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Minutes 12-27-89MINUTES OF THE SPECIAL CITY COMMISSION MEETING RE TRADEWINDS SETTLEMENT HELD IN COMMISSION CHAMBERS, CITY HALL, BOYNTON BEACH, FLORIDA, WEDNESDAY, DECEMBER 27, 1989 AT 5:00 P. M. PRESENT Gene Moore, Mayor Robert Olenik, Vice Mayor Arline Weiner, Commissioner Lee Wische, Commissioner J. Scott Miller, City Manager Sharon Randolph, Interim City Manager Raymond Rea, City Attorney Sue Kruse, Deputy City Clerk Mayor Moore called the meeting to order at 5:00 P. M. The developer's offer of $8,000,000 for a total settlement of all issues involved in the controversy was on the table. Mayor Moore said each side would be given 15 minutes to speak~ unless the Commission had other views on that. Those in opposition would be given an opportunity to be heard, and they would be limited to five individuals with a three minute limit for each one. Mayor Moore asked if anyone wished to speak in opposition to the proposed settlement° Gary Lehnertz, 619 S. W. 2nd Avenue, President of Lake Boynton Estates Homeowners Association, stated it was the overwhelming opinion of everyone in the Homeowners Associa- tion and in the entire Lake Boynton Estates that this settlement should not be agreed to. They feel the City has constantly been badgered by Tradewinds Development Corpora- tion. The change in zoning of this area was turned down by the City Commission several years ago. Since then~ every time the City Commission has done something Tradewinds did not agree with, Tradewinds has immediately gone to the Courts to try and change it. Tradewinds has ignored what is beneficial to the City. Mr. Lehnertz felt Tradewinds had no leg to stand on and no reason to ask for any money. Mr. Lehnertz saw where everyone living in his area will be responsible for several hundred dollars of additional taxes if this would go into effect. Looking at what was going he felt the City was giving in completely and giving Trade- winds what they asked for when Tradewinds "refused to play ball." Mr. Lehnertz urged the Commission not to accept the $8,000,000 offer of settlement Joseph R. Molina, 81i S. W. 6th Avenue, stated he, together with a majority of the Leisureville residents, was opposed to the taxpapers money being used in this fashion. Any benefits that accrue from the efficiency Of good government in this City should accrue to the citizens of Boynton Beach and not to any developer or outside element. MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA DECEMBER 27, 1989 Mr. Molina stated they witnessed a plan that was wrong in 1986. It was wrong then, and it is wrong today. The dens- ity is too high. Mr. Molina called attention to the impact it would be on the natural resources, environment, and the life style of the citizens, and he elaborated. He emphasized that to add money to the coffers of the developers was un- called for, and he begged the Commission to deny this. Barry Cohen, representing Woolbright Partners, who owns property across the street from Tradewinds' property, said they had not come forward yet in this matter. He expressed concern that the settlement as it was, with the specific inclusion of Ordinance 89-39, would result in an entire taking of the property directly across the street, south of the Tradewinds property. By that, his client and the commercial property in the area in general will end up paying more of the settlement than anyone else involved in the matter. Mr. Cohen did not think that was being seen by the City Commission. He thought road impact studies would show it will be impossible for development of commercial property in this area. The increase of commercial density on the Trade- winds property will make it impossible for his client to get building permits to develop a commercial site. Mr. Cohen felt they would be paying an inordinately large amount of the settlement and objected for that reason. In addition, he felt the amount of value given for the enhance- ment as a result of Ordinance 89-39 was, to a great extent, undervalued. If the Commission would look at what this will be worth down the road, in light of the inability of others to produce and develop commercial property, it will be greater than the value placed on that. For that reason, Woolbright Partners objected. Shirley Jaskiewicz, 1917 S. W. 13th Avenue, spoke as a tax- payer, and objected to paying Tradewinds anything more than the concessions already granted by the City Commission. She recalled that City Attorney Rea had said Tradewinds could have proceeded with the project at any time. Tradewinds was only to comply with the requirements any builder has to comply with when he revises his plans. Tradewinds chose not to. Ms. Jaskiewicz said the plan now being discussed bore little resemblance to the one initially presented to the public in Court. She was amazed at the inflated figures arrived at by economists hired by the City and developers, and she could not imagine what they were taking into consideration. 2 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA DECEMBER 27, 1989 Ms. Jaskiewicz called attention to office buildings that are empty or for sale and to the real estate market° After elaborating, Ms. Jaskiewicz referred to the City compensating the developer for delay by deleting the one family homes. She also referred to Home Depot and the increase in commercial space. Ms. Jaskiewicz expounded and then said the City had a highly professional staff who presented to the Commission and the public many valid reasons for rejecting the plan. Residents filled the Commission Chambers asking for consideration of their concerns. They purchased residential homes next to vacant property zoned for residential use. If anyone has a valid reason for a lawsuit, it should be them. Ms. Jaskiewicz felt the Commissioners who voted for this should accept responsibility for it. Everyone wants the property developed~ but she thought more consideration could be given to the residents directly affected by it. The present officials have now permitted this developer the aforementioned considerations. If they were not willing to accept these conditions without additional monetary considerations, Ms. Jaskiewicz urged that the City partici- pate in the January 17, 1990 hearing to determine if City officials have any liability in this matter. She also urged the City Commission and all concerned citizens to contact the Governor and the State Attorney General to review the entire matter before the taxes of the citizens and the taxes of their grandchildren are committed to a developer. Ms. Jaskiewicz named current pressing needs in the City and then urged the developer to accept the concessions the City had made. Mayor Moore asked if anyone wished to speak in favor of the proposed settlement. Dee Zibelli, 440 Ocean Driveway, read a letter written by Michelle Costantino, which said the Commission was presented with a petition in the early months of 1989 with over 1,000 signatures of taxpayers who said Tradewinds should be settled. Now, just days away from the end of the year, some Commissioners are hesitant, with the excuse of using the Court to decide the fate of the City, knowing the Courts have not once ruled in the City's favor, and still throwing tax dollars away on attorneys' fees and court costs. MS. Costantino questioned whether those Commissioners were serving the residents or themselves. MINUTES - SPECIAL CITY CO~ISSION MEETING BOYNTON BEACH, FLORIDA DECEMBER 27, 1989 Ms. Costantino wrote they must make the residents being led by Mr. Lehnertz and Mr. Molina know the majority of the residents have to bite the $8,000,000 bullet. The City is not paying any more. If damages above and beyond are awarded after this negotiated settlement is accepted, Ms. Costantino felt the intervenors should have the additional financial burden alone. She asked the Commission to accept the settlement offer. Using a population of 47~450 people with 9.5 interest at five years, Ms. Costantino figured it would come to $248~68 per person. Speaking as Dee Zibelli~ former City Commissioner, stated that the Commission settled this a long time ago, knowing it was in the best interest of the City to do so. There was a fiasco a lot of people do not know about unless they were on the inside as a Commissioner or knew what happened within the City. Lowell Bennett, 400 S. W. Golfview Terrace, Leisureville, took exception to what Mr. Molina said. In his opinion, Mr. Molina did not now represent the majority of Leisureville, nor did he ever represent the majority of Leisureville. Mrs. Zibetli had said what Mr. Bennett would have said. He believed the City had been in Court six times on this. Each time, the ruling has been in favor of Trade- winds. Mr. Bennett believed the City had spent over $200,000 in legal fees. He thought it was silly to pay legal fees to try and negotiate another settlement when all they could see in the future were more legal fees, a higher cost, and more delay. Mr. Bennett did not like to pay more taxes, but he did not want to look at the future and see that the settlement was $t0,000,000 or $15,000,000. He added that was well within the realm of possibility. No one else wished to speak, and THE PUBLIC HEARING WAS CLOSED. Mayor Moore informed the public that the Commission spoke to its trial counsel. Commissioner Weiner had no comment. Comments by Vice Mayor Olenik Vice Mayor Olenik expressed that this was one of the most difficult decisions he had been faced with during his lifeo He had just met with the City's counsel. Vice Mayor Olenik mentioned he was the only Commissioner potentially up for 4 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA DECEMBER 27, 1989 re-election in March~ and one would think he needed to make the decision that would get the most votes. He wanted to make a decision that would benefit the citizens. Vice Mayor Olenik stated the issue tonight was whether the City owed damages to Tradewinds Development Corp. If so, what is the value of the damages and could they come to an equitable agreement tonight? The decision had nothing to do with the project or vacant properties. After explaining, Vice Mayor Olenik remarked that $8,000,000 is 1/3 of the City's annual budget for the General Fund. Vice Mayor Otenik apprised the audience that the Commission has to meet in front of the press, television and opposition to discuss what they are going to do. He noted no one tonight said the settlement might be $5~000,000 if they go to trial. The numbers Tradewinds put on the table range from $11~000,000 to over $30j000,000 or $40,000~000. None of the numbers have been audited by the City. Numbers on the table on the City's side range from*S700,000 to $5,000,000. The City made a 3.3 million dollar concession a couple of months ago on zoning. minutes. Vice Mayor Olenik stated the City's counsel advised him that offer was potentially several million dollars higher than what the City feels is comfortable for the damages suit. He asked why the City could not go to mediation and let an independent Judge sit down with the Attorneys on both sides. Obviously, the City was at fault, but the question on Vice Mayor Olenik's mind was the value of the fault. Vice Mayor Olenik stated the City's side is going to audit the number. The other side had assured him those were good numbers, but Vice Mayor Olenik could not feel comfortable without an independent audit. Comments by Commissioner Wische Commissioner Lee Wische informed everyone he was probably the only one on the dais who had been fighting Tradewinds from the beginning. He spoke against Tradewinds on more than one occasion, but he also stated when he became elected, he personally would abide by the Fourth District Court of Appeals' decision, no matter what it would be. The Fourth District Court of Appeals voted in favor of Trade- winds. Commissioner did not hide what he was going to do when that decision came out. It was stated in the newspapers and was quite obvious to everbody that the City lost for the sixth time~ *Should be several hundred thousand dollars. See 2/1/90 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA DECEMBER 27, 1989 Verbatim (requested by Commissioner Wische) Wische: I tried negotiating with the other members of this Council for the best interests of the entire City. My number one priority was to get the fine dismissed instead of punitive ($290,000) to compensatory along with my other Commissioners. Another thing we agreed on was giving more density for getting some enhancement which was roughly $2,500,000 to $3,500,000. Another thing which I personally brought out, which we seemed to overlook, but I'm sure someone would have picked it up, was that the three officials being sued by Tradewinds for $15,000,000 apiece (a total of $45,000,000) would be another additional enhancement that they should consider, and they agreed to that too. Now~ I don't want to pay any more taxes than anybody else, but no one here tonight has come up with how we can pay this $8,000,000, if we agree, so I did a little homework on my own, and I have a suggestion° I have to read it because I compiled these figures today, and they are subject to meetings between the Commission. There are several ways to pay $8,000,000 with- out, without having to raise taxes or having a bond issue. ~i is by tightening our belts which was, by the way, my opening speech when I took office. I would like to suggest the following methods, merely for discussion: Now we approved ~hree additional jobs roughly at $20,000 per job. That's another $600,000. I'll get into that. Also, we can reduce our Use the .5 mills set aside for capital improvement each year. If it's for capital improvement, well~ construction is capital improvement. That comes to roughly $900,000. Cut in half compensation adjust- ment. That would be $300,000. Cut manage- ment plan by, package by $60,000. *Should be See 1/2/90 minutes. 6 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA DECEMBER 27, 1989 Wische: (Cont.) community improvement program by $100,000. If you add that all up, we get $350,000 each year° That would come to $1,960,000. All right. Now the 30 jobs. They were frozen for three months. This City operated efficiently those three months without any loss in levels of service. If we don't want to do the whole thing, we can do half. And that was during the most hectic time that this City has ever seen and I hope will ever see again. We can do that. In addition to the above suggestions, we use our car, our ear pools could be formed instead of individuals using cars. This would eliminate car allowance and keep a tighter rein on uses of vehicles. These are just a few ways of saving money without lowering our levels of service. Also, no one seems to have mentioned that we will recover from insurance for legal fees and damages approximately Sit000,000. Now I know it means tightening our belts, but there are ways that we could do without a bond issue and raising taxes. This is a suggestion by me, which I'm sure the other Commissioners can improve on. Now look at it this way. If we can have $2~000,000 a year, and Tradewinds would accept four payments of $2,000,000 per year without our raising taxes or floating a bond, I leave it up to you to figure out whether that's a good way of doing it. Thank you. Comments by Mayor Moore Mayor Moore said there comes a point and time when individual elected officials have to face the music. The City did wrong in this. A decision was made which resulted in defying a Court Order. The City has been fined in excess of $260,000. Mayor Moore thought the City had lost six consecu- tive issues in Court. He emphasized that you do not defy a Court Order. Mayor Moore commented that he put Mr. Molina with the three politicians into this mess. It was thought they spoke for 7 MINUTES - SPECIAL CITY COMMISSION MEETING BOY'TON BEACH, FLORIDA DECEMBER 27, 1989 Leisurevitte, which meant whether they were reelected or not. The decision was wrong. A very minor group of people got the City into this mess° Elected officials made the wrong decision in following what they were dictated to do. Mayor Moore asked how long they would defy a Court Order before they would realize they were in a losing situation. He did not like to pay $8,000~000 but said the other side of that coin is $18,000,000, $20,000,000 or $30,000,000. Mayor Moore could not believe Commissioners could sit there and say the City should not be out of this. A Court directed the City is wrong, and the property owner's rights prevail above the political scene. If they did not accept the settlement tonight, Mayor Moore predicted they would be in deep trouble. He added you never know until you get the final decision. Back in March, he was not allowed to talk to the Tradewinds people. In retrospect, he thought they could probably have come up with something in the area of $4~000,000 or $5,000,000 at that time, but the City wanted another Court decision and lost. Now they were hearing they should wait for a mediator. If this continued, Mayor Moore thought a lot of people would sell their properties and move out of town. Comments by Commissioner Weiner Commissioner Weiner met with the City's legal counsel and was advised not to comment on the case from the dais. She commented that Attorney Burman recommended they not settle for $8,000,000. Discussion Vice Mayor Olenik noted no one on the Commission, with the exception of Commissioner Weiner, had addressed what was at hand tonight. He knew the Fourth District Court of Appeals (DCA) ruled against the City. Vice Mayor Otenik reiterated the issue tonight was the value of settlement. Everybody was saying it could be $15,000,000 or $20,000,000. He said it could be $3,000,000~ $4,000,000 or $5,000,000. Vice Mayor Olenik questioned why no one was looking at the low side. Using Tradewinds' numbers and looking at the hard costs, it did not come close to $8,000,000. If they go to trial, Vice Mayor Olenik said it was quite possible the Judge would tell them to go to mediation. They possibly could arrive at an equitable payment for damages. Vice Mayor Olenik agreed the City erred and there were damages, but the 8 MINUTES - SPECIAL CITY COMMISSION MEETING BOYI~TON BEACH, FLORIDA DECEMBER 27, 1989 question was what the value of the damages was. He was not convinced it was $8,000,000. Mayor Moore responded that the City's counsel recommended $5,000,000 and no more. He stated bills from the Attorneys are averaging close to $15,000 a week. The City must pay them regardless. Mayor Moore said the City has had City Attorney Rea and a number of other experts in this area that it paid in excess of $350,000, and they have been wrong six consistent times. The Commission acknowledged the City owes damages. In business, a poor settlement is better than a good lawsuit° Mayor Moore recalled the prime platform he ran on was settling this tragic issue. Again~ Commissioners were say- ing to put it off and let a second Judge decide. Mayor Moore guaranteed it would not get any cheaper. Comments by Martin Perry, Attorney for Tradewinds Attorney Perry noticed Vice Mayor Otenik commented the City's counsel advised him (Olenik) the City and counsel did not have an opportunity to examine Tradewinds' numbers. Attorney Perry submitted that Attorney Burman had Tradewinds' complete data package for several months. Attorney Burman had analyzed it, but Attorney Perry did not agree with Attorney Burman's conclusions. He thought the $200,000 number was laughable. When Attorney Burman got to the $5,000,000 range, he was approaching some sense of sanity. Attorney Perry does not believe three of Attorney Burman's experts are competent to testify about damages. Attorney Perry said they laid everything they had on the table and supplemented it, but except for conclusions, very little was presented to them from the City's counsel. Whether the City Commission settled this tonight or not did not make a lot of difference from the City's perspective or theirs. Attorney Perry stated they laid an offer on the table, and they are not going to retreat from that~ They were prepared to settle for $8,000,000. The enhancements were not even on the table for discussion. Those would go without saying° Every time the City approaches a number, Attorney Perry noticed they always use the number that is most convenient to the City. He noted $3,500,000 for enhancements was mentioned, and he said that was the upper part of an agreed upon range that started in the $2,000,000 range for purposes 9 MINUTES - SPECIAL CITY COM~4ISSION MEETING BOYNTON BEACH, FLORIDA DECEMBER 27, 1989 of negotiation. The City locked in that it was $3,500,000. If they want to talk about damages for settlement, the City wants to take the lower part of the range because it is better for the City. Attorney Perry commented that was the way the matter has progressed since Day 1. He emphasized they would not accept one cent less than their offer. If the City's Attorneys are right, the City will benefit, and Attorney Perry stated he would see the City in Court. If the City Attorneys are wrong was what Mayor Moore was talking about. Attorney Perry submitted that even Attorney Burman would not give the City a commitment that $8,000,000 is the high end of the spectrum. He stated he will be very surprised if Attorney Burman gives such a commitment. Mr. Lehnertz asked if there could be more public comment. Mayor Moore answered negatively, and he explained that the ones in favor had not yet used up their 15 minutes. Mayor Moore said he has argued relentlessly and continuously that opinions from Attorneys should be backed up with a contingency type basis. If they had that all along, he thought the City would have been out of this three years ago. Motion Commissioner Wische moved to accept the terms Tradewinds was o~fering with no further legal fees or anything else attached, whereby the City would pay another penny. Mayor Moore added it should be left to the City's Attorneys to work out the details and relief to the three individual defendants and whatever else should go with ito Vice Mayor Otenik questioned whether Commissioner Wische wanted to add a dollar figure to the motion. Commissoner Wische answered affirmatively and agreed to add the figure of $8,000,000 to the motion. Mayor Moore passed the gavel to Vice Mayor Olenik and seconded the motion. Vice Mayor Olenik repeated that the motion was to accept the settlement offer from Tradewinds Development Corporation's damages lawsuit, releasing every claim against the City and previous elected officials and staff members. Vice Mayor Olenik thought there was a number the City owed in damages, but he did not feel comfortable that $8,000,000 was the number. He was willing to stake his political career that the City may benefit in going to a mediator. 10 MINUTES - SPECIAL CITY COM~IISSION MEETING BOYNTON BEACH, FLORIDA DECEMBER 27, 1989 The vote on the mOtion was 2-2, and the motion failed. Mayor Moore and Commissioner Wische voted for the motion. Vice Mayor Olenik and Commissioner Weiner voted against the motion. Vice Mayor Olenik co~mented that there will be a full Commission at the second meeting in January. Mayor Moore predicted it will bring a settlement, and he elaborated. Commissioner Weiner emphasized that she was not voting against the settlement. She was voting against the numbers involved. There were other comments. ADJOURNMENT The meeting properly adjourned at 5:48 P. M. CITY OF ATTEST: ~i~ty ~lerk C°(Oni~gTaS~eC~etary ~/ 11 Mayor Commissioner C o ~m'~i~s s ioner Commissioner