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03/14/2022 Community Redevelopment Agency Meeting Minutes March 14, 2022 City of Clearwater Main Library- Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 m Meeting Minutes Monday, March 14, 2022 8:00 AM Main Library - Council Chambers Community Redevelopment Agency Page 1 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 Roll Call Present 5 - Chair Frank Hibbard, Trustee David Allbritton, Trustee Hoyt Hamilton, Trustee Kathleen Beckman, and Trustee Mark Bunker Also Present—Jon Jennings—City Manager, Micah Maxwell — Assistant City Manager, Michael Delk — Assistant City Manager, David Margolis — 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 minutes of the February 14, 2022 CRA meeting as submitted in written summation by the City Clerk. Trustee Hamilton moved to approve the minutes of the February 14, 2022 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 Approve an Interlocal Agreement between the City of Clearwater and the Community Redevelopment Agency (CRA), Pinellas County, and the Clearwater Housing Authority to provide for revenue sharing and the redevelopment of 306 S Washington Avenue, and authorize the appropriate officials to execute same. The purpose of this item is to request approval of an Interlocal agreement that is a companion item to the 306 South Washington Avenue development Page 2 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 agreement. The 306 South Washington 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 workforce units at 120% of AMI. Typically, affordable housing projects pay local property taxes on only 50% of the taxable value. This is a benefit under Florida law to support affordable housing. This project is a mixture of affordable and workforce housing units that will be subject to income restrictions and the land will be owned by the Pinellas County Land Trust. Although this is a permanently affordable project, it is not recognized as such under current Florida law. Because most of the units exceed 60% AMI, it will be taxed as a market rate, for profit project at 100% of the taxable value. Based on the land restrictions requiring permanent affordability, the developer assumed the state discount and estimated a tax payment of$1,200 per unit or $205,200 annually in city/county taxes as part of their project proposal and grant requests. After meeting with the property appraiser in March 2021, the CRA and developer learned the actual tax payment per unit would be $2,388 per unit or$408,348 annually. Under projected rental rates, the project will not generate enough income to pay the full project amount of city and county property taxes. This mixed income housing project is a high priority for the City, CRA and Pinellas County to meet the significant need for workforce housing and downtown redevelopment goals. Without additional financial subsidy, this project cannot move forward. Staff believes the best option is to transfer ownership to the Clearwater Housing Authority (CHA) who has the expertise to manage a mixed income property and has proposed a revenue sharing agreement. Additionally, all revenues generated by the CHA must be spent to further their mission of providing affordable housing. Mixed income projects like these provide a continuous source of revenue to construct and maintain affordable housing without relying on federal, state, or local subsidies. The proposed Interlocal agreement is a multi-party agreement including the Clearwater Community Redevelopment Agency (CRA), the City of Clearwater (City), Pinellas County (County) and the CHA. The agreement outlines each parties funding commitments to the project, the long-term ownership of the project site and public parking and the revenue sharing arrangement between the CHA and the other parties. The agreement includes the following terms: • Acknowledges that the provision of workforce and affordable housing is an adopted policy of all entities that are party to the agreement. • The CRA will sell the project site to the Pinellas County Land Trust for $3,460,000 and will reinvest the proceeds into the construction of the project. The Land Trust will enter a long-term lease with the Clearwater Housing Authority. Page 3 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 • The CHA and the Developer will construct and manage the project in accordance with the terms adopted in the development agreement with the CRA. This includes the provision of 40 spaces for public parking, no assignments unless approved by all parties and maintaining income restrictions. • The CHA will participate in revenue sharing if there is net surplus after all loan obligations, administrative fees and maintenance costs are met. "Net Surplus Revenues of the Project" shall mean the net cash income of the Project after the payment of all operating expenses (including management fee of not in excess of 6%), funding or replenishment of operating, debt service and replacement reserves for the Project, required payment of debt service (including redemption of bonds issued for the construction of the Project). • The CHA will pay 50% of the Net Surplus Revenues of the Project, up to but not exceeding an amount equal to $400 per unit shall be paid to the City ($100 per unit), the CRA ($100 per unit) and the County ($200 per unit); If, during the term of this Agreement, the CRA ceases to exist, the City's portion of the annual payment shall be increased to include what would have been the CRA's share. As proposed, this would be an annual payment of$68,400. • 50% of the Net Surplus Revenues of the Project shall be retained by the CHA and used for any purpose consistent with Chapter 421, Florida Statutes. • Payment will begin after the first year of stabilization of the project meaning occupancy levels of 95% for a period of six months. Payments will be made on an annual basis. There is a significant need for affordable and workforce housing in Pinellas County and in Clearwater. This project is a public/private partnership that can deliver a high quality, mixed income apartment development that will remain financially sustainable ensuring affordable housing for decades into the future. CRA Executive Director Amanda Thompson provided a PowerPoint presentation. In response to questions, Ms. Thompson said staff anticipates 6 to 9 months for construction drawings to be completed and be shovel ready. The costs for supplies is hard to predict. She said the Housing Authority is willing to take over this project because of the 120% AMI units, which is an income restriction for a household of two of$70,000, will pay to subsidize the lower units. She said that is why one sees a shift to a true mixed income. The project will not receive a federal subsidy. Pinellas County has appropriated $6 million for the project. Ms. Thompson said the surplus funds the CHA maintains may be used for the operations of the housing authority, maintenance of the properties, and construction of new affordable housing. The housing authority will be required to maintain a maintenance and operations fund for this site,- Page ite,Page 4 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 anything beyond that may be spent on any of the housing authority's sites or development of other sites. Trustee Allbritton moved to approve an Interlocal Agreement between the City of Clearwater and the Community Redevelopment Agency (CRA), Pinellas County, and the Clearwater Housing Authority to provide for revenue sharing and the redevelopment of 306 S Washington Avenue, and authorize the appropriate officials to execute same. The motion was duly seconded and carried unanimously. 4.2 Approve the proposed agreement for the sale and development of the property located at 306 South Washington to SP Clearwater WFH, LLC and the Clearwater Housing Authority for the purposes identified in Request for Proposals and Qualifications (RFP/Q) 53-20 and authorize the appropriate officials to execute same. The purpose of this item is to request approval of a development agreement between the Community Redevelopment Agency (CRA), the Clearwater Housing Authority (CHA) and SP Clearwater WFH, LLC (Developer) to redevelop the CRA-owned property at 306 South Washington Avenue for the purposes identified in RFP/Q 53-20. Background The Community Redevelopment Agency issued RFP/Q 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 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 supporting commercial uses on the ground floors of APEX 1100, The Nolen apartment buildings and the planned brewery at 115 S. Martin Luther King, Jr. to the north of the subject property. The CRA received responses from the Housing Trust Group, LLC and SP Clearwater WFH LLC. 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. Proposed Project The project is a 171-unit mixed income apartment development, with a minimum 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 Page 5 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 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. Current Status From November 2020 to April 2021, the developer 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. Two issues emerged that increased construction and operating costs - an environmental issue and a property tax issue. The Montrose Phase I Environmental Report prepared for the Developer acknowledges that the 2009 City Phase I environmental report's conclusion that the project site is "clean" relies on a Site Rehabilitation Completion Order (SRCO) dated July 1, 2009, by the Florida Department of Environmental Protection (FDEP) after testing of the soils and the groundwater showing no contaminates exceeded the allowed thresholds. This determination was found to be still in place because there has been no activity on or near the site that would have introduce contaminants to the site since the report was issued. However, the ECS Geotech Reports 1 and 2 completed in March 2021 found (1) a buried concrete vault that needs to be dug out and replaced with controlled fill, (2) buried peat that is unbuildable and requires being dug out and replaced by controlled fill and (3) the top 2 feet of soil covering the site has small bodies of non-soil debris including slag throughout the site that could not be used for building. All unusable dirt will need to be hauled off the site and replaced with structurally sound dirt. The CRA has allocated up to $300,000 in additional grant funds to remove the concrete vault, the buried peat and bring in controlled fill to make the site buildable. Typically, affordable housing projects pay local property taxes on only 50% of the taxable value. This is a benefit under Florida law to support affordable housing. This project is a mixture of affordable and workforce housing units that will be subject to income restrictions and the land will be owned by the Pinellas County Land Bank. Although this is a permanently affordable project, it is not recognized as such under current Florida law. Because most of the units exceed 60% AMI, it will be taxed as a market rate, for profit project at 100% of the taxable value. Based on the land restrictions requiring permanent affordability, the developer assumed the state discount and estimated a tax payment of$1,200 per unit or $205,200 annually in city/county taxes as part of their project proposal and grant requests. After meeting with the property appraiser in March 2021, the CRA and developer learned the actual tax payment per unit would be $2,388 per unit or$408,348 annually. Under current and projected rental rates, the project will not generate enough income to pay the full Page 6 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 project amount of city and county property taxes. To address the property tax increase, staff recommends the CRA partner with the Clearwater Housing Authority (CHA) to manage and own the project. The CHA is a tax-exempt entity. However, the CRA has negotiated a revenue sharing agreement to provide up to $200 per unit to the City/CRA and $200 to the County. The terms of the revenue sharing are outlined in a separate Interlocal agreement. The developer, Southport LLC, will still design and build the project as originally proposed. Proposed Development Terms 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 and up to $300,000 for site remediation - Support an application before the Community Development Board to receive 6 housing units from the density pool - Assignment of the project to the Clearwater Housing Authority (Term Added January 2022) 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 late 2022. 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 pool Closing dates and final approvals established for transfer of ownership to the Pinellas County Land Trust Project Justification The proposed project meets the goals outlined in RFP/Q 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. Page 7 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 Objective 21VI: 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 three aspects to this proposal that provide long term housing affordability. First, the CRA will 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 Clearwater Housing Authority. 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. Third, all revenues generated by the Clearwater Housing Authority must be used aligned with their mission to provide affordable and workforce housing. This project will be a long-term source of revenue for affordable housing in Clearwater. APPROPRIATION CODE AND AMOUNT: Funds are available in CRA Project Code 3887552 - R2009 Housing - City. Trustee Beckman moved to continue Item 4.2 to a date uncertain. The motion was duly seconded and carried unanimously. 4.3 Approve the Placemaking and Resident Engagement grant program for property owners, tenants, organizations, or individuals to fund placemaking and outreach opportunities that assist in transforming Downtown Clearwater into a destination filled with a variety of active, beautiful, and creative public places. The purpose of this item is to request approval to establish a new grant program that funds Placemaking and Resident Engagement activities to further the revitalization of downtown. The proposed grant program is identified in the CRA's two-year strategy as a method to reduce blight and provide programming to connect Clearwater's neighborhoods to downtown. The purpose of the Community Redevelopment Agency (CRA) Placemaking grant program is to provide support and funding to those who are interested in making a positive change through placemaking and resident engagement. The Placemaking Grant Program's objectives are to: • Infuse downtown with innovative and thriving public spaces. • Increase and diversify placemaking within downtown by making it easier for new producers and community leaders to enhance the community. • Incentivize those looking to energize downtown by connecting employees to downtown and connecting residents to downtown, providing opportunities for these groups to take pride in their community. Page 8 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 Provide additional support for those who wish to engage downtown employees, children and implement art/tech projects. Eligible placemaking projects must provide a positive public impact to the space in which they occur. Improvements can vary from temporary to semi-permanent enhancements. Outdoor and indoor projects must provide access for public enjoyment of the place. Approved projects must take place within an eligible location and must fall within one of the four placemaking project categories: standard, creative, or tactical placemaking or resident outreach. Eligible projects must also provide improvements that fall under: beautification, activations, or engagement. The amount of grant funds for the program will be established by the CRA Trustees on an annual basis through the budgeting process. The maximum funding awarded per project shall not exceed $25,000. Projects that target downtown employees, children and/or incorporate art/tech are eligible to receive funding for 100% of their project costs up to $25,000. CRA staff will review each funding request and establish the grant amounts per the individuality of each project. All grant awards are subject to budget availability. Applications will be accepted on a rolling basis. The proposed program authorizes the CRA Director to approve grant applications, execute grant agreements and authorize reimbursement. Staff recommends allocating $50,000 for the 21-22 fiscal year. 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 those who wish to invest in downtown. If approved, the grant program would become effective May 2, 2022. APPROPRIATION CODE AND AMOUNT: Funds are available in CRA project code 3887552-R2002 Community Engagement, 3887552-R2003 Economic Development City TIF and 3887552-R2004 Economic Development County TIF CRA Public Relations and Programs Manager Eric Santiago provided a PowerPoint presentation. In response to questions, Mr. Santiago said applicants will not be able to seek funds from this program and other CRA grant funds for the same project. Staff will work with individuals to determine which grant program best fits the project. CRA Executive Director Amanda Thompson said if the applicant is seeking funds to clean up a commercial property, staff would steer the applicant towards the commercial beautification grant. Mr. Santiago said parklets can be designed for public use or as a curb-extension for private use. Staff is supporting parklet projects for public use as an additional public space when not at private Page 9 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 establishment. Ms. Thompson said private businesses must obtain a sidewalk cafe permit. Mr. Santiago said marketing campaign targeting community groups and office tenants will begin once the program is underway. He said these types of events do not generate income. Trustee Bunker moved to approve the Placemaking and Resident Engagement grant program for property owners, tenants, organizations, or individuals to fund placemaking and outreach opportunities that assist in transforming Downtown Clearwater into a destination filled with a variety of active, beautiful, and creative public places. The motion was duly seconded and carried unanimously. 4.4 Approve work orders to Cardno, Inc. for Post Active Remediation Monitoring of the former Carpro Facility at 1359 Cleveland Street in an amount not to exceed $150,000 for five-years pursuant to Request for Qualifications (RFQ) 26-19, Engineer of Record Consulting Services (EOR), and authorize the appropriate officials to execute same. (consent) Environmental Site Assessments conducted for the Carpro Facility at 1359 Cleveland Street revealed that it historically operated as a retail gasoline and service station and then an automotive repair facility. During the site assessment, groundwater contamination was found. This included a plume of Trichloroethene (TCE) and isolated areas of isopropyl benzene and arsenic. In order to remediate the site, a remedial action plan was prepared and submitted to FDEP. Cardno implemented an extensive bio-augmentation injection program in December 2011 that included the injection of selected microbes and nutrients that are specifically designed to convert chlorinated solvents to innocuous daughter products (primarily ethene and water). Since that time, the City has been performing semi-annual groundwater testing and submitting Post Active Remediation Monitoring Reports to the FDEP. Over time, levels of contamination at the site have been reduced to very close to the cleanup target levels. Based on the most recent test results, Cardno has recommended continuing the semiannual sampling plan. FDEP agreed with Cardno's recommendations. APPROPRIATION CODE AND AMOUNT: Funds are available in Community Redevelopment Agency Project 3887552- R2004 Economic Development-County In response to questions, Sr. Environmental Specialist Joe DeCicco said Cardno is an engineer of record. The City Manager said he was concerned Page 10 City of Clearwater Community Redevelopment Agency Meeting Minutes March 14, 2022 that the process had been going on since 2011 and requested staff to expedite the matter. Mr. DeCicco said the property will be ready for commercial use, he will ask Cardno regarding the requirements to make the site ready for residential use. CRA Executive Director Amanda Thompson said with the purchase of the Idle Spur, which is adjacent to this location, the site is large enough to have parking for a commercial use. Mr. DeCicco said this site impacted the Idle Spur property, the contaminant pool is quite large. Staff can approach the Department of Environmental Protection regarding approving the site for temporary uses. The City Manager said it would be very difficult to redevelop a former gas station site for residential use. Based on the information provided today, he would be very careful about any residential or any type of public use until a permanent solution is determined. Trustee Hamilton moved to approve work orders to Cardno, Inc. for Post Active Remediation Monitoring of the former Carpro Facility at 1359 Cleveland Street in an amount not to exceed $150,000 for five-years pursuant to Request for Qualifications (RFQ) 26-19, Engineer of Record Consulting Services (EOR), and authorize the appropriate officials to execute same. The motion was duly seconded and carried unanimously. 5 Director's Report CRA Executive Director Amanda Thompson provided a PowerPoint presentation of recent and upcoming events. In response to questions, Engineering Director Tara Kivett said the decorative barricade at the 400 and 500 blocks of Cleveland Street will begin in 30 days. Staff is currently repairing the paver crosswalk. The traffic light at Osceola and Cleveland Street should be on recall for pedestrians only, some traffic counts and speed studies have been conducted in the area in an effort to address concerns raised by the Downtown Merchants Association. She said staff can look at the traffic light timing. Staff was requested to provide information regarding what happened to the paver crosswalk at Ft. Harrison Avenue and Cleveland Street. Page 11 City of Clearwater Community Redevelopment Agency 6. Adjourn Meeting Minutes March 14, 2022 The meeting was adjourned at 8:41 a.m. :1A.,atJ 74".°1 Attest `opM EN ‘,0011111,11,,,,,,„ iC'i hair Community unity Redevelopment Agency g ::../1/1-01(e-/ 1��l AT.q. % _.PA2 41 City Clerk ?cr4"'4 OvQpRATE .� =1-o: DT= ,. ',��� ��nFt OP�O�````� City of Clearwater Page 12