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12/11/2000 CITY COMMISSION SPECIAL WORKSESSION CITY OF CLEARWATER December 11, 2000 Present: Brian J. Aungst Mayor/Commissioner J. B. Johnson Vice-Mayor/Commissioner Robert Clark Commissioner Ed Hart Commissioner David Hemerick Commissioner-Elect Also present: William B. Horne II Interim City Manager Garry Brumback Assistant City Manager Bob Keller Assistant City Manager Pamela K. Akin City Attorney Cynthia E. Goudeau City Clerk Ralph Stone Planning Director Brenda Moses Board Reporter The meeting was called to order at 9:05 a.m. at City Hall to discuss Beach by Design and proposed beach redevelopment with associated parking garages. ITEM #2 - Review of Public Work Shops regarding Draft Beach by Design and Commission Direction regarding Formal Adoption The Interim City Manager requested Commission feedback on development proposals and direction regarding developer negotiations and the Beach by Design concept. Planning Director Ralph Stone said a draft of the Beach by Design document was delivered on September 5, 2000. At the subsequent Work Session and Meeting, the Commission directed staff to review the plan and provide recommendations, processes, and timeframes for public review and comment. Staff met with developers regarding the scope of proposals and consistency with the Beach by Design draft. After a series of public meetings, the draft included major components: 1) Land use; 2) Mobility; 3) Off-street parking; 4) Catalytic projects; 5) Finance; and 6) Design guidelines. Staff recommends further refinement regarding mobility, financing, and catalytic projects (public and private sector) before CDB (Community Development Board) review. ITEM #3 - Overview of Clearwater Beach Redevelopment Proposals Three major development proposals continue to be refined. Elements of each proposal would be a major catalyst to beach development. Designs, costs, and funding alternatives require further analysis. Staff wishes to continue its review and negotiate with each party until sufficient information is available to determine priorities, understand key design issues, and evaluate funding impacts. Staff feels reconfiguration of S. Gulfview Boulevard (Beach Walk) should be the next key beach project. It was require removal of beach parking, relocating the street, and constructing one or more parking garages. Staff requests direction as Beach Walk 1 msw1200 12/11/00 would affect two proposed projects. Each development proposal needs to be evaluated for short-term costs, the mid- to long-term payback of ad valorem revenues, and other revenue generating sources. Mr. Stone reviewed proposals: 1) Kimpton - both sides of Third Street between South Gulfview and Coronado. Project requires vacating portion of Third Street. Includes: a) 250- room resort hotel (proposed Marriott Hotel); b) 1,000-space parking garage with City purchasing 600 public spaces at $17,900 each; and d) 35,000 – 50,000 square-foot retail space including restaurants. Preliminary designs are for a structure approximately 150 feet high with stepped back design on beach side. Requires units from pool in Beach by Design draft; 2) Markopolus - includes Port Vue property east of Coronado and south from property at South Gulfview and Coronado to Golden Beach property. Project includes: a) 460-room resort hotel; 2) 900-space parking garage with 400 public spaces; and 3) 2,000 person convention center. Preliminary designs are for a structure approximately 150 feet high and 500 feet long with all rooms fronting the beach. Requires units from pool in Beach by Design draft; and 3) Mack - property north and south of causeway. Project includes: a) 700-space parking garage south of Third Street between Coronado and Hamden; b) 600 – 700 space parking garage at Pelican Walk; c) on both sides of East Shore - public bayfront walkway, 90,000 square-foot retail in six-story structure, 140 – 160 unit bayside hotel in five-story structure, 110 residential units in five-story structure, and 400 residential units in 15-story structure. Project would require transfer of development rights from off-site properties. Mr. Stone said none of the proposals is ready for consideration. Staff recommends approval of Beach by Design concept. ITEM #4 - Overview of Financial Considerations regarding Beach by Design Finance Director Margie Simmons said estimated costs of Beach by Design projects are significant and reviewed potential funding sources. In addition, Papaya and San Marco improvements are estimated to cost $1 million. Beach by Design proposes to fund costs with 50% from the City and 50% by special assessment. City costs are estimated at $6 - $7 million. Staff has included $5.5 million in the Penny for Pinellas budget over the next four years. If the schedule is more aggressive or additional funds are needed, adjustments to other projects will be necessary. Using other City revenues would require increasing the millage rate or reallocating General Fund operations and reducing service levels. Once FY (Fiscal Year) 1999/2000 financial statements are complete, unreserved retained earnings will be reviewed to determine if excess funds are available to allocate for this project. If the City supports a special assessment, several decisions are needed: 1) project costs to be funded by special assessments; 2) allocation of costs (assessed value, property size, etc.); 3) who would be assessed; and 4) assessment time period. The process is complicated and lengthy. The City may need to issue bonds with principal and interest paid from assessment collections. If not for public health, safety, or industrial development, bonds would require referendum approval. Beach by Design recommends the City seek federal funding for capital costs for a beach transit system. Guideway cost estimates are included in the plan but rail and vehicle 2 msw1200 12/11/00 expenses are not. Vehicles are estimated to cost $2.8 million. As it is unlikely user fess would be sufficient to fund operations, the City would have to cover operating costs. Beach by Design suggests the need for several parking garages to serve citizens, tourists and businesses. Garage costs will depend on the number of spaces, other uses, and facility quality. Parking garages are proposed for: 1) South of Pier 60; 2) Pelican Walk; 3) Rockaway Beach; and 4) Clearwater Pass area. The City is working with Parson’s Transportation Group to analyze the need and financial feasibility of building parking garages, if garages will be self-supporting, and if City financial resources will be required. Related costs include construction (annual interest/principal for bond), operations, and maintenance. The three development proposals include public parking: 1) One proposes to provide public parking at no cost/revenue to the City; 2) one proposes City-owned public/private parking facility with City paying costs and receiving revenue; and 3) one proposes the City lease parking facility from developer. Ms. Simmons said revenue increases are a result of outstanding weather and increased parking rates put into effect last year. Staff proposes additional parking rate increases that would generate approximately $350,000 annually. The Parking Fund currently pays $1 million annually for beach guards and cleaning, the Jolley Trolley, and parking system operations. If paid from another source, funds available for parking garages would increase. Using General Fund dollars would require a millage increase. The current PILOT (Payment in Lieu of Taxes) is 4.5%. The Parking Fund is the only profit-making operation that does not pay a PILOT (Harborview does not pay as it does not produce a profit). A Parking Fund Pilot would total $167,000 annually. Beach by Design recommends realignment of Gulfview and elimination of many beach parking spaces and therefore, parking system revenues. Each space in Gulfview/Pier 60 lots generates an average of $2,390 annually. Eliminating 200 to 300 spaces would reduce annual Parking Fund revenues by $478,000 to $717,000. Under current market conditions and interest rates (5.5%), the annual principal and interest payments on a $10 million bond would be approximately $770,000 over 25 years. To issue bonds, the City would need approximately annual revenues of $1.155 million above operating costs. Numerous financial issues need to be addressed before proceeding with Beach by Design. Charlie Siemon, Siemon & Larsen, said $1.8 million for Hamden improvements remain in the plan. ITEM #5 - Presentation of Proposals by Developers a) Marriott Seashell Beach Resort - Kimpton Richard Gehring, consultant, reviewed the Marriott Seashell Beach Resort proposal. The team is working on design, transportation planning, parking systems, Gulfview redevelopment, surveys, geo-technical and environmental analysis, demolition, banking, and legal issues. He was cognizant of limited City resources, was working to address cost issues, and was poised to act on Commission approval of the project. b) The Clearwater Beach Resort Hotel - Markopolus 3 msw1200 12/11/00 Harry Cline, representative, said the developer owns the land and the project does not require direct economic support from the City. He said the quality project would revitalize the beach. Melanie Cornell, of HKS Architects, and Bill Palmer, of Welbro Building Corporation, reviewed their firms and completed projects. c) Master Redevelopment Plan by David A. Mack Tim Johnson, representative, reviewed the redevelopment plan. He said after the City leases the garage for 30 years, it would be eligible to acquire title. The garage does not depend upon Gulfview Boulevard improvements. Plans are to transfer up to 60 units from East Shore development. Final numbers will be available by month-end. An economic impact study will be done. He anticipated the project will result in an annual net ad valorem tax benefit of $3 million. City eminent domain powers are not required. The project would be built on a timetable selected by the City. The developer is prepared to post a $1 million cash guarantee to ensure construction of the garages in a timely manner. He said nearly 700 residents, mostly from the beach, have submitted petitions supporting this project. He said the project will rejuvenate a portion of the beach in serious decline. He said contracts for the south beach garage expire in January 2001. It was stated that David Healey, Executive Director of the PPC (Pinellas Planning Council), indicated Beach by Design would not have a negative impact countywide. Mr. Stone said proposed developments require PPC approval. The Comprehensive Plan requires an amendment regarding pool units. Mr. Siemon said pool unit impact on density would be minimal and not impact evacuation. The plan strives to change traffic patterns to pedestrian/ non-vehicular traffic. Resorts would be required to reduce vehicular trips. Mr. Stone said the plan increases hotel units, not residential units. Staff supports the Beach by Design concept. The three projects would generate significant economic development spin-offs. It was felt that dilapidated beach sidewalks should be repaired regardless of these projects. Mr. Siemon said the City can avoid completion problems by negotiating control of property disposition during the contract process. It was felt that Mandalay upgrades should be a priority. It was suggested the City encourage transit system use with incentives. It was felt that two transit systems are not necessary. It was stated the City provides the Jolley Trolley a subsidy but has no control over its operations. The Interim City Manager said the Jolley Trolley’s fit in the transit system would be a budget priority. Staff will review the City of St. Petersburg’s “looper,” which was funded privately. Mr. Stone said it is difficult to identify a timeframe to pursue tax increment financing until detailed designs are completed. Roadwork, parking garages, and concurrency issues must be considered. Ms. Simmons said the City needs to hire a consultant to analyze projected ad valorem benefits. Mr. Siemon said the City has finite resources for parking garages and the three developers must fit their plans into City capacity. It was recommended that the City ensure it receives something in return for new infrastructure. Mr. Stone estimated a need for at least 400 parking spaces. Consensus was to agenda conceptual approval of the Beach by Design plan for December 12, 2000. Mr. Siemon assessed developer proposals, expressing concern about the Kimpton project’s mass and Markopolos project’s scale. He felt it is a quality resort project and Beach 4 msw1200 12/11/00 Walk would be in an area where it is most needed. He said the Mack project would set the character of the beach. While the boardwalk proposal is significant, he expressed concern regarding the economic ability to support it. He felt the City has sufficient financial resources to make it work. He said the project would have the catalytic effect the City wants. He said closing a portion of South Gulfview for the Markopolos project is attractive and there is a functional value to dry sand access. By allowing the Markopolos project to take advantage of the east half of Gulfview, Coronado could be widened to four lanes. If all three projects move forward, sufficient rights-of-way almost to Brightwater would allow a longer stretch of Coronado to be widened to four lanes. A Coronado parking garage would allow mitigation of parking in rights-of-way. Mr. Siemon supported all three projects. He said time is of the essence for a Commission decision due to limited time to exercise contracts and changing economic conditions. Mack Properties has requested a response by the end of January; Kimpton wants approval as soon as possible; and Markopolos requests the same consideration as the other proposals. The number of parking spaces can be negotiated. It was questioned if developers were willing to give something in exchange for pool units. Mr. Siemon said the Markopolos developer indicated he is prepared to move forward without joint participation or parking. Under the Kimpton proposal, the unit pool could be negotiated. He said the net gain of building in the yacht basin would be minimal. He said language also refers to eminent domain powers. The three contracts could be negotiated to address Commission concerns/requests. The Interim City Manager said when meetings with developers began, there were three areas of focus: 1) fair deal for City; 2) garage elements well defined; and 3) clearly identified deal breakers. Developers were to articulate if they expected any obligations from the City. Ms. Simmons said even if the City receives revenues from a 700-space parking garage on Coronado, construction debt and loss of Gulfview space revenues need to be considered. Revenue lost by removing 200 Gulfview parking spaces may not be offset by parking garage spaces as garage spaces may not always be filled. Mr. Siemon recommended phasing in garages. Mr. Stone said staff will refine the land use portion of the Beach by Design document and ensure that no other tall buildings are constructed beside the three opportunities specified. The Interim City Manager will bring forward an agenda item tomorrow requesting Commission guidance on the Beach by Design timeline, concepts for South Gulfview, and negotiations with the three developer groups. ITEM #6 - Adjourn The Worksession adjourned at 12:02 p.m. 5 msw1200 12/11/00