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Minutes 11-09-95 MINUTES OF THE CITY COMMISSION WORKSHOP MEETING, HELD ~ CO~SSION CHAMBERS, CITY HALL, BOYNTON BEACH, FLORIDa, THURSDAY, NOVEMBER 9, 1995, AT 7:00 P.M. PRESENT Gerald "Jerry" Tayior, Mayor Matthew Bradley, Vice Mayor Shirley Jasldewicz, Commissioner Sidney Rosen, Commissioner Carrie Parker, City Manager James Cherof, City Attorney Sue Kruse, City Clerk CALL TO ORDER Mayor Taylor called the meeting to order at 7:14 p.m. to discuss the marina proposal. He advised that Mayor Pro Tern Matson is out of town and will be informed on what transpires this evening. MARINA PROPOSAL Jack Simons, residing at 602 N.W 6th Avenue, Delray Beach. advised the Commission of his credentials, professional career, and projects he has been involved in. He stated he has a successful track record of development that he believes is predicated on two principles. One, he does not take on mall type projects or projects that take extended periods (seven to ten years}. He looks at the current market conditions, on how long he believes the window of opportunity is, and makes sure that he does not overextend himself. Second. he has had the privilege over the years of being associated with some of the best and the brightest in the architectural, construction, and leasing fields. He attributed his success to the quality of the people who have been very productive in each aspect of the project. He did nol want the Commission to think that he is going to mm around the City of Boynton Beach on a 7 acre site, especially with an acre and a half underwater. However, he was convinced that we are at a turning point and can do something productive that will stand the test of time. We can let people know with brick and mortar, with tenants, and with sales, that we are different than previous administrations, and that the demographics here can change just as quickly as they did in Delray Beach. On this 7 acre site on the [ntracoastal, with the existing marLna~ some things are possible. He advised that a height variance would be to support the retail and restaurants. He needs that mass. that additional square footage of residential, be it rental, condominium, or hotel ,condominium, to be able to afford the free rent, the tenant improvements, and the cost of putting together the rental side, so that when he goes to the best and the brightest on the retail side, and when he gets the strongest credit tenants with the highest quality of management who is committed to a particular store for the long term. it is MINUTES CITY COMMISSION WORKSHOP MEETING BOYNTON BEACH, FLORIDA NOVEMBER 9, 1995 not a source of embarrassment or a financial problem five years after construction is completed. Mr. Simons said he has had a grea~ deal of experience with contaraJnated soil. He said that without the height for the mass, and without addressing the contamination, it would be very difficult [or him to do what he can do. He said it is very easy for him to bring together a team that will successfully complete this project. He could not guaranty success on this project, but he believed that given what we have, the innate abilities of the people that are working on the project, and the site itself, that this product mix will work. lie said Langan is an engineering firm in southern,Florida and has been in existence for 25 years. They are prepared to bring in their drill rigs next week to go down 60 or 70 feet so that we can ascertain the foundation and the structural requiremems for these particular structures, and come up with a finalized plan to recommend to the City. Mr. Simons distributed advertising brochures regarding Langan Engineering and Environmental Services. and Pavarini Construction Co., Inc. He stated that Pavarini has a long standing crack record that is well known to everyone in the real estate industry, both on the construction management side and the general construction side. Thek mid rise and high r~se capabilities are unparalleled. They have done it throughout the world, including southern Florida. He was very comfortable that the quality of this team, the quality of the end product, and the interaction with the types of tenants and customers that we anticipate for the project. give us the best chance for success. Mr. Simons advised that there is a timing problem. The contract expires on January 15. There is a 60 day extension in there for remediation of soil' if it is not completed. There is no requirement by the seller to remediate. There are no financial default provisions. If the seller defaults, or does not fully remediate, the only recourse, under the contract, is to declare it null and void. He needs to have negotiated a contract amendment that will provide for reservation of funds out of the $2,000,000 purchase price to fully remediate the soil. His experience leads him to believe that $2,000.000 is substantially in excess of any costs required to remediate the site. The soil was declared contaminated in March of this year. The contract with ATEC for the delineation of the full scope of the contamination was not signed until yesterday. He did not believe that the additional testing, the results of that testing, the interacting with the County to ge* approval [or a remediation method, and the remediation resulting in a closure letter (a lette~ from the County saying that no further action is required) will happen before March or April of next year. He believes this contact will lapse before the contamination will be at a point where substantial equity investors of millions of dollars and lenders of tenfold MINUTES CITY COMMISSION WORKSHOP MEETING BOYNTON BEACH, FLORIDA NOVEMBER 9, 1995 that mount will consider funding such monies. With the height variation, and with a change in the contract, he was comfortable that he has the ability to successfully complete this project in a rather limited period of time (two years) with an outside date of three years. To be successful to do this, he needs the City's assistance. Vice Mayor Bradley asked Mr. Simons to explain again about the cost of the remediation of the soil becoming the burden of the City. Mr. Simons said that was not his intention. What he would tike to do is have reserved from the seller's proceeds the cost of remediation, plus reserves. He said he has been associated with a number of redevelopment agencies who, in exercising their condenmation authorities and rights, have condemned contaminated sites. But out of the awards:for the condemnation, they have reserved proceeds for the remediation. This is not a new and innovative idea. Th/s has happened before in similar situations. Although this is not a condemnation, the principle remains the same. Commissioner Rosen asked Mr. Simons about the components of the marina. Mr. Simons displayed and explained a site plan. This site plan was drawn for data purposes by Currie and Associates. the project architect, so that they could use it to interact with Langan when they do their soil boringss and coordinate with Pavarini in assist~g us in determimng the ultimate site plan. This particular site plan shows the components, although not the final configuration, of the entire project. The City haS requested retail and restaurant space. Therefore. 40,000 square feet.of retail and ~estaurant space has been provided in two different freestanding buildings. This site plan proves that you can, on the best location on the site for retail, i.e.. tl~e closest point.to Ocean Avenue, put in 60 foot depth bays and have a 5 to 1 parking ratio for retail of as much as 40,000 square feet..Although the request for proposal provided for leaseholds on garking garages off site, most retailers, and all of the major hotel chains he has talked to. insisted ~upon ha;ring absolUte control over their own destiny with respect to parking. Because of this!-re~qniremenL a five level parking garage was put on the site to see if we could g6t in excess o~ ~0 parking spaces on it, and we did. In addition to the parking garage, there is a U,shaped ao~kdominium hotel. In trying m come up'with a plan that would make the retail Work his first theatght WaS that he needed, increased density of residential and demographics that would support reta~ -He did not go with a time Sharing hotel because the sell out time v~ould be twic~'~ long, ,thereby elongating the t0talpi:oject timing. In addition, he felt that the quality ofi:thei*demOgra?hics for the people who b0$ght hotel condominium units would be more assoc~te~ WiSh. the n,atural product ~kx necessary to make the retail work. He designed it in a U-shaPe:~to' make.stu'e that we could build res!dential on both the north s~de, of the ,ca,mi and the south ~d~ 0~the canal, There will be addit~ona! residential He did not loaow wnemer it will be high end rental, condominium, or extremely ,high end town houses associated with 3 MINUTES CITY COMMISSION WORKSHOP MEETING BOYNTON BEACH, FLORIDA NOVEMBER 9, 1995 the mahna. Since we are on the Intracoastal, one of the greatest attractions for both retail and residential, will be a higlter end marina. If we are going to draw people from off site and walk them through the entire site. building out fully on both sides of the canal seemed appropriate. He could not say if there will be rental units on 45 foot slips for $3,000 a month, or if we are going to sell $65,000 slips. He said that would require Two or three months for him to return with a plan. He did not think .he could do this with the physical configuration of the land as it is. By the same token, he was willing to have not only his whole team exposed to the City every step of the way, but final site plan approval by the City so that not only is no one surprised at the final site plan, but when all is said and done. the City is in control of its own destiny. Vice Mayor Bradley asked Mr. Simons to describe in a little more detail about the retailers and hoteliers wanting m control their own parking destiny. Mr. Simons said when you have parking off site, most people know and understand that buildings generally do not have a life longer than 50 or 75 years. However. when you have a condominium sale, generally those people think in terms of 20 to 35 years. If you have a 50 year ground lease with one 25 year renewal option, this person discounts dramatically the price that he will pay for this because when it comes time to resell and he anticipates dramatic increase in value, without control over the parking, in his mind, he does not achieve. When they change hands and are renovated by the same people, they always have a basic physical plan that includes parking. That is not the case on the leasehold. He has not discounted that completely. He is going to wait until the soil borings come back. He wants m see if we can ring this with residential and have a Mimer Park effect where you have retail on the first floor and residential above that. He might be able to consider it at that time. But right now, the major chains he talked to on the hotel site want to control their own destiny. Mr. Sknons' concept is not a hig~h end of the line retail mall type concept. That is the only place where paved parlcing has ever worked, and it has not worked often in those situations. The demographics of the area dictate that a middle scale, something along the lines of the types of tenants you would fmd in a Macy's/J. C. Penney mall, certainly galleries and restaurants of a little higher scale than what you see on Atlantic Avenue in Delray Beach, are doable here. However, those types cannot afford and are not oriented towards paying for parking off site. In the retail business today, there are two major problems~-value in cost, and security. The further we divorce the parking from the physical plan of the site, the greater the problem associated with security. Therefore. in this plan. Currie and Associates tried to control our own destiny as much as possible. 4 MINUTES CITY COMMISSION WORKSHOP MEETING BOYNTON BEACH. FLORIDA NOVEMBER 9, 1995 Commissioner Jaskiewicz asked if the parking facility would be for the public also. Mr. Simons answered affirmatively. He said in this particular plan, we came up with the ability to have 5 to 1 parking on ground level for the retail. There are other configurations that would work should we go to a greater level of ietail. Commissioner Rosen asked if the public will be charged for parking. Mr. Simons advised that they will not be charged for parking. Commissioner Rosen asked if this could be a problem if this project is successful and there is a need for additional space for the retailers and the hotel. Mr. Simons said ali retailers have the problem of making sure that they have adequate parking for the height of the season. Eighty percent of sales are conducted during 20 pereem of the year. This is whyhe gave them the 5 to 1 parking ~atio as opposed to most city codes, which are 3 to 1.3 1/2 m ~, 4 to 1. or 4 1/2 to 1. He believed that the 5 to 1 would adequately provide for the success, both immediately and in the furore, of the retailers. COmmissioner Rosen asked if it would be feasible tO have the parldng tickets stamped. Mr. Simons said that is an alternative. However, g~nerally, that is a function of the price p~ints on the individual retailers. Today, without extensive studies and without extensive cc~ntacts, he did not believe that the price points of the types of retailers here are such that they cap afford to paying for the parking. The density of mass on the residential side pays for, among other ~gs. the non-income producing parl/ing garage. Parking garage spaces cost al~out $10.000 each. Commissioner Rosen asked if there have been any hot leads on a major hotel Mr. Simons answered affirmatively. Commissmner Rosen asked about their requirements. Mr. Simons said they require no contamination and a workable [City Commission. They are greatly concerned about security., and want to know what the neighbors are going to be like. Mayor Taylor asked want would happen if a variance is not granted with regard to the height limitation. Mr. Simons said in that case. he would prefer to proceed without any retail or restaurant space. He believed that for a Sg,000,00~ purchase price, the attendant problems of the site, the physical location of the site, the structural, etc., the project that is most viable would be an entirely residential one. Mayor Taylor opened the floor for public commem. Harry Stein, 760 East Ocean Avenue, asked Mr. ~imons if he is an investor or if he is an agent for a syndicate or principal. Mr. Simons smd he is the investor/developer- His own MINUTES CITY COMMISSION WORKSHOP MEETING BOYNTON BEACH, FLORIDA NOVEMBER 9, 1995 money will go into this project. He w/Il be the developer making the decisions on everything from construction ro tenants. He will not be the sole principal. He will have other equity investors. Mr. Stein said he spoke to Mr. Simons today and Mr. Simons mid him that the bridge is going to be 40 feet high. Mr. Stein informed everyone about a piece of land in Bridgeport, Connecticut that was valued between $750,000 and $1,000,000. It was discovered that the land was contaminated, and it was estimated that it would cost $6,000,000 to decontaminate it. This land was sold three or four months ago for $150,000. He felt Mr. Simons was asking too much from the City. He said Congress Avenue is where everything is today. He did not think a hotel would be successful in the downtown area. Janet Hall, 700 Casa Loma Blvd., knows that a lot of time. thought, and work has gone into trying to improve the downtown. She felt the City has the opportan/ty to try to work out a plan for this property. She felt this project should be tried because the Commission is willing to keep an open mind, and someone is willing to put a lot of his own time and money into bringing about a workable plan. Margaret Shepherd Brown said she has waited many years for someone like Mr. Simons to come along and do something for our town. She agreed with Mrs. Hall and hoped the City Commission will approve this. Mayor Taylor pointed out that this will require a height variance. Up until this point, we have alWays believed that in order to change the height limitation, a referendum would be required. However, we have found that this is not necessarily true. The City Commission has the authority to change the height ordinance without a'referendum. He felt that if Boynton Beach is going to realize what it is looking for. we are going to have to address this problem. He asked the audience for their opinion. Daniel Richter, 3565 South Lake Drive, said he has been on the Planning and Zoning Board for Boynton Beach and worked on the current Comprehensive Plan With the City Commission and Other City boards. One of the plans for the downtown area was to expand the downtown red6velopment area. He said it had been pre~iously recommended and approved that this area be goned MX for mixed use. In that MX district, it was up to the City Commission to use a height variance where needed. At that time, most of the members of the City Commission wanted it to go to a referendum. Mr: Richter felt this was an appropriate use for that area and believed it would be a linchpin to start the complete redevelopment of Boynton Beach. MINUTES CITY COMMISSION WORKSHOP MEETING BOYNTON BEACH, FLORIDA NOVEMBER 9, 1995 Jim Zengage represented the Boymon Beach Boulevard Association. He said he would be happy to bring this up at the Association meeting on Monday for a vote. He felt the Association would support anything that would improve the downtown, including this project. Commissioner Jaskiewicz said perhaps one of the reasons why our City has not progressed like other cities is because we are limited with the height restriction. She did not believe height restrictions should be lifted all over the City. However, it sounded logical to her that we should consider this particular ama a mixed use. She felt the suggestion to rezone particular areas m the City so that it would not affect residential areas was a good suggestion. She felt perhaps this would be the key to £mally moving this City on the way up and creating a progressive atmosphere. She pointed out that Coastal Towers exceeds the height limitation with five stories, and it has not adversely affected an.vone. Commissioner Rosen felt this City could prove nself to be much more advanced than Delray Beach. He felt the waterfront property should be developed, and that this could very well be the catalyst for a beginning. Bill Lynch. 1912 S.W. 16th Avenue, said he has been waiting for a long time for something to happen in the downtown area. He felt he was looking at a Commission with the courage of their convictions artd a Comrmssion that will do what is right for the City. He thinks this project is fine and hopes the Commission considers it favorably. Mayor Taylor felt something like this could be a catalyst for everything we dreamed about for the downtown. He pointed out that any time there is change, there are going to be people who are opposed to it, He stated that we need the people who are present tonight to help us sell this to the rest of the community. City Attorney Cherof advised that this is a workshop meeting and no action is required with respect to further evaluation of the RFR The purpose of this meeting was for Mr. Simons to embellish on his paperwork. There are many other decisions that ultimately need to be made; however, they will not be made at this meeting. Mr. Simons said there is an RFP which targeted the December 31 date, which is less than 60 days from now. He said he needs to make a number of representations to national hotel chains and to investors. He needs to see the rules that the City sets for him. in writing. He asked when he could receive those rules in writing. MINUTES CITY COMMISSION WORKSHOP MEETING BOYNTON BEACH, FLORIDA NOVEMBER 9, 1995 City Manager Parker advised that the statute requkes another 30 days' advertising time of the Commission's intent to move forward with any purchase or resale of the property. City Attorney Cherof advised that this could be put on the next City Commission agenda. This would give him time to research each of the legal points that Mr. Simons has raised, and to explore the possibilities of either amendments to the contract or the like. City Manager Parker said the Commission could express their intent at the November 21 Commission meeting. Then the ad could be put in on November 22 for 30 days. This does not mean that we cannot move forward with finalizing the details in that 30 days. She pointed our that the contamination report was only signed yesterday, and that neither the City nor Mr. Simons want to go forward until we see what that report indicates. Mr. Simons was concerned about this entire project disappearing, not only the window of oppommity, but the contractual obligation to sell. City Manager Parker pointed out that she and Mr. Simons had a conversation with Mr. Garcia's firm yesterday, and they indicated they would be willing to immediately implement the 60 day contract amendment for the extension. as well as do another contract extension~at whatever time we suggested. Therefore. she did not think the project is going to go away. City Attorney Cherof said he was sure we could work with Mr. Garcia to get authorization for Mr. Skuons to go on the property and do whatever testing he wants to. City Manager Parker said we already gave that authorization to Mr. Simons yesterday. City Manager Parker commented that the actual height of the bridge is 21 feet, not 40 feet. City Manager Parker said we could have the contract extensions on November 21. She felt one of the critical items is going to be the soil report from ATEC. She said we could have the contract amendments, as well as any agreements that Mr. Simons feel are necessary. MINUTES CITY COMMISSION WORKSHOP MEETING BOYNTON BEACH, FLORIDA NOVEMBER 9, 1995 There being no further bUsiness to come before the City Commission, the meeting was adjourned at 8:16 p.m. CITY OF BOYNTON BEACH ATTEST: Cit~'Clerk ~ Recording Secretary (One Tape) Mayor 9