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09/16/1993 COMMUNITY REDEVELOPMENT AGENCY September 16, 1993 The City Commission, meeting as the Community Redevelopment Agency, met at City Hall, Thursday, September 16, 1993 at 4:30 P.M., with the following members present: Arthur X. Deegan, II Chairperson Rita Garvey Vice-Chairperson Richard Fitzgerald Trustee Sue Berfield Trustee Fred Thomas Trustee Lillian Trickel Ex-officio Trustee Absent: Phil Henderson Ex-officio Trustee Also Present were: Michael J. Wright Executive Director Milton A. Galbraith, Jr. Attorney Cynthia E. Goudeau Secretary ITEM II. - Minutes: Special meetings of July 8 and August 9, 1993 and regular meetings of August 16, 30 and September 2, 1993. Chairperson Deegan wished to clarify in the August 9 minutes on page 2, paragraph 9, that it was from an earlier discussion, not from a latest discussion regarding the policy for the five year return on investment. In the August 16 minutes, Trustee Fitzgerald questioned the Executive Director statement on page 12 regarding having spoken to the Mayor of Fort Lauderdale regarding Mr. Holzman. It was indicated this was the statement made by the Executive Director. The Executive Director clarified the statement stating he should have said he spoke to the Mayor of Fort Lauderdale regarding Ms. Magee, not Mr. Holzman. Trustee Berfield moved to approve the minutes of July 8, August 16, August 30 and September 2 as submitted and of August 9 as amended. The motion was duly seconded and carried unanimously. ITEM III. - Unfinished Business a) Sale of CRA property in conjunction with Sun Bank (Atrium) Building The CRA has met several times to discuss the possibility of selling CRA owned property in conjunction with the City selling the Sun Bank building (Atrium) to Walter T. Krumm Ventures Incorporated. Al Justice, representing Mr. Krumm, stated the objective today is to ask the CRA to approve those ingredients in the Memo of Understanding and to direct the City Attorney to include those provisions in a contract for sale in order to proceed to an early closing date. A new draft of the Memorandum of Understanding has been received. Paragraph 1. Sun Bank/Atrium Building A statement has been added in the second line after the words parking garage, "(including a pro rata 1/2 interest in land)." Chairperson Deegan indicated he felt the appraisal of the garage was based on the bottom two floors having the land valued with them. There was some confusion as to what this statement means. Walter Mackey, Attorney and associate to Mr. Krumm, stated during the last discussion it was stated the price of the garage included half the value of the land. It was felt when an appraisal of the garage was done it would include the whole parcel. The Executive Director indicated that, legally, the CRA owns the land and the first two floors. Chairperson Deegan questioned whether or not the value of the building's top two floors was absent land value. The Executive Director indicated that use restrictions tie the third and fourth floor to the land. Emil Pratesi, Attorney representing the City, indicated this was not an issue at this time, and how to value the two floors would be determined when the purchaser's exercise the option on the garage. It was indicated this should be deleted for now. Chairperson Deegan again questioned the provision in the draft regarding who would pay closing costs. Mr. Mackey indicated if all other issues can be worked out, this will not be a problem. Also added in paragraph 1 is the phrase "construct on top of or" in regard to covering the fourth floor. It was indicated this could be allowed. Another phrase which had been added to paragraph 1 is "which will expire when and if the Buyer purchases the garage." This references the joint use agreement regarding maintenance and operation of the garage. It was indicated it should be clarified that this is when they purchase the balance of the garage, as they are already purchasing the top two floors. Paragraph 2. Parking The potential purchaser has changed the title of this paragraph to "parking" from "Bilgore Tract." Chairperson Deegan expressed concerns regarding the phrase "at any time" being included in this paragraph saying the time period is to be limited to five years. Mr. Mackey indicated they have changed their thinking and they are not asking for the 150 spaces right away, and actually there is no interest in ever obtaining the Bilgore site. This simply allows the CRA two years to find an alternate site for provision of the 150 parking spaces. Chairperson Deegan said during its latest discussion the CRA had deleted a responsibility for it to find the alternate 150 spaces, stating the CRA would help locate them but would not assume that responsibility. Mr. Mackey indicated they were willing to pay for the property, however they did not feel they had the clout the CRA did in order to obtain the needed property. He stated essentially they are providing a two year period in which to find a site. Chairperson Deegan indicated it was the CRA's desire not to permanently tie up the Bilgore site and, as currently written, this agreement ties it up for 20 years. Mr. Mackey indicated they would be paying 100% of the costs and it is totally at the City Commission's option. He said they are just saying there needs to be the 150 spaces somewhere. Vice-Chairperson Garvey stated the way the agreement reads now, it is at any time after, that the CRA will be obligated. Mr. Mackey indicated after they purchase the garage, the CRA would have to find the site for the additional 150 parking spaces. Vice-Chairperson Garvey questioned within what radius the parking spaces had to be located. Mr. Mackey indicated the proposal is that the CRA would have X number of years to find an alternate site. If this can not be done, Bilgore could still be used for the parking. Mr. Justice indicated the 150 spaces did not have to be all in one spot. Chairperson Deegan emphasized the CRA did not feel they should have the responsibility to locate the site, and that they only wish to tie up the Bilgore site for a five year period. Trustee Thomas stated the crux of the problem was the purchaser's need 150 spaces to add to the parking for the building. He expressed concerns that the way the agreement is worded the CRA is put in a corner where they are in a "no win" situation. He felt options on Bilgore should run parallel with an option to purchase the Police Department or other property that may become available. Mr. Mackey indicated this could be changed to at any time to within the next 24 months the CRA would find an alternate site. Trustee Thomas indicated when the CRA comes up with land they would notify the purchasers, and if the purchasers say no to that site the CRA would be released of the obligation. Mr. Mackey indicated they would not want to be "hung out" more than two years. He stated within two years the site would be identified, they would buy the property at the City's cost with a 20 year amortization. Trustee Thomas suggested there be a two to three year time frame in which the CRA can come up with the land within the area designated, and that it would be provided to the purchasers at fair market value with the right of first refusal. If they refuse to purchase the property, the CRA would be released of its obligation to provide 150 spaces. Mr. Mackey indicated he would accept that general concept. Trustee Fitzgerald questioned if this meant the CRA was going to go out and buy property and then offer it to the purchasers at fair market value. Trustee Thomas said it does not mean the CRA would be buying anything, but that they would identify the land. If it is property that is already owned by the City such as the Police Department, it would offered to the purchasers and if they refuse, there is no longer an obligation to provide the 150 spaces. He stated the agreement is obligating the CRA to maintain the Bilgore site until an alternate piece of land is identified. Mr. Mackey expressed concerns regarding the property identified being more expensive, Cleveland Street frontage. The Executive Director indicated there are 150 city-owned parking spaces within the area designated by the purchasers. Mr. Mackey indicated he was in disagreement with Mr. Justice regarding the 150 spaces not being all together. He indicated he would like to see a maximum of two locations. Trustee Fitzgerald questioned the language "lease shall be a permanent arrangement." Mr. Mackey indicated that once they purchase the property they would own it, but the cost to the CRA/City would be taken and amortized over 20 years. Trustee Thomas indicated this might be possible on property owned by the CRA/City but not owned by others. He felt the issue being discussed now was different from that of the parking garage and he had no problem with payments being made over time for the garage purchase. He indicated there would be 150 spaces at the Bilgore site with a right of first refusal for the purchases on properties owned by the City/CRA. However, if another piece of property not owned by the City/CRA were to be brought forward, the purchasers would be obligated to make a decision. If they refuse to purchase the property, the CRA/City would be off the hook. Mr. Mackey expressed concerns regarding them being obligated to purchase an overvalued piece of land. It was indicated the land would be appraised. Chairperson Deegan suggested it be phrased as the "Bilgore site or other property of comparable value." The Executive Director indicated there were four sites with 140 under-utilized spaces that the City owns at this time. He indicated the property is owned by the City but could be sold to the CRA for less than fair market value. Trustee Thomas questioned whether they accepted the right of first refusal on the Police Department and maintaining the current language for all other properties owned by the City. Mr. Mackey indicated they accepted the right of first refusal on the Police Department but would request some language regarding the Bilgore site. Chairperson Deegan indicated the purchasers had indicated they were not willing to buy the Bilgore site at fair market value. Mr. Mackey indicated there had been no appraisal on that property at this time. A question was raised regarding the boundaries which are currently stated as the area west of Myrtle, east of Fort Harrison, south of Drew Street, and north of Court Street. The Executive Director recommended changing Court Street to Chestnut. He also questioned leaving it at east of Fort Harrison as there is city-owned parking on the west side of Fort Harrison, south of Drew. Chairperson Deegan emphasized the CRA was in no way anxious to tie up the Bilgore site. The City Attorney requested clarification regarding which agency would be obligated to find the parking. Consensus was it would be the CRA's obligation. He questioned the term of the obligation, and it was suggested it be limited to 20 years. Mr. Justice expressed concern that if there were 150 spaces on the Bilgore site and the CRA said there was another site, and the purchasers did not buy that site, that the lease on Bilgore would be canceled. He felt there should be a restrictive covenant that this could only be done if the City has a use for the Bilgore site. Trustee Thomas expressed concerns regarding 38 spaces on the garage site currently used by the Police Department. Paragraph 3. Parking Garage Chairperson Deegan stated the language about purchasing the air above the garage was moot as that will already be purchased along with the Sun Bank building. The Executive Director indicated they may want the air space even further above than the fourth floor. Chairperson Deegan pointed out the requirement for the initiation of the buyer's right to request 150 parking spaces should be deleted as this has been taken care of. Mr. Mackey indicated they will have a right to ask for 100 spaces in the garage. Trustee Thomas again expressed concerns regarding the 38 spaces on the ground outside the parking garage. Mr. Justice indicated they have already agreed that when they purchase the garage, the City will still have a right to use those spaces. Trustee Fitzgerald questioned the reduction of the option price from $200,000 to $50,000. It was stated the $200,000 had been requested when the CRA planned to improve the Bilgore site, and this was no longer being required. Trustee Fitzgerald expressed a concern that if an alternate parking site was not identified, the CRA would still have to improve the Bilgore site and pay for it at that time. General consensus was to accept the $50,000 payment for the option to purchase the parking garage. Paragraph 4. Police Station: The Attorney pointed out that the previous draft had the option on the Police Department not being transferrable. The current draft has added to it "or its general partner." Mr. Mackey indicated the closing could be in a related partnership rather than Walter T. Krumm Ventures Incorporated. Chairperson Deegan questioned the addition of the words "at or" in the third line between bid and above. The Executive Director indicated you needed above as you did not want two bids at the same amount. Chairperson Deegan asked for an explanation of the added phrase "this right shall expire upon the closing of the other offer." Mr. Mackey explained this would be the closing by the third party. Chairperson Deegan expressed concern that the right of first refusal had an indefinite term and felt that was too open-ended. It was indicated if the City abandons the Police Department, they are merely asking the City to follow the procedure to declare the property surplus and sell it. The Executive Director questioned what if the City decides to put the building to use other than a Police Department. It was indicated as long as it is for a public use, the City would not be obligated to sell it. It was the consensus to change the wording to "abandons the police station as a City use", rather than it being abandoned as a police station. Mr. Mackey indicated he felt if the building were abandoned as the Police Department, the City would not require the 38 spaces surrounding the garage. Paragraph 5. Spaces Around Garage Trustee Thomas expressed concern that if they buy the garage they will have purchased the 38 spaces surrounding it and the obligation for the 150 spaces elsewhere should be reduced. Chairperson Deegan stated on page 6, third line, that the closing referred to should be the closing on the garage, not on the bank building. Trustee Thomas stated the easement required is a problem, in that, if the purchasers do not buy the Police Department, it is lost property. Chairperson Deegan questioned whether or not it would be a problem if there was an easement until an ownership change. Vice-Chairperson Garvey questioned whether or not this would be a permanent incumbrance. It was indicated it would run concurrent with the option. Attorney Pratesi stated the easement could be terminable. The Executive Director stated the easement would be needed in order to access the parking. Paragraph 6. Spaces South of Sun Bank/Atrium Building It was stated it had been mentioned that the purchasers had talked with the restaurant owner and they were agreeable to the reconfiguration. It was emphasized they are the tenant, not the owner of the property. Mr. Mackey questioned if they brought in a petition from the property owners supporting the reconfiguration, would the City put forward $180,000 for improvements to this area. There was no guarantee of funding but it would be considered. It was stated it had to be understood this would be a petition of property owners, not tenants. There were no problems with paragraphs 7, 8 and 9. Paragraph 10. Taxes: A question was raised regarding whether or not this referred to sales tax on rent or on closing costs. It was indicated the sales tax would apply to rent. Paragraph 11. This is a new paragraph regarding appraising the value of the garage. It was stated valuing the property in the way it is set out in paragraph 11 would result in a lower value. The Executive Director pointed out that 38 spaces outside the footprint of the garage were valued separately. It was indicated this would be two floors plus a factor for the parking and the easement. The Executive Director also pointed out there was not a 50/50 split on the garage, but that there was a slight difference in the number of spaces. It was the consensus to use the appropriate ratio. Paragraph 12. This is a new paragraph regarding a City commitment to spend money south of Cleveland between the Park Garage and the Sun Bank building in order to beautify, reconfigure, landscape, and create park areas. Chairperson Deegan suggested that rather than inserting a dollar amount, that it be that we would support the concept of being willing to work something out regarding the reconfiguration and beautification of this area. The Executive Director recommended this not be left open-ended. Mr. Mackey stated they would need one last meeting on this issue, and they would have to meet with the landowners. It was the consensus that this would be worked out. Trustee Thomas indicated he felt there was still a "loaded gun" regarding the 38 spaces outside the garage, and that the requirement for the 150 other spaces should be reduced by that amount if they buy the parking garage. Mr. Mackey explained they were paying for all the property. Chairperson Deegan requested what would be a reasonable target date for closing. The Attorney indicated the Memorandum of Understanding would have to be redrafted. Mr. Mackey indicated he would redraft it and send it to the Attorney. The Executive Director questioned whether or not staff and the purchasers were authorized to complete the sale at the earliest possible moment. It was the consensus they wanted to see the final document first, and this would be done at the CRA meeting of October 4. b) CDC Status - Continued c) Executive Director Search Chairperson Deegan indicated a letter from Mr. Gozza had been received stating the basic offer was acceptable. There were two issues he wished to ask the CRA to consider: 1) a vacation which he has already planned for the week before Thanksgiving and 2) his ability to do private consulting work two days a month. Chairperson Deegan indicated he had checked with the Human Resources Director regarding the normal procedure for city employees regarding outside employment. The Executive Director indicated as long as the outside employment does not conflict with City duties, employees are allowed to participate in outside employment. Chairperson Deegan questioned whether or not the CRA members would allow the private consulting work with the understanding that the consultant contracts would be approved by the CRA. Trustee Fitzgerald objected to this stating he felt this employee should be committed to the City of Clearwater full time. He felt private consulting work could be in conflict with City duties. Trustee Berfield stated she was not in favor or allowing the private consulting work, but would consider readdressing it after a year. She stated right now Mr. Gozza would have his hands full with the CRA. Chairperson Deegan stated he felt a precedent had already been set as other employees are allowed to do this. Vice-Chairperson Garvey stated when outside employment is allowed there is no conflict. Chairperson Deegan said if Mr. Gozza was to give a presentation, he would be paid to do so. He felt this would add to Mr. Gozza's service to the City. Vice-Chairperson Garvey stated she felt there was potential conflict. Chairperson Deegan again pointed out the CRA would approve the consulting contracts. He questioned whether or not he was authorized to go back to Mr. Gozza and say they accepted his contract as long as there was no conflict with the private consulting and that the CRA approve each of the private consulting contracts. Vice-Chairperson Garvey stated she agreed with Trustee Berfield that there should be at least one year before private consulting was done. Trustee Thomas stated he concurred with Trustees Berfield, Fitzgerald and Vice-Chairperson Garvey. He felt the person should be with the CRA 100% for at least the first year. There was no problem with allowing the vacation the week before Thanksgiving. Trustee Deegan stated he would notify Mr. Gozza of the CRA's consensus. ITEM IV. - New Business a) Transfer of available balance in CRA Trust Fund as of 9/30/93 for funding of redevelopment projects Chapter 163 of the Florida Statutes requires that all monies remaining in the CRA Trust Fund at the end of the fiscal year be appropriated for a "specific redevelopment project pursuant to an approved Community Redevelopment Plan" or deposited into the debt service fund to be used for subsequent retirement of existing debt. Failure to do one of the above results in a requirement to return any such balance to the contributing taxing authorities, in this case the City and the County. The following list of projects are believed to qualify for appropriation: Cleveland Street parking modifications Maas Brothers repair/renovation Bayfront park renovations Bilgore parking lot construction Facade improvements assistance for downtown businesses Train station acquisition The Executive Director indicated he felt the Park Street improvements could also be added to the project list. Chairperson Deegan questioned if the whole sum was put into one of the projects and it was found that all the funds would not be needed, could it then be transferred to another project. It was suggested the CRA adopt all the projects as possible uses for the funds. Trustee Thomas moved to authorize the transfer of whatever balance remains in the CRA Trust Fund as of September 30, 1993 into a project which would include the options of Cleveland Street parking modifications, Maas Brothers repair/renovation, Bayfront park renovations, Bilgore parking lot construction, Facade improvements assistance for downtown businesses, Train station acquisition, and Park Street improvements. The motion was duly seconded and carried unanimously. It was indicated this would show up as one project which encompasses all of the options. b) Monthly Financial Statement - Continued c) 1993/94 Budget (Res. #93-03) The budget has been discussed at the previous public hearing of September 2, 1993. Total revenues for 1993/94 are shown as $487,600 with expenditures of the same amount. The expenditures include administrative, miscellaneous, saturday downtown parking, and advertising, as well as transfers for redevelopment projects, debt service requirements, administrative expenses, Jolley Trolley, and the Garden Avenue Garage funding. The City Attorney presented Resolution #93-3, and read it by title only. Trustee Thomas moved to pass and adopt Resolution #93-3, the Operating Budget for the Fiscal Year beginning September 30, 1994, and authorize the appropriate officials to execute same. The motion was duly seconded and upon roll call, the vote was: "Ayes": Fitzgerald, Berfield, Deegan, Thomas and Garvey. "Nays": None. c)1) clean up of downtown streets - No Action ITEM V. - Executive Director Verbal Reports - None ITEM VI. - Other Trustee Business - None ITEM VII. - Adjournment: The meeting adjourned at 6:28 p.m.