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10/04/1993 COMMUNITY REDEVELOPMENT AGENCY October 4, 1993 The City Commission, meeting as the Community Redevelopment Agency, met in regular session at City Hall, Monday, October 4, 1993 at 9:01 A.M., with the following members present: Arthur X. Deegan, II Chairperson Rita Garvey Vice-Chairperson Richard Fitzgerald Trustee Sue Berfield Trustee Fred Thomas Trustee Phil Henderson Ex-officio Trustee Lillian Trickel Ex-officio Trustee (arrived 9:12 a.m.) Also Present were: Peter Gozza Executive Director Michael J. Wright City Manager Milton A. Galbraith, Jr. Attorney Cynthia E. Goudeau Secretary The Chairperson called the meeting to order and turned the conduct of the meeting over to the Vice-Chairperson as he a sore throat and difficulty in speaking. ITEM II. - Minutes: Trustee Berfield stated there was a typographical error on page 3 of the September 16, 1993 minutes; "sated" should be "stated". She also requested who "they" in the second paragraph on page 8 be clarified. Trustee Berfield moved to approve the minutes of the September 16, 1993 meeting as amended, and September 28, 1993, meeting as submitted. 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 City Commission, City Staff and Walter T. Krumm Ventures, Inc. (the potential purchasers) for the Sun Bank (Atrium) Building have been negotiating regarding this purchase for several months. The potential purchasers have requested to be able to purchase or have options to purchase certain CRA properties in order to provide additional parking for the building. Concerns were expressed that the deal was getting complicated and confusing at this point. Trustee Thomas suggested that all points of agreement be noted and resolved in order to get to those points on which there may be disagreement and/or concern. Vice-Chairperson Garvey stated the major concern is parking and if there can not be agreement on that, it would not matter on which items the parties agree. It was decided to go through the agreement page by page. Page 1: Trustee Fitzgerald questioned whether or not it had been resolved that the buyer was to pay all closing costs. Mr. Mackey stated that if everything else was resolved this would not be an issue. Trustee Thomas asked for a yes or no answer regarding whether or not the buyers would pay the closing costs. Mr. Mackey indicated they would. Page 2: It was agreed that a phrase regarding leasing spaces at so much per space per month should be deleted as this was left over from a reference to the term of the lease. Trustee Thomas raised a concern regarding the 38 parking spaces surrounding the parking garage. The City Manager indicated there were actually 31 legal spaces with a half a dozen more parallel spaces that were not legal. Trustee Thomas expressed a concern that if the spaces surrounding the garage were not counted toward the 150 additional spaces being requested by the purchaser, it would be more difficult to locate the space for the 150 parking spaces. Vice-Chairperson Garvey questioned why the CRA should be responsible to provide the 150 spaces. Mr. Mackey indicated there is a parking deficit in the downtown area and they will pay for the parking spaces over time. He stated Clearwater is the tenth largest municipality in Florida, however, the downtown area is scary for developers due to the lack of parking. Trustee Thomas indicated he agreed there was a parking deficit. He requested clarification regarding the number of spaces desired stating that the purchasers were wanting 4 spaces per 1,000 square feet of space in the building which equated to 540 spaces. He stated taking the 420 spaces in the garage plus the 150 being requested was 570 spaces. Mr. Mackey indicated there were looking for 4 and 1/2 spaces per 1,000 square feet which would result in total spaces of 608. Trustee Thomas questioned whether or not these spaces would be required under the zoning code. The City Manager indicated that in downtown, the code provides for credit for existing parking and that the number of spaces required for the building would have to be calculated. However he did not believe 608 would be required. Trustee Fitzgerald indicated this was his concern in that the CRA is being asked to resolve the issue of parking and this is not something they would normally do for other developers. Trustee Thomas requested the issue regarding parking be nailed down. Mr. Mackey indicated they need 608 spaces but they are flexible regarding whether or not the spaces are on two or three sites. Trustee Thomas questioned what city the purchasers considered to be the best as far as parking. Mr. Mackey indicated that in West Palm Beach they have a ratio of 4.8 spaces per 1,000 square feet. Trustee Fitzgerald indicated the bottom line is the purchasers want a 4.5 ratio and Trustee Thomas equated that to 608 spaces. Mr. Mackey indicated this was their desire. The City Manager indicated the number of spaces in the garage had been counted last week and there were only 407 spaces in the garage, 212 associated with the Sun Bank Building and 195 owned by the CRA. A question was raised regarding whether or not 31 or 38 spaces would be allowed on the area outside the garage. The City Manager indicated that if the purchasers bought the property, the additional 7 spaces would probably not be a sticking point. Trustee Thomas stated the bottom line is that 160 spaces have to provided. Mr. Mackey indicated as long as an additional 150 spaces can be identified, they would be satisfied. Trustee Thomas expressed concerns regarding the easement on the land for the police department reducing that land value. Mr. Mackey indicated the easement issue had been resolved two meetings ago and there needs to be a curb cut in order for them to have access to the parking spaces. The City Manager indicated there is an unequal owning of the driveway and the police department actually needs the driveway more than the garage does. There was no problem with the easement being provided. Trustee Thomas questioned the territory in which the 150 spaces could be located. The City Manager indicated that they would need to be able to identify three sites and use property west of Ft. Harrison Avenue. He stated the options are to build on the Bilgore site or to provide property at Garden and Drew Street. He indicated there were no other places in which to provide the number of parking spaces. Trustee Thomas questioned the number of spaces that could be placed on the police department land if that land were sold. The City Manager indicated there would be more than enough parking as there is also a parking lot immediately adjacent to the police department. Trustee Thomas questioned, from a development point of view, which property had a greatest advantage to grow. He stated it would be more viable for downtown to have a development on Bilgore and parking on the police department property. Vice-Chairperson Garvey reiterated that the Trustees had already reached consensus that they wanted to be able to develop the Bilgore site. Trustee Thomas agreed it would be better to clear off the police department property to come up with 150 spaces and that Bilgore should be developed. Chairperson Deegan reiterated that after the last meeting, the agreement was that the CRA was supposed to identify properties that were available to provide the 150 spaces and that if the purchasers refused those, then the CRA and City are "off the hook" for identifying and/or providing parking. Trustee Fitzgerald indicated that his major concern is that he did not want to obligate the City to identify and buy. He stated if the CRA is just required to identify the property that is one thing, but if they are required to purchase the property to sell it to the potential purchasers, he was opposed to that. Trustee Thomas requested a clarification regarding what the purchasers were asking. Mr. Mackey indicated that in the agreement, the purchasers would have a period of time in which they have the right to say they need the 150 spaces. The City/CRA would be obligated to buy and deliver those 150 spaces and that the purchasers would then either lease or buy the property back from the City and/or CRA. Chairperson Deegan indicated this is a change from what he thought had been agreed to at the last meeting. He stated it is a critical thing now as they had agreed to identify the property but it was never intended that the CRA and/or City would have to buy the property to sell back or lease back to the purchasers. Mr. Mackey indicated they would pay the City for the parking, provided the City buy and improve the property. Trustee Berfield requested clarification whether what is being requested is the CRA would provide the 150 spaces somewhere, somehow and the purchasers are agreeing that they would buy it back. Mr. Mackey indicated this was true. Trustee Berfield questioned whether or not this is because the purchasers are assuming the City can negotiate better. Mr. Mackey indicated it would be easier for them to buy from the City. Trustee Berfield questioned if the CRA bought land, would they sign an agreement to purchase it back. Mr. Mackey indicated it would be a simultaneous deal. Trustee Thomas stated he did not remember the CRA agreeing to lease 150 spaces. He felt they had only agreed to identify where they could have them. Trustee Thomas indicated the original agreement was that if they had to lease the Bilgore property, they would lease that for five years. Amortization was spoken of when it came to exercising an option to purchase the remainder of the parking garage. He stated however it was done, the City was to be out of the deal within five years. Several CRA members expressed concern regarding this was their memory and they are now confused regarding the proposal. Mr. Mackey indicated that throughout the lease, it was always assumed there would be financing. He stated the basic issue is still if the City will take existing land and allow the purchasers to pay for it over time in which to provide parking. Trustee Thomas stated he agreed the purchase arrangement could be a lease/purchase but that it was cashed out over five years. Chairperson Deegan emphasized that the CRA and/or City were to identify the parcels, not purchase them. Trustee Fitzgerald expressed concern regarding any reference to the CRA/City doing anything other than identifying the property. Mr. Mackey reiterated they would be paying for the property over time. He stated they would pay fair market value. Vice-Chairperson Garvey questioned whether or not they would pay whatever the CRA had to pay and Mr. Mackey indicated, not necessarily. Trustee Thomas agreed with Trustee Fitzgerald saying that the CRA/City would identify the property and the purchasers would buy it. Vice-Chairperson Garvey stated she would not object to the CRA buying the property if there was an agreement at the front end that there would be pay back in five years of the price paid for the property. The City Manager indicated the following options; one, to identify spaces already owned by the City and/or CRA which are a series of strip parking lots, some across Court Street and probably not practical; two, the Bilgore site; three, add 130 spaces at the Garden Avenue garage and four, purchase the parking lot at the corner or Garden and Drew Street which has 192 spaces and an asking price of $812,000. Trustee Thomas questioned the cost for the 150 spaces. The City Manager indicated it would cost approximately $1,000 per space to construct the parking lot plus the cost of the land. Trustee Thomas stated he was ready to forget providing for parking and to reduce the price of the Sun Bank Building. Trustee Fitzgerald expressed concerns regarding what was being done. He stated even if the CRA identified the property and it was taken out of the market place for the rest of downtown, it would be creating a bigger difficulty for everyone else. Trustee Thomas indicated that parking is an important issue for downtown Clearwater that will have to be addressed however, he felt it was something for the private sector to solve. He suggested reducing the price of the building and selling it. He stated it was time to decide whether or not they wanted to sell the building. He reiterated the building could be operated at a profit but the question was whether or not the City/CRA should be competing with private industry. He stated if the 150 spaces are the sticking issue it should be gotten rid of. He questioned whether or not the potential purchasers were agreeable to that thought. Mr. Mackey stated he would be if it kept it simple. Vice-Chairperson Garvey expressed concerns that when the bids were let, they came back with the offer of $6.9 million without the parking and she would not agree to a lesser price. Trustee Fitzgerald indicated he would not agree to a reduced price stating it is a valuable piece of property and that the City has an opportunity to use it and it should be used for the purpose for which it was purchased. Chairperson Deegan expressed concern stating he thought a deal had been struck at the end of the last meeting and the whole agreement hinged on the CRA/City identifying property where the parking could be located. He stated he wanted to be clear that the City/CRA would only be identifying the property. He stated if this can not be done the whole deal will be off. Mr. Mackey indicated they had always had CRA financing in the deal. Chairperson Deegan indicated this was only if the CRA already owned the property. Mr. Mackey stated that whether or not the parking is added in, there needs to be some activity in the downtown area and at some point people will ask what are we doing in downtown. A suggestion was made that this be continued. Chairperson Deegan requested that it be kept simple and that sites the City Manager can identify be purchased by the purchasers of the Sun Bank Building at fair market value. The City Manager again outlined the lots already owned by the CRA and/or City. He stated when the office buildings were built in downtown, the City built parking garages to subsidize those developments. Trustee Thomas stated that the urban cores that are successful have depended on mass transit. He stated we are trying to make downtown a suburban setting. He stated we must decide whether or not they want to sell the building as is or solve the parking problem. Trustee Fitzgerald expressed concerns that the Sun Bank Building is one of the few deals in which the City has made money. He stated there is still a potential for a lot more profit. He stated the building is not going to go down in value. He stated the bid was for $6.9 million for the building and the parking that went with it. He did not want to do something that would have a detrimental impact on the rest of downtown. He did not want the citizens of Clearwater to become the local bank. Trustee Thomas indicated he was aware Trustees Fitzgerald and Garvey wanted to use the Sun Bank Building as a new City Hall. Vice-Chairperson Garvey indicated the question is whether or not we are going to sell the building or give it away. Trustee Thomas questioned whether or not they would be willing to keep it as an office building and stay out of the City Hall issue. Vice-Chairperson Garvey stated her concern was to make sure it was the right kind of sale, either they want the building or they do not. Mr. Justice indicated the City Manager had identified the fact that conditions have changed in downtown, that these are problems that have evolved with which we now have to cope. He said the City can not sit with the building and make a profit from now on. He stated the Commission has to decide if they are willing to bite the bullet and do what it can for downtown. Mr. Mackey indicated the time spent on negotiating was nominal and it has been done in public. He stated the option on the garage should be collapsed to two years. Trustee Thomas suggested to make this a simple sale they should buy the building the way the City bought it and they pay closing costs. Chairperson Deegan stated he was inclined to agree if the purchasers were not willing to stay where we were at the end of the last meeting. Trustee Berfield questioned whether or not estoppel letters from the tenants had been received and questioned that the assessed value had gone down. She agreed to sell the building with the two floors of the parking garage. Trustee Thomas indicated that if they sell the building, it must be closed in ten days. Mr. Mackey indicated they could not close in ten days. He stated they could close in sixty. Trustee Thomas suggested a ten day time period in which to have a deposit. Trustee Thomas moved to recommend to the City Commission that they sell the Sun Bank (Atrium) Building at the price of $6.45 million with the buyer paying all closing costs, closing to occur in a maximum of sixty days with a contract and a 20 percent good faith deposit executed within ten days with the deposit being non-refundable, that the CRA give the purchasers an option to purchase the CRA's interest in the parking garage at the appraised value at the time they execute the option with the option being for two years. The motion was duly seconded. Mr. Mackey indicated he did not feel Mr. Krumm would agree to a 20 percent deposit but would agree to $100,000. Trustee Thomas amended his motion to $100,000 good faith deposit. The seconder agreed. Upon the vote being taken on the amended motion; Trustees Thomas, Berfield and Chairperson Deegan voted "Aye", Trustee Fitzgerald and Vice-Chairperson Garvey voted "Nay". Motion carried. The City Manager requested clarification regarding the methodology for appraising the CRA portion of the garage. Discussion ensued regarding several methodologies. Trustee Thomas moved that the methodology by which the garage is to be appraised is to take the footprint of the garage structure and appraise it as a garage, then take the number of spaces and divide that number into the appraised amount; take that number and multiply it by the number of spaces owned by the CRA and that would be the sales price for the garage; as a separate component of the appraisal, the piece of land to the east and south sides of the parking facility, currently used as a parking lot, would be appraised as a parking lot and added to the appraisal. The motion was duly seconded. Upon the vote being taken; Trustees Thomas, Garvey and Berfield and Chairperson Deegan voted "Aye", Trustee Fitzgerald voted "Nay". Motion carried. The City Manager then asked for clarification regarding what happens to the spaces surrounding the parking garage being used by the police department and at what point did the police department have to vacate those spaces. It was generally agreed that the police department would vacate those spaces 24 months after closing on the parking garage. A question was raised regarding the easement on the property and it was agreed it would be a permanent easement. Trustee Thomas moved to agree that when the land associated with the parking garage is sold, the police department retains the right to use those spaces for two years from closing and to recommend to the City Commission that it execute, in conjunction with the CRA, a permanent access easement to allow access to the spaces on the CRA property and that the purchasers execute a similar easement to allow access to spaces on the police department property. The motion was duly seconded and carried unanimously. Trustee Thomas moved to recommend to the City Commission that they grant a right of first refusal on the current police department building site, bounded by Pierce Street, East Avenue, Park Street and the parking garage to the purchasers of the Sun Bank (Atrium) Building. The motion was duly seconded and carried unanimously. The meeting recessed from 11:17 a.m. to 11:29 a.m. b) CDC Status - no report. c) July Monthly Financial Statement & IV b. - New Business/August Monthly Financial Statement Finance Director, Dan Deignan, presented the July and August financial statements. Trustee Thomas moved to accept the July and August financial statements. The motion was duly seconded and carried unanimously. d) Downtown Plan - recommendation to City Commission Vice-Chairperson Garvey requested the changes be reviewed. Scott Shuford, Central Permitting Director, stated that the measures of success have been changed to provide specific floor area measurements, that figure 4, regarding the Drew Street improvements has been deleted, that on pages 15 and 16, the special transportation area has been deleted as this is no longer a state program. Also deleted were references to the Maas Brothers Building being removed and public land uses are no longer restricted to water uses. On page 21, a Main Street program was added. Chairperson Deegan requested an explanation of the first paragraph on page 21, a reference to parking. Mr. Shuford indicated they had drafted a proposal on parking garage regulations. Chairperson Deegan questioned whether or not it was to encourage parking structures versus parking on land and what that would do to the purchasers of the Sun Bank Building. The City Manager indicated the CRA had simply left it for the purchasers of the Sun Bank Building to solve their parking problem. Trustee Berfield questioned how a new parking garage being required to have first floor retail would apply. Mr. Shuford indicated it would not be required in the core. A question was raised regarding whether or not it should be mandated or market driven. Discussion ensued regarding blank walls of parking garages not being conducive to revitalization. The City Manager indicated the only garages he knew of that were to be constructed were by non-profit organizations. A suggestion was made that variances be allowed to the regulations. Chairperson Deegan expressed concern that he had not heard of variances to downtown plans. Mr. Shuford indicated this would be implemented through the zoning regulations. Trustee Thomas indicated they want to be flexible to promote growth and development and at the same time they want the development to be aesthetically pleasing. The Executive Director stated design guidelines for the redevelopment district could be made a part of the Land Development Code. Mr. Shuford indicated the DDB is working on that concept at this time. He stated there are decisions to be made and there is a need for flexibility. Trustee Berfield questioned whether or not the designs would have to be a part of the downtown plan and Mr. Shuford indicated they would not have to be. Trustee Berfield questioned if it would cost more to put retail on the first floor. Mr. Shuford indicated it would but it would also provide an opportunity for greater revenue. The City Manager emphasized it would not require the entire first floor to be in retail. It was the consensus to strongly encourage retail on the first floor, rather than mandate it. Mr. Shuford indicated they would be taking out appendix E of the plan. He stated another major change was to delete the addendum, called the periphery plan. This addresses areas outside the CRA districts but that land use plan and zoning categories are being assigned that will encourage redevelopment. He stated the periphery plan will be reviewed by the PPC and that the Downtown Plan has already been included in the PPC Consistency Program. Chairperson Deegan questioned a reference to landscape islands. Mr. Shuford indicated these are landscaped areas on right-of-way, not necessarily in medians. Chairperson Deegan questioned the reference to a need for 260 of these landscaped islands. Mr. Shuford indicated this is not a requirement but an option to pursued. Chairperson Deegan suggested the projects listed for use of funds carried forward from the previous fiscal year be added and to down play the landscaping. He also asked that on page 74, that the year 1992 and 1993 be added. Trustee Berfield moved to recommend that the City Commission adopt the Downtown Plan as amended by the CRA. The motion was duly seconded and carried unanimously. ITEM IV. - New Business a) C.O.#1 and Final to Station Square Parking Lot Contract to K & S Contractors, Inc., Tarpon Springs, FL, increasing the amount by $8,094.30 for a new total of $38,222.80 After the removal of the Kravas building and commencement of the work to construct the parking lot, it was found that two septic tanks, several old concrete footings and several lengths of old storm drain pipe required removal. An eight inch vitrified clay pipe which had been examined and lamped by inspectors also fell apart when the embankment around it was removed. In addition, the FDOT permit required that the Cleveland Street driveway be concrete instead of the original brick design. These discoveries occasioned new items of work which generated this change order. Trustee Thomas moved to approve C.O.#1 and Final to the Station Square Parking Lot Contract to K & S Contractors, Incorporated of Tarpon Springs, Florida, increasing the contract amount by $8,094.30 for a new contract total of $38,222.80 and that the appropriate officials be authorized to execute same. The motion was duly seconded and carried unanimously. b) August Monthly Financial Statement - See page 9. ITEM V. - Executive Director Verbal Reports - None. ITEM VI. - Other Trustee Business It was requested that a date be set for a joint CRA/DDB meeting. Mr. Henderson indicated that the earliest a meeting could be held was the 12th of October. Consensus of the CRA was to set a joint meeting with the DDB for 5:30 p.m. on October 12, 1993. ITEM VII. - Adjournment: The meeting adjourned at 1:20 P.M.