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11/17/2003 COMMUNITY REDEVELOPMENT AGENCY MEETING CITY OF CLEARWATER November 17, 2003 Present: Brian J. Aungst Chair/CRA Trustee Whitney Gray CRA Trustee Hoyt P. Hamilton CRA Trustee William C. Jonson CRA Trustee Frank Hibbard CRA Trustee Bob Fernandez Ex-Officio Member David Allbritton Ex-Officio Member Also present: William B. Horne II City Manager Garry Brumback Assistant City Manager Ralph Stone CRA Executive Director/Asst. City Manager Pamela K. Akin City Attorney Cyndie Goudeau City Clerk Brenda Moses Board Reporter The Chair called the meeting to order at 9:06 a.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. 2. Approval of Minutes: October 13, 2003 Trustee Jonson moved to approve the minutes of the regular meeting of October 13, 2003, as submitted in written summation by the City Clerk to each Trustee. The motioncarried was duly seconded and unanimously. 3. Recommend approval of amendments to the Clearwater Downtown Redevelopment Plan -Ordinance #7231-03 The City Commission approved the Clearwater Downtown Redevelopment Plan on September 18, 2003. The draft Plan was initially submitted to Pinellas County staff for review in June 2003 and multiple meetings were held between City and County planning staff to discuss the proposed Plan. As a result of these discussions, the City agreed to incorporate certain clarifications and additions requested by County staff into the Plan on first reading. After the City adopted the Plan, the County staff requested additional information regarding how tax increment revenues will be used to implement the Plan. The County staff asked for an account of the amount of tax increment financing (TIF) funds to be used for each project as compared to other eligible sources of funding. The City prepared an estimate of this information and provided it to the County in early October. On October 21, 2003, the Board of County Commissioners (BCC) discussed the Plan under the County Administrator’s Reports. The Board indicated its general support for the Plan as the Redevelopment Plan and Special Area Plan for Downtown but had concerns with the Plan’s use of TIF. In particular, the Board appeared to concur with the County Administrator’s concerns about the length of the term of the Tax Increment Community Redevelopment Agency 2003-11-17 1 11/17/03 District as well as objecting to certain intended uses of TIF funds. The County Administrator’s report indicated that the Board should delay a decision on the Plan until the City made amendments to the Plan to address the County’s concerns regarding the use of TIF funds. Senior City and County staffs have held several meetings to resolve as many of the outstanding issues associated with the Plan as possible. Of the four major areas of concern, City and County staffs have reached agreement on two. These issues and their resolution are described below and are included in the proposed amendments. 1. Use of County TIF Only for Capital Projects and Capital Programs. The Downtown Plan supported the use of TIF funds for a variety of capital projects, as well as redevelopment programs and initiatives. The County requested more specific information on the types of programs to be funded, the amount of funding and the timeframe for expenditures. The City submitted the requested information. Upon the review of this information the County Administrator indicated the County would not support the County portion of TIF for redevelopment incentives and other non-capital programs such as a revolving loan program and retail lease/relocation incentives. It should be noted that the Board of County Commissioners requested the City to compile information detailing how other CRAs throughout the State use their TIF revenues. Based on the survey conducted, it was determined that other Florida CRAs use TIF to fund the type of programs the County does not want to fund. The proposed amendments to the Downtown Plan clarify that County TIF will only be used for capital projects and programs). City TIF will be available to be used for non- capital programs and initiatives. 2. Cost Estimates for Several Identified Capital Projects. Three capital projects did not include cost estimates because the project timeframe for construction is years away. The County staff wanted estimates included for all projects. The City’s best possible estimates have been developed and are proposed to be included in the Capital Improvement Plan. Two remaining issues require specific policy direction from the City Commission and are discussed below. 1. Length of TIF. The length of the TIF has not been resolved. Originally, the City Administration desired TIF to be in effect for 30 years from the date of the approval of the updated Plan which is as established by the Florida Statutes. In addition, a longer period of time is more useful to affect redevelopment through the capital projects and programs whose purpose is to eliminate slum and blighting conditions in an under performing downtown. The County Administration desires TIF to be approved for a short-term period of 15 years due to concerns about the uncertain future of the County budget. Several solutions have been explored between County and City staff. One solution discussed was that the County would approve the use of TIF for a 30-year term with a review after 15 years. However, when the County reviews the Downtown progress in 15 years, the County would be limited by the Florida Statute provision that restricts the decision to a continuation of TIF funds at the 95% level or complete elimination of both County and City TIF. This option clearly carries enormous risk for the City since Community Redevelopment Agency 2003-11-17 2 11/17/03 elimination of a major source of funding could be done prior to completion of substantial improvements within the Downtown. A second alternative explored was a TIF term for 15 years if no bonds are issued by the City or a 20-year term if bonds are issued within the first year after final Plan approval. The City Administration prefers this alternative since it allows the City more flexibility in funding options. In addition, three current or pending projects have obligated substantially all of the TIF project funding for the next three years. These projects include the loan payment for the Dimmitt property, incentives to be provided for the Beck project, and payment for the Cleveland Streetscape and Station Square Park capital projects. At this point, it is not clear if the County administration will support this option. 2. Inclusion of Table Identifying Funding Sources for all Capital Projects in Plan. The County Administrator requested the City include an amendment that adds a table entitled Clearwater Downtown Redevelopment Plan Capital Projects – Table Identifying Funding Sources for all Capital Projects (copy attached as an exhibit). The Table estimates the funding sources for each project, differentiating the amount of TIF funds versus other eligible funding sources. This chart is not included in these amendments because the City Administration believes this requested level of detail is not appropriate for inclusion in a 20-year plan, but more appropriately should be reflected in the City’s five-year capital improvement budget adopted annually by the City Commission. All redevelopment capital improvement projects conducted to implement the Downtown Plan must be consistent with the Capital Improvement Plan, but the City reserves the right to determine the exact amount and source of funding at the time that the project is formally initiated by its inclusion in the capital budget. The City Administration recommends that this table not be included in the Clearwater Downtown Redevelopment Plan. The Community Development Board will review the proposed amendments to the Clearwater Downtown Redevelopment Plan in its capacity as the Local Planning Agency (LPA) at its regularly scheduled meeting on November 18, 2003, and the Planning Department will report its recommendation at the November 20 Commission meeting. In response to a question, City Attorney Pam Akin said the County’s position is for a 30-year TIF with a 15-year review, and was not receptive to a 20-year TIF with bonding. Assistant City Manager Ralph Stone said the commitments that staff has anticipated that would require TIF funding total up to about $81 million. He said if the County were to cancel the last 15 years of the TIF, the City would lose approximately two-thirds of the original amount of the TIF. Ms. Tarapani said the County complimented the City on the redevelopment plan and had no concerns with the plan but the use of the TIF. She said there is this uncertainty because 30 years is a long time. She said we are the first City that has asked to go beyond the original term. Concern was expressed that the County would be looking at this TIF based on their financial situation and could potentially remove the TIF in 15 years. Ms. Akin said the City could at any time go back to ask them for bonding for a longer period of time Community Redevelopment Agency 2003-11-17 3 11/17/03 than 15 years, however it is not an automatic approval. She said the City could bond for specific projects, however, staff is not recommending a list of projects as it would lock the City into allocating funds only to those projects unless the Downtown plan were amended or changes were made to individual projects. Discussion ensued in regard to the need for the County to participate in helping with Clearwater’s downtown and it was indicated a delay in redevelopment could result in a negative effect countywide. Ms. Tarapani said in the first 20 years of the CRA the TIF funding generated an increment of about $10 million and the County admitted the City had spent this money wisely and properly. She said staff is estimating $65 million in TIF funds over the next 30 years. Discussion ensued in regard to the City’s preference for a 30-year TIF without a 15-year review, however, given the County’s response at this time, that option does not seem plausible. City Manager Bill Horne emphasized that the concern the County has is a state- wide concern among counties and there is a mind set toward restricting new CRAs. He said the County is looking for greater accountability and wants to know where the money goes. The County feels since they are a home rule County they have more authority than what appears in the State Statute. Ms. Akin said the City’s authority to have a CRA comes from the County as it is a home rule County. They control the ability to delegate a CRA, to approve the City’s plan, and to control the City’s TIF. The County also could change the ordinance, which regulates these matters. It was remarked that Clearwater will continue to work with the County in a spirit of cooperation. Clearwater has no problem with its administration living up to performance standards. In response to a question, Ms. Tarapani explained how streetscape projects are tied into the TIF. Ms. Tarapani said regarding the accountability issue, the County requires a report every two years on the status of the progress in the Downtown. If after six years or so, they do not like the direction the City is taking, they will have an opportunity to check and keep the City on task. Trustee Gray moved to direct staff to pursue a 30-year TIF without a review if motion possible; if a review is required, then performance standards should apply. The carried was duly seconded and unanimously. Trustee Gray moved to recommend approval of amendments to the Clearwater motion Downtown Redevelopment Plan -Ordinance #7231-03. The was duly seconded carried and unanimously. 4. Executive Director (Assistant City Manager) Verbal Reports Mr. Stone said staff has concluded there is a major need for a multiplex theater in the County, particularly in Clearwater. Staff will be bringing a request for proposal (RFP) Community Redevelopment Agency 2003-11-17 4 11/17/03 to the CRA in December for the development of a multi-pled theater complex with an incentive package in the core area. 5. Other Business Concern was expressed the Community Development Board (CDB) is being asked to make decisions regarding amenity incentives without having policy decisions from the CRA. Ms. Tarapani said when amendments were heard at first reading, it was her understanding the Commission did not want to stop any projects. She noted there is one project that will be using the incentive pool. She said the policy and the process is in the plan. She said the CRA will review the development agreement for the project. 6. Adjourn The meeting adjourned at 10:14 a.m. Community Redevelopment Agency 2003-11-17 5 11/17/03