The Action Sports Park and other recreational facilities at Lake Cunningham have lost some of their luster in recent years, but San Jose could turn to a public-private partnership model to revitalize the regional park and make it more profitable.
Elected officials have given the city the green light to solicit bids to operate its water park (formerly known as Raging Waters) and include the Action Sports Park and other park attractions such as the marina in the package.
“I think it’s a win-win situation,” said San Jose City Councilor Bien Doan. “Not only does the city get money, the local (union) will continue to create different jobs and maybe even new positions. I think private-public cooperation is a must.”
Since reopening after COVID-19, the Action Sports Park has struggled to recover. Before the pandemic, the park had about 18,500 guests. In the last fiscal year, attendance dropped to 4,658 guests.
While San Jose traditionally subsidizes the Action Sports Park, the dismal numbers caused the city to repay only 10.5% of its $1 million in spending last year, the lowest percentage since the 2020-2021 fiscal year.
To make matters worse, the park’s bike area was damaged by last year’s winter storms. The city took its time repairing it, making park officials realize they may not have the expertise to properly maintain and operate the area.
“The investments we need to make to do more marketing, to create more partnerships and the like, given the number of visitors we’re seeing, probably exceed our ability to recoup the costs,” said Jon Cicirelli, director of Parks, Recreation and Neighborhood Services. “Even if we doubled today’s number of visitors, we still wouldn’t be profitable.”
The lake’s marina is also currently unoccupied. Lake Cunningham’s main attraction is the water park, for which the city is seeking a long-term operator.
In February, California Dreamin’ Entertainment temporarily took over operations after Palace Entertainment terminated its lease two years early, leaving the city government to look for a short-term solution to keep the park open this year.
California Dreamin’, which also operates the former Raging Waters in Sacramento, has now reopened the park under a new name: CaliBunga Water Park.
Under the agreement with the city, California Dreamin’ has invested $6 million in capital expenditures to bring the park back into operation while also leasing 6% of gross revenues to San Jose. If California Dreamin’ does not become the long-term operator of the park, it will recoup $3.45 million of its investment.
Although California Dreamin’ is contractually obligated to manage the park only through next year, its representatives and Thomas Lochtefeld, the original landlord and developer of Raging Waters in San Jose, recognized that Lake Cunningham could develop into a regional attraction.
“I really want you to know that Lake Cunningham has a great opportunity as a regional park,” Lochtefeld told the City Council in February. “And not only is it regional, but we can make it a destination for worldwide recreational opportunities for families, children and, I imagine, sporting elements.”
San Jose has had some success with private management of public assets, including San Jose Municipal Golf, LLC, which operates three of the city’s golf courses.
The 15-year lease signed last year to operate the Rancho del Pueblo, Los Lagos and San Jose Municipal golf courses saw a 3.9% increase in usage and a 6.4% increase in revenue in the first year.
The agreement released the city from all cost obligations related to operating the plazas, while San Jose Municipal was required to make capital improvements and pay rent based on sales.
City records show that San Jose received $916,129 in rent for its golf courses and an additional $400,000 for course improvements.
However, the “privatization” of public property sparked some discussion about what would happen to the park employees currently working at the Action Sports Park and what protections would be available to keep it open to the public.
“Our public resources are for the public, the entire public,” said District 10 Councilor Arjun Batra.
While the city could decide against the public-private partnership if it is not satisfied with the proposals, City Manager Jennifer Maguire assured that there would be no layoffs unless “the budget situation was absolutely devastating.”
As for concerns about public accessibility, Cicirelli said the city could specify those conditions, such as requiring its approval of any price increases, directly in its agreement.
For example, leasing the golf course required an agreement with First Tee Silicon Valley, which offers programs for youth and financially disadvantaged families. San Jose Municipal Golf, LLC also offered to establish a scholarship fund, host other events for the community, and provide access to the facilities to high school teams.
“It will be in black and white and they will have to sign it,” Cicirelli said.
Originally published:
