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12/02/1991 CITY COMMISSION SPECIAL MEETING Maas Brothers Purchase December 2, 1991 The City Commission of the City of Clearwater met at City Hall with the following members present: Rita Garvey Mayor/Commissioner Sue Berfield Vice-Mayor/Commissioner Lee Regulski Commissioner William Nunamaker Commissioner Richard Fitzgerald Commissioner Also present were: Michael J. Wright City Manager M. A. Galbraith, Jr. City Attorney Cynthia E. Goudeau City Clerk The meeting was called to order at 9:00 a.m. The purpose of this special meeting is to discuss the purchase of the downtown Maas Brothers property. ITEM #2 - Assign the contract for the purchase of Maas Brothers to the Community Redevelopment Agency (CRA) On September 5, 1991, the City of Clearwater made an offer to purchase the property which currently houses the downtown Maas Brothers Department Store. The $1.9 million bid for the 3.8 acres of land and improvements was accepted and approved by the appropriate officials of Allied Stores General Real Estate Company and by the bankruptcy court, Southern District of Ohio. At the City Commission Workshop of November 18, 1991, the consensus of the Commission was to investigate the feasibility of dividing the property with the Community Redevelopment Agency (CRA) purchasing the portion above the 28 foot contour line and the City retaining the portion below the 28 foot contour line. Rather than unduly complicate the purchase procedure by attempting to divide the property, the process can be facilitated by assigning the contract as stipulated in the contract for sale and purchase. In accepting the assignment, the CRA will agree to deed that portion below the 28 foot contour line to the City. The City Manager indicated staff had talked at length on how to divide the property and questioned whether or not the Commission agreed with this proposal. Discussion ensued regarding the history of efforts to preserve the bayfront. It was stated the original ordinance for the charter restriction did not include the 28 foot line nor did it include a referendum but rather a 4 to 1 Commission vote. Prior to the ordinance being adopted, it was amended to include a more detailed legal description including the 28 foot contour line and the requirement for the referendum. It was stated it was assumed the 28 foot contour line was inserted into the ordinance in order to address City Hall and the Library already being below that line. Further discussion ensued regarding the restriction, how it came about and what was intended by the ordinance with some of the Commissioners indicating they felt the City Commission should acquire the property in order to ensure that the public has input regarding the disposition of the property. Concern was expressed this would limit the task force's ability to address recommendations to the Commission. The City Manager indicated there was no question regarding the City needing to own the Maas Brothers property. The debate centers around what to do with the property once it is in the City's possession. He stated staff originally proposed the CRA purchase the property to provide the greatest flexibility possible. He stated at this time, staff's proposal protects the bottom portion of the land for the City and provides the top part, above the 28 foot line to the CRA for development if that is determined to be the best use of the property. He stated this is a policy decision of the City Commission. Further discussion ensued regarding the charter restriction and how it came about. It was stated the 28 foot line being established to exclude the library and City Hall was an assumption of one of the Commissioners. A suggestion was made that the contract be assigned to the CRA with a condition that the CRA has a requirement to sell the property to the City at the end of four months. This will allow the task force the greatest flexibility with no loss of control by the City. A concern was expressed regarding four months being enough time for the task force to complete its work. A concern was expressed that the 28 foot line splits the building which could cause difficulty. Discussion ensued regarding the proposal and whether or not this would allow flexibility and protect the bayfront at the same time. A citizen spoke regarding the issue stating there was a perception that downtown belongs to downtown and that the rest of the City is not involved in the decision making for this area. A citizen requested that the City buy the property and it be made a focal point for the whole City of Clearwater. It was stated the vote on the referendum was to protect the bayfront and not on the 28 foot line. One citizen spoke stating it was valuable to maintain flexibility and to keep options open however, there was a need to listen to the will of the people. The citizen questioned the City Attorney's opinion that the CRA was not bound by the charter restrictions. The City Attorney reiterated his opinion the city charter can not bind another governmental agency. Pete Woodham, representing the Chamber of Commerce, spoke requesting that the contract be assigned to the CRA in order to provide the most flexibility for the property. He stated there was no need to rush a decision and that four months may be too short a time period to receive input from the citizens. He requested the big picture be considered and development of the whole bluff be looked at. A citizen spoke recommending that the contract be assigned to the CRA in order to provide greater flexibility. Another citizen spoke indicating that assignment to the CRA would take away control of the City for this property. Questions arose regarding whether or not the City could sell the property to the CRA without a referendum. The meeting recessed from 10:34 a.m. to 10:42 a.m. for additional research on this question. The City Attorney indicated that if the City were to take title and then deed it to the CRA, the City would then be doing indirectly what it could not do directly. He indicated the current contract for the purchase does contain a right for the City to assign the contract to the CRA. A citizen spoke requesting what development plans there were for Maas Brothers and for what use the task force was created. The City Manager indicated the purpose of the task force was to recommend plans for the Maas site. Concerns were expressed regarding buying the property with no plans for development. It was indicated the window of opportunity for the submission of the bid was small. The City made the bid and then established the task force to review proposals and possibilities and to make recommendations to the Commission regarding the ultimate use of the property. Another citizen spoke in support of the contract being assigned to the CRA. Ed Mazur, Chairman of the Maas Brothers Task Force, stated it was the intent of the task force to use their meetings in January to gather public input and February would be used for internal discussions and the task force hopes to come up with a recommendation by the end of March. He stated four months would not be long enough to present a proposal to the Commission. Questions were raised regarding funding for the purchase of the property. It was indicated these issues would be decided at a later date. The City Manager indicated the closing on the property had been moved to December 10 and he suggested the building not be bifurcated as this would be difficult to deal with. Discussion ensued regarding the perceptions of difference between the CRA and the City Commission with Commissioners differing on their obligation when they are acting as the CRA. Further discussion ensued regarding the difference between having the City or the CRA own the property. Commissioner Regulski moved to deny the assignment. The motion was duly seconded. Upon the vote being taken; Commissioners Regulski and Berfield voted "Aye", Commissioner Fitzgerald and Nunamaker and Mayor Garvey voted "Nay". Motion failed. Discussion ensued regarding whether or not to assign the contract to the CRA with conditions that the City can purchase the property at the end of six months. The City Attorney indicated that a condition on the assignment would have no effect as closing will occur prior to the expiration of any time frames the Commission may set. Commissioner Fitzgerald moved to assign the contract for the purchase of the downtown Maas Brothers property to the CRA. The motion was duly seconded. Upon the vote being taken; Commissioners Fitzgerald and Nunamaker and Mayor Garvey voted "Aye", Commissioners Berfield and Regulski voted "Nay". Motion carried. ITEM #3 - Funding for Purchase of Maas Brothers Property On September 5, 1991, the City of Clearwater made an offer to purchase the property which currently houses the downtown Maas Brothers Department Store. The $1.9 million bid has been approved by the officials of Allied Stores General Real Estate Company and the bankruptcy court in Southern District of Ohio. In the previous item at this meeting, the Commission voted to assign the contract for the purchase to the CRA. The City Manager indicated the CRA does not have the cash in hand to buy the property and it's requested the City Commission loan the funds necessary to the CRA with conditions that the City has the right to forgive the loan and take the property within six months. Discussion ensued regarding the significance of the six month time period and it was indicated this would give the Maas Brothers Task Force time to consider all input and options and to make a recommendation to the Commission. The condition would also allow the Commission control in that it can determine whether or not to retrieve any or all of the property at the end of that six month period. Commissioner Fitzgerald moved to authorize a loan of $1.9 million to the CRA for the express purpose of acquiring the Maas Brothers property. A condition of the loan is that is must be reviewed in the month of June, 1992 and at that point, the Commission may retrieve any of all of the property and the CRA will pay interest in an amount equivalent to the City cash pool rate. The motion was duly seconded. Upon the vote being taken; Commissioners Fitzgerald and Nunamaker and Mayor Garvey voted "Aye", Commissioner Berfield and Regulski voted "Nay". Motion carried. Consensus of the Commission was to have a letter of understanding or an agreement prepared for action at the December 5, 1991 City Commission meeting. It was requested that if the CRA had funds to go toward this purchase, they use that money for that purpose. The meeting adjourned at 11:40 a.m.