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04/12/2021 Community Redevelopment Agency Meeting Minutes April 12, 2021 City of Clearwater Main Library- Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 E.:. fib• .. p.� Yi / + q Meeting Minutes Monday, April 12, 2021 8:00 AM Main Library - Council Chambers Community Redevelopment Agency Page 1 City of Clearwater Community Redevelopment Agency Meeting Minutes April 12, 2021 Rollcall Present 5 - Chair Frank Hibbard, Trustee David Allbritton, Trustee Hoyt Hamilton, Trustee Kathleen Beckman, and Trustee Mark Bunker Also Present: William B. Horne II — City Manager, Micah Maxwell —Assistant City Manager, Michael Delk—Assistant City Manager, Pamela K. Akin - City Attorney, Rosemarie Call — City Clerk, Nicole Sprague — Deputy City Clerk, and Amanda Thompson — CRA Executive Director To provide continuity for research, items are listed in agenda order although not necessarily discussed in that order. 1. Call to Order— Chair Hibbard The meeting was called to order at 8:00 a.m. 2. Approval of Minutes 2.1 Approve the March 15, 2021 CRA Meeting Minutes as submitted in written summation by the City Clerk. Trustee Allbritton moved to approve the March 15, 2021 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 Confirm the City Manager's appointment of Michael Delk as the Interim CRA Executive Director. CRA Executive Director Amanda Thompson will be on maternity leave from May 7, 2021 through July 30, 2021. The Community Redevelopment Agency (CRA) rules require the Board to confirm the appointment of the CRA Executive Director. City Manager Bill Horne is requesting that the CRA confirm Assistant City Manager Michael Delk as the Interim Executive Director until Ms. Thompson returns from maternity leave. Trustee Beckman moved to confirm the City Manager's appointment of Michael Delk as the Interim CRA Executive Director. The motion was duly seconded and carried unanimously. Page 2 City of Clearwater Community Redevelopment Agency Meeting Minutes April 12, 2021 4.2 Approve an agreement for the sale and development of the property located at 306 South Washington to Southport, LLC for the purposes identified in Request for Proposals (RFP) 53-20 and authorize the appropriate officials to execute same. The purpose of this item is to approve a development agreement between the Community Redevelopment Agency (CRA) and SP Clearwater WFH, LLC to redevelop the CRA-owned property at 306 South Washington Avenue for the purposes identified in RFP 53-20. Background The Community Redevelopment Agency issued RFP 53-20 for the redevelopment of its site at 306 South Washington on August 17, 2020. The request called for a mixed-use or apartment development with a focus on workforce and market rate housing, the opportunity for shared parking to serve surrounding restaurant/retail businesses, construction to begin in 2021 and ample outdoor amenity space. There is currently a lack of supply of rental housing for employees in the technology industry downtown, at Morton Plant Hospital and on Clearwater Beach who earn 80% or higher of the area median income (AMI). Building shared parking on the South Washington site is key to preserving existing greenspace on the CRA-owned property nearby on Pierce Street as well as supporting commercial uses on the ground floors of APEX 1100 and The Nolen apartment buildings. The CRA received responses from the Housing Trust Group, LLC and SP Clearwater WFH LLC. The projects were ranked on Developers Experience and Qualifications, Legal and Financial Feasibility, Ability to Meet Redevelopment Objectives, and Proposed Timeline for Construction. While both applicants have significant experience with affordable housing and presented attractive architectural proposals, SP Clearwater WFH scored higher for the following reasons: - More detailed proposal including construction cost estimates and ability to begin construction in 2021, - Ability to source local financing, not dependent on the state 9% and 4% tax credit program, - The provision of workforce rental housing above 80% AMI, - Long term affordability through a partnership with the Pinellas County Land Trust, and - Significant research into the market and financial feasibility of the project. On October 12, 2020, the CRA Trustees selected SP Clearwater WFH, LLC as the winning bidder and authorized the CRA Director to prepare a development agreement. Page 3 City of Clearwater Community Redevelopment Agency Meeting Minutes April 12, 2021 Current Status In the past four months, the developer has obtained approval for grant funding from Pinellas County, filed with the City for site plan approval and for six additional units from the public amenities pool, confirmed construction cost estimates and completed environmental site analysis. The next step is to adopt a development agreement which will allow all for parties involved to prepare for closing and sale of the property. Proposed Project The project is a 171-unit mixed income apartment development, a minimum of 260-space parking garage with tenant amenities including a pool, dog walking area, two playgrounds, exercise room and community room. There is a mixture of 1-bedroom (725 sq. ft.) units and 2-bedroom (925 sq. ft.) units. There will be 18 affordable units at 80% of AMI, 49 units at 100% of AMI and 104 affordable units at 120% of AMI. The building will include high efficiency HVAC, Energy Star rated windows, low flow toilets and sound deadening construction. The parking area will include a dedicated Uber/Lyft area to support car sharing services as well as ample bicycle parking. There will be 40 public parking spaces operated by the apartment management company that will be available to the public for a minimal charge. The overall project cost is approximately $38,436,995. We expect this number to increase due to a rise in lumber costs and potential environmental remediation, however the CRA contribution currently is remaining the same. Any additional requests for financial support from the CRA would occur outside of this development agreement. The proposed development agreement is conditioned on the construction of plans substantially similar to those submitted with the original application and the following CRA incentives: - The sale of the site to the Pinellas County Land Trust for $3,420,000 and reinvestment of those funds back into the project - The provision of an $800,000 grant towards the project in exchange for public parking - Support an application before the Community Development Board to receive 6 housing units from the density pool The applicant is requesting the following funding from the City (which is a separate action from the CRA development agreement): - $880,000 HOME loan Sale of the property, or closing, is anticipated to occur in early September 2021. The proposed agreement requires the following conditions to be met prior to closing: • Approval for the $880,000 HOME loan from the City • Final zoning entitlements for the additional 6 units from the density Page 4 City of Clearwater Community Redevelopment Agency Meeting Minutes April 12, 2021 pool • Closing dates and final approvals established for transfer of ownership to the Pinellas County Land Trust The proposed project meets the goals outlined in RFP 53-20 derived from the Principles, Goals and Objectives of the 2018 Clearwater Downtown Redevelopment Plan to support redevelopment projects that are pedestrian friendly, incorporate quality urban design and provide a variety of land uses in downtown, including: • Policy 12: The City shall make use of Community Development Block Grant, HOME Investment Partnership Program, State Housing Initiatives Partnership program, and other federal, state, and county funds for Downtown infrastructure and increasing affordable housing options. • Policy 18: The design of all projects in Downtown shall incorporate pedestrian-scale elements that create and maintain an inviting pedestrian environment. • Objective 1 F: Allow for a variety of residential densities and housing types to provide for a range of affordability and mix of incomes consistent with the Character Districts. • Objective 1 G: Continue to utilize a variety of incentives to encourage the construction of new residential uses to location Downtown. • Objective 2M: Create parking as infrastructure through a park once strategy that utilizes consolidated parking to serve all of Downtown and reduces the requirement for use by use on-site parking. This is a catalyst project for this area that would provide new residents to downtown and parking to support nearby businesses on Cleveland Street. There are two aspects to this proposal that provide long term housing affordability. First, the developer proposes that the CRA sell the land to the Pinellas County Land Trust who will own the underlying land in perpetuity. The land trust will then provide a 99-year lease to the developer. Second, the rental rates are set by the AMI established by Pinellas County and cannot increase more than 1.02% per year. Typically, market rate rental amounts increase more than 1% per year. CRA approval of the sale and development of this site to SP Clearwater WFH, LLC is recommended. APPROPRIATION CODE AND AMOUNT: Funds are available in CRA Project Code 3887552 - R2009 Housing - City. CRA Executive Director Amanda Thompson and Southport Financial representative Peter Leach provided a PowerPoint presentation and requested the item be continued to a date uncertain. In response to questions, Mr. Leach said there is a statewide effort to Page 5 City of Clearwater Community Redevelopment Agency Meeting Minutes April 12, 2021 propose legislation that addresses the challenges associated with affordable housing construction projects with restricted rents. He said the costs associated with lumber and framing materials have increased since the bid was awarded, creating a financial challenge that forces the contractor to work with the architects to change materials and detailed construction plans. Ms. Thompson said the environmental assessments were done approximately 15 years ago. Mr. Leach said conditions change and what may have been acceptable 15 years ago is no longer acceptable today for banks. The City Clerk said it is too late for new legislation to be considered during this legislative session. Since the issue is a statewide concern, the matter can be presented to the Florida League of Cities during their legislative policy development process. She said the matter may also be included in the City's 2022 legislative agenda. Ms. Thompson said staff would like to see the project continue making progress. She said placing the project on hold has a detrimental effect on the CRA's ability to show progress. Staff is looking into the possibility of using some of the COVID-19 funds the City expects to receive to offset increased construction costs due to COVID. She said funding from the new brownfields program can be used to remediate the site. Discussion ensued with consensus for staff to pursue a proposal for the environmental remediation of the site. Trustee Bunker moved to continue Item 4.2 to a date uncertain. The motion was duly seconded and carried unanimously. 4.3 Approve the Vacancy Reduction grant program to assist owners with renovating vacant and underutilized commercial spaces to attract businesses that generate pedestrian foot traffic, with additional funding available for unique, catalytic uses and authorize the appropriate officials to execute same. The Community Redevelopment Agency (CRA) is recommending approval of a grant program as part of the CRA's two-year strategy to reduce vacancy and encourage private investment in downtown. The CRA staff spent 18 months in conversation with tenants, property owners and other city departments to understand how to develop partnerships with the community that will fill vacant, older commercial spaces. The purpose of the Community Redevelopment Agency (CRA) Vacancy Reduction grant program is to reduce vacancy in commercial properties by assisting property owners with funding to renovate vacant spaces for occupancy by long-term uses that generate pedestrian foot traffic in downtown. The program's objectives are as follows: Page 6 City of Clearwater Community Redevelopment Agency Meeting Minutes April 12, 2021 • Reduce the number of vacant properties in Downtown Clearwater by bringing older, vacant properties up to current building and fire codes to allow occupancy • Increase the number of commercial spaces suitable to create new restaurant, retail and cultural destinations in downtown • Incentivize the attraction of new businesses that generate pedestrian foot traffic to occupy vacant spaces by reducing the costs of renovation There are two parts to this program - Part A funds interior and exterior buildouts of vacant spaces to attract the following kinds of businesses as defined in the Downtown Zoning code: Retail and restaurant businesses Personal Services Industries (e.g., barber and beauty shops, health spas, dance studios, photography and art studios, tailoring, and other similar services) Galleries, theaters, other cultural and community gathering spaces Applications must include a concept site plan, interior and exterior concept plans, a narrative description of the proposed improvements, description of the future tenant/use, project timeline, and a scope of work with a minimum of two quotes from qualified vendors for completing the work. Every project must include interior improvements. The total project cost is determined by the total costs of eligible grant expenses. Grant funds can only be used towards eligible expenses. Matching funds must be used towards eligible expenses. The maximum grant amount per space is $250,000, which requires a total project cost of a minimum of$500,000. No more than two spaces/parcels/buildings will be considered per application. If two buildings are combined for one renovation project, then the maximum grant amount will be $500,000 for a total project cost of$1 million. Part B provides additional funding for renovations and the purchase of specialty equipment for tenants and/or uses that will serve as a unique destination in downtown. For example, an award-winning chef or dining concept that would be new in downtown or a cultural attraction with an established audience. The applicant will be asked to show evidence of the proposed tenant's ability to generate significant visitors. Depending on the type of business/tenant proposed additional information will be required including, but not limited to, a narrative description of why the use is destination worthy, the total project costs and sources of funding, a multi-year pro forma for the business operations and breakdown of grant expenditures that will stay with the building versus any funds for specialty equipment. The maximum grant available for Part B is up to $500,000 per request with a 50% match from the property owner to attract and maintain the unique, destination use. This is the maximum grant regardless of the number of spaces/buildings. For Part B, the property owner can match the CRA grant funds in the following ways any construction costs (including Page 7 City of Clearwater Community Redevelopment Agency Meeting Minutes April 12, 2021 labor/materials/permit fees), rent abatement for the tenant, and any Part B eligible expenditures. Matching funds cannot be counted twice. Any matching funds used for a Part A grant, cannot be used for Part B grant. CRA grant funds can only be used towards eligible expenses. The CRA will require the property owner to commit to a five-year loan to grant agreement secured through one or more of the following methods: • A mortgage on the property • A personal guarantee • A promissory note For Part A grants, if a tenant goes out of business in less than five years, the property owner will have six months to replace the tenant with any eligible business under this grant program. For Part B grants, if a tenant goes out of business in less than five years, the property owner will have nine months to find a similar tenant or will have to seek approval to amend the grant agreement from the CRA Trustees for another eligible use. CRA staff recommends establishing a one-year budget of$1 million for this program with the grant funds split evenly between Part A and Part B. At a minimum, this amount would provide funding for the buildout of two spaces and one "catalyst" business. The proposed grant program balances the legal requirements for the use of CRA funds, meets the goals of the downtown redevelopment plan and provides a partnership opportunity for property owners who wish to invest in downtown. The program would become effective May 1, 2021. APPROPRIATION CODE AND AMOUNT: Funds are available in CRA project code 3887552-R2003 ED-City. CRA Executive Director Amanda Thompson provided a PowerPoint presentation. In response to questions, Ms. Thompson said all funds will be provided on a reimbursement basis; no retroactive funding. Prospective grant applicants should not pursue any work until they have an executed grant agreement. Staff will review the receipts, confirm work and reimburse 50% of the work. She said CRA will reserve 10% of the grant award until the project is complete. Ms. Thompson said it will be harder to find a specialty tenant for the catalytic use and will take a longer. It was suggested that the program be reviewed in six months to determine effectiveness. Page 8 City of Clearwater Community Redevelopment Agency Meeting Minutes April 12, 2021 Trustee Hamilton moved to approve the Vacancy Reduction grant program to assist owners with renovating vacant and underutilized commercial spaces to attract businesses that generate pedestrian foot traffic, with additional funding available for unique, catalytic uses and authorize the appropriate officials to execute same. The motion was duly seconded and carried unanimously. In response to questions, Ms. Thompson said pre-COVID, the CRA established a partnership with Amplify Clearwater, who is working on a farmer's market through the special events permit process. Some of the challenges associated with engaging community members in a farmer's market are identifying interested individuals, making sure those individuals have the skill set to go through the special event process, and fundraising. CRA does not have the staff capacity to manage and organize a farmer's market. She said there is no neighborhood association to assist with a farmer's market; Jack Mortimer was running a Downtown Neighborhood Association but it has not been active since he stepped away from the role. Ms. Thompson said CRA funds are state restricted; a little more than half comes from Pinellas County and can only be spent on capital improvements. The interior improvement program projects are funded mostly with city funds. 5. Director's Report 6. Adjourn Attest CRA Executive Director Amanda Thompson said staff will be presenting budget approval items in May for the Cleveland Wayfinding Streetscape Phase 3. Engineering is the project manager. A marketing campaign and community engagement efforts will begin once the timeline has been finalized by the awarded bidder. Renderings of the proposed Mercado Plaza area available on Downtown Clearwater.com The meeting adjourned at 9:01 a.m. 4-011 /2.4 City Clerk City of Clearwater Chair Community Redevelopment Agency Page 9