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Minutes 03-14-06 MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY HELD IN COMMISSION CHAMBERS, CITY HALL, BOYNTON BEACH, FLORIDA, ON TUESDAY, MARCH 14,2006 AT 6:30 P.M. Present: Jeanne Heavilin, Chairperson Henderson Tillman, Vice Chair James Barretta Alexander DeMarco Marie Horenburger Steve Myott Stormet Norem Ken Spillias, Board Attorney Lisa Bright, CRA Director I. Call to Order Chair Heavilin called the meeting to order at 6:30 p.m. II. Roll Call The Recording Secretary called the roll and declared a quorum was present. CRA Director, Lisa Bright, introduced the new CRA staff members. Phyllis Zitcer, the new Administrative Assistant, came from Florida Atlantic University where she was Executive Secretary for the Dean of Graduate Studies. She was helping to organize the administrative processes. Mr. Vince Johnson is the Planning & Development Manager. Mr. Johnson is a native of South Florida who made a lasting impact on the Broward Alliance in the position of Vice President of Business and Industry Services. While there he developed relationships with the Enterprise Florida Group as well as the Governor's Office of Tourism, Trade and Economics. He was helping the Planning Department and the Economic Development Department establish many of the needed databases such as property management and financing tools for affordable housing. Ms. Rosalind Murray, the Economic Development Director, is a long-time resident of Boynton Beach and most recently served with the Delray Beach Community Redevelopment Agency in the capacity of West Atlantic Program Manager. She is responsible for the innovation of small business programs and the administration of grants, specifically Palm Beach County Economic Development Region grants, and business recruitment/retention programs. Chair Heavilin welcomed the new CRA staff on behalf of the CRA. 1 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 III. Agenda Approval A. Additions, Deletions, Corrections to the Agenda Chair Heavilin noted agenda pages 67-78 were duplicates of pages 53-66. III. Agenda Approval A. Additions, Deletions, Corrections to the Agenda Chair Heavilin added Pulled Consent Agenda Items after approval of the Consent Agenda and before Public Comments. B. Adoption of Agenda Motion Mr. Barretta moved to accept the agenda as amended, seconded by Ms. Horenburger and passed 7-0. IV. Consent Agenda A. Approval of the Minutes CRA Board Meeting, February 14, 2006 B. Budget Amendment C. Fa~ade Grant application - Seagate of Gulfstream Condominiums _ $15,000 Ms. Horenburger pulled Consent Agenda items (B) and (C). D. Enter into Lease Agreement for Relocation of CRA Offices Motion Ms. Horenburger moved to approve Consent Agenda items (A) and (D). Mr. Barretta seconded the motion that passed 7-0. Pulled Consent Agenda Items B. Budget Amendment Ms. Horenburger asked the dollar amount of the budget amendment, and Finance Director Reardon responded, $380K to purchase two properties on Sea crest Boulevard, #603 and #607. Mr. Reardon commented the appraisal was lower than what was requested by the owner, but the CRA prevailed. 2 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 Motion Ms. Horenburger moved approval of Consent Agenda Item B., Budget Amendment. Mr. Myott seconded the motion that passed 7-0. C. Fa~ade Grant Application - Seagate of Gulfstream Condominiums, $15,000 Ms. Horenburger asked for the history of this kind of grant to residential properties. Chair Heavilin understood the Fa~ade Grant Program was strictly for commercial property owners. CRA Planning Director, Vivian Brooks, responded the CRA had a Fa~ade Grant Program for residential properties and commercial properties. The subject request did not fit into the residential category since it was geared towards single-family dwellings. Before her employment with the CRA, Ms. Brooks believed grants had been given to condominiums along Federal Highway. Chair Heavilin believed the only condominium grant approved was Colonial Center, for office condominiums, and it had clearly fit the commercial guidelines. Mr. Barretta asked the Board Attorney whether a grant program created and used only for commercial properties could be used for a residential condominium. Attorney Spillias said the program guidelines clearly state it is for commercial properties and businesses. He suggested if the Board wanted to consider fa~ade grants for something that did not fit into either of its existing programs, it should create another program. Once they went outside the program guidelines, the door would be opened for others to come in and make similar requests, without any particular criteria intended to address condominiums. Chair Heavilin declared the reason for fa~ade grants was to encourage existing businesses to improve their physical facilities so they would stay in the redevelopment area. She did not believe the program applied to condominiums and questioned whether they had the funds to accept an influx of condo applications at this time. Vice Chair Tillman echoed Chair Heavilin's concerns. After the initial commercial program, the CRA developed a single-family residential program that had not been promoted as much as it should have been. He hoped with the current staffing level, this would improve. Condominiums had never been part of the Board's consideration. Ms. Horenburger questioned the viability of the Fa~ade Grant Program in the long term because many grants were being awarded for properties that were subsequently purchased and demolished, with no return to the CRA. If this continued, the Board would have to decide whether to continue the program or not. The Board declined to consider a church fa~ade grant request, stating the previous approval had been for a church that was part of a commercial center. 3 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 Motion Ms. Horenburger moved to approve the Seagate of Gulfstream Condominium Fa~ade Grant application. Vice Chair Tillman seconded the motion that failed 7-0. V. Public Comments Chair Heavilin opened the floor for comment on items not on the agenda. Hearing none, she closed it. VI. Public Hearing Board Attorney Spillias declared the quasi-judicial board procedures were available at the rear of the Chamber for interested parties. He then asked the Board members to reveal any ex-parte communications they might have had with anyone appearing before the Board at this meeting. Mr. DeMarco had a telephone call today from Mr. Bert Oliver of Ocean One. Board Attorney Spillias then swore in all who planned to speak during the Public Hearing portion of the meeting. Old Business - None New Business A. Tuscan Villas a) Annexation 1. Project: Agent: Owner: Location: Tuscan Villas (ANEX 06-002) Wendy Tuma, Urban Design Studios Tuscan Villas @ Boynton Beach LLC East side of Federal Highway approximately 1,100 feet north of Gulfstream Boulevard Request to annex 1.407-acre parcel into the City Description: b) Land Use Plan Amendment/Rezoning 2. Project: Agent: Owner: Location: Tuscan Villas (LUAR 06-002) Wendy Tuma, Urban Design Studios Tuscan Villas @ Boynton Beach LLC East side of Federal Highway approximately 1,100 feet north of Gulfstream Boulevard 4 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 Description: Request to change the land use classification from Palm Beach County Commercial High, with an underlying Medium Residential 5 units per acre (CH/5) to Special High Density Residential (SHDR); Request to rezone from Palm Beach County Commercial General (CG) to Infill Planned Unit Development (IPUD). Proposed Use: 22 townhouse-style condominium units on 1.407 acres c) New Site Plan 3. Project: Agent: Owner: Location: Tuscan Villas (NWSP 06-002) Wendy Tuma, Urban Design Studios Tuscan Villas @ Boynton Beach LLC East side of Federal Highway approximately 1,100 feet north of Gulfstream Boulevard Request new site plan approval to construct 22 townhouse-style condominium units and related site improvements on 1.407 acres in the Infill Planned Unit Development (IPUD) zoning district. Description: Eric Johnson, Planner, presented all aspects of the Tuscan Villas requests at one time. Staff recommended approval of the requests for annexation, land use plan amendment, and rezoning for the following reasons: · The requested annexation is consistent with the City's annexation policy. · The property is contiguous to all properties lying within the City of Boynton Beach and forms a reasonably compact addition to City boundaries. · The future land use element is consistent with the poliCies in the City's Comprehensive Plan, particularly that portion of Policy 1.16.1 defining the Special High Density Land use relative to redevelopment planning. · The project is consistent with the Federal Highway Corridor Redevelopment Plan. · The requested land use amendment and rezoning meet the criteria for review as required in the Land Development Regulations. Mr. Johnson reviewed the technical aspects of the site plan, displaying an aerial photograph of the property. There were 33 conditions of approval and Mr. Johnson understood the applicant was in agreement with all conditions. 5 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 The site plan proposed 22 townhouse style condominiums in five different buildings. The proposed landscape buffers along Federal Highway are seven feet wide. The north and south landscape buffers would be five feet wide. The landscape buffer along the east property line would be 10 feet wide. The distance between the building and the east property line would range from a minimum of 11'-7" to 35'-2". The building setback on the north would be 10'-3" from the property line and from the south, 5'-9". The north and south setbacks abut commercial property. The applicant proposed a buffer wall to separate the project from the adjacent residential neighborhood to the east to mitigate any negative impacts from the project. The midpoint height of the buildings is 34 feet. The buildings were three stories high, but the units next to the residential properties to the east were stepped down to two stories to enhance compatibility. Ms. Brooks agreed the elevations needed enhancement. She asked the applicant to add awnings for more color on the frontage, but they added arched windows, which sufficed. They had pedestrian access along Federal Highway as requested also. She recommended approval. Mr. Johnson declared City Planning staff recommended approval of the site plan also. Chair Heavilin opened the floor for public comment, closing it when no one wished to speak. Wendy Tuma, Urban Design Studios, agent for Tuscan Villas @ Boynton Beach LLC, gave a PowerPoint presentation on the project. She indicated the applicant agreed with all conditions of approval. Board Comments · The fa~ade is too smooth and uninteresting. · The crown above the arched windows looks cramped. The applicant agreed to put some small outriggers on the towers and crown to reduce crowding at the arches. · Lack of space for adequate landscaping on the two' building ends, as they would be the areas most visible from Federal Highway. The applicant responded there was eight feet for landscaping on each end and they had three levels of landscaping: trees, shrubs, and ground covers. · Narrow building setbacks, which might lead to zero lot line applications. 6 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 The applicant responded the five-foot setback only pertained to Unit #9, located in the southwest corner of the site. Building E, also on the south property line, is set back nine or ten feet. Mr. Johnson indicated staff had reviewed all setbacks, which were adequate and met Code requirements. · The concrete wall connecting the project to the single-family neighborhood is not placed on the property line, creating a false boundary. · Maintenance of the landscaping on the side away from the project could be a problem if the properties to the north and south were redeveloped. The applicant responded the wall would go within the 10-foot buffer on the east property line with landscaping on each side. They would have to make arrangements with the property owners to maintain the hedges on the other side of the wall; however, they had chosen low-maintenance plants. · The lighted parking lot next to the residential development might be of concern to the residents. Mr. Johnson responded the light poles would not go all the way around and staff would ensure lighting levels would be low and that there would be no spillover. · Guest parking appears to be inadequate. Although parking met and even exceeded requirements, there were only four guest parking spaces, one of which had to be converted to handicapped per the conditions of approval. The applicant indicated some people would park in front of their houses and make arrangements with their neighbors to use their driveways if they were having a party and the four guest spots were full. · Has the City sent legal notices for public hearings? Mr. Johnson responded that the legal notices had been published. Motion Ms. Horenburger moved to approve annexation of Tuscan Villas. Vice Chair Tillman seconded the motion that passed 7-0. 7 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 Motion Vice Chair Tillman moved to change the land use classification for Tuscan Villas from Palm Beach County Commercial High, with an underlying Medium Residential 5 units per acre (CH/5) to special High Density Residential (SHDR). Mr. Myott seconded the motion that passed 7-0. Motion Mr. Myott moved to approve the request of Tuscan Villas to rezone from Palm Beach County Commercial General (CG) to Infill Planned Unit Development (IPUD). Vice Chair Tillman seconded the motion that passed 7-0. Motion Mr. Myott moved to approve Tuscan Villas' site plan, subject to stated elevation revisions, all staff conditions of approval, working with staff to study the lighting levels, and further analysis by staff as to whether the location of the wall on or away from the property line was best. Ms. Horenburger seconded the motion that passed 6-1, Mr. Barretta dissenting. B. Seaview Park Club a. Site Plan Time Extension Project: Agent: Owner: Location: Description: Seaview Park Club (SPTE 06-002) Andy McGregor, Lennar Homes Lennar Homes 1620 North Federal Highway Request for a one-year Site Plan Time Extension for site plan approval granted on February 15, 2005, from February 15, 2006 to February 15, 2007. Mike Rumpf, Planning & Zoning Director, reported the Seaview Park Club received site plan approval on February 15, 2005 and was requesting a one-year site plan time extension through February 15, 2007. Two conditions of approval were: 1) proceed with demolition within 30 days of real estate closing, and 2) installation of overhead utilities underground along Federal Highway. The original approval was for a multi-family project on the east side of U.S. 1 approximately 900 feet north of the C-16 canal. It was approved for 69 dwelling units with some conditions. Ultimately, a minor modification was processed to reduce that down to 64 units and convert it to a townhouse style project. The time extension request was reviewed and there were no changes to the Land Development Regulations (LDR) that should now be reviewed against this project. Concurrency in a coastal residential project was not an issue. Good faith effort was proven by numerous 8 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 accomplishments for the project, as outlined in detail in the staff report. Staff recommended the time extension be granted. Mr. Barretta recused himself since Lennar Homes is one of his clients. The Recording Secretary furnished Mr. Barretta a Voting Conflict form, a signed copy of which is attached to the original minutes on file in the City Clerk's office. The consensus on the Board was that 18 months was a more appropriate period of time for site plan approvals than the current 12 months. Mr. Rumpf responded this was being proposed in the current Land Development Regulations rewrite. There was some concern on the Board that the changed project should have been brought back before the Board and not reviewed as a minor modification by staff only. Andy McGregor, Lennar Homes, declared it had taken so long because when they got approval, one of the 54 conditions was to work with their neighbors to reduce the height on the buildings. This effort delayed preparation of final engineering drawings. They were scheduled to close on March 27. If approved at the Board level, the extension would be at the City Commission on March 21. A demolition contractor was scheduled to begin work on March 28, the day after closing. Mr. DeMarco questioned the applicant about permit issues. Mr. McGregor responded the Army Corps had closed the file this month on Seaview, determining all of the property under contract is non-jurisdictional and not wetlands. In regard to burying overhead utilities on Federal, Mr. McGregor hoped the CRA would not require this if Yachtsman's Cove did not do it also. Having only a short section underground would look odd, they believed. Chair Heavilin opened the floor for public comment. Stan Nitkowski, President of the Inlet Cove Neighborhood Association (INCA), was sworn in. Mr. Nitkowski expressed INCA's support for the time extension, since the approval had incorporated numerous conditions meant to satisfy INCA's concerns. Hearing no further comment, Chair Heavilin closed the floor to public comment. Motion Ms. Horenburger moved to approve the request for a one-year site plan time extension for site plan approval granted on February 15, 2005, from February 15, 2006 to February 15, 2007 pursuant to the following conditions: 1) proceed with demolition within 30 days of real estate closing, and 2) install overhead utilities underground along Federal Highway. Mr. Norem seconded the motion. 9 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 Chair Heavilin asked about the applicant's request not to require burial of the overhead utilities if Yachtsman's Cove did not do so, but Ms. Horenburger believed the Board should request the staff-initiated condition. The motion passed 6-0 (Mr. Barretta recusing). VII. Old Business A. Homebuyers Assistance Program - Financial Analysis Discussion Robert Reardon, Interim Assistant Director, Finance Director, and Operations Supervisor, spoke in response to a request initiated by Mr. Barretta for CRA staff to analyze the financial aspects of the Homebuyers Assistance Program. Mr. Reardon included a detailed analysis in the agenda packet including a letter to the Board, the original guidelines, and the revised guidelines. He was satisfied Ms. Brooks had addressed all of his concerns in the proposed amended guidelines. The program provides gap financing. Three specific examples were mentioned where one person needed $l1K to close the deal, another $30K, and another only $2K for closing costs. Not every applicant would ask for or need the full $50K. The program is meant to work in tandem with the City's SHIP program. A discussion ensued about the particulars of the Homebuyers Assistance Program amended guidelines. The majority of the discussion centered on the issue of shared equity. The program recipients would be monitored through the Tax Assessor's office to determine whether they filed for Homestead Exemption the year following purchase. If they did not do this, the mortgage would become due and payable with interest. If a person leased the house out, the mortgage would become due and payable with interest. If they sold to a non-income qualified buyer without advising the CRA, the CRA would get back 50% of the loan, depending on the sliding scale if the Board decided to go with a shared equity formula. If a property were resold to an income-qualified buyer, the funds would stay with the property to close the affordability gap. Rather than lose the affordable unit, it would stay affordable to the next family in that income range. None of the funds accrue to the seller. A shared equity formula would allow for some appreciation that would go to the first homebuyer. The City's program does not currently include equity sharing. This would have to be analyzed to determine how long a person would have to hold the property to achieve a certain amount of equity. Tax benefits and control of cost of living are two benefits that 10 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 accrue to the homebuyer regardless of whether they share in the equity or not. Many felt there should definitely be some amount of equity sharing. Ms. Brooks will come back to the Board with a formula. The consensus was that a sliding scale would be appropriate. The Board differed in its views of shared equity. Some felt the CRA needed to recapture as much of its funds as possible in order to continue providing affordable housing. Others felt the homebuyer should have an opportunity for some equity over time. The Board agreed the City and CRA programs should mirror each other. The length of time a homebuyer would have to occupy the house before any shared equity formula would begin and the amount of any sharing were issues. Ms. Octavia Sherrod, the City's Community Improvement Director, and Habitat for Humanity's President, Joe Santorella, were of the opinion low-income buyers tended to stay in their houses longer than the 4-6 years mentioned by Chair Heavilin. Of 64 Habitat for Humanity homes built in Palm Beach County over 15 years, only one buyer had subsequently sold the house. Ms. Sherrod made the point that participation was key. Low and very low-income buyers did not have a choice, but moderate and upper income homebuyers did. Ms. Sherrod wanted to work closely with Ms. Brooks to bring something back before the Board with the teeth the Board wanted, without sacrificing participation in the program. The City was thinking of including a shared equity component in its program, partly predicated on a fear the SHIP funding source might not be available for any length of time. A factor to be considered was that homebuyers were putting money into maintaining their properties on a daily basis, helping to increase the property's value. Motion Mr. Norem moved to approve the amended CRA Homebuyer Assistance Program guidelines as presented with no shared equity program. Mr. Barretta seconded the motion. Joe Santorella, President of Habitat for Humanity, explained the homeowner shares with Habitat 1/30 per year of appreciation over the purchase price. However, for the first three years, their deed of conveyance declares the homeowner is not entitled to any appreciation. Typically, Habitat's mortgages run for 30 years and Habitat keeps a first-right-of-refusal option to buy the home back from the homeowner. The motion passed 6-1, Mr. Myott dissenting. Motion Ms. Horenburger moved to direct staff to work with the City on the issue of shared equity, as part of the guidelines for the CRA Homebuyer Assistance Program, and come 11 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 back to the Board with a proposal. Vice Chair Tillman seconded the motion that passed 7-0. Ms. Brooks will bring shared equity scenarios to the Board at its next meeting. B. Update Adaptive Re-Use of the Old High School Presented by Corey O'Gorman Ms. Bright declared the Board had allocated the money in the budget to start the RFP process for the adaptive re-use of the Old High School. They contracted with Corey O'Gorman, who presented a Town Square concept to the City Commission in 2005. She invited Mr. O'Gorman to bring the Board up to date on the status of this project. Corey O'Gorman explained the process called for 1) community input, and 2) solicitation. A series of open house sessions were scheduled for March 16, 17, and 18 in the Library Program Room. The open house had been extensively advertised. The participants in the open houses would be shown a possible layout for adaptive re-use along with slides of the existing building and other buildings to generate questions and ideas. The participants would be asked to respond to a series of statements. Ms. Horenburger inquired whether the questions would include the possible cost to the taxpayers, and Mr. O'Gorman responded affirmatively. Mr. O'Gorman will present the findings from the open houses to the Board at its meeting on April 11. Chair Heavilin asked if the solicitation would include funding sources, and Mr. O'Gorman responded affirmatively. C. Marina Parking Easement Agreement Ms. Bright reported the Board approved an agreement at its December 15, 2005 meeting to purchase the Two Georges Marina from DSS Properties. The documents before the Board were a Marina Easement Grant and a letter from City Manager Bressner declaring this was a non-conforming site. The easement is necessary for the Two Georges Restaurant, which will remain in ownership of DSS Properties, to meet its parking requirements for the City. It is an easement for the north side only of the Casa Loma driveway. The south side remains under CRA control for drop-off for the marina slips. The north side will belong to DSS Properties for parking. Ms. Bright clarified the parking was now all for Two Georges. The agreement was such that during the daytime hours there would be signage on the side by the slips so people who wanted to drop off their dive gear would be able to do so. Ultimately, the CRA will own parking spaces in the parking garage when Marina Village is completed. The south side will revert to public parking after 6:00 p.m. The north side had to remain as an easement, which would also be sign-identified, for Two Georges Restaurant. 12 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 Motion Ms. Horenburger moved approval of the Grant of Easement on Item VII.C. Mr. Myott seconded the motion that passed 7-0. D. Martin Luther King Self-Assembly Update Ms. Brooks reported progress on the self-assembly issue. Staff met with the Director of Development for the City, Quintus Greene, and some of the self-assembly group members. Mr. Greene is supportive of the concept. It will be brought to the City Commission as an informational item on April 4. Lewis Longman Walker, the CRA attorneys, drafted a Letter of Intent, which CRA staff reviewed with the participants today. They were in agreement with all the items. Granted a Letter of Intent was not binding, the parties agreed to work exclusively with each other and not "shop" their properties to others. This exclusivity clause would be in effect until August 2006 or until a partnership agreement was signed. The general direction of the Board was to avoid becoming a general partner for reasons of liability. Ms. Bright indicated the purpose of having this on the agenda was to give the Board an update. It was clear the City Commission had to be made aware the self-assembly group was on board. No detailed dialogue had taken place with CRA counsel. Work would start on the partnership agreement if the City Commission agreed to the concept. Attorney Spillias advised the partnership agreement would take some time to prepare. In response to a question about the need for participation, Ms. Brooks responded the CRA had a self-assembly program that encouraged property owners to come together to create larger development sites that would be of interest to developers. This self- assembly group is related to a site the City and CRA had been trying to acquire. In order to reduce the need for using eminent domain, property owners were asked if they wanted to participate in the process, sell, or be subject to eminent domain. This self- assembly group's proposal includes property adjacent to CRA-owned property. The CRA's participation was driven by its interest in having a cohesive Phase I project. Ms. Bright interjected if the Heart of Boynton Phase I were to go through the bid process, it could challenge the CRA's goal of maintaining an affordability component in the housing and commercial markets. This could possibly be addressed in the partnership agreement. In light of the objections she heard about entering into a general partnership, she would explore the idea of a limited partnership approach. In regard to a question on potential expenses, Ms. Brooks explained the CRA had a grant program with the other self-assembly groups where the CRA funded legal fees, site plan analyses, surveys, appraisals, and so forth. The program had been put on hold temporarily. 13 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 E. Ocean One - TIF Agreement Discussion & Direction Ms. Bright understood the Board had been hearing concepts and ideas regarding the Ocean One project since late October of 2004. Ocean One also made a presentation at the CRA's December 13, 2005 Board meeting. They came before the Board in 2006 with a request for four condo units for condemnation. The CRA went to the City and the City gave CRA staff direction they wanted to insure a public parking component in this particular project. Before the Board was a Tax Increment Funding (TIF) proposal drafted by the developer for the Board's review, consideration, and discussion. Mr. Reardon declared his presentation was not based in theory or policy, but simply how he saw the numbers. It also did not address any potential benefit of having the project. Ostensibly, the CRA would be buying a 400-space parking garage. His calculations showed it would cost $117M over 30 years with a net present value, discounting 45% for the first 10 years, of about $28M. To him, this related to about $75K per space. When he recalculated using a loan he could get today, they would have to pay back $55M to borrow $30M over 30 years. If a more conservative price of either $15K or $20K per space were applied, the CRA could get the same 400 spaces for about $8M. The $117M includes a full TIF allocation and the requested direct incentive of $15,137,140.91. In analyzing the original spreadsheet given by Ocean One, the first 10 years gave no weight to the 45% incentive increment. This explains the difference in final costs between the developer's numbers ($102,844,966) and the CRA's ($117,982,107). In addition to that, when Mr. Reardon asked about commercial space being available to the CRA, he was told this would not enter into the picture. They later discussed the concept of trading off 3K square feet for the 45% incentive for the first 10 years. When Mr. Reardon looked at the two existing incentives on the books, The Promenade and The Arches, the comparison to Ocean One's incentive request paled in equity, in his view. They were being asked to give $117M over 30 years to Ocean One as opposed to the $10M they had given on another project. Mr. Reardon found a letter dated October 19, 2005 from the former director calling for the inclusion of a 3,000 square foot commercial space that would be given to the CRA in trade for the Relax Inn. The same document alluded to free public parking, which they had since been dissuaded from initiating because of the experience in Palm Beach County with parking facilities in Boca Raton. Mr. Reardon concluded the deal was not advisable. Mr. Barretta expressed his opinion that the CRA could build the garage for $6-8M as opposed to $30M. Mr. Reardon agreed, and added even if a figure of $20K per space were used, there would be many more spaces on the property they already owned. 14 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 Board Comments (Developer Rebuttal/Clarification in Italics) · A Board member expressed an opinion the $900K value for the Relax Inn site was based on a very old appraisal and the current value would be about $3.5M. The properties across the street are shown on the pro forma at $5M per acre. The Relax Inn site is two-thirds of an acre. That same formula yields $3.5M. The value of the property in the Ocean One pro forma for the acre and a half was $8M. Using the same costs per square foot, the Relax Inn site would be between $3.2M to $3.7M. The CRA did not have to take $900K for a $3M site. The developer responded that a significant portion of the Relax Inn site was taken to create the extension of Boynton Beach Boulevard It is so thin and so narrow, it was questionable if a use could be found for it, The developers appraisal included the assembly of the entire amount of land The value of the individual parcels of land of less than an acre is a fraction of the value in the appraisal, so that was not a fair comparison. If offered the Relax Inn site for $3M, they would pass. · Discussion of the Board resulted in the following possible alternatives: 1) have the same project without the 400 parking spaces, 2) Use $3.5M from the Relax Inn site to purchase a site on which to build a parking garage for under $10M, 3) Purchase a site for $2M and build a parking garage near the project for $8-10M. Various sites were discussed. The developer responded that just having the project without the parking would require starting over and that was not an attractive prospect. They had one year and $1 M already invested in the project. Also, they are running out of time on their contract for First Financial and the right of Bank of America to renew its lease, In addition, in their experience, peripheral parking did not work in downtown cores. The Legislature is a ticking bomb in regard to the issue of eminent domain. It was not known whether this would have an effect on this project or not. The developers had originally asked the City Commission to go forward with the eminent domain piece first, but they chose not to do so. · Comments were made indicating Bethesda Hospital recently built a parking garage for $9.6M for 860 spaces, a little over $llKjspace, not including the land. Also, A general contractor reported tOday he was building two parking garages, one for 900 spaces and one for 500 spaces, with a cost to the end buyer of $12.5K/space. The developer contended consideration had to be given to more than just the hard costs of building a parking garage, Land had to be purchased The numbers suggested by the Board were unrealistic. Parking garages are not attractive and have to be "dressed up" in downtown areas, driving up the cost. Soft costs such as architectural fees, permit fees, legal costs, and so forth would be 20-25% of the hard costs, In 15 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 addition, the parking garage they were building was integrated with the structures above it and topped with a full amenity deck, It required a poured-in-place, pre-cast structure and "beefing up" of the structure to support the weight above it. . It does not appear the spaces are being conveyed to the City. The cost seems very high for parking spaces that are not guaranteed. The developer responded that at a minimum, there would always be 366 spaces and the right to use those spaces was actually deeded or granted in the form of a perpetual easement The City did have effective ownership of the spaces, . A Board member expressed the understanding the total TIF outlay meant all of the TIF funds coming into the CRA would go back to this project. The property owner would then be paying today's taxes to the City and no tax on the appreciation of the value of the property. The developer responded this is the money that is being used to finance the public parking, $117,982,107. The $26, 8M is the amount that would be borrowed, · It was suggested, if the CRA had to give away its TIF for 30 years, it would end up bankrupt. It would not have the funds to carry out its mission. No Board member could give away all of the CRA's TIF income for 30 years and face their constituents. The developer responded TIF is available to finance public parking. The developer used a 10% discount rate and a 1.5% annual growth rate in the taxes to arrive at a value of about $24,5M, While $117M sounded like a lot of money, it was relative and showed the time value of money, · The Board contended the Direct Incentive Program was a good opportunity to bring people downtown and build up the downtown core. However, it was necessary for the CRA to retain enough funds to operate. The developer responded direct incentives had been given to The Arches and The Promenade. The incentives were granted on certain factors their project would also meet The incentive program would provide 45% for 10 years. There would be a direct payment made up front and this payment would be paid back out of the eRA s TIF after the project was completed. Once paid back, there would be a sharing of revenues going forward They were asking for no more or less than what had been given to The Arches and to The Promenade. Various Board members mentioned the Board had never been apprised of the details of this project. It had given approval to the former Director to proceed on the concept, with no knowledge of the costs, details, and ramifications they were now hearing. 16 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 There was general agreement that parking in the downtown core would be ideal. There was also general consensus this would be a good catalyst for the downtown core if it did not cost so much and have to be financed with a bond or 100% of the CRA's TIF income for 30 years. Some felt the extra costs spoken of by the developer were not costs the CRA should have to bear. If the project did not work with the parking garage, it could be taken out. The project could be done without the 400 spaces. The excess 200 spaces on nights and weekends would still be available through the shared parking avenue. A letter from the former Director indicated the intent had always been to bond this project, and not use TIF. The developer believed the window of opportunity was running out on eminent domain, but no one stated the CRA was retracting its recommendation to the City Commission to pursue eminent domain for the property, with or without 400 parking spaces. Ms. Bright summed up, saying Delray Beach and Boca Raton were still parking challenged and used valet parking extensively. In terms of planning for the whole downtown area, the Ocean One proposal would represent the premier project for the core. The CRA was trying to establish a level of height and density for the downtown and land costs would probably drive the cost up even higher if the land and garage had to be purchased and built elsewhere. Also, the phasing for the Ocean One project was very tight. Pryse Elam, President of Marinus Development Company LLC, the development entity formed to develop Ocean One, read an article that appeared in The Palm Beach Post on February 20, 2005 written by Will Vash. The article referred to a proposed multi-million dollar project in downtown Boynton Beach. It would include a public/private partnership that would place a full-service hotel, two office buildings with potential retail space, condominiums, town homes, and a six-level parking garage on three parcels between Ocean Avenue and Boynton Beach Boulevard. CRA members gave the former CRA Director, Doug Hutchinson, the "go ahead" to work on the proposal. Mr. Elam indicated they were here with the results of a year of work. It was all coming together at this moment and the only thing that had really changed was the market conditions. Everything else was what the CRA had requested. The opportunity was here now, and would not be available forever, according to Mr. Elam. Mr. Elam distributed a copy of a presentation, a copy of which is attached to the original minutes on file in the City Clerk's office. Construction costs were escalating rapidly, growing at more than 2% per month over the past year. The condominium market had slowed significantly. The sales center at Marina Village, with the same advertising last year to this year, is experiencing one 17 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 quarter of the traffic of last year. Many projects were not being built and there was no margin for error. This project allowed them to build some opportunity for momentum. They proposed providing 631-680 public parking spaces that were available on nights and weekends when they were most needed and 366 spaces available at off-peak public hours. The variation was due to the fact that it was a mixed-use project. They had office tenants who would be there during the day, but not likely on nights and weekends. They had residential tenants who would be there on nights and weekends, but not as much during the day. This was based upon the parking table codified in the Municipal Code. They were providing an assemblage of 90% of the First Financial Plaza and a mixed- use project including office, residential and retail. They were pioneering offices in an area that did not have much office space at present. They were asking the City to: 1) provide a TIF package to pay for this; 2) contribute to the Relax Inn site; and 3) contribute the four First Financial holdout units. Mr. Elam spoke of having to strike a balance between value provided and value received, but the intangible benefits had to be kept in mind. These benefits are: 1) momentum in the downtown; 2) creating a downtown core; 3) addition of needed office space; 4) adding to the taxable value of the City. Ocean One would provide an Assemblage Premium of $3,100,000, and a Parking Garage of $27,700,000, for a total of $30,800,000. This does not include the 231 - 280 spaces available nights and weekends through shared parking, which would be worth approximately $6M. Regarding the First Financial holdouts, their offer was at approximately $270/foot. If that were multiplied by the four holdouts at an average of 1,200 sq. ft., the cost would be $l.3M. Looking at the same analysis, if they took the net present value of the TIF at $24.5M, the value of the Relax Inn site at $lM, and the value of the First Financial holdouts at $l.3M, they arrived at $26.8M. Mr. Elam compared a bottom line total of the value provided by Boynton Beach and the value provided by Ocean One and it came out to $26.6M from Boynton Beach and $30.8M from Ocean One, not counting the value of 231-280 extra parking spaces on nights and weekends. Ms. Bright reported one of the "what if" scenarios she and Mr. Reardon had worked on was the challenge of bringing to the Board a bond to do a parking garage on the subject site, using a value of approximately $30M. If they wanted to do that, they would have to go back to the City Commission. Staff spoke to bond counsel who indicated if they borrowed $30M through a bond to build a parking garage, it would 18 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 ultimately cost the CRA $55M. That scenario was challenged by the fact the CRA could not bond on its own. She agreed there was a great deal of information the Board had not been given. The consensus was to send this item back to staff. The Board members wanted to see viable alternatives. Motion Ms. Horenburger moved to have staff, 1) do a current appraisal of the Relax Inn property; 2) do an analysis of what it would cost and possible locations for a parking garage or mixed use on the Relax Inn site with some parking, or various scenarios. This would include further negotiations with Ocean One following the fact-finding activity. Vice Chair Tillman seconded the motion. Ms. Bright clarified she would be doing cost analyses on surrounding sites. The motion passed 7-0. VIII. New Business None IX. Comments by Board Members · Provide a wireless microphone for presenters and a laser or metal pointer for people making presentations. · Staff presentations could be made to the Board's left. · The screen on which presentations are made should be raised to a higher position to improve visibility. At 9:45 p.m., the Board concluded it would continue until 10:00 p.m. instead of adjourning at its 9:30 p.m. time certain. The next joint City/CRA meeting on Retail Demand Analysis was scheduled for March 23 in the Library Program room at 6:00 p.m. This would be the final retail demand presentation and density discussion. Ms. Horenburger spoke of an article from the Palm Beach Post about the eminent domain issue that would definitely affect the CRA. She was planning to be in Tallahassee in April and would be paying attention to this while there. Since the CRA did not have a lobbyist, she did not know if the Board wanted her to do or say something about it. Really tight restrictions were being proposed that would only allow eminent domain to be used for traditionally accepted public projects such as government buildings, parks, schools, roads, bridges, airports, seaports, and utilities. 19 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14,2006 Also, Ms. Horenburger referred to another article regarding funding for housing and the Sadowski Housing Trust Fund. The Board might want to send a message up to the Florida Redevelopment Association that the CRA really supported opening up the trust funds to be spent. Ms. Horenburger requested status on the lawsuit on the issue of use of the Intracoastal. She had asked Ms. Bright for money in the budget for the Savage Creatures project, but she thought the possibility of being able to do the project was slim to none, based on the objections of the Army Corps of Engineers. She wanted to free up that money for other uses if it were determined the Army Corps of Engineer would continue to deny use of the Intracoastal. She referred to this as a "razzle dazzle" project. Vice Chair Tillman said while the Savage Creatures issue had an element of "razzle dazzle," it was still a drawing card for the City. It was brought before the CRA and he thought it should be trademarked and copyrighted. There were some people out there that might want to do it. Since it was already in house, the CRA should be able to get some benefit from it, even if the CRA was not going to do it. Ms. Horenburger thought that was a good point - someone would then have to pay the CRA to use the idea. Vice Chair Tillman's contention had always been the Board should follow professional operational guidelines and a management objective plan. Guidelines need to be developed to define how Board members interact with the CRA employees. It is of paramount importance to do this to avoid a lawsuit in the future from employee/Board tampering. The Board acts as policy makers and the employees follow the Board member's directives. Having something in place would help protect the CRA from a liability standpoint. There were a lot of issues that came up when the former Director left. Ms. Horenburger added "employee to employee" actions should be included as well. Chair Heavilin said the CRA Board is a governing Board that sets policies. Staff is charged with managing the operation. The Board members need to be very careful not to cross a line and try to become managers. She was hearing from some of the staff that some Board members were doing this. As policy, unofficially, Board members need to go through Ms. Bright, and not directly to any other staff person. Ms. Bright knows the tasks, the priorities, and the deadlines. The members were reminded that no one on the Board could speak on behalf of the CRA without Board approval. Board members had to be careful when speaking to the public not to express a personal position as one that reflected the opinion of the entire Board or Agency. Specifically, a request for donation had come forward. Chair Heavilin would not sign it because the Board did not have a policy allowing individually authorized donations to not-for-profit organizations. If they agreed as a Board they 20 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14,2006 wanted to do that or wanted discretionary money similar to the City Commission, then guidelines would have to be put in place. Another issue was whether Board members should have cell phones and what the lines of communication should be between meetings. The Board members had to identify how they wanted to be contacted. Mr. Norem and Mr. Barretta did not believe it was necessary to provide cell phones or the use of them. Vice Chair Tillman requested a cell phone because his cell phone bill was dominated by CRA telephone calls. Rather than asking for per diem, he asked the Director, through Finance, for a dedicated cell phone. Calls during the daytime hours are expensive. There was Board consensus to direct staff and/or the Board Attorney to bring some sample board policies back to the Board by its next meeting. Vice Chair Tillman did not believe it was necessary to have all of its policies in place for the Board to discuss governance issues. They had discussed having this at a retreat. Ms. Bright responded there were schedule conflicts and she was trying to schedule it for a day in June. Ms. Bright reported the City Commission asked her to determine whether the CRA was interested in having another series of visioning sessions, similar to Visions 20/20 held over ten years ago. If the Board wished to do this, there was the possibility of working with the City to get a grant to do it. She felt the visioning effort would take several days and could be held in the late summer. Mr. DeMarco reiterated the Commissioners had contacted him on the vIsionIng workshop also. The session called Visions 20/20 was one of the most impressive gatherings Mr. DeMarco had ever attended and he wanted to see it happen again with all the interested parties, stakeholders, and the Chamber of Commerce. Ms. Bright will present the finalized Direct Incentive Program revisions and suggestions at the Board's next meeting. X. Comments by Board Attorney Attorney Spillias will provide information on Board governance policies. He will also determine the status of the permit concerning the use of the Intracoastal Waterway. He asked whether the Board wished him to pursue trademarking the Savage Creatures and the response from the Board was affirmative. He recommended viewing a great Boynton Beach marketing piece in the form of the movie "Boynton Beach Club." XII. Future Project Preview None 21 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 14, 2006 XIII. Future CRA Workshops 1) March 23, 2006 Rental Demand Analysis Final Presentation & Density Discussion - Library, 6:00 p.m. 2) April 20, 2006 City/CRA Project Presentations and Savage Creatures Discussion - Senior Center, 6:00 p.m. XIV. Adjournment Motion Vice Chair Tillman moved to adjourn the meeting at 10:01 p.m., seconded by Mr. Barretta and unanimously passed. Respectfully submitted, ~~~~- Susan Collins Recording Secretary (031406) 22