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09/07/2010 COMMUNITY REDEVELOPMENT AGENCY MEETING MINUTES CITY OF CLEARWATER September 7, 2010 Present: Chair/Trustee Frank Hibbard, Trustee George N. Cretekos, Trustee John Doran, Trustee Paul F. Gibson, and Trustee Bill Jonson. Also William B. Horne II - City Manager, Jill S. Silverboard - Assistant City present: Manager, Rod Irwin - Assistant City Manager, Pamela K. Akin - City Attorney, Rosemarie Call - City Clerk, and Cynthia E. Goudeau – Deputy City Clerk. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. Unapproved 1. Call to Order The meeting was called to order at 9:00 a.m. at City Hall. 2. Approval of Minutes 2.1 Approve the minutes of the August 16, 2010 CRA Meeting as submitted in written summation by the City Clerk. Trustee Bill Jonson moved to approve the minutes of the August 16, 2010 CRA Meeting as submitted in written summation by the City Clerk. The motion was duly seconded and carried unanimously. 3. CRA Items Approve a Contract For Purchase of Real Property with MNEK, Inc. to purchase 3.1 real property described as Pinellas County parcels 15-29-15-65286-000-0180, 0190 and 0191 within (PADGETT’S ESTATES, PB4, Pg 11) together with Pinellas County parcels 15-29-15-58788-000-0280, 0290,and 0310 (within RE- SUBDIVISION LOTS 11,12,13,14, and 15 of PADGETT’S ESTATES, PB 12, Pg 24) for the sum of $1,675,000, and authorize the appropriate officials to execute same, together with all documentation required to effect closing; approve the Community Redevelopment Agency 2010-9-7 1 terms and conditions of a loan in the amount of $1,900,000 from the City of Clearwater (Central Insurance Fund) to the Community Redevelopment Agency (CRA) to underwrite the aforementioned acquisition cost, as well as closing costs and site demolition costs, in the amount of $1,900,000, at an interest rate consistent with the City cash pool rate-of-return and with an amortization schedule providing interest–only payments through Fiscal Year 2012 and level debt service (principal and interest) from Fiscal Year 2013 through Fiscal Year 2018. The subject property comprises the bulk of the East Gateway block bounded by Cleveland Street on the South ; North Betty Lane on the East; Grove Street on the North; and, North Lincoln Avenue on the West. I t includes all the parcels on the block owned by MNEK, Inc., including the Economy Inn; former Royal Palm Motel; Viva Mexico restaurant; two duplexes on Grove Street and one owner-occupied single family residence on the corner of Grove Street and North Betty Lane. It does not include three single-family residences on Grove Street not under ownership of MNEK, Inc. The acquisition parcels total approximately 96,885 sq. ft., or 2.2 acres, according to Property Appraiser. This property has presented an “acquisition opportunity” for the CRA at his time as the property has recently been listed for sale and reductions in asking price have made the acquisition feasible for redevelopment purposes. The rationale for acquiring these properties is: The properties have become a major, continuing source of blight and inappropriate activity, which is materially affecting the CRA, City and East Gateway community’s efforts to stabilize and revitalize the East Gateway area. The magnitude of these problems far exceeds other properties in the East Gateway area. For example, Police Department records indicate calls for service/complaints to the Economy Inn alone during the last 12 months totaled 421---more than one call per day requiring Police attention. The properties have become a significant drain on CRA and City resources at a time when these resources are revenue–constrained and needed for other CRA and City priorities. The parcels have a long history of repeated code and police problems, even across changes in ownership, indicating an uncertain ability to resolve the problems through code enforcement or police action, without long and costly legal action with uncertain outcome. The assemblage represent a strategic, 2.2 acre redevelopment opportunity, at a critical location in the East Gateway, at a time when surrounding parcels are making significant investment investments to stabilize the immediate area. The MNEK parcels acquisition Community Redevelopment Agency 2010-9-7 2 would allow the CRA to secure these investments and provide a significant opportunity to move forward the East Gateway effort. The current “for sale” status of the parcels presents both an opportunity and a threat to the East Gateway effort. If the CRA fails to acquire the parcels at this time, the opportunity may be lost and either continuation of the current situation will be experienced, or the parcels will be sold, in their entirety or in part, presenting the possibility of continued problematic use. Time is thus of the essence if the CRA is to assure that these parcels contribute in a positive way to supporting and consolidating the private sector investment in and around the immediate area. Funding for this acquisition is recommended to be a loan to the CRA from the City Central Insurance Fund in the amount of $1.9 million dollars to cover acquisition, closing and demolition/stabilization of the parcels. The loan will be interest only for Fiscal Year 2011 and Fiscal Year 2012, due to outstanding CRA commitments, with level debt service for the next six years. If the property is sold prior to the loan being satisfied, the sale proceeds will go to pay off the loan. An exemplary debt service schedule is attached to the Agenda Item, reflecting the current Insurance Fund rate of return totaling 3.5%. The loan terms will be structured in such a way that the Central Insurance Fund is completely made “whole” from an interest standpoint in advancing the funds to the CRA. Interest payments will match the cash pool earnings rate of the Fund throughout the loan period. A CRA Project Fund 388- 94866, Economy Inn/MNEK, Inc., will be established and the loan proceeds deposited in that account. Concerns were expressed with impact troubled parcel has been on Police Department and code enforcement staffing resources. In response to a suggestion, the City Attorney said business licenses are a tax and legal actions against the business entity are lengthy. CRA Executive Director Rod Irwin said the property could be sold and the code and police problems start over again. In response to a question, Economic Development and Housing Director Geri Campos Lopez said the neighborhood has filed a petition with the State regarding the unlawful activities. The City Attorney said staff will confirm if the State has been contacted. Concerns were expressed regarding the city’s history of purchasing properties for redevelopment and timeframe associated with turning over the properties. Mr. Irwin said the CRA is negotiating the purchase of one other parcel. It is the responsibility of the CRA to acquire certain parcels in a redevelopment area to eliminate blight and add Community Redevelopment Agency 2010-9-7 3 development potential. The CRA should hold the parcel until a quality development is proposed. In response to questions, Mr. Irwin said three prospective individuals have expressed an interest in the Prospect Lake property but financing has been an issue in the current economic environment. Police Chief Anthony Holloway said the department has drafted a letter addressed to hotel/motel owners explaining the unlawful activities will be actively enforced. The City Attorney said the letter is the first step in obtaining a detailed record keeping in order to proceed with legal action . Trustee John Doran moved to Approve a Contract For Purchase of Real Property with MNEK, Inc. to purchase real property described as Pinellas County parcels 15-29-15- 65286-000-0180, 0190 and 0191 within (PADGETT’S ESTATES, PB4, Pg 11) together with Pinellas County parcels 15-29-15-58788-000-0280, 0290, and 0310 (within RE- SUBDIVISION LOTS 11,12,13,14, and 15 of PADGETT’S ESTATES, PB 12, Pg 24) for the sum of $1,675,000, and authorize the appropriate officials to execute same, together with all documentation required to effect closing; approve the terms and conditions of a loan in the amount of $1,900,000 from the City of Clearwater (Central Insurance Fund) to the Community Redevelopment Agency (CRA) to underwrite the aforementioned acquisition cost, as well as closing costs and site demolition costs, in the amount of $1,900,000, at an interest rate consistent with the City cash pool rate-of- return and with an amortization schedule providing interest–only payments through Fiscal Year 2012 and level debt service (principal and interest) from Fiscal Year 2013 through Fiscal Year 2018. The motion was duly seconded and carried unanimously. Approve an Interlocal Agreement between the CRA and the City of Clearwater to 3.2 provide CRA funding in FY 2010/2011 in the amount of $140,422.36 to underwrite the cost of additional Community Policing Services by the Clearwater Police Department in the East Gateway CRA District, pursuant to the East Gateway Five-Year Action Plan and authorize the appropriate officials to execute same. The CRA approved the East Gateway District Five –Year Action Program on May 13, 2008. The Action Program responded to public input on the issues of drug dealing, prostitution and street crime by including an action item for increased police presence and crime reduction within the East Gateway District. Community Redevelopment Agency 2010-9-7 4 An allowable funding source of this action item is the use of CRA Tax Increment Financing (TIF) funds. Florida Statues allows for the use of TIF funds for “community policing innovations” in Community Redevelopment Areas. The CRA and Clearwater Police Department have reached an agreement on a proposed scope of services and terms as delineated in the Interlocal Agreement. Included in the scope is the delineation of specific, measurable crime reduction targets by which to monitor the success of the initiative as well as providing clear language required by statute assuring that the resources are applied to the CRA/East Gateway area. Funding will be from the CRA East Gateway Project account (388-94849). Trustee George N. Cretekos moved to approve an Interlocal Agreement between the CRA and the City of Clearwater to provide CRA funding in FY 2010/2011 in the amount of $140,422.36 to underwrite the cost of additional Community Policing Services by the Clearwater Police Department in the East Gateway CRA District, pursuant to the East Gateway Five-Year Action Plan and authorize the appropriate officials to execute same. The motion was duly seconded and carried unanimously. Approve the Interlocal Agreement with the Downtown Development Board (DDB) 3.3 to provide personnel, administrative and management responsibilities during Fiscal Year 2010-2011 in the amount of $62,170 and refund the CRA tax increment fee of $162,352. Florida Statutes 163.387 requires all taxing authorities, which includes the DDB, to make an annual appropriation in an amount equal to the incremental increase in the ad valorem revenue within the CRA area. The DDB’s increment payment is $162,352 according to the Pinellas County Property Appraiser’s office. In a spirit of cooperation to further the downtown redevelopment plan, the CRA Trustees executed the first Interlocal Agreement in FY 1999-2000 to provide personnel, administrative and management responsibilities to the DDB and to refund the difference between the increment payment and the management fee. This is the eleventh fiscal year that the CRA would enter into the agreement. Pursuant to Florida Statute 163.01, the CRA and DDB can enter into this agreement in which the DDB agrees to perform certain responsibilities and functions including funding projects and programs consistent with and in furtherance of the downtown redevelopment plan. The intent of this agreement is for the DDB and the CRA to work collaboratively on projects and programs that further downtown goals and objectives. For the second year in a row, downtown retail and restaurant recruitment programs and downtown events are the focus for the CRA and the DDB collaboration. The Community Redevelopment Agency 2010-9-7 5 management of the DDB by CRA staff enables the CRA and the DDB to utilize the public dollars more efficiently. The agreement also outlines the DDB’s commitment to financially support the construction debt service, operation and maintenance of the boat slips, docks, boardwalk, promenade and related facilities proposed to be constructed on the Downtown Waterfront. The DDB has made four contributions of $50,000 since April 2007. Due to the economy, the City determined that it was not in the best interest of the City and the taxpayers to borrow funds for construction of the boat slips. Instead, the City is paying for the majority of the construction costs from City reserves. Any of the annual DDB contribution not needed for operations of the boat slips will be used to reimburse the City for the cost of construction. The intent of the DDB is to contribute up to $50,000 a year for 10 years for a total not to exceed $500,000. The DDB shall pay the CRA $62,170 for the services agreed to in the Interlocal Agreement. The DDB approved the Interlocal Agreement at their meeting on August 4, 2010. In response to a question, Economic Development and Housing Director Geri Campos Lopez said it was not mandatory the funds be returned to the Downtown Development Board. The Interlocal Agreement with the DDB is for one year. Trustee Bill Jonson moved to approve the Interlocal Agreement with the Downtown Development Board (DDB) to provide personnel, administrative and management responsibilities during Fiscal Year 2010-2011 in the amount of $62,170 and refund the CRA tax increment fee of $162,352. The motion was duly seconded and carried unanimously. Adopt final budget amendments for the Community Redevelopment Agency for 3.4 fiscal year 2009/10. There are no budget amendments proposed to the Community Redevelopment Agency operating budget at this time. CRA capital project amendments reflect a net increase of $58,762.26. Significant capital project amendments include: The establishment of two new capital projects to capture expenditures for the Main Street Clearwater Development (Tony’s Pizza) and the Rule Development (Bellini’s Casanova) projects. Both of these development agreements had been previously approved by the Board. Community Redevelopment Agency 2010-9-7 6 To transfer $230,000 from Downtown Redevelopment to the Station Square Redevelopment project code to provide for the final commitment for the reimbursement of impact fees according to the Station Square Development Agreement. To transfer $50,000 from Downtown Redevelopment to Retail Attraction/Assistance to fund downtown restaurant and retail recruitment activities per the CRA approved Retail Recruitment Strategy. All capital project amendments are outlined on the CRA Capital Improvement Project Fund Final Review worksheet. CRA Executive Director noted the entry for retail attraction should be $100,000 and the $50,000 transfer is to Mainstreet. Trustee John Doran moved to a dopt final budget amendments for the Community Redevelopment Agency for fiscal year 2009/10. The motion was duly seconded and carried unanimously. Approve the Fiscal Year 2010-2011 Community Redevelopment Agency 3.5 Proposed Budget and adopt CRA Resolution 10-01. The major highlights of the Fiscal Year 2010-2011 proposed budget are as follows: Tax Increment revenues decreased by $ 597,700 due to a 14% decrease in Assessed Value--a 12% decrease in the old Downtown CRA (Downtown) and a 19% decrease in the expanded CRA area (East Gateway). Operating expenditures are decreased by $ 43,987 or 13.5% largely due to the decrease in “pass through” funds for the DDB because of the lower assessed values. Net of the DDB “pass through” the operating expenditures are decreased by $ 9,550, which represents a 7.5% decrease. This year the General Fund-Administrative contribution from the CRA reflects the allocation of 100% of the cost of the Community Development Coordinator position in Economic Development to the CRA, compared with a 30% allocation in Fiscal Year 2009-2010. The Work Program for the position in Fiscal Year 2010-2011 is anticipated to be completely allocated to East Gateway Initiative activities, thus indicating the need for the re-allocation of cost. This allocation will be evaluated annually and adjustments made as needed based upon Work Program. Transfers Out to various projects are as designated in the CRA Six Year Plan, a copy of which is available for review. Community Redevelopment Agency 2010-9-7 7 The Proposed Fiscal Year 2010-2011 Agency budget is consistent with the Six Year Plan. Trustee George N. Cretekos moved to approve the Fiscal Year 2010-2011 Community Redevelopment Agency Proposed Budget. The motion was duly seconded and carried unanimously. CRA Resolution 10-01 was presented and read by title only. Trustee Paul Gibson moved to adopt Resolution 10-01. The motion was duly seconded and upon roll call, the vote was: “Ayes”: Chair Frank Hibbard, Trustee George N. Cretekos, Trustee John Doran, Trustee Paul Gibson, and Trustee Bill Jonson. “Nays”: None. Other Business 4. 4.1 Closing Intersection of Ft. Harrison and Cleveland Street for Blast Friday Blast Friday representative Bill Stytervant requested closure of Ft. Harrison in order to have a continuous event along Cleveland Street. The group has an opportunity to use the 400 and 500 blocks to augment their event activities. Discussion ensued with concerns expressed with impact Ft. Harrison closure will have on traffic. In response to questions, Traffic Operations Manager Paul Bertels said the cost associated with traffic control measures during event would be $500 a month. Measures would include 4 officers at 4 key points. Staff does not recommend closing Ft. Harrison on a Friday during peak afternoon hours. Fire Deputy Chief Robert Weiss said the department is hesitant to support as it creates an impediment to traffic. Trustee Bill Jonson moved to deny request to close intersection of Ft. Harrison and Cleveland Street for Blast Friday. The motion was duly seconded and carried unanimously. Community Redevelopment Agency 2010-9-7 8 5. Adjourn The meeting was adjourned at 10:13 a.m. Chair Community Redevelopment Agency Attest ??bC lam- ??? City Clerk \\111111111111/1/ '/ ME /j ??W A7 Rq,?'F''% S?fJ PATE Community Redevelopment Agency 2010-9-7 9