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03/14/2016Monday, March 14, 2016 1:00 PM City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 City Hall Chambers Community Redevelopment Agency Meeting Agenda March 14, 2016Community Redevelopment Agency Meeting Agenda 1. Call To Order 2. Approval of Minutes 2.1 Approve Feb. 29, 2016 CRA Meeting Minutes as submitted in written summation by the City Clerk. 3. Citizens to be Heard Regarding Items Not on the Agenda 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. 5. Adjourn Page 2 City of Clearwater Printed on 3/10/2016 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#16-2213 Agenda Date: 3/14/2016 Status: Agenda ReadyVersion: 1 File Type: MinutesIn Control: Community Redevelopment Agency Agenda Number: 2.1 SUBJECT/RECOMMENDATION: Approve Feb. 29, 2016 CRA Meeting Minutes as submitted in written summation by the City Clerk. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 3/10/2016 Community Redevelopment Agency Meeting Minutes February 29, 2016 City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 Meeting Minutes Monday, February 29, 2016 1:00 PM City Hall Chambers Community Redevelopment Agency Page 1 City of Clearwater Draft Community Redevelopment Agency Meeting Minutes February 29, 2016 Roll Call Present 5 - Chair George N. Cretekos, Trustee Doreen Hock-DiPolito, Trustee Jay E. Polglaze, Trustee Bill Jonson, and Trustee Hoyt Hamilton 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 Coordinator To provide continui ty for research, items are listed in agenda order although not necessarily discussed in that order. Unapproved 1. Call To Order The meeting was called to order at 1:01 p.m. at City Hall. 2. Approval of Minutes 2.1 Approve the minutes of the January 19, 2016 CRA meeting as submitted in written summation by the City Clerk. Trustee Jonson moved to approve the minutes of the January 19, 2016 CRA meeting 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 Accept ULI Priority (P) Project Quarterly Progress Report for the period October 1, 2015 through December 31, 2015, as well as the cumulative expenditure report since Fall 2014. Staff committed to the CRA Board, as a part of the ULI Advisory Panel Report Implementation activities that the Board would be provided with quarterly updates on the status of Priority (P) implementation items, as well as a compilation of total expenditures to date on ULI Report activities across all funding sources. The expenditures report is inclusive of all expense, on an accrual basis, since last fall. Page 2 City of Clearwater Draft Community Redevelopment Agency Meeting Minutes February 29, 2016 Projects Update: To summarize, the status of the 13 Priority (P) projects are as follows: 5 Projects complete: • Boost Downtown Library to Support Redevelopment (ULI 9) • Attract Incubator/Support Entrepreneurial Ecosystem (ULI 15) • Real Estate Parcel Marketing (ULI 30) • Create Stakeholder Advisory Group (ULI 31) • TIF Bonds Examination (ULI 34) 6 Projects on schedule: • Comprehensive Boating Plan for Harbor (ULI 1) • Comprehensive North Marina Master Plan (ULI 5) • Master Development Plan for Bluff/Coachman/Waterfront (ULI 8) • Use Harbor Bridge as Aesthetic Gateway (ULI 10) • Update of Downtown Redevelopment Plan (ULI 12) • Mercado in East Gateway (ULI 27) 2 Projects in progress/delayed: • Enhance Gateways to Downtown/East Gateway (ULI 20) • Comprehensive Branding Initiative (ULI 29) In addition to the council-designated priority projects, two additional ULI projects have been addressed: • Create a Water Taxi/Ferry (ULI 4) • Ensure Environmental Integrity of Clearwater Harbor (ULI 2) Expenditure Update: With respect to the financial expenditure report, on an accrual basis, $609,839 has been encumbered with $312,591 expended for ULI projects since September 2014. Broken down by funding source, the expenditure allocations are: General Fund, $100,000; General Fund Reserve, $186,064; and CRA, $26,527. The preponderance of expenditures/commitments to date are attributable to five projects: 1) Comprehensive Boating Plan, $59,975; 2) North Marina Master Plan, $105,624; 3) Boost the Library - Library Maker Space and staffing, $134,965; 4) Attract an Incubator- Clearwater Business SPARK, $125,000; and 5) Comprehensive Branding Initiative, $100,000. Staff has provided a spreadsheet identifying line item expenditures and fund balance through the period ending December 31, 2015, for the General Fund ULI account 181-99888. Information including fund allocations, timeframes, staff resources and responsibilities for each Priority Item (P) is also provided. No actual or committed funds were charged against the $1,000,000 CRA/ULI Project Account in Q1 FY2015/16. Beginning with the Q2 FY 2015/16 report, a Page 3 City of Clearwater Draft Community Redevelopment Agency Meeting Minutes February 29, 2016 similar sheet will be provided for the $1,000,000 CRA /ULI Project Account. The City Manager provided a PowerPoint presentation. In response to questions, the City Manager said this presentation will be presented at the next joint CRA/DDB/Chamber/CDP meeting. Interim CRA Executive Director Geri Campos Lopez said she will be providing the same presentation at the next Downtown Development Board meeting. She anticipates the next CRA/DDB/Chamber/CDP meeting will be held in July. The City Manager said the Memorial Causeway Bridge is maintained by the Florida Department of Transportation (FDOT) and staff advises FDOT of any maintenance issues. Staff has contacted the City of Tampa regarding their experience in addressing the aesthetic issues. The City Manager said maintenance issues will be a challenge as Clearwater has a higher maintenance standard than what may be established by the agency. A concern was expressed that the Memorial Causeway Bridge has mold and vegetation growing on the wall. It was suggested that the bridge be inspected for infrastructure cracks. Engineering Director Mike Quillen said staff was unaware of any infrastructure cracks; staff frequently communicates with FDOT regarding any concerns. Staff was directed to provide information regarding the bridge maintenance (i.e., cleanliness, infrastructure, etc.). In response to questions, the City Manager said staff is focusing on the recommendations in the ULI report. For those recommendations that have reached their final destination, staff will continue to develop the ideas behind the recommendation. Ms. Campos Lopez said the brochure is part of the Department's continued marketing efforts; a second brochure may be considered as the recommendations develop. The City Manager said the strategic planning session in April will be a precursor to the budget development process; staff will be incorporating ULI elements as the CIP (Capital Improvement Program) is developed moving forward. The CRA Trustees will confirm the new CRA Executive Director appointment. Staff's updates alert the Trustees on the progress being made on each recommendation as staff integrates the recommendations into the CIP work plan. Ms. Campos Lopez said staff continues to work through the next steps for the North Marina Plan and the Comprehensive Boating Plan as each will be included in the upcoming budget process. The Bluff Coachman Park Master Plan RFP was released in November and the responses were due in January; the selection is expected to occur in April. Discussion ensued with a suggestion made that more transparency to the plan implementation and changes would be beneficial to the community and Trustees. It was stated that staff provides quarterly reports and advises when there are stumbling blocks; the implementation process should not be Page 4 City of Clearwater Draft Community Redevelopment Agency Meeting Minutes February 29, 2016 rushed. Trustee Hock-DiPolito moved to accept ULI Priority (P) Project Quarterly Progress Report for the period October 1, 2015 through December 31, 2015, as well as the cumulative expenditure report since Fall 2014. The motion was duly seconded and upon the vote being taken: Ayes: 4 - Chair Cretekos, Trustee Hock-DiPolito, Trustee Polglaze and Trustee Hamilton Nays: 1 - Trustee Jonson Motion carried. Interim CRA Executive Director Geri Campos Lopez reported that while attending a recent conference she was asked to join a panel on inclusive economic development. She provided a PowerPoint presentation on the City's East Gateway. A Georgia Tech professor was in the audience and is interested in using the East Gateway as a case study for a new textbook. Trustee Jonson stated the plantings in the pots along Cleveland Street are tall and out of scale with the pedestrian scale on the sidewalks. 5. Adjourn The meeting adjourned at 1:52 p.m. Chair Community Redevelopment Agency Attest City Clerk Page 5 City of Clearwater Draft Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#16-2211 Agenda Date: 3/14/2016 Status: Agenda ReadyVersion: 1 File Type: Action ItemIn Control: Community Redevelopment Agency Agenda Number: 4.1 SUBJECT/RECOMMENDATION: 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. SUMMARY: 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 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 Page 1 City of Clearwater Printed on 3/10/2016 File Number: ID#16-2211 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 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 Page 2 City of Clearwater Printed on 3/10/2016 File Number: ID#16-2211 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 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. Page 3 City of Clearwater Printed on 3/10/2016 Resolution No. 16-01 RESOLUTION NO. 16-01 A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF CLEARWATER, FLORIDA, RECOMMENDING THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA REDUCE THE REGIONAL STORMWATER BUY-IN FEE FROM $235,700 TO $0 FOR THE NOLEN,AKA PROSPECT PARK APARTMENTS ON CLEVELAND STREET AND PROSPECT AVENUE PURSUANT TO THE CRITERIA ESTABLISHED BY CITY RESOLUTION NO. 99- 43 SECTION 3; PROVIDING AN EFFECTIVE DATE. WHEREAS, the City and CRA’s 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; and WHEREAS, CRA views the development of The Nolen, formerly known as the Prospect Park Apartments or the Cleveland Street and Prospect Lake Park site, as a major opportunity to further these strategies by adding a mixed-use project with 257 market-rate rental units that activates the street and creates living opportunities for the District’s workforce; and WHEREAS, on June 10, 2014, the CRA and Prospect Real Estate Group and Forge Capital Partners (collectively, 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; and WHEREAS, the CRA sold the property to the Developer on October 30, 2014 and the Developer commenced construction in March 2015; and WHEREAS, once construction commenced on the Project, the Developer encountered even greater soil issues or “muck” than anticipated by the Developer’s and City’s geotechnical consultants; and WHEREAS, the Developer has detailed $529,104 in additional costs related to the condition of the soils in order to ready the site for the foundation; and WHEREAS, the Developer is requesting relief on impact fees to alleviate the financial pressure on the project caused by the condition of the soils; and WHEREAS, according to City Resolution No. 99-43 Section 3, for projects larger than 1.5 acres, the City Commission (now Council) may reduce payment for the regional stormwater buy-in district on a case by case basis depending upon project variables such as capital investment, number of jobs, etc.; and Resolution No. 16-012 WHEREAS, The Nolen is anticipated to have significant impact to the CRA, the City of Clearwater and Pinellas County with a capital investment of $34 million, 143 direct jobs and 102 indirect and induced jobs from construction, and over $60 million in taxable sales estimated over 10 years for Pinellas County from new residents and restaurant and retail establishments (economic impact calculated by Total Impact economic modeling software by Economic Development and Housing Department staff); now, therefore, BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF CLEARWATER, FLORIDA: Section 1. The Board recommends the City Council reduce payment of the regional stormwater buy-in fee for the Nolen from $235,700 to $0 pursuant to the criteria established by City Resolution No. 99-43 Section 3. Section 2. This resolution shall take effect immediately upon adoption. PASSED AND ADOPTED this _______ day of _____________, 2016. COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF CLEARWATER, FLORIDA ____________________________ George N. Cretekos Chairperson Approved as to form: Attest: _______________________________________________________ Pamela K. Akin Rosemarie Call City Attorney City Clerk