make a presentation to the board at the next meeting. Ms. Lee asked if there is anything that prohibits the sale of the land? Mr. Randol stated he’s not aware of anything and Mr. Walton stated he would research the matter. Asked what portion of Grass Dale will be developed, Mr. Randol stated approximately sixty-five acres out of the one hundred thirty-three acres. The developer also intends to restore wetlands.
D. Grass Dale Campground – Mr. Jim Bauerle and Mr. Mike Nally of Blue Water Development Corporation provided a PowerPoint presentation (handout included) for their proposed Campground Resort. The presentation included an overview of their company, the RV hospitality industry, RV park demographics and the park’s potential economic impact to the local area. Discussion and an exchange of questions and answers followed. It was decided that within the next few weeks Board members would visit Blue Water’s Massey’s Landing campground in Millsboro.
C. RV Campground – Mr. Randol stated that a few of the Board members took a tour of Massey’s Landing Campground in Millsboro, Delaware and a general discussion followed. Mr. Scoglietti and Mr. Diliplane both commented that the trip was worthwhile, and they had an overall favorable impression of the operation. The park was professionally run and well laid-out. Mr. Garvin questioned whether the Massey’s Landing model translates to the Fort DuPont site as the fort site does not have a beach. Ms. Lee commented that she would like to see the business plan for the proposed campground and also how the wetlands would be protected. Ms. Lee noted the benefit to the local economy and state parks. Mr. Randol stated that his impressions echoed those of Board members and that he believes the campground will be the economic engine that moves Fort DuPont forward. Mr. Parets stressed the importance of the campground’s positive impact on the local economy. He also expressed concern about the volume of traffic, size of RVs and making sure that the future round-a-bout is able to handle the traffic. Mr. Randol stated Blue Water is currently working on a draft agreement which he expects to receive by the end of the week and present at the next Board meeting.
B. Grass Dale Campground Site Plan – Mr. Nally, Mr. Bauerly and Mr. Huddleston representing Bluewater Development, presented an overview of the current site plan for the proposed RV Resort Park (handout). Mr. Nally commented as follows: The number of total sites on the presented preliminary plan is 429, reduced from 511 on the concept plan previously presented to the Board. Of those 429 sites, 358 are RV/cottage sites, interchangeable based on market demands. Pull-through lots are popular and are a premium in the RV community. The plan is forthree separate communities with a connector road by. The park count will remain around 420 sites with designated primitive tent sites. Amenity will include a community center at the current Grass Dale location and will include planned recreation, multiple pools and open space. Observation platforms and a kayak launch shown on the plan are tentative based on the permitting process. Engineering design is focused on avoiding wetlands areas. Bluewater is in the preliminary engineering stage and has a PLUS meeting scheduled for July 24th. Bluewater believes the preliminary plan is a good one, is sensitive to wetlands, has a good density, and a quality mix that maximizes the site without overburdening it. Mr. Huddleston reviewed each community area within the park and further explained the different types of sites within each of those communities. The park mix includes 20 cottages, 50 pull-throughs and 358 RV/cottage flexible sites. Primitive areas are the last sites to be included after engineering is complete. There is no year-round living on the site. The first three years of marketing will determine the final overall mix for the entire resort. Bluewater will present their plan to Delaware City’s Planning Commission and the Commission will determine if the plan conforms to its Conditional Use Zoning. Construction is expected to take six to seven months once planning and approvals are in place.
V. Legal
Ms. Thompson commented as follows:
A. Blue Water Development Agreement – The confidential memorandum circulated to the Board regarding Blue Water’s agreement is a summary of what has happened between last month’s Board meeting and today. Based on that summary, there is no update to report today; a report is expected at the October Board meeting. If there are questions regarding the memorandum, the Board will need to go into Executive Session to address specific details. The Corporation has a revised agreement, with comments, from Blue Water, which was received on Saturday, September 7. There is no final agreement to present today, however, Blue Water continues to move forward with site design, planning and approvals with the anticipation of closing an agreement with Fort DuPont. The plan calls for 419 sites.
V. Legal Mr. Walton commented as follows: A. Blue Water Development Agreement – Blue Water Development’s revised draft was received with comments the week of October 4th. Mr. Walton worked with BWD’s legal counsel on several issues and Mr. Walton expects either a final draft or complete agreement will be presented to the Board at the November meeting. Mr. Randol commented that BWD continues to invest in the project and continues with their due diligence.
V. Legal Blue Water Development Agreement – Mr. Short noted that discussion of the BWD Agreement would be conducted in Executive Session.
VI. Adjourn to Executive Session A motion was made to enter Executive Session by Mr. Diliplane, seconded by Ms. Scott. Motion carried.
VII. Return to Public Session A motion to return to Public Session was made by Mr. Diliplane, seconded by Mr. Baylor. Motion Carried. A motion was made to have counsel incorporate points made by the Board in Executive Session into the agreement with BWD. Motion was made by Ms. Fedele, seconded by Mr. Diliplane. Motion carried.
III. Adjourn to Executive Session Mr. Short noted the meeting would have to go into Executive Session early due to a conflict in Mr. Walton’s schedule. A motion to enter Executive Session was made by Mr. Baylor, seconded by Ms. Scott. Motion carried.
IV. Adjourn to Public Session A motion was made to return to public session by Mr. Parets, seconded by Mr. Diliplane. Motion carried.
Mr. Walton outlined the five conditions relating to the Blue Water Development draft agreement as discussed in Executive Session. Those conditions are as follows:
1. Financials & Tax Return from Todd Burbage to be submitted to the Finance Committee for approval during the Approval Period and the necessity for ensuring that the Guarantor remains financially able to back the Note.
2. Clarification of Design Guidelines during the Approval Period to address the concern/objection to the Kampgrounds of America reference.
3. Completion of the Exhibits as referenced in the Agreement.
4. Clarification that the improvements to N. Reedy Point Road will be per DelDOT specifications.
5. Corporation’s right to extend would be changed from 90 days to 180 days. Mr. Baylor made a motion to conditionally approve the draft agreement subject to the five points raised during Executive Session, as just stated by Mr. Walton. Motion was seconded by Mr. Diliplane. Motion carried.
IV. Legal
B. Declaration Revision – Ms. Thompson stated she is currently working on revising the current Declaration to address the addition of the campground, and her goal is to have a revision for the March meeting for the Board’s review.
C. Campground – The project continues to move forward; Blue Water Development is working through the approval process with various governing agencies and will go before Delaware City’s Planning Committee on the first Monday in March (March 2nd).
B. BWD Extension Agreement.
Mr. Walton reviewed some of the changes made in the Blue Water extension agreement, including Blue Water exercising their option to extend their due diligence period 180 days due to COVID-19. Other changes to the agreement included extending the community amenities deadline and what infrastructure the Corporation will be responsible for installing. A motion to extend BWD’s due diligence period was made by Mr. Diliplane, seconded by Ms. Scott. A roll call vote was taken, motion carried unanimously.
E. Recusal Report – With respect to the Blue Water Development agreement, Mr. Walton will step out of his role as counsel for this matter. Delaware City has retained Bill Rotunda and FDRPC has retained Richard Forsten as respective counsel.
B. Amendment to BWD Agreement. Mr. Forsten stated this item will be discussed in executive session; Mr. Walton will recuse himself from the discussion.
X. Adjourn to Executive Session -A motion was made to adjourn to Executive Session by Mr. Episcopo, seconded by Ms. Scott, and approved by the Board. The Board moved into executive session to discuss Item IIB on the agenda, Amendment to the BWD Agreement.
XI. Return to Public Session- Upon returning to Public Session, a motion was made by Ms. Stewart to amend the Bluewater Development Agreement with language that would indemnify the title company against legal fees with a cap not to exceed $100,000. The motion was seconded by Mr. Parets. A roll call vote was taken, motion carried with Ms. Scott abstaining.
A. Bluewater Agreement**. Mr. Forsten gave an update on the Bluewater Agreement stating they are anxious to close, but that recent issues came up regarding environmental reports that need to be worked out with the lender prior to closing and caused a delay. Bluewater is asking for an amendment to the agreement, which include a) closing date of 09/30/2021 or earlier; b). relocation dates for DNREC extended to 3/1/22; c) extension of the water and sewer lines to be completed by 05/01/2022; and d) Bluewater would take responsibility for construction of N. Reedy and Polktown Road and credit the $1.4 million charge against the $3.5 million note. Questions: Mr. Baylor asked when the Polktown road needs to be built by as he’s concerned how it will impact the Polktown residents. Mr. Randol stated Fort DuPont is looking to start this fall prior to the round-a-bout which is scheduled for February through May of 2022. Mr. Smith asked for details about the environmental concern. Mr. Forsten stated they will not be able to water from the site unless the water is treated because there are traces of mercury and nickel in the ground water. He also stated that Bluewater is fine with not using shallow groundwater wells being that the site is already served by Artesian. The additional environmental testing was for a chemical compound called PSFA, which is typically tested for, but was not required by DNREC due to the low risk. Ms. Stewart asked for further clarification of the change in the agreement regarding the $1.4 million reduction on the note for the roads and round-a-bout. Mr. Randol explained that Fort DuPont is obligated under the agreement to building N. Reedy and Polktown Road, but that the cost was capped at $1 million. Bluewater has agreed to do the work and credit the $1 million plus interest and construction management expense for a total of $1.4 million against the outstanding note of $3.5 million. The balance of $2.1 million is payable in 4 years from closing. The round-a-bout remains the responsibility of FDRPC. Ms. Stewart asked regarding the relocation of the DNREC offices what will happen if there is no space at Fort DuPont; are we locked in to Fort DuPont and how many employees do they have. Mr. Randol stated space within Fort DuPont has been identified and construction plans are underway. The buildings in a maintenance shop, gunpowder magazine, archive and park offices for approximately full-time and seasonal employees. Mr. Smith asked if this would replace the previous amendment. Mr. Forsten stated this will be a further amendment. Mr. Short asked if Fort DuPont is obligated to provide choices at the Fort. Mr. Randol explained that the lease states Fort DuPont has the right to relocate with DNREC’s approval, but it does not specify where. A motion to authorize the Executive Director to sign the second amendment to the Bluewater Agreement was made by Mr. Dangello, seconded by Ms. Scott. Motion carried.
D. Corporation Counsel***. Mr. Short stated that after years of service, Max Walton with Connolly Gallagher has resigned. A resignation letter was provided. The corporation will seek to identify new council, but not yet sure of the process. An RFI or RFP will be considered. Questions: Mr. Smith asked if this resignation is from Connolly Gallagher as a whole? Mr. Short stated that collectively, no. Mr. Baylor stated he believes there could be a conflict with the firm if FDRPC were to keep Connolly Gallagher and that the city might have concerns. Mr. Baylor also stated that he is in a precarious position with being both City Manager as well as a board member and that his decisions must first consider what is best for Delaware City. If going forward he is excluded from an email due to potential conflict, he asked that other board members understand why and to please not copy him. If there is a question as to his involvement on an issue to address the question to the Executive Director. Mr. Short stated he agrees with what was said and that we should all be cognizant of Mr. Baylor’s position.
Mr. Forsten gave the following updates on the Blue Water contract:
• The Blue Water contract was signed years ago, it’s the 2nd amendment signing that is pending which will be signed today.
• The testing previously discussed has been completed and the results are being reviewed.
• Blue water is anxious to close, and it’ll possibly be scheduled for the end of the month.
• By the October meeting the closing should be done.
VI. Legal
Mr. Forsten stated that the corporation is inching closer to closing the Blue Water deal but it has not officially closed yet.