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03/10/1989 COMMUNITY REDEVELOPMENT AGENCY MEETING March 10, l989 The Community Redevelopment Agency (CRA) of the City of Clearwater met at City Hall, March 10, 1989, at 2:01 P.M., with the following members present: Rita Garvey Chairman Lee Regulski Member Don Winner Member William Nunamaker Member Tyler Grady Ex Officio member Tommy Thompson Ex Officio member Absent: James Berfield Member Also present were: Ron H Rabun Executive Director M. A. Galbraith, Jr. City Attorney Cynthia E. Goudeau Secretary In order to provide continuity for research, the items will be listed in agenda order although not necessarily discussed in that order. The Chairman of the Community Redevelopment Agency (CRA) called the meeting to order and the following items were discussed: Approval of the Minutes I. and II. Minutes of 12/15/89 and 2/10/89 Member Nunamaker moved to approve the minutes as submitted. The motion was duly seconded by Member Winner, and carried unanimously. Old Business I. Sale of Bilgore Properties for Residential Development to H & G Structures In a telephone conversation of 2/14/89, John Gallant conveyed his last bid for the purchase of the Bilgore Property. The offer is for a total payment of $400,000 with $50,000 down at closing and $350,000 to be paid on a pro rata square foot basis to the Community Redevelopment Agency as the individual units are sold and all funds to be paid to the CRA within three (3) years. This offer is near the top of the range a developer could be expected to pay for land on which to build condominium units priced in the $90,000- $100,000 range. The CRA paid $690,000 for the land resulting in a difference of $290,000. The CRA could be expected to receive approximately $206,000 in increased tax revenue over a five (5) year period, and the City of Clearwater General Fund would receive approximately $10,000 over the same five year period. These calculations are based on fifty (50) units with an average sale price of $95,000 and one-fourth (1/4) of the units claiming homestead exemption. The combined CRA and General Fund 5 year increased tax revenues are $216,000 and when coupled with the sale price of $400,000, total maximum return to the City would be $616,000, or $74,000 less than the purchase price. It should be noted the site was originally purchased as commercial property and there is an inherent risk in accepting payment for the real estate on a unit by unit basis. A question was raised regarding accepting the proposal, and a year from now the project collapsing. The City Attorney stated this eventuality would need to be addressed in the contract. Chuck Arn, representing H & G Structures, stated construction would not begin unless 50% of the units were pre-sold. Discussion ensued regarding whether or not the proposal should be accepted, and concerns were expressed regarding how to assure the project is successful. Some concern was expressed regarding this being a residential development, and it was stated that while this may not be an ideal site for residential development, it would provide additional people in downtown. A question was raised regarding whether or not commercial or retail facilities could be provided on the first floor, and Mr. Arn stated the number of units will have an effect on the price range and that they are now getting out of the proposed range. Member Winner moved to continue negotiations with H & G Structures for thirty (30) days with a progress report to be provided. The motion was duly seconded and carried unanimously. II. Update on the City Hall Annex Property The City of Clearwater has been approached by at least one developer who is interested in acquiring the entire 14 acre City Hall Annex site as a retail shopping center. Specifics were not finalized, but a purchase price of between $4.50 and $5.50 a square foot was suggested, with the City removing the existing building. In round numbers, the sale price would be between $2.7 million and $3.3 million less $50,000-$100,000 for demolition. Staff is recommending that the City reject the tentative offer, because the City does not control all the property at this time. If the City were to sell the annex, it would have to relocate it's personnel to rental or hastily purchased property. The City is not yet prepared to make a decision regarding a new City hall or City Annex building. The suggested purchase price may be too low according to informal discussions with other non-involved developers and realtors. Before any sale of the property is made, there should be an extensive marketing effort to make sure the City receives an optimum price. Over the next eighteen (18) to twenty-four (24) months the City should begin a systematic approach to develop the new City Hall building. Once the Willingham study is complete, the staff can begin developing the options for consideration by the City Commission. At the same time, and on a parallel track, staff can develop a methodology to pay for the building and to identify any expenses that might be eliminated through the discontinuance of existing leases, consolidation of employee functions and other related expenditures. Discussion ensued regarding the need to prepare alternatives for a new City Hall facility and that the $5.00 per square foot was too low a price to accept. Staff had recommended establishing an "savings account" to go toward the construction fund, however, CRA members did not feel this was appropriate. No action was taken. III. Update on Proposed Purchase of Dr. Brown's Property, City Annex Site After a series of negotiations with Dr. Paul Brown, the City Staff had reached an impasse. Dr. Brown is firmly convinced the property is worth at least $800,000 and the City believes it can offer no more than $400,000 cash, or the CETA Property as an equal exchange. The CETA property, which the CRA purchased for $450,000 several years ago, is slightly more than an acre and is located across Cleveland Street from Dr. Brown's property. Dr. Brown's site is slightly larger than one-tenth (1/10) of an acre and contains a building with 6,250 sq. feet. The City's MIA appraisal for the property is $270,000. The acquisition of the property would enhance the City's Annex site for marketing purposes, however, it is not critical in terms of hindering potential development. Member Winner moved to discontinue negotiations with Dr. Brown. The motion was duly seconded, and carried unanimously. IV. Proposed amendment to the Downtown Sidewalk Project In May of 1988 the City Commission awarded the Downtown Streetwalk Improvement Project to L. G. Couch Construction Co. Due to the fact that Couch had not participated in a project of this size before, they could not obtain a performance bond for the project amount. The City authored an agreement protecting it's interest and accommodating the circumstance. It has now been found that the contractor cannot provide even the reduced bond as described in the agreement. The proposal that staff will be making to the City Commission is to waive the bond for this project knowing that the City's interest will be fully covered by management of the amount of work that the contractor must complete before being allowed to begin further disruptions and by increasing the payment retainage amount referred to in the agreement from 5% to 10%. A question was raised regarding whether or not the award of the contract could be legally challenged based on this amendment. It was staff's opinion that this was not a probability. Member Winner moved to recommend that the City Commission approve the amendment to the contract. The motion was duly seconded and carried unanimously. Verbal Reports I. First Florida Bank Negotiations It was reported that the City staff is still meeting with various groups regarding this proposal. III. Update on Advertising Agency Selection Process for Downtown Marketing Study It was reported that requests for proposals have gone out and that it is hoped they will be received in late April. Other Agency Action Member Winner requested the status regarding the Economic Development Director. The City Manager reported that they have re-advertised for the position and they are receiving new resumes. Member Winner requested a break-out regarding the Parking Garage revenues and costs. The meeting adjourned at 3:11 P.M. Mayor/Commissioner Attest: