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Minutes 08-17-06 MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETING HELD IN THE CLAYTON CONFERENCE CENTER, BETHESDA HOSPITAL BOYNTON BEACH, FLORIDA ON THURSDAY, AUGUST 17, 2006 AT 6:00 P.M. Present: Henderson Tillman, Chair Stormet Norem, Vice Chair Rev. Lance Chaney Jeanne Heavilin Marie Horenburger Steve Myott Guarn Sims Lisa Bright, CRA Director Ken Spillias, Board Attorney I. Call to Order Chair Tillman called the meeting to order at 6:05 p.m. and explained the meeting was to hear presentations from the two developers who qualified and responded to the Master Developer Request for Proposal for the MLK Corridor. The two respondents were InTown Partners, LLC for Seacrest Village, and Auburn Development Group. II. Roll Call The Recording Secretary called the roll and declared a quorum was present. Mayor Taylor, Vice Mayor McKoy, and Commissioner Ensler were present. Also present was Kurt Bressner, City Manager, and Wilfred Hawkins, Assistant City Manager. III. Coin Toss for First Presenter Chair Tillman tossed the coin. InTown Development made the first presentation. Samantha Simon, President of InTown Partners, LLC, and Chief Development Officer of Plus 2 Development Group were representing InTown Development. She explained its managing partners had over 25 years of combined development expertise and they had the capability, equity and financial ability to complete the Heart of Boynton project. Their partners were strong financial institutions who were committed to creating vibrant, mixed-use communities on the east MLK Corridor with an established track record in community involvement. The three partners were Plus 2 Development Group, McCormack Baron Salazar and Torti Gallas and Partners. Plus 2 Development Group were stakeholders of 19% of the site. Ms. Simon introduced Richard Baron, Chairman and CEO of McCormack Baron Salazar. He announced his firm was developing mixed-income and mixed-use communities for nearly 30 1 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 years and had completed 113 projects in 26 cities in the U.S., containing more than 16,500 units. He explained his firm had always focused on the importance of developing mixed-income communities so they could generate the kind of economic mix of both for sale and rental units to increase the retail services and tax bases in the community. They manage all the communities they develop. They have developed programs at the national level that provide the ability to create mixed-income housing. An affiliate program, Urban Strategies, which was a not-for-profit corporation, establishes community partnerships and programs on the human capital side. He reviewed other projects they have completed and clarified they do not develop 100% tax credit projects, because they do not feel the economic mix would be able to support retail and other types of services Torti Gallas, Executive Vice President of Torti Gallas and Partners, provided urban planning and architectural design services for the project. He explained they were committed to designing great mixed-use and mixed-income projects and in its 53-year history, developed 375,000 housing units in over 600 communities in 52 cities and 22 states. They participated in a HUD program called Hope Six, which is a program about transforming blighted communities into viable communities so people could rent and own in those communities. He reviewed some of his other developments, some of which they won awards for due to their involving the community, through a steering committee, in their process. His firm currently has six locations in Florida. Ms. Simon introduced the individuals associated with the project: ~ Bonnie Miskel, Esq. of Ruden McCloskey, Land Use Attorney ~ Reeves Laverdure, Public Relations ~ CB Richard Ellis, Residential and Commercial Real Estate ~ JEG Urban Planning Associates, Human Capital Retail Consultant Services would be provided Gibbs Planning Group, Retail Consultant Services ~ Reynolds, Smith and Hills, CivilfTraffic and Transportation/Landscape Design services ~ NorthMarq Capital, Equity services ~ Ted Carter, CBRE for the South Florida Region. ~ Joe Gray, Urban Planner and originator of the project Mr. Gray indicated several key points were needed to develop a viable corridor, which were critical to the success of the project. He acknowledged the plan was a comprehensive revitalization. They had a not-for-profit corporation and were members of the community. It was important the plan created economic opportunity and would provide community building. He announced they were ready to deliver. He advised they spoke with seven different neighborhoods in the community, and there was a lot of planning and meeting with the community residents to put the plan together. There were pockets of blighted areas that needed to be addressed. They created a steering committee and held community leadership interviews. Patrice McGinn, a partner in Torti Gallas & Partners indicated there were 11 existing homeowners on the 26 acres. The area was mostly vacant with a deteriorating housing stock; there were issues with crime and there was an issue with a non-sustainable tax base relative to the lack of homes in the area. The project site would be broken down into super blocks that 2 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 were manageable, walkable areas. They intended to create a neighborhood residential scale with neighborhood retail along Seacrest so local business could be maintained and business owners returned to the neighborhood to enjoy prosperous businesses. There would be a neighborhood/commercial building scale along Martin Luther King Plaza. They would have a new police substation, a new St. Paul AME Church, and a new community center with a series of community services such as job training, and a job bank, as support for the neighborhood and community. There would be one open civic space, which would narrow down into a retail neighborhood. There would be structured parking with rooftop amenities such as tennis and basketball courts and Ms. McGinn indicated they would provide a seamless transition. No one would ever be able to tell who owns what unit and how much it cost. There would be impervious surface pavements and intimate courtyards, thereby creating a very active, vibrant area where the Floribbean experience would be unlike anything else seen in Florida. Ms. McGinn even announced they were looking into green roofs, and were looking to be involved with sustainable green practices. They would create interactive waterways and band shells for entertainment and there would be a gated area at Gateway into the neighborhood off Federal. The project, which would be constructed in three phases, might also have the opportunity of becoming a Transit Oriented Development (TOD) station. Mr. Gray said they would hold interviews, conduct surveys, have charrettes and core groups, and a community steering committee so they would know what was correct for the community. InTown was looking to have a park that could be brought into the MLK Corridor, which would be a part of the stormwater management system. There would be local grocers. Mr. Sims estimated the project would bring 200 to 300 jobs too the community. There was a relocation program that included a debt free mortgage if the individual was already debt free. The affordable housing component from InTown was $3.8M, exclusive of any other resources. They could have up to 40% of affordable housing in the City. They have a homeownership program. An individual earning between $27K and $33K could live in the HOB MLK Corridor. There was a $25K a year scholarship program. They were committing $150,000 for the revitalization of Sara Sims Park. How the east met the west was an important aspect of the project and they announced they had been working with the Housing Authority for the Cherry Hills area to revitalize the west side of the community. The project would generate a 5,000% increase in the tax base. A police substation would be in Phase I, which would be 5,000 square feet. The focus would be on families with children, and InTown had been awarded $60M in New Market Tax Credits. There would be micro-enterprises and the Business Genesis Program would assist in bringing back the local businesses into the neighborhood. They were working with the St. Paul AME Church, who has been in the community 110 years. She explained InTown has met the matriarchs of the neighborhood, Ms. Jefferson and Ms. Girtman. Richard Baron indicated they would be looking to provide programs for teenagers, after school programming and summer programs. They would work with local schools and try to connect programs there. He indicated they could provide upfront capital. InTown could move forward immediately because they have control of a portion of the site and anticipated the total time frame for complete build out of the project would be about six years. 3 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Bonnie Miskel indicated the recurring sentiment she heard from the community was it was time for something to happen. They created a scholarship fund for residents unable to afford college tuition. The commitment was a personal commitment to the community and Ms. Miskel reported they would be happy to answer any questions the board might have. Chair Tillman thanked InTown for their presentation. He indicated the CRA would hear the presentation from the second presenter, Auburn Development, followed by questions to both presenters and then public comment. IV. Second Presenter Mr. Cito Beguiristain, representing Auburn Development, was present and indicated they were a local developer based in Delray Beach, who, over the course of 18 years, successfully built 4,000 affordable homes for people who make between $27K and $33K per year. They were the first company to ever build a tax credit affordable rental complex in Boynton Beach - Boynton Bay Apartments. Boynton Bay Apartments were constructed about 15 years ago, which was rental housing for seniors who earned less than $33K per year. He indicated the development was beautiful and they provided many services such as transportation, free meals, medical, etc. on site. Mr. Beguiristain indicated they were a for-profit company with a social mission to provide affordable, quality, safe and decent housing. Mr. Beguiristain indicated they were not just in the business of building homes, but improving lives. Mr. Beguiristain expressed that if he could communicate anything, he hoped the vision for the MLK corridor would be clearly conveyed. They have studied the HOB Master Plan and the Treasure Coast Regional Planning Council study and discussed the plan with the residents. The neighborhood said they wanted quality and affordability and that they wanted to be part of the revitalization process. He expressed any redevelopment that did not benefit the people who lived in the corridor was not a success. He indicated many people believe rich people should move into the community because they were better than "ordinary people". He disagreed with that attitude and indicated they planned to fight and work hard to provide quality and affordable housing. He quoted Abraham Lincoln who said, "God must like ordinary folks better because he made more of us." He indicated the people that live in the neighborhoods, i.e. the police officers, the teachers, firefighters and nurses, could all benefit from this type of development. Mr. Beguiristain indicated the CRA was successful with development east of Federal Highway and he applauded it, but noted that presently there was a wall along Federal Highway, and none of the renaissance had crossed over to the west. He explained the development needed a corridor that could act to create synergy. He explained he was working with Mr. Finkelstein and Mr. Seimen of Cherry Hills to redevelop their properties. He also reported his senior citizen property comes out of compliance at the end of the year, because their contract expires. Therefore the obligation to the federal government to provide rentals to the seniors is completed. He announced that although they could easily convert those units to condos, they do not plan to do that. As developers, what they have been doing wrong was they separated people by income which created a cycle of poverty. He planned to develop a diversity of housing choices for a mix of incomes with a strong base of affordable units to create a place where residents could progress through stages of life without leaving the neighborhood. Mr. 4 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Beguiristain explained in his proposal, virtually all of the pricing was affordable, based on the competitor's standards. He did not think $280K to $300K was affordable so they set aside an additional 20% for workforce housing which would show no differentiation between units and would include townhomes of every type. The way the program works, you could not charge more than 35% of the recipient's income. His proposal created a vibrant, attractive, mixed- use, mixed-income community where people of all economic strata, races and cultures could live. The plan recognized the desires of the other stakeholders, the community, and of the existing residents and business owners who would participate and benefit from the revitalization of the area. It also encompassed economic, social, cultural, historical, sustainability. Mr. Beguiristain would commit to a Minority and Women Business Enterprise participation goal. They would provide job training, college scholarships through the "I have a Dream Foundation", summer camp scholarships, and a new senior center as part of a proposed affordable senior community. Those amenities were not a requirement, but they would be represented. The cultural center would have music, culture, dance classes, etc. He stressed the development should not be a CityPlace and the identity should not be lost. The plan contained nothing over three stories. He did not want to build properties that were out of scale with the community. He showed the MLK Corridor site plan and reviewed the retail opportunities which were a grocer, pharmacy, barber shop, medical offices, dry cleaners, restaurants, day care, cultural and senior center. He would build upon traditional models of town development with Floribbean architecture for neighborhood character and a sense of place. The designs would be integrated into the community through the use of local architectural tradition, building scale, groupings of buildings, and design elements. Mr. Beguiristain proposed to provide pavers, and pedestrian connectors to calm traffic, and would also provide enhancements of the natural environment. He developed over 4,000 units in Florida and received over $2M in County, State and Federal subsidies. Mr. Beguiristain provided a list of projects he worked on and spoke about the corridor development. Auburn Development sponsored charities and other non-profit community groups such as Weed and Seed; Expanding and Preserving Our Cultural Heritage, Inc. (EPOCH); the Spady Cultural Heritage Museum; Carver Estates Youth Program; the Community Child Care Center, and the, I Have a Dream College Scholarship Foundation. He reported when Boynton Bay was built, they received the National Association of Homebuilders Award, as the best built program in the country. To summarize, their vision for the HOB was one that respected the current residents and reflected strongly, that the dream should be realized. Mr. Beguiristain intended to make it a quality development that would provide relocation assistance to displaced residents. He stressed they would not build $500K condominiums or five story buildings. v. CRA Board Q & A Mr. Myott disclosed that he has worked for the Auburn Group on other projects in other towns and he did discuss this project. He disclosed he declined to work on the project at the architectural firm where he was a partner because he felt it was not the right thing to do. He was working on a project in Delray and indicated he was not worried that the Auburn Group would withhold any future work to his firm because of his vote one way or another. 5 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 The following CRA members disclosed they had ex-parte communications: Ms. Heavilin, Rev. Chaney, Mr. Sims, Vice Chair Norem, and Ms. Horenburger. Chair Henderson did not have any communications. Chair Tillman explained the board would ask questions of the presenters, followed by public comment and then selection. ~ Ms. Horenburger asked which team members had proven experience with completion of mixed-use projects on MLK Corridor or similar corridors to ours and how many jobs Auburn Development would bring to the area. Mr. Torti Gallas, and McCormack Baron Salazar from the InTown team had proven experience with mixed-use corridors. Mr. Joe DeCristina of the Auburn Group had experience with mixed-use corridor completions. Mr. Beguiristain, from Auburn Group estimated over 500 jobs could be created during the development process, and that issue was not included in the proposal. ~ Ms. Horenburger asked both groups what percentage of the project funding either group was applying for from the City and CRA in terms of waivers, programs and tax incentives. Auburn Development was not relying on City and CRA waivers, programs and tax incentives. Rather, they would be using their own funds. InTown Development indicated for their affordable housing component, they would utilize programs already in place. Beyond that, they were not relying on the aforementioned funding mechanisms. ~ Ms. Horenburger asked both groups what percentage of the project funding either group was applying for from the City and CRA in terms of waivers, programs and tax incentives, that could be denied from local, state and federal agencies that if not awarded, could jeopardize their project. Mr. Beguiristain responded they would like to build an affordable senior component, but their proposal did not include the use of any grants. He clarified they would use any grants that were available, but were prepared to use their own money. Mr. Robert Reardon advised both candidates demonstrated they had the financial viability to move forward with the project. InTown Development indicated they have $60M in tax credits already awarded in New Markets Tax credits and would provide over 200 jobs. ~ Ms. Horenburger asked each group if they were selected as the master developer, how long they projected it would take to acquire all the land in the RFP to develop the project. 6 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Intown Partners responded they currently had 19% of the site, with the City and CRA controlling another 17% of the site totaling almost 40% of the project area. She explained they were moving 38%, so the immediate control that InTown partners owned was 73% of the entire 26.3-acre area. Auburn Development indicated he had not begun acquiring additional properties but announced they do own a few lots in the area already associated with Larry Finkelstein. He indicated they would move expeditiously to acquire and close of additional lots. ~ Ms. Horenburger indicated the City Commission Auburn Development included nine acres that were not placed under consideration for the purpose of the RFP. It included the City's Utilities site and possibly the HeadStart site by the southern boundary of the RFP. She indicated the CRA voted to sell all the property outlined in the RFP and the City Commission voted to sell all the property they owned in the RFP. She asked whether the City Commission and the Head Start Board voted to sell them those properties and if not, why would they be included in the proposal because they would skew the numbers in the proposal, complicating a comparative analysis. Mr. Beguiristain explained the City component was included, and Cherry Hill, Ocean Breeze and Boynton Bay because they felt the HOB revitalization required they go beyond the scope of the MLK RFP. InTown Development also indicated they had discussed alternative site plans which did incorporate the public utility site and land associated with the HeadStart School in their plan. Ms. Simons responded they would never go over the heads of the HeadStart, but those lands were included. ~ Ms. Horenburger asked how many acres they calculated their figures on, the 26 or the 35 acres. Auburn Development calculated their gross figures on the 35 acres at $600,000 per acre. InTown indicated the average per price per acre was $3,533,948 or $831,517 per acre for 4.25 acres. They averaged $1.1M on CRA land and the $831,517 on City property. Together, the aggregate total for the 26.3 acres was $28,930,000. It was ascertained InTown was paying one price for CRA land and one price for City land. Ms. Vivian Brooks, CRA Planning Director advised she did not know they assumed one price for both the CRA and the City land. InTown used a percentage. ~ Ms. Horenburger asked about the resumes of team members. She questioned the role of Larry Finkelstein in the project. Mr. Beguiristain indicated he was included as an incredible source of information. Mr. Finkelstein was a former CRA Chair and was part of the 20/20 Vision who could assist with other aspects of the project such as land acquisition and other development activities. He would be an active team member. 7 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 ~ How much Tax Increments Funds would the project generate and bring to the CRA? Auburn Development estimated the CRA TIF funds generated as $9M and to the City, those funds were about $6M. ~ Has the City of Boynton Beach made a determination to sell the Utility Site that was included in the proposal (Auburn Development)? Mr. Beguiristain indicated they approached the City Commissioners and they all indicated the project would happen. ~ How many townhome units are proposed in the response to the RFP? InTown indicated they had flexible numbers regarding how many townhomes would be developed. Phase I had 42 townhomes, 22 condos and 35 lofts. ~ How many total affordable workforce units would you have InTown indicated they would incorporate 97 workforce-housing units without other public resources. They were providing a $3.8M incentive to the community for the workforce units. If they went outside for contributions from the County, the City and the CRA for workforce units, the number could amount to 40% of the project. Their workforce units, with the buy down component ranged from $175K to $205K, which could be supported on a $27,000 income. InTown categorized workforce and affordable housing as a term that was interchanged often. The Palm Beach County standard sets a workforce category. ~ Ms. Horenburger also noted the height restriction was categorized as being subject to future policy decisions. Ms. Horenburger asked what heights would be used. InTown indicated they would adhere to the recommendations contained in the Treasure Coast Regional Planning Council Study and the HOB plan. InTown recognized a lower density along the western side of the community, having both live/work units for business owners, which would be three story townhomes above retail. Moving north into the community, there was lower density along 11th Street and there would be three story homes. To the south, next to St. Johns Missionary Baptist Church, the units would be low rise. Further east to the Federal Highway area, all the businesses could handle a higher density. Therefore, the project would have three stories, moving to four stories, and in phase II could potentially have six stories. InTown indicated they knew how to successfully edge the project. ~ Ms. Horenburger asked where the senior and day care center would be located. Auburn Development indicated the senior and day care center could both-be located within the area of the RFP and they left the plan as conceptual. ~ Reverend Chaney asked whether the proposals included rental properties. 8 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 InTown indicated about 30% to 40% could be rental, but there would be more ownership than rental. The community indicated ownership was important, and they would be flexible. InTown indicated they were trying to increase the median income through their retail program thereby offering not only a home ownership opportunity, but a lifestyle rental opportunity as well. Auburn Development indicated they had an affordable rental component in their proposal, which was primarily the senior component. He recognized not everyone was ready to become homeowners, financially, and needed a rental. His proposal estimated about 240 units as rental. Auburn Development defined low income/affordable and workforce development. HUD defined extremely low income as 30% of the area median income based on the County's median income (about $13K per year). Very low income would be about $27K per year and moderate income would be a range between 80% and 120% of the median income, allowing a family of four to qualify with a $75K income. Low income affordable were people earning between $19K and $39K, and Workforce housing was for people earning between $55K and $75K. InTown indicated they were aware $27K was more on the low side. Their allotment of the Tax Credits would be used to further assist the lower income members of the community, whether it was rental or ownership. ~ Reverend Chaney inquired what would happen to the people in the neighborhood that did not earn $27K. InTown also indicated that those individuals that do not qualify for the tax credits, who needed more assistance could take advantage of the Section 8 program. Their proposal was to develop a partial market rate and partial workforce-housing rate. The market rate would leverage their other housing units. Reverend Chaney pointed out that Section 8 has a two and three year waiting period. Auburn Development indicated they were proposing at least 15% of the units for the very low about $13K and under. ~ Reverend Chaney noted the proposals did not include rentals. He asked whether the there would be any rental property at all. InTown indicated the proposal would have rental/lease and for sale properties. He estimated about 30% to 40% would be rentals. The feedback from the community indicated the desire for ownership units. Auburn Development included an affordable rental portion as the senior component, which could be expanded upon. He estimated about 240 units would be rentals and recognized not everyone was ready, financially, to become homeowners. ~ Reverend Chaney asked each developer to define low income, affordable housing and workforce housing. 9 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Auburn Development explained HUD defines extremely low income as 30% of the area median income, which was based on the County's median income, which would be about $13,000 per year. Low income was $27,000 per year and moderate income as a range between 80% and 120%. He defined low income as individuals earning between $19K and $27K and workforce housing for those earning between $55K and $75K. InTown indicated $27K was more on the low side than moderate income and they had tax credits to provide a subsidy for qualified homeowners whether that was for a rental or ownership unit. ~ Reverend Chaney explained there were many residents not making $27K living in the neighborhood and he was concerned about those who would not rise to the standard of low income. InTown explained for those individuals needing more assistance than just the tax credit program, Section 8 and working with the Housing Authority could help. There was a mix of income going to families who are 30% Very Low Income up to 60% of area median and then up to market rate. InTown's proposal was to develop partially a market rate and partially a workforce housing/affordable community. The market rate would leverage abilities to compensate for the affordable and workforce programs. Auburn Development would provide on the rental component, at least 15% of the units for 30% of the area median income category, which was about $13,000 or less. ~ Reverend Chaney asked about the business units and whether the business would be able to purchase the commercial spaces. Auburn Development indicated they did not want to remove the business owners in the community. Current business owners could take advantage of their consultants to modernize and upgrade their business and it could be made into an ownership option. Their proposal included about 33K square feet for retail. InTown responded their proposal would include rental/lease spaces and they would use their Business Genesis Program to bring people back into the neighborhood. They want to utilize the Business Genesis Program to lower the lease rates to give the neighborhood retail a chance to move back into the Heart of Boynton. CBRE were specialists in the area and they could accommodate their program of retail, which was for neighborhood retail. There would also be a live work component. ~ Reverend Chaney asked InTown how many parking spaces would be in the plan. InTown would provide just shy of 2,400 parking spaces in the Heart of Boynton. The spaces, all of which would be structured, and done in Phases, would be done in accordance with the Urban Land Institute CUll) Shared Parking Calculations. ~ Reverend Chaney expressed concern about storeowners who were adamant about not moving and several churches, maybe five churches that would need to be relocated. He 10 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 explained there was not enough land to relocate all of them, and favoring one church over the others would be problematic. He was curious about how the storeowner on Sea crest that did not want to sell could be moved without using eminent domain and how do you plan to relocate five churches. InTown explained they spoke to each of the church leaders and reviewed their needs and wants. There is land available to the west. Ms. Simon announced Samuel the Voice, on 11th Avenue said they would move to Lake Worth and had no problem being west of Seacrest, Jesus House of Worship was willing to move. All five churches were not perceived as a problem. The storeowner on Seacrest was willing to sell; however, their terms were a little high and they would work with them to determine what their needs would be. Auburn Development indicated they could work with the owners of the Seacrest business, so long as it was not a source of crime, and the owner was not being unreasonable. He advised the store could be upgraded, the owner offered another location, or offered a price to purchase. A solution would be found, or a final option would be to incorporate them into some of the new retail. ~ Reverend Chaney indicated the City had already allocated $8M for the Wilson Center and thought it would be redundant to have a community center or a senior center when the Wilson Center was being refurbished. InTown clarified the community center was a seed to facilitate ongoing job training, job banks, well ness, medical and community services. They did not want to duplicate services. Rather they wanted to add to them and they have allocated $300K for that purpose. The funds were being committed where the community needed them even if it meant being spent on the Wilson Center. It was noted the Wilson Center was a recreational facility. The community center, with the enhanced retail proposed for the project, would be the location the community would utilize to get a job, or receive training, etc. Auburn Development responded with the senior center, the citizens have difficulty traveling and should have a clubhouse to have services provided on site. They would work with the City to determine where the senior component should be located. ~ Vice Chair Norem yielded his time to the public comment time, but did ask about the total time for completion of the project. Auburn Development indicated Phase I would be completed in three to three and one-half years. Phase II would be completed in six years. InTown, setting aside any required Comprehensive Plan Changes, would need two years for each of the phases for a total of six years. They estimated the land acquisition would be completed within the next six months. ~ Mr. Sims noted Auburn Development was quoted at having 67% affordability and InTown having about 40%. He asked whether either developer would entertain placing a cap on the number of units that an investor could have to prevent them from 11 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 purchasing multiple units and then becoming absentee landlords. He also asked what assurances could be given to prevent the community from returning to its previous condition. InTown was willing to address the issue. Auburn Development was willing to go way beyond that and would work with the City and noted the workforce homes needed to have restrictions placed in order to preserve their affordability over a period of time. On the remaining percentage of non-workforce housing, they could limit the units to one home per buyer. He elaborated the days of flipping properties were long gone. Auburn Development cautioned in a rental area, care must be taken to prevent the project from reverting back to its original status. He noted there are some legal remedies that could prevent some individuals from moving into a development, more specifically individuals convicted of violent or serious crimes. There was a question about attracting retail development. Bonnie Miskel, Attorney for InTown, explained five years ago, there were subdivisions with 300 to 500 units, which were primarily low-income affordable units with a subsidy. Because those subdivisions had a large volume of people that did not have significant disposable income, retail could not be attracted. If there were market units mixed with non-market units, the one subsidizes the other. ~ Mr. Sims asked about the selection process to be used when there were 150 applicants for 100 units. InTown indicated in those instances, a lottery system was usually used. Auburn Development indicated opportunity for home ownership would be advertised, and if an applicant qualified, it would be first come, first served. ~ Ms. Heavilin asked about the residential and commercial relocation strategies that would be used. Auburn Development explained there were relocation funds in the amount of $2,500 per month. They also had extra lots and properties in the area, which could house residents that were temporarily displaced. InTown Development indicated as construction of vacant sites commenced, they could give residents the opportunity to buy or move into the units as opposed to relocating them. Most of the people in the area were elderly. InTown advised that of the 19% of the project they were in control of, all were under contract, and they were working on closing. Some have already closed. Auburn indicated 20% of the project was dedicated as affordable. They assumed there would be a percentage as retail that would be provided at a significant discount as a lease or ownership option. ~ Mr. Myott asked about the New Markets Tax Credit Program. 12 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 InTown responded it was a Treasury Program. Entities make application, but they were awarded the credits because of the types of services they provided, which could be used anywhere in the country. The projects financed for the use of the credits need to qualify under the regulations. Developments that were mixed-use could be financed with the New Markets Tax Credits. The pro forma was based on the economics of the project and they had a commitment letter. If the land costs were lower, the project could be a lower density. Their pro forma was based on market rate units leveraging the affordable housing units. InTown did not need City funds right away for the parking. The numbers for the infrastructure were approximately $15M. They indicated in the future, it could be a future Transit Oriented Development (TOD) opportunity. Approximately 60% of 30% of Phase III structured parking could accommodate some of the City's needs, which could fit in with the City's trolley system. The City's payment of the $3.3M was in Phase III. InTown had the funds for the infrastructure for Phases I and II. It was possible that by the time they"reach Phase III they would have the capital for the parking and they would not be relying on the City. Auburn Development indicated there was nothing, aside from zoning that would prevent them from proceeding. The density for the project would be about 25 units per acre. Mr. Myott indicated the one issue common to both presenters was the zoning. Mr. Myott thought it would be very helpful to hear from the Planning and Zoning Department or have a City representative comment on the issue. ~ Chair Tillman thought the presentations were stupendous. Part of the project had market driven components, however, he read a list of projects and gave their status. Some of those projects had site plan extensions. He asked how the present real estate market could detract from their conducting a viable project and how well they could do. Auburn Development believed his project was in line with the current market conditions. He announced there was a housing crunch, with 300 individuals on the County's affordable housing waiting list to purchase a workforce home. The demand for homes in the low to high $200k's, was high. With available resources, the homes could easily be made available in the mid $100k's. There are many teachers, police and firefighters who could use the homes. InTown explained they have the right mix and the New Market Tax Credits could mitigate the project. The feasibility study they provided showed the viability of the project. ~ The Treasure Coast Regional Planning Council study indicated it is not viable to do retail on the MLK Corridor. Chair Tillman was interested in knowing where the respondents obtained information that businesses were viable. InTown indicated if they write down the lease rates for prospective business, they could afford the business. The tax credits could do this and sustain the business until there was enough critical mass to support the business. Auburn Development indicated the area should not be retail, and that was why they provided community centers. VI. Public Comments (Comments are limited to 3 minutes) 13 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Chris Plummer, R.M. Lee CDC, requested the RFP be re-advertised because the process was very short and the time frame did not allow adequate response time. The process did not allow for CDC input. He expressed the removal of the community approach left the door open for displacements in the community. With CDC's, infrastructure and physical conditions would be improved, and relocation of residents would be minimized. Profits going to CDCs were reprogrammed into the community. Brother Victor Norfus, a resident of Boynton Beach, indicated he was concerned about the business development. He was interested in knowing with the townhomes and current residents who already rent, if there was an assistance that would be provided to local business. He also wanted to know if there were some rental units for business owners who wanted to upgrade their businesses as well. He questioned where the business townhome units would be located, i.e., whether on Seacrest or toward Federal Highway. He pointed out there are three public schools and two or three private schools from Boynton Beach Boulevard to the canal area. Within that area, he questioned what type of training there was, or what type of financial assistance would be available. He expressed he knew some individuals interested in those programs, but needed more information about that opportunity. Brian Finney questioned the $60M and New Markets Tax Credit. Mr. Finney was a former banker and he recommended asking the CRA to ask the respondents how they could turn the $60M New Market Tax Credit into $60M in cash. He explained the tax credits were a two-thirds credit amounting to $20M. He also questioned how Auburn Development could move forward without any subsidy. He was not sure if the structure of the process allowed the community a fair chance to compete, because no one spoke to any viable community partner about sharing in the equity and assets of the project. Terri Murray took exception with Joe Gray being on the InTown team. She asked how this would be addressed. She also indicated the definition of workforce housing was simple. She indicated the CRA had a study conducted by FlU and the definition said workforce housing was a product of price points and housing types that matched the workers' earnings. She indicated neither proposal addressed that issue at all. The proposals should be evaluated on what was written in the proposal, not changes as they happened. Doing so gives the appearance the process was tainted through a very quick process of 30 days. She urged the proposals be evaluated very carefully, by the criteria in the RFP, and the needs from the FlU Study. Gary Atkinson moved to the area about one year ago. He inquired what would happen to the west side of Sea crest. He had not heard anything about the Cherry Hills area. Anita Jenkins expressed concern about the ability of the two teams to proceed and have the development come to fruition. She was especially concerned about the lack of experience of the lead developer on the InTown side. A project of this magnitude takes specific experience in the financing to make it work. She believed they did not fully understand how the New Markets Tax Credits work. Ms. Jenkins reported that in order to be able to finance affordable housing, rentals or space to be purchased for small business owners, a subsidy from some source would be needed. Extra 14 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 profits from the market rate development, unless they were creating $500K to $600K condominium units, would not provide enough dollars at the end of the day to make that happen. For the respondents to indicate they would not need public dollars, she felt was not a truthful statement. She recommended not making hasty decisions and displacing individuals. She urged having a project the community could benefit from. Pastor Antonelle, Greater St. Paul AME Church, was present and said the community wanted to see some movement along the MLK corridor. His church sits in the center of Seacrest and Federal Highway and there were a number of different issues the community was experiencing that were not conducive to a viable workable neighborhood. He met with InTown Development and conveyed his concerns. He thought it was encumbent on the CRA to move the project forward. He urged the board to do what is best for the community. Glendon Turko, 111 NE 9th Avenue, asked InTown how much land they owned and if the opponent were selected, what they would do with their land holdings. He did not want to relocate somewhere else. He owned his home and wanted to own his same home. He asked whether they had a program to return current homeowners to their homes in the community. Sergio Casaine indicated affordable housing and workforce housing was not the same. He wanted to know whether there was a subsidy mechanism included for people to be returned to their homes and whether they would have the first choice. He also indicated the elderly needed to be taken care of and they needed a development for seniors. They did not need a community center, and he recommended that the $300K be used to rehab the one they already have. Kevin Ballard, 551 W. 13th Avenue, questioned whether InTown's 19% land holdings were already under contract, and what would happen to the land if they do not get the land under contract. For businesses they would re-establish, he questioned whether they would be leased back to the business owner and what would they do during the construction period. He noted the business owners would need to sell their land to InTown and did not think they should be leased back. Charice Gillard spoke to InTown and questioned the low-income figures of $27,100 and what that meant in terms of pre-qualification for any members in the community to see if they could prequalify for the $280,000 homes with the incentives. She also wanted to know what that would mean on a monthly basis for the workforce housing, with the median income capped at $55K. She commented that InTown was noted as scouting the area for four years. She owns property in Cherry Hills and wanted assurance the visionaries were considering those properties as well. She announced as an individual who owns a property in Cherry Hills for investment purposes, caps were put on the property by the City, which would not allow her to refinance the property, sell it or do anything to it. This property was intended to support her daughter's college education. As a result, she could not use the investment for the purposes that she intended and she felt stifled and stuck, because Cherry Hills was not in the immediate phase for development. 15 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Courtney Cain spoke to InTown and indicated he had not seen them do anything during that time. He indicated this was all about community ownership, and noted there were two local CDCs that were not even mentioned. Lamont Robinson spoke to both parties, and asked which they felt was most important, residential or retail, and why. He wanted to know what percentage of local and minority business already in the area would be used. He asked what the budget was to acquire properties in the areas. Mayor Taylor indicated there was a question posed whether the City was receptive to rezoning or what was needed for comprehensive plan amendments. He indicated, as far as he was concerned, the City was always supportive of making the Heart of Boynton plan a go, and they would be open to changes needed so long as the change would benefit the remainder of the entire community. He indicated nothing could happen until the City gave the go ahead. InTown does own a certain percentage of the property and Auburn did not, which he had a concern about. His other concern was if they could not get the grants, how they would move forward. Both respondents made promises, and he wanted to know how they would accomplish them. Susan Horn, a realtor, announced when the Promenade opened, she stood on line for three days and purchased properties there, only to receive a notice one year later when the prices were going up. She lost three deals as a result of that, and other deals backed out followed by lawsuits. She indicated the other community by Banana Boat was behind a year and were desperate for sales. The management of the Promenade has now contacted her, as a realtor, offering 5% Commission and $5K in closing costs to buyer. She advised the developers got greedy and lost all these buyers in one day. She noted this because, while the first project looked beautiful, she questioned whether it was what the community really needed. What she was seeing in the market today was single-family homes that were $300K last year had competition and would sell in one day. Today, a single-family home at $400K is not moving and people are not even looking. Nothing is moving. She did not know who, in the MLK community, could afford what she was seeing offered on top of the taxes, insurance and monthly maintenance fees. Scott Klein indicated it was inappropriate and perhaps unethical for an elected official to be lobbying. Wilfred Hawkins, Assistant City Manager had several concerns and was seeing a 1,000 lb. elephant in a horse's quarters. He expressed concern the project is not what fits into the community and he questioned whether this was truly what the community wanted. He was not convinced that either of the designs preserved the true character of the community nor were the price points truly affordable to the community. He said $1K per month is not affordable, unless you ride the bus or trolley. The community had been waiting for the redevelopment to occur for a long time, but he emphasized the community did not have to accept whatever came along. He asked what the return on investment was and indicated he felt bamboozled and one third short of feeling confident because he was not sure of any of the details. He reported this community was unlike any other community in the City and he advised you could not put standardized cookie cutter projects in the community. He thought it should be unacceptable. 16 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Chair Tillman gave each presenter five minutes each to answer questions from the audience. The CRA Attorney would then outline the CRA options, and then the issue would be returned to the board for action. He requested the respondents only answer the questions that were not addressed during the presentations. Bonnie Miskel spoke for InTown Development and indicated any owner that wanted to go to contract does so at arms length, which meant they had a choice to sell or not to sell. InTown was a contract purchaser. They spent a lot of money in the community already with their current property acquisitions. If they were not awarded the bid, the contracts could be withdrawn, or the properties dumped or sold to another entity. She responded the Mayor was not lobbying for InTown. He lives in Boynton Beach and had a right to speak. For business relocations, they had four times the retail Auburn had. They intended to take care of every business owner who wished to remain in the community, and they would be given first right of refusal. The plan was a conceptual plan, which was a starting point. There would be multiple approvals before they got to the finish line and public input would be given as part of that. The dialogue given tonight would be incorporated into their plan. The Promenade project was on hold due to escalating construction costs. Ms. Simon contacted five of the largest construction companies in Florida for their construction needs. Their construction costs match the current market costs with contingencies in it. She reported Cherry Hills was an important part of the neighborhood and they met with Mr. Seaman, head of the Housing Authority, who indicated they were excited and interested in taking a comprehensive approach to help revitalize the HOB. Ms. Miskel indicated a feasibility study was conducted which supported their position and master development plans. The subject area contained only 11 individuals who registered as homesteaded. The rest of the overall sites were vacant parcels. The individuals in the community who wanted to stay could stay. Two respondents responded to the RFP in a timely manner, and it is very hard to effectuate change. They intended to continue their dialogue through the course of the development. Mr. Berguiristain indicated there would be opportunities to return businesses to the community. He clarified he could construct the community without subsidy via loan. He indicated homes do not have to receive government subsidies to be constructed. For affordable housing, government subsidy was needed, and they had successfully received these subsidies 22 times. He expressed Auburn has a complete interest in working with the CDCs, especially when working with the senior community. The definition of workforce housing meant the home was affordable based on earnings. Regarding development west of Seacrest, they had spoken with Mr. Seaman about redeveloping the site and redeveloping it as a multi-family affordable rental deal. They would use any public grant needed to make the project affordable. In terms of the CRA TIF funds for infrastructure, he would rather see those funds stay with the CRA to continue to turn the funds over for more affordable homes. He said they would provide seniors with a quality home with services provided. Local residents have first right of refusal to return to a unit at discounted prices. He hoped the CRA, in lieu of providing funds, would reinvest the funds resulting in homes that were affordable. He noted as far as being a contractor, if he controlled 19% of the site, they would have built something. In terms of selling and leasing, they were willing to keep people as owners, but acknowledged there should be a certain component as rentals because not everyone is immediately ready to buy. They work with Safe Harbor Mortgages who provide 104% mortgages with $500 out-of-pocket expenses, with a good payment history. He would realize a 15% return on investment. 17 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Chair Tillman thanked the respondents for their responses. VII. CRA Board Discussion and Selection of MLK Developer Attorney Spillias, CRA Counsel, outlined the options for making a decision, and what the next step would be. He indicated the CRA could reject one or both proposals; they could select one proposer and reject the other. The proposers could be ranked and then staff directed to negotiate a development agreement within a particular period of time. If that failed, negotiations would move to the next proposer. He pointed out that given the complexities in the proposal, the project and the community, putting together a development order would take time since the details are hashed out in negotiations. Some examples of the negotiable items were CDC community involvement, land control, displacement, relocation, Comprehensive Plan and rezoning process, amount of commercial, incentives for homebuyers, etc. Another issue was a time frame. He indicated there was a situation with another CRA and developer, where the property did not move and the possibility of having no action within the entire scope or time frame of the project could occur. He recommended having a tightly drawn agreement with the City's and CRA's expectations, time deadlines and other deliverables and that they be as clear as possible, including consequences for not meeting those expectations. This would be a tri- party agreement involving the City's attorney, and it would be a significant process. Attorney Spillias thought a minimum of three months or longer for the development agreement was likely, and was contingent upon how difficult the negotiations were. Attorney Spillias noted in this instance there were several land owners. He explained, generally, in the development agreement there would be conditions that have to be met and land use approvals should be included, because there could not be contract zoning. He recommended milestones and benchmarks, or alternatives be negotiated. Mr. Sims wanted to make it clear this was a start. The next phase would be the most important phase and he wanted to make sure the issues discussed made their way into the development agreement. He agreed comments made by the community were important. He liked the idea of having a 70-person steering committee and felt comfortable with that. He questioned if there was anyone willing to make the commitment to be a part of the steering committee to work with the selected developer to ensure the components that were important were added to the development agreement. People wanted change and they wanted to make sure the character and development of the community was maintained. Ms. Heavilin recalled the CRA previously discussed the selected developer would partner with the CDCs and thought that should be added to the development agreement. Mr. Myott thought the land lot sizes and multiple ownership would not support a simple development plan, nor would it support large buildings. He did not think the time was right for that, but he thought the time for redevelopment was correct. He thought it would be lower scale and lower density but it would be successful in that people within the community would be able to stay. He emphasized it was important to wind up with something everyone was proud of. He was comfortable moving forward, but emphasized he did not think the end result would be what either developer was proposing and that it would evolve into a development of a different scale. 18 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 Ms. Horenburger announced the MLK corridor was unique and was the kingpin of all the other development. She stressed the CRA could not fail to create a sense of place that would bring an excitement and an interest about the HOB and its future. If the project did not bring back some of its historical residents or any other aspects, then it would be the same old humdrum development. The developers should be welcomed with open arms after waiting five years, while speculators plundered the MLK area. She indicated one developer was proposing 35 du per acre and the other proposed 20 - 30 du per acre. She did not disagree with putting some height on MLK because a few blocks. away there were 15 story buildings, and she was aware the Commission would like to see stepping along the edge on US 1. The bottom line was whether they wanted a $180M investment in the community or a $418K investment. She favored a $418K investment and wanted to work on the details as they moved along. Reverend Chaney indicated at a prior CRA meeting he protested the RFP process because he thought it was too short. He indicated he received the proposals on Friday and felt he did not have enough time to evaluate the two. He liked both proposals. He did not think it was fair to make a decision in such a concise period of time. In some ways, he almost felt deceived when it was learned the $60M in tax credits only converted to $20M cash. That was one of the questions that he thought should have been addressed as quickly as possible and it spoke to the integrity of the developer. He thought more time was needed. Vice Chair Norem indicated he would not be disappointed having either group operate in the City. He indicated the process was to select a developer to enter into negotiations with. His biggest concern was not the decision, rather the members of the board who live and work in the Heart of Boynton need to buy into whatever group is selected and run with it. If a decision was made, the board needed to support the developer. The CRA needed to hear from the community. There were different factions in the Heart of Boynton and the community had to come together or the process would continually be delayed. The process had been ongoing for five years now, but there were times when a decision needed to be made. Chair Tillman indicated he is not a rubber stamp. He did not think either presenter really did the most efficient job of responding to the questions of the audience. He indicated the relocation issue was brushed over. The fragmentation in the community must end, and the income must be sustainable and unified. With the development agreement, there were things that need to be added and should be added. The issues raised by the CRA members should be addressed. Motion A motion was made by Ms. Horenburger to approve InTown Partners as the Master Developer of the MLK Corridor defined in the RFP, subject to successful negotiations with CRA attorney, staff and board, and subject to the policy decisions to be made by the CRA and the City Commission regarding matters relating to the development of their plan, and additionally Auburn Development Group should be named number two should negotiations fail. Mr. Sims seconded the motion. Attorney Spillias indicated the development agreement would be brought back to the CRA. The agreement needed to be negotiated by a professional staff, the CRA, the developer, and ultimately the City as well. As part of the process of developing their final plan to the CRA and 19 Meeting Minutes Special Community Redevelopment Agency Boynton Beach, Florida August 17, 2006 City Commission, the Master Developer would be required have community participation and the citizen input on the nature of the development, which would be part of what they put into the development agreement. More specifically, it would be specified what kind of participation, who would participate, and how the community input would be received. The development agreement involves legal processes and deadlines and those types of issues. He informed the CRA it would be very difficult to negotiate a development agreement with the public. Additionally, Attorney Spillias indicated what goes into the development agreement binds the developers, and issues such as density, Comp Plan, rezonings, site plans, etc. go through a public hearing process, independent of what goes into the development agreement. There would be public input even before that point, and that would then return to the CRA board and then to the City Commission. Attorney Spillias counseled the decision made today only authorizes the agreement to come back to the CRA and City Commission and the decision just gives the developer the right to be the first ones to negotiate a contract. It is the contract that establishes the vested rights they would have. Attorney Spillias confirmed items could be added for the negotiations. In the development of the final site plan, community charrettes about the kind of development the community wants could be required. Mr. Myott advised a fourth option was to require a development agreement process with both developers and look at both agreements. Attorney Spillias indicated that would be a very difficult process to manage. He explained there would be some elements in the development agreement that would be common to both respondents. The CRA could develop a checklist of issues that must be addressed in the Development Agreement. Beyond that, direction the CRA gave as to what they think was critical. The CRA needed to trust staff and the attorneys to negotiate as good a contract as possible and bring it back to the CRA as final product even in draft forms. If an agreement cannot be made with the chosen developer, and a back up is not designated, then it comes back to the CRA. Vote There was a vote on the motion. Motion passed 4 to 3. (Ms. Heavilin, Mr. Myott and Rev. Chaney dissenting.) VIII. Adjournment Meeting adjourned by consensus at 10:22 p.m. Respectfully submitted, I) II ' j I . ( '_ ' "/1/0/l1 Catherine C , rry-Guberman Recording S cretary 081806 20