03/14/2016 Community Redevelopment Agency Meeting Minutes March 14, 2016
City of Clearwater
City Hall
112 S. Osceola Avenue
Clearwater, FL 33756
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Meeting Minutes
Monday, March 14, 2016
1 :00 PM
City Hall Chambers
Community Redevelopment Agency
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City of Clearwater
Community Redevelopment Agency Meeting Minutes March 14, 2016
Roll Call
Present 5 - Chair George N. Cretekos, Trustee Doreen Caudell, Trustee Hoyt
Hamilton, Trustee Bill Jonson, Trustee Jay E. Polglaze,
Also Present—William B. Horne — City Manager, Jill Silverboard —Assistant City
Manager, Pamela K. Akin — City Attorney, Rosemarie Call — City
Clerk, Nicole Sprague — Official Records and Legislative Services
Coo rd in ator
To provide continuity for research, items are listed in agenda order although not
necessarily discussed in that order.
1. Call To Order— Chair Cretekos
The meeting was called to order at 1:10 p.m. at City Hall.
2. Approval of Minutes
2.1 Approve Feb. 29, 2016 CRA Meeting Minutes as submitted in written summation by
the City Clerk.
Trustee Jonson moved to approve Feb. 29, 2016 CRA Meeting
Minutes as submitted in written summation by the City Clerk. The
motion was duly seconded and carried unanimously.
3. Citizens to be Heard Regarding Items Not on the Agenda — None.
4. New Business Items
4.1 Recommend the City Council reduce the Regional Stormwater Buy-in Fee for the
Nolen, aka Prospect Park Apartments, pursuant to criteria established by City
Resolution 99-43, from $235,700 to $0, and adopt Resolution 16-01.
The City and Community Redevelopment Agency's (CRA) redevelopment
strategy emphasizes the creation of a significant residential concentration in
and around the downtown core to create the support for a retail and recreation
destination environment in the Cleveland Street District. In addition, the City's
Economic Development Strategic Plan calls for the growth/support of
employment opportunities as part of the CRA's Technology District and its
software/information technology industry cluster. The CRA views the
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City of Clearwater
Community Redevelopment Agency Meeting Minutes March 14, 2016
development of the Cleveland Street and Prospect Lake Park site, now known
as The Nolen, as a major opportunity to further these strategies by adding a
mixed-use project that activates the street and creates living opportunities for
the District's workforce.
In summary, The Nolen is a mixed-use project consisting of 257 market-rate
rental dwelling units and up to 24,000 sq. ft. of allowable ground floor
commercial. Approximately 7 of these units will be Live/Work units fronting
Cleveland Street, which will be composed of a retail/office space and a
residential component. The project will have 300 parking spaces and
approximately 10,000 sq. ft. of accessory uses (exercise area, leasing office,
and business center).
On June 10, 2014, the CRA and the Developer entered into the Agreement for
Development and Purchase and Sale of Property (Development Agreement) in
response to Request for Proposals/Qualifications (RFP/Q) 12-13. In summary,
the business terms of the Development Agreement was a $2.5 million
purchase price for the property with up to $250,000 in reimbursements for
utility relocations, $700,000 in reimbursement of impact and permit fees to
assist with retail incentives, and a credit of$725,000 at time of closing for
Developer to address the anticipated soil conditions (muck) on the site.
On August 4, 2014, the CRA approved a first amendment to the Development
Agreement clarifying several points (commercial entitlements and other items
requested by construction lender). The project's real estate and financial
closing occurred on October 30, 2014. The groundbreaking celebration was
held on February 4, 2015 with construction commencing in March.
Defining the Issue
Since construction began, The Nolen, aka Prospect Park Apartments, has
suffered some significant financial hardships due to soil conditions that were
not anticipated as part of the project negotiation. The muck had become a
huge challenge both to engineer a remedy that worked but also the months of
delay it caused, adding to the overall development timeline and general
conditions costs. The demucking process included over excavating the
building pads, importing fill, dewatering, and removing and replacing unsuitable
materials. Because of the muck, foundation enhancements needed to occur
with additional auger cast piles and grout. The costs incurred to ready the site
for the foundation was significantly more than what was anticipated by both the
Developer's and the City's geotechnical consultants.
The developer detailed $529,104 in additional costs and is requesting a credit
offset on impact fees to alleviate the financial pressure on the project. These
additional costs do not include the additional length of time to build, and
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City of Clearwater
Community Redevelopment Agency Meeting Minutes March 14, 2016
associated general conditions and other overhead as a result of delay. At this
point, the project will not meet promised expectations which will cause a
financial burden given the federal EB 5 loan funding which requires a minimum
return on investment.
Staff Analysis
The Engineering Department has reviewed the geotechnical reports and the
developer's request. The muck that was found on site was in excess of what
was anticipated in the geotechnical reports reviewed by the city. Staff concurs
that the site and soil conditions constitute an unforeseen condition in delivering
a developable site to the developer that was not discussed as part of the
original negotiations of the Development Agreement. These increased costs
have created a burden on the project.
The City/CRA views The Nolen as a pioneering project for the downtown area
whose success could encourage future projects, attract developers and
improve the livability of the Cleveland Street District. As the first market-rate
rental development in downtown, an untested market, The Nolen needs to be
placed in the best possible position to succeed. According to the Developer
Agreement, the additional risk and cost of construction is the responsibility of
the Developer. However, this project has been a public private partnership
from inception and to protect the future success of the project, the City/CRA
should consider sharing in the additional costs specifically related to the soil
conditions found on site.
Staff Recommendation
Staff recommends the City/CRA share in approximately half the requested
amount attributed to the soil conditions. To assist the project, staff
recommends the City Council reduce the Stormwater Buy-in Fee of$235,700
to $0. Resolution 99-43, Section 3, allows projects larger than 1.5 acres, to
reduce payment on a case-by-case basis, depending on project variables such
as total capital investment, number of jobs, density of impervious area, etc.
Bond counsel has reviewed the ability of the city to reduce this fee and has
determined that the City Council can choose to waive stormwater impact fees
with no impact on stormwater bond covenants.
The Nolen is anticipated to have a significant impact to the redevelopment of
downtown. The capital investment in the Nolen is over$34 million. The
estimated completed project value of$27,000,000 is estimated to generate
$309,000 in tax increment (City, County and Downtown Development Board) in
the first full assessment year the project is operational (estimated to be 2017).
According to the Economic Development and Housing department's economic
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Community Redevelopment Agency
5. Adjourn
Attest
City Clerk
City of Clearwater
Meeting Minutes March 14, 2016
impact modeling program, Total Impact by Impact Data Source, we have
estimated 143 direct jobs and 102 indirect and induced jobs resulting from
construction. In addition, there are significant resident and restaurant/retail
impacts expected from taxable sales estimated at over $60 million over 10
years.
In response to questions, CRA Interim Executive Director Geri Campos
Lopez said the project is expected to be completed by August of this
year. EB5 is a federal program that allows foreign companies to
stimulate economic development and job creation through work visas.
The program is highly regulated and is used as an investment to gain
access to capital and funding and is tied to the economic impact and job
creation for company's designated area. Ms. Campos Lopez said EB5
funding is being used throughout Florida for hotel and rental construction
projects. Engineering Director Mike Quillen said if paid, the fees would go to
the stormwater utility fund; the fee reduction does not impact any stormwater
projects.
Trustee Caudell moved to recommend the City Council reduce the
Regional Stormwater Buy -In Fee for the Nolen, aka Prospect Park
Apartments, pursuant to criteria established by City Resolution
99-43, from $235,700 to $0. The motion was duly seconded and
carried unanimously.
Resolution 16 -01 was presented and read by title only. Trustee
Polglaze moved to adopt Resolution 16 -01. The motion was duly
seconded and upon roll call, the vote was:
Ayes: 5 - Chair Cretekos, Trustee Polglaze, Trustee Caudell, Trustee
Hamilton and Trustee Jonson
The meeting adjourned at 1:22 p.m.
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