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04/28/1992 (2) . CITY COMMISSION SPECIAL MEETING April 28, 1992 The City Commission of tha City of Clearwater met at City Hall with the following members present: Rita Garvey Richard Fitzgerald Lee Regulski Sue Berfield Arthur X. Deegan, II Mayor/Commissioner Vice-Mayor ICommissioner Commissioner Commissioner Commissioner Also present were: Michael J. Wright Cynthia E. Goudeau CitY Manager City Clerk The meeting was called to order at 9:00 a.m. to discuss downtown issues. . The City Manager opened the meeting indicating the Commission was not here to make decisions but to discuss a long range concept for the downtown area. He stated this is an opportunity to look at what the City is doing. The proposal is conservative and does not include any external borrowing but does include internal cash management on the short term basis. He stated the proposal does not negatively impact the General Fund in that it will use capital money. He emphasized the proposal will not reduce or diminish any other projects currently listed. He indicated he is making this proposal now as there is a real estate opportunity at "rock bottom" prices. He indicated if he felt he could, he would wait a year to make this proposal. He reported over 85 companies have expressed an interest in the East End RFQ but he emphasized that even if a company were chosen today, it would take over a year to reach a concrete proposal. He stated if the City waits to act on this proposal, it will miss a window of opportunity. He reviewed his plan geographically. For Coachman Park he proposes to extend the contract currently held with Post, Buckley, Schuh and Jernigan for the Drew Street Widening Project to incorporate closing Drew Street at the boat docks to its intersection with Cleveland Street and to incorporate an S curve for Osceola to Cleveland using the parking lots along Drew Street and Osceola AVenue. The park would then be extended to the water. He recommended the Maas Brothers Task Force be allowed to finish their work but whatever their recommendations are they would fit into this plan for downtown development. . minsp428.92 1 4/28/92 . The City Manager is recommending Increasing parking facilities in downtown by buying the "Kravas property" which fronts on Cleveland Stroet, immediately east of Station Square Park. He indicated he feels the City can purchase this property for $365,000 with an additional $75,000 needed to construct the parking. He wishes to further enhance parking facilities by using eRA money to provide free parking in the Garden Avenue garage. He stated 85 spaces could be made available on the Kravas proporty which would be short term or metered. Staff is trying to obtain state approval for a curb cut on Cleveland Street for this parking lot. Regarding the East End Project, he stated there are currently 150 employees in the annex building. The RFO procedure Is proceeding with the first round of responses due by May 15th. He stated he will not request any action from the Commission until after that. He stated there will be approximately one million square feet of property for the East End project which he feels could garner the City 8 to 10 dollars per square foot. The City Manager further recommended the money obtained through the East End development be dedicated to the Library in order to rebuild the main facility. He is not making a firm suggestion as to where this should go but the main library should stay in downtown. He indicated the current facility has structural defiencies. He said one possible thought would be to take the current library building off the bluff and to construct the new library on the existing City Hall site, using the existing City Hall building for administrative offices and meeting facilities and adding on to the building for book space. He stated he would prefer the involved boards and committees come up with a final plan but that using the monies from the East End property would be the funding source. . The City Manager then stated a question that has to be answered is where to put the people in the annex. He reported he has looked at every available option and a number of existing buildings, including RTe properties in and outside downtown and five buildings in the downtown area. His recommendation is the City purchase the Sun Bank building which contains 136,000 square feet and one half of the parking garage. He stated City staff has deferred major repairs to the annex in anticipation of moving to new facilities. He stated the original air conditioning and heating units are being used at the annex and the roof is in need of repair. He anticipates these repairs would cost several hundred thousand dollars. He stated the available vacant space in the Sun Bank building will accommodate the employees in the annex and he feels he can purchase this building for $60 to $63 per square foot. He stated this would be a cash transaction and the people currently working in the annex would be relocated in the near future. The City Hall Annex would then be closed down. The City essentially would become tenants in the Sun Bank building and would do nothing more than move in. The current management company and services in the Sun Bank building would be maintained and the building would be operated as it is today. He stated the City would propose to keep the existi.ng tenants and taxes would be paid on that portion of the building which they occupy. The City Manager reported the original mortgage for this property was $16 million. An appraisal has been obtained that says it is worth $11.4 million and the tax rolls assess the property at $10.6 million. He stated he has been in contact with Maria Real Estate Company, who owns the buildil1g, and believes the City can purchase the building for under $10 million. . minsp428.92 2 4/28/92 . He stated they have talked to the company s number of times and have reviewed the leases of the current tenants. He stated it is his true belief that If the City does not act now to purchase this building, the building wilt be sold to someone else. The City Manager requested Elizabeth Deptula, Assistant City Manager, review the proposed funding mechanisms in order for this to be a cash transaction. Ms. Deptula reviewed the proposal starting with the General Fund surplus. She indicated at the end of fiscal year 1990-91, there was an undesignated balance of $9,181 ,400. She stated reducing this amount by $417,200 to be used to fund payment of extended sick leave of retired employees and maintaining the Commission policy of 10% reserve of $5,985,030, there is still an available balance in the General Fund surplus of $2,779,170. The second source of funding would be to free up $3.8 million of Penny for Pinellas Funds which have been designated for road improvement projects and use transportation impact and gas tax funds for those projects. It was emphasized there would be no delay in road improvement projects that have been scheduled. A third source of funding is the Special Development Fund in which there is $644,763 which has not been designated for programs. . The fourth source of funding is the Capital Improvement Project Budget. She stated there is approximately $2 million left in the East End acquisition project. Staff recommendation is to retain $1 million of that and to use the remaining $984,000 for this purchase. There are also monies left over in the police parking lot project, the Courtney Campbell beautification project and the Countryside Boulevard widening project, as well as money from the Dunedin Pass project. The final source of funding is the bond interest funds in which there is $227,311 for a total of $10,001,048 available for this purchase. The City Manager indicated he felt the building could be purchased for under $10 million. He reported staff has carefully analyzed the existing leases as there are some leases which have a number of years left. The City would receive revenue from those leases in the amount of $6,242,363. Maintenance of the facility waul _ cost $3,738,566. He also reported that closing down the annex would save $1,748,900 for a total cash flow from the project anticipated at $4,094,450. He stated he asked staff to make sure assets were not being stripped from the City's budget and he emphasized there will still be funds available from the sale of the HilIsborough County land. If the Sun Bank building is purchased, the utility building would be vacated and that property could be sold. Also, $1 million in Penny for Pinellas funds had been designated for the library and those funds would no longer be needed for that purpose. As welt as an additional $4 million in revenue from gas tax and impact fees from 1996 to 200q and recurring interest earnings. . minsp428.92 3 4/28/92 . He steted the Immediate results of this purchase would be to allow the relocation of 1 50 employees from the annex which would also result in an additional 250 people a day In the downtown areB. It would provide visible parking, would expedite improvements to the library and would assist In the development of the East End property. In the long term, he indicated this would consolidate four outlying sites. would provide a convenient central location for businesses in downtown and would increase downtown patronage. He reported he also researched what other road projects would be done if this purchase was not approved. He indicated virtually every road that would need improvements already has a funding source. . He reported regarding Coachman Park that all the property on the bluff. except the Chamber property, will be owned by the City and he suggested opening discussions with the Chamber according to what is decided regarding the library. He also indicated that by closing the north.south extension of Drew Street and diverting traffic to Cleveland, the capacity of Cleveland may be Improved by eliminating a turn movement at the bottom of the bluff. . He showed 8 map which indicated the proximities of the City facilities in the downtown area. He also indicated additional properties are needed to complete the East End project which he anticipates will be marketed within the next two years. He stated the road improvements needed for Clearwater are funded. A question was raised regarding what would happen to the 'employees in the current City Hall. Kathy Rice, Deputy City Manager, reported regarding the space needs study which was done in January of 1991. She indicated the proposal is to consolidate the employees from the annex, the utilities building, City Hall and the purchasing area into one building. The study anticipated a need for 121,000 square feet and the Sun Bank building is 136,000. The City Manager stated that over the next few years, City employees would systematically be moved into the Sun Bank building. It was indicated the building is slightly larger than the anticipated need however, he emphasized this building could be purchased for less than the City could build its own building. He also reported there is consideration of moving some Police Department personnel into this facility. The Deputy City Manager reported estimates have been placed at $14 million to build a new City Hall. In response to a question, the City Manager indicated it would take the next 5 years to move in the affected City employees but at the same time, there would be cash flow from the existing leases in the building. A question was raised regarding the anticipated savings if the annex is closed and whether or not those monies were already budgeted. Elizabeth Deptula, Assistant City Manager, indicated those costs are the annual operating costs of the annex building and did not include any major repairs. Major repairs had not b~en funded or in the budget. . minsp428.92 4 4/28/92 . A question was raised regarding the ability of the current lease holders in the Sun Bank building to leave the building. Jerry SternsteinJ Economic Development Director J Indicated he has reviewed the leases and unless there is a change In the environment of the buildingJ there Is no reason for the leases to be voided because of a change In ownership. The City Manager Indicated this is why he wishes to keep the current management company and services in the Sun Bank building. Discussion ensued regarding the need to address whether or not B new City Hall is desired and what alternatives were considered prior to this plan being proposed. The City Manager indicated he had looked at a variety of buildings and he factored in costs, renovations needed, location and parking and believes the best value Is the Sun Bank building. He stated other options Bre to construct B new building however, estimates to do that have been placed at $14 million. He stated there is also a possibility that a developer submitting a RFO for the East End project could propose to build a City Hall however, it is not believed it could be done for less than the purchase price of the Sun Bank building. In response to a questionJ the City Manager indicated he had asked the CityJs consulting engineer (COM) to examine the building for any defects. Bill Baker, Public Works Director, indicated he will be receiving a written report but COM has advised him the building is in excellent condition. . In response to questions about the need for a new City HallJ the City Manager indicated a consolidated City Hall had been talked about for some time and that if there is to be development on the annex property, those employees will need to be relocated. A request was made that the Commission be provided more information regarding the evaluation process in considering the alternatives. The City Manager indicated that the total proposal would cost $1 5 to $20 million and is a visionary approach. He stated his emphasis was on avoiding debt and avoiding impacting operating costs. He felt that this was done while at the same time maintaining service to the citizens, improving transportation options and the library. Discussion ensued regarding the nerd to determine whether or not there are higher priority needs for the funding sources the'.t were outlined. Some concern was expressed regarding buying the building because the \'pportunity has presented itself. Concern was expressed regarding the imnAct of a City Hall in the RFO process for the East End project. The City Manager emphasized that before he made these proposals, he requested the actuaries review the CityJs finances and the actuaries had indicated there is enough in the surplus and insurance accounts at this time. He stattld he honestly believed that the time and opportunity are correct for the purchase of the Sun Bank building. Comments were made that the plan was good and visionary but it was up to the Commission to look at all angles to make the final decision. . minsp428.92 5 4/28/92 . Statements were made that the consolidated City Hall had been talked about for a number of years and it was believed that it was needed. The City Manager requested that as ideas and questions are developed by the Commission, they forward them to him so that he can answer them as soon as possible. In response to a question. the City Manager indicated he would discuss with the Commission how they wished to obtain citizen input regarding the proposal. The Mayor opened the meeting to public comment. A question was raised regarding the space needs study and how the space needed was determined. Deputy City Manager Rice reported regarding the study and stated the City has actually lowered the figures as there are less employees in the areas that we want to consolidate than there were in January of 1991. A request was made that the Commission reconsider the closing of Drew Street and it was indicated this decision has not been made. One citizen spoke commending staff on their presentation but questioned whether or not the current City Hall building had been analyzed to determine that it could hold books. The City Manager indicated that it was not his proposal that the current City Hall house the books but rather there be an addition to the current City Hall for that purpose. The current City Hall would be used for administrative offices and meeting rooms. . Also in response to a question, the City Manager indicated his proposal regarding using City Hall for the library was a starting point and that the appropriate staff and boards would be requested to investigate and make recommendations. One citizen spoke in favor of the plan stating that although moving employees to the Sun Bank building would remove employees from the East End project, the East End project would generate traffic of its own and this would result in an anchor on both ends of the downtown area. A question was raised regarding whether or not the Chamber of Commerce would be willing to move into the new City Hall and the City Manager indicated he had discussed this with them and they prefer to be self-contained. In response to a question, Ms. Rice indicated 281 employees would be housed in the 120,000 square feet proposed by the space needs study. ' A question was raised regardir.g how the City would obtain the Chamber of Commerce site and the City Manager indicated this would be negotiated if the Commission so directed. . Attest: The meeting adjourned at 10:29 a.m. minsp428.92 6 4/28/92