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05/15/2007 COMMUNITY REDEVELOPMENT AGENCY MEETING MINUTES CITY OF CLEARWATER May 15, 2007 Present: Frank Hibbard Chair/CRA Trustee Carlen Petersen CRA Trustee John Doran CRA Trustee George N. Cretekos CRA Trustee Paul Gibson CRA Trustee Also present: William B. Horne II City Manager Garry Brumback Assistant City Manager Rod Irwin Assistant City Manager/CRA Executive Director Leslie Dougall-Sides Assistant City Attorney Cynthia E. Goudeau City Clerk Patricia O. Sullivan Board Reporter The Chair called the meeting to order at 8:12 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 2.1 Approve the minutes of the April 16, 2007 CRA Meeting as submitted in written summation by the City Clerk. Trustee Petersen moved to approve the minutes of the April 16, 2007 CRA Meeting, as motion recorded and submitted in written summation by the City Clerk to each Trustee. The carried was duly seconded and unanimously. 3 - CRA (Community Redevelopment Agency) Items 3.1 Approve the Assignment of the Interest held by Clearwater Centre, LLC in the Development Agreement for the project known as “Clearwater Centre”, located at 1100 Cleveland Street, to Clearwater Espacio Development, LLC. The ownership of the “Clearwater Centre” project, located at 1100 Cleveland Street, has notified the CRA of a change of ownership entity from Clearwater Centre, LLC to Clearwater Espacio Development, LLC and has requested CRA approval of the assignment of the interest held by Clearwater Centre, LLC in the development agreement approved by the CRA on January 16, 2007, for the above-referenced project to the new ownership entity. The new entity would assume and continue all of the obligations of Clearwater Centre, LLC under the development agreement. Espacio is the real estate development arm of Grupo OHL, a 103 year-old construction company headquartered in Madrid, Spain with revenues of approximately $2.5 billion annually. They have completed projects worldwide and currently are making an entrance into the U.S. real estate market, with a focus on Florida, Arizona, Texas and New York. Espacio will hold a Community Redevelopment Agency 2007-05-15 1 50% interest in Clearwater Espacio Development, LLC, with the remainder retained by the current principals of Clearwater Centre LLC. Espacio will provide construction financing, estimated at approximately $40 million, to allow the project to move forward with construction within the time parameters of the development agreement. Pending completion of due diligence by CRA staff, the new ownership entity, which includes a 50% ownership share by Espacio, would appear to strengthen the financial and performance capacity of the project. Approval of the Assignment is therefore recommended. Trustee Doran moved to approve the Assignment of the Interest held by Clearwater Centre, LLC in the Development Agreement for the project known as “Clearwater Centre”, motion located at 1100 Cleveland Street, to Clearwater Espacio Development, LLC. The was carried duly seconded and unanimously. 3.2 Approve a Development Agreement between the CRA and Clearwater Hospitality Properties, LLC of Jacksonville Florida concerning the “Residence Inn by Marriott” project, 940 Court Street, delineating the terms and conditions for the provision of certain economic assistance by the CRA. Clearwater Hospitality Properties, LLC is developing the “Residence Inn by Marriott” project located at 940 Court Street. The Project is a 115-room, extended-stay hotel with accessory swimming pool and surface parking. Flexible Development Approval was issued by the Community Development Board on May 16, 2006, which permits development of the project. The purpose of this Development Agreement is to secure economic assistance through the CRA to increase the economic feasibility of a project which supports the implementation of the City of Clearwater’s “District Vision” for the revitalization of the CRA area, and to further the implementation of the Downtown Redevelopment Plan by the development and construction and operation of the Project to enhance the quality of life, increase employment, and improve the aesthetic and useful enjoyment of the downtown. The main business terms of the Agreement are: 1) reimbursement of impact and permit fees, not to exceed $178,000, payable upon receipt of a Certificate of Occupancy for the property, and 2) reimbursement of the City only portion of the TIF (Tax Increment Financing), but not more than 50% of the total TIF revenue generated by the project, for a period of six years, to offset extraordinary costs, including an enhanced FF&E (furniture, fixtures, & equipment) package required by the Marriott Corporation, and to allow the project to meet the minimum hurdle rates of return necessary to support construction of the project. However, the total reimbursement to the Developer under item 2 shall not exceed a total of $400,000. At an assessed value of $12 million, the project is estimated to generate $140,000 in tax increment revenue in the first full assessment year the project is operational (estimated to be 2010). A total of $1,684,087 in TIF revenue is estimated to be generated through the expiration of TIF authorization in 2019. Community Redevelopment Agency 2007-05-15 2 In response to questions, Representative David Clarkson said the hotel will not feature amenities but will have limited meeting room space. CRA Executive Director Rod Irwin said construction will begin by August 15, 2007, and be completed in 14 months. Mr. Irwin said if the property is sold during the incentive period, the CRA’s TIF obligation would cease if a comparable flag is not retained. As the agreement is based on the TIF, legislative actions to rollback property tax rates would not affect the City’s financial obligation. It was requested the property’s landscape be maintained until construction begins. Trustee Cretekos moved to approve a Development Agreement between the CRA and Clearwater Hospitality Properties, LLC of Jacksonville Florida concerning the “Residence Inn by Marriott” project, 940 Court Street, delineating the terms and conditions for the provision of motion carried certain economic assistance by the CRA. The was duly seconded and unanimously. 3.3 Adopt mid year budget amendments for the CRA for the period of October 1, 2006 though March 31, 2007. Amendments reflect anticipated operating amendments to the CRA at mid-year reflecting corrected receipts from tax increment financing with the adoption of final millage rates for the City of Clearwater and Pinellas County. In addition, budget amendments to CRA capital projects will shift all CRA funding out of the City's Special Program and Capital Improvement Funds and establish the appropriate projects in the newly established CRA Program Fund. Actual TIF revenues were $162,061 less than anticipated: 1) -$106,284) – Pinellas County; 2) -$52,598 – Clearwater; and 3) -$3,179 - DDB (Downtown Development Board). A budget amendment of $1,686,914 reflects the return of CRA funds from the Capital Improvement Fund and the redistribution of these funds to the same project in the new CRA capital fund. A budget amendment of $1,686,914 reflects the return of CRA funds from the Capital Improvement Fund and the redistribution of these funds to the same project in the new CRA capital fund. A budget amendment of $819,747 reflects the return of CRA funds from the Special Program Fund and the redistribution of these funds to the same project in the new CRA capital fund. Budget Director Tina Wilson said Clearwater Centre is the only new project. CRA Executive Director Rod Irwin said the budget amendments replace projections with actual TIF numbers. Trustee Gibson moved to adopt mid-year budget amendments for the CRA for the period motion carried of October 1, 2006 though March 31, 2007. The was duly seconded and unanimously. 4 - Other Business Mr. Irwin reported some initial interest in the RFQ (Request for Qualifications) recently released for the Prospect Lake parcel and reviewed staff efforts to advertise the RFQ. Community Redevelopment Agency 2007-05-15 3 It was requested that discussion of the retail recruitment plan be agendaed for the next CRA meeting. 5 - Adjourn The meeting adjourned at 8:34 a.m. -z:..~~~ ~ Oflafr Community Redevelopment Agency Att~ . - ~ )1". D." City CI Community Redevelopment Agency 2007-05-15 4