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Minutes 08-12-08 MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY MEETING HELD ON THURSDAY, AUGUST 12, 2008, AT 6:30 P.M. IN CITY COMMISSION CHAMBERS, BOYNTON BEACH, FLORIDA PRESENT: Jerry Taylor, Chair Lisa Bright, Executive Director Jose Rodriguez, Vice Chair James Cherof, Board Attorney Woodrow Hay Marlene Ross Ron Weiland (Begin transcription by C. Cherry at 6:30 p.m.) I. Call to Order - Chairman Jerry Taylor Chair Taylor called the meeting to order at 6:30 p.m. II. Pledge to the Flag and Invocation Mr. Hay gave the invocation and Mr. Weiland led the Pledge of Allegiance to the Flag. III. Roll Call The recording secretary called the roll. A quorum was present. IV. Agenda Approval: A. Additions, Deletions, Corrections to the Agenda Ms. Bright announced a request was made to review the board recommendations made at the budget workshop. This would be heard under Old Business as item A-l. Vice Chair Rodriguez moved up Item E regarding the MLK Corridor Development Agreement, under Old Business to Item A-2 under Old Business. Vice Chair Rodriguez inquired about the cancellation of the September 9, 2008 meeting. There was no need for a second budget hearing. The CRA budget would be approved after the City Commission meeting on September 2, 2008. The CRA September agenda would include regular items and approval of the budget. B. Adoption of Agenda Motion Ms. Ross moved to approve the agenda as amended. Mr. Hay seconded the motion that unanimously passed. 1 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12,2008 V. Announcements & Awards: Mr. Hay announced the Senior Baseball Team beat Hawaii 5-2 yesterday and were supposed to play the Phillipines but were delayed because of rain. The team was doing well. VI. Consent Agenda: A. Approval of Minutes - CRA Board Meeting - July 8, 2008 B. Approval of the Period-Ended July 31, 2008 Financial Report C. Approval of a Commercial Facade Improvement Grant to The Pantry D. Approval of Board Travel to Florida Redevelopment Association (FRA) 2008 Annual Conference - October 21-24, 2008 E. Rescission of Contract with Burkhardt Construction Motion Vice Chair Rodriguez moved to approve the consent agenda. Mr. Hay seconded the motion that unanimously passed. VII. Information Only A. CRA Policing Activity Report for the Month of June 2008 and District Statistics for the Months of June and July 2008 B. Boynton Beach CRA and Trolley Website Updates C. INCA Newsletter D. Boynton Beach Arts Commission Meeting Workshop Minutes - June 14, 2008 E. Boynton Beach Arts Commission Meeting Minutes - June 26, 2008 F. Boynton Beach Arts Commission Meeting Minutes - July 22, 2008 VIII. Pulled Consent Agenda Items: None IX. Public Comments: (Note: comments are limited to 3 minutes in duration) Chair Taylor opened the public comments. 2 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 Mack McCray, 806 NW 4th Street, wanted to ensure the HOB budget funds would not be moved to other projects. He explained District II has more blighted areas than any other area of the City. He expressed the CRA was created to eliminate slum and blight and he did not want the members to change what the prior Commission and CRA started. Mark Karageorge, 240A Main Boulevard, commended the board for the Southwest trolley route. He advised he heard great feedback from residents about it from High Point. He advised the CRA had very nice signage at the Gulf Stream Plaza site, which read a Work of Art in Progress. He felt the slogan was appropriate. He announced former CRA Board member, Rev. Lance Chaney had been diagnosed with prostate cancer a few months ago and was successfully treated at John Hopkins. The cancer was eradicated and he was doing well. He requested members keep him in prayer. Lastly, he advised he and another resident had started a Boynton Business Blog a one-way blog site promoting the positive aspects of Boynton Beach from a business, new business development and business expansion perspective. He gave kudos to the board for having construction projects under way when other municipalities did not. Capital projects were underway and Boynton Beach was leading. The site was free to residents and through working with the Chamber of Commerce, there is a link. He expressed it was a good way to get news out to the community. Oda B. Bouie, resident of San Antonio, Texas, was present with her mother E!izabeth Jenkins. She advised last year she was visiting Ms. Jenkins and she assisted her with filing an application for home improvement which she submitted to the CDC. As a follow-up this year, the CDC informed her Ms. Jenkins had to go to the CRA and the file appeared to be lost. This was upsetting to both Ms. Jenkins and Ms. Bouie because of the confidential information included in the file. She was unsure how to proceed and inquired what needed to be done. Vivian Brooks, CRA Assistant Director, responded and advised she spoke with the CDC about it. Previously the CDC handled those requests for the CRA and Ms. Jenkin's file was submitted during the transition period. It was never forwarded to them. She explained the file had been destroyed and she invited Ms. Jenkins to fill out a new application with the CRA. She apologized for the inconvenience. Mr. Weiland left the dais at 6:44 p.m. and he returned to the dais at 6:45 p.m. A representative from the CDC was not available to address the issue; however Ms. Brooks followed up on the issue and it was an internal issue with the CDC. She explained the amount available for exterior improvements was $20K and if Ms. Jenkins needed more, she should approach the City for Community Improvement funds through Ms. Sherrod. Mr. Hay apologized for the mishap and suggested making a copy of her application in the future. Sherrie Johnson, Executive Director, Community Caring Center, 145 NE 4th Avenue, thanked the CRA for its consideration of the Community Caring Center's request. She congratulated the CRA on what they have accomplished and appreciated the trolley adding a stop at the library. She advised she received many calls from senior citizens who wanted to attend the Green Market. Adding the stop would allow them to do so. She complimented the new amenities added at the marina, such as restrooms and pedestrian walkways and suggested moving the Green Market to that location. 3 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 Ms. Johnson requested the CRA create ways to assist the Community Caring Center that did not necessarily require funding. Examples could be a website link, free advertising on the trolley for a time, and other creative ways to market them and the Green Market. In referring to the CRA budget, Ms. Johnson made reference to a property purchase and the $200K set aside to solve their issues. She suggested if the CRA assisted the Woman's Circle, that might put them in a position to negotiate on a portion of the property they were interested in purchasing. Ms. Johnson said this would solve their problem. Chair Taylor explained in reference to the trolley, the southern route was successful, but because of cost, some of the routes had to be scaled back. They reviewed the item very ca refu Ily. Mack McCray, 806 NW 4th Street, suggested identifying which CDC was referred to in reference to Ms. Jenkins, since there was more than one CDC within the City. It was noted the CDC in question was the Boynton Beach Faith Based CDC. He also advised if free advertising would be given on the trolley, he hoped there was something in place so that anyone who had a business in Boynton would also receive free advertising. There being no further comments, Chair Taylor closed the public hearing. X. Public Hearing: None (End transcription by C. Cherry at 6:51 p.m.) XI. Old Business A-l. eRA Board Policy Direction for FY 08-09 Budget (Janet Prainito begins transcription at 6:51 p.m.) At the CRA budget workshop, the board made recommendations to staff to implement a balanced budget. They brought forward a list of items with only one item missing which was the proposal and request for $1.8 million to purchase the land for the Museum of Lifestyle and Fashion History. The board directed staff to do a boundary amendment, but that funding opportunity had never been discussed. Susan Harris, Finance Director, reviewed the projections based on the differential between what happened in the City as a whole and the CRA assessed valuations. This was elaborated into two different scenarios; one at the suggestion of the City Manager in an e-mail to Ms. Bright where he suggested a 6% reduction in assessments for next year. When Vice Chair Rodriguez suggested the reductions could be 12% to 15%, a second scenario was prepared. . Scenario #1 shows a reduction in assessed valuations in 2009/10 of 6%. In terms of TIF, that computes to $7.6 million in revenue. When looking at the new construction anticipated coming on-board in 2010/11, more than $3 million is 4 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 anticipated. In that fiscal year, the TIF will be over $10 million. That would put the CRA at the same level as in this current fiscal year of $5.9 million. . Scenario #2 shows a drop in assessed valuations in 2009/10 of 12% which would result in a TIF of $6.9 million without new construction. When the new construction is added, that figure increases to $9.8 million in fiscal year 2010/11. In spite of this great reduction in assessed valuations, with new construction coming on-board, the TIF will move up to current levels. Another chart prepared by Ms. Harris elaborated on the two scenarios discussed; however, it showed what would occur if there was a 6% loss in valuations in fiscal year 2009/10. The changes discussed at the budget workshop were programmed in and the budget is balanced for this coming fiscal year and instead of a $6 million deficit for 2009/10, there is a deficit of approximately $2 million. In budget Scenario #2, which covers a 12% loss in valuations, there will be a $2.5 million deficit. Ms. Harris will be in touch with the Property Appraiser to closely monitor this situation and will return to the board with revised numbers as information becomes available. Ms. Harris referred to a historical chart beginning with fiscal year 2005/06 through the upcoming fiscal year to show the cost of different projects related to City projects and services. In 2005/06, when the Boynton Beach Boulevard Extension and Promenade were built, there were police services, events and lobbying costs that amounted to $10 million. The TIF funds for that year were slightly above $6 million excluding any of the Bond #1 proceeds. This amounted to 20% of TIF. In the next fiscal year, that figure increased. In another chart, the $4 million in the proposed fiscal year is 48% of the $8.4 million in TIF. Ms. Bright reported the responsibility from the staff level was to program the recommendations the board made during the workshop and bring back to the board a balanced budget at the September 2' 2008 meeting. Chair Taylor expressed the core mission of the CRA was redevelopment and elimination of blight in the community. The #1 project on the table is the Heart of Boynton. Redevelopment in the downtown CRA produces the money for such redevelopment. Chair Taylor discussed his items of concern as follows: . SE 4th Street Utility Streetscape - Three years ago, the board made an agreement with the City to share in the cost of that project because the Arches development was anticipated along with other development. Those were good reasons to participate. However, Chair Taylor now believes this is not a CRA project; rather, a City utility project. The design has been changed and much of the landscaping has been removed. The CRA should not be involved since the development did not take place and probably will not take place for two to three years. The CRA has $300,000 from the County that was set aside for that project. The money should be given to the City. When development takes place, the developers can provide the upgrades. 5 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 If the board did not agree with that proposal, Chair Taylor suggested deferring the project to 2010 as long as the CRA pays its portion at that time. By that time, the CRA could probably do a bond issue that would allow additional dollars for this project. . Chair Taylor expressed concern about the $1.3 million to purchase the City's property in the Heart of Boynton. The City paid $60,000 for the property and he is opposed to paying so much more money for that property. If the CRA does not buy the property, the City could negotiate with the developer. This would eliminate the burden of the $1.3 million expense on the CRA. The CRA does not need that property until approximately October 2010. At that time, the CRA would be in a better financial position regarding TIF or bonding would be a possibility. Further, a bond would be necessary to secure the $22 million needed for the Heart of Boynton. Vice Chair Rodriguez felt the board did not do a thorough review during the budget workshop since a great deal of time was spent "squeezing" $1.6 million from projects while little time was spent on operating costs. Vice Chair Rodriguez believes more time should be spent reviewing the operating costs in an effort to find dollars. The budget indicates $3.8 million in operating costs. He questioned why it is costing $3.8 million to manage the CRA. The board did not spend any time looking at those items. Chair Taylor reported that he spent a great deal of time studying the budget and noted that a lot of money was cut from training and transportation. One employee position was eliminated. Chair Taylor feels the staff is very qualified and they do a great deal in-house where other CRAs take those projects outside to private industry. Vice Chair Rodriguez agreed the staff is great; however, he felt a responsibility to look at every expense. Vice Chair Rodriguez pointed out that the budget in his possession did not include the details of the line items for the operating expenses. Chair Taylor referred to backup received previously that showed the decreases in operating expenses. Vice Chair Rodriguez pointed out there was an overall 11 % decrease which was $125,000 as compared to the $1.6 million decrease in projects. In addition, there is a contingency of $314,000. He questioned the need for that contingency funding. Ms. Bright explained there has been a contingency of $200,000 to $400,000. Staff deprograms over $200,000 in professional services. When Vice Chair Rodriguez visited the CRA Office, he was ill and he did not review the details of the budget. A question was brought up at the workshop related to the Delray CRA versus the Boynton Beach CRA. Ms. Bright explained that the Delray Beach TIF is $13.2 million this year. They have a staff of nine and their salaries are exactly the same as those at the Boynton Beach CRA. Ms. Bright offered to review the details of how the reductions were achieved. CRAs are not bound to have reserves. Every dollar can be programmed. The $314,000 can be reprogrammed back into something that was eliminated or into a new program. Ms. Bright pointed out that she reviewed the detail with three of the five board members. Vice Chair Rodriguez referred back to previous comments regarding squeezing dollars out of projects while $314,000 was not programmed. He reiterated that he would like to review the 6 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12,2008 details of the operating budget. Commissioner Hay requested the opportunity to also go through the details. Ms. Harris explained that she did not have the details of the operating budget with her; however, she offered to provide those details. In response to a question from Vice Chair Rodriguez, Ms. Harris had the travel budget with her. Ms. Harris explained that the budget workshop this year was somewhat different from the past. Staff was looking for higher level decisions from the board members because of the large deficit. Staff needed guidance since millions of dollars were involved. While there are millions of dollars in the operating budget, that budget also includes some marina expenses. In the $3.8 million of operating expenses, there is $1 million for department overhead that includes salaries and benefits. The remainder of the items included insurance items ($115,000), professional services (reduced by more than $460,000) which included audit fees, bond compliance fees, and arbitrage rebate fees. A marina audit will have to be performed this year for the first time. Additionally, an audit of the trust fund is also required by the Auditor General. Economic development and small business development fees are also included. In response to Vice Chair Rodriguez, Ms. Bright explained that as an outcome of the American Assembly, there was discussion about an economic development person. Although the City has not made a decision about this position, the job has always been programmed in the CRA budget. When further questioned by Vice Chair Rodriguez, Ms. Bright explained the position is in the CRA HR plan. An economic development plan was developed for the CRA to address small business development issues. A person was hired to create that plan. This plan is not finalized from staff at this time, but it will be brought before the board. When Vice Chair Rodriguez inquired about the cost associated with that project, Ms. Bright recalled the figure to be approximately $40,000 of which $30,000 would be carried over to next year to complete that project. Mr. Hay requested that Ms. Harris break down the details so that he is aware of each of the costs in each line item. Ms. Harris added that there are marketing fees contained under professional services. The CRA pays a fee to the City through an interlocal agreement for information technology services ($20,000). Contingency is budgeted for unforeseen expenses. This year, the development line item was overspent because $1.3 million was not available for the purchase of the licenses. The development line had been programmed for $1 million for land acquisition and property was purchased for $200,000 along with the licenses for $1.3. Contingency covers those types of unanticipated expenses. Chair Taylor agreed CRA staff should provide the line item detail information to the individuals who wished to have it and he was willing to discuss it at the next meeting. Mr. Hay requested an opportunity to meet one-on-one with CRA staff. Vice Chair Rodriguez requested the information be provided to him for his review and then he would meet one-on-one with CRA staff. During the next meeting, concerns would be discussed. Mark Karageorge expressed his opinion that economic development cures blight. 7 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 Mack McCray, 806 NW 4th Street, asked how much money was owed in bonds because that is a burden on the City. He thanked the board members who met with the CRA individually for doing their jobs. Chair Taylor corrected Mr. McCray's statement about bonding since it is not a liability on the City. Rather, it is a liability on the CRA since they have to come up with the debt service. Vice Chair Rodriguez wished to correct the record to reflect the fact that he briefly met with Ms. Bright and Ms. Brooks. Unfortunately, he assumed the details would be in the book that was provided and they were not included. He recommended that the details be included in the books next year. With regard to the NE 4th Street Streetscape, Mr. Weiland felt that project could have been done in 2002. The plans were ready, but he was told at that time nothing was going through because of the anticipated Arches development and there was no desire to tear up the street twice. At this time, Mr. Weiland does support the CRA spending money on that project. Mr. Weiland recalled individual appraisals were going to be sought to make sure the City's appraisals matched the CRA's appraisals. The CPA agreed to pay the appraised value; however, had he known the City paid $60,000 for those properties; he would not have made that agreement. The City and CRA should work together to transfer the property to the CRA at a much lower price. If the City does not want to do that, the City can deal with the developer and the money could be deferred. When the discussion of bonding arose, Attorney Cherof advised that a bond would require a vote of the CRA. It does not go before the citizens for a vote. Vice Chair Rodriguez confirmed with Ms. Bright that the City assumes liability if the CRA defaults. Attorney Cherof reported that at this time, no one is going out to bond until the Strand case is decided. When the Supreme Court rules, there will be a better understanding of what can or cannot be bonded. Further, Chair Taylor pointed out that the CRA would not go out for a bond if it were not able to pay the debt service. Ms. Bright reminded the members that the financial advisors suggested the CRA might be in a position to consider what the City had done with its February 2008 Utility Tax Bond. The lobbyists indicated that Strand is taking so long because two Supreme Court justices are retiring by September 30th and they have committed to the Governor that they will make a ruling on the Strand case and what opportunities will be available for special taxing districts. Chair Taylor confirmed with Ms. Bright that the CRA still has substantial bonding capacity at this time. Mr. Hay agreed to delay NE 4th Street Streetscape project. He wanted to ensure that the $1.3 million for MLK did not get lost in the shuffle, but believed the CRA would be in a better position in 2010 to move forward with the Auburn proposal. Ms. Bright said Mr. Bressner made it clear that the City has the money but the board would need to make sure the $300,000 grant goes to the City. With regard to MLK, Mr. Hinners confirmed that November 2010 would work for everyone. The money could be 8 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 programmed to a simultaneous closing with the City, but that would be determined later in the meeting. Ms. Harris explained that if the $300,000 grant is received in November or December and it is given immediately to the City, that dollar figure would be reduced from the $1.1 million and that difference is what would be delayed. Vice Chair Rodriguez recalled Mr. Bressner saying that if the CRA did not share in this, the City would still have to do this project and that would present challenges for the City Commission from a budgetary standpoint at this particular item. The City is counting on that money. Ms. Bright said she confirmed with Mr. Bressner that he could float the CRA for the three years through the Utility Tax Bond until the CRA saw the first increase in the TlF if the CRA board wanted to keep the project with the current drawings (the way it is currently redesigned). Chair Taylor agreed with Ms. Bright's statement. Chair Taylor reiterated for the edification of the members that the CRA would give the $300,000 to the City as soon as it was received. That would leave $823,394 that would be delayed until October of 2010. When Vice Chair Rodriguez questioned what would be done with the $823,394 in the budget, Chair Taylor said it might depend on what was done with the $1.3 million. The $823,394 might help offset that figure. Vice Chair Rodriguez questioned whether the board would have to go back through the budget to reallocate funds. Ms. Bright advised the marina is programmed for next year. It is a 24-month project with a total cost of $5.9 million. The first $2 million is up front from the County which is being paid this year. The second phase would be $1.9 million. Depending on what Auburn tells the board during its presentation, the board may be able to encumber some money for them. Ms. Bright has been working with their staff and there are some possible opportunity purchases within the Phase I M LK corridor. The 4th and 5th Street projects and Ocean Breeze are other options. There are opportunities to reprogram the money into TlF-generating redevelopment projects. Mr. Weiland said if the two projects discussed earlier are deferred, he would like the money funneled into the Heart of Boynton. It could be split between Ocean Breeze and MLK so that those two projects continue to move forward. Vice Chair Rodriguez inquired if there is money pending for the MLK or Ocean Breeze projects. Ms. Bright said the MLK project had the expectation and needed payment of $1.9 million. If money is not encumbered to honor the commitment, there is no possible way to honor the financial commitment when the money is needed. The money was in the budget for 2009/10. It was due October of 2009. The TlF refunds do not come in until December of 2009; therefore, it was necessary to take money out of this budget for that obligation. The CRA has not signed a Master Development Agreement, but that issue would be considered by the board later in the meeting. Cito Berguirstain, Auburn Development, said if it were necessary to push the project off because of budget constraints, Auburn would be willing to deal with that budget reality. However, it certainly was not the best thing for the project and not in the best interest of 9 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 getting this project done quickly. It would be better to remain on the originally proposed schedule. Ms. Ross was willing to delay the NE 4th Street Utility Streetscape project until 2010 and the $300,000 would go immediately to the City when the grant was received. Consensus There was consensus of the board to delay the NE 4th Street Utility Streetscape until 2010 and the $300,000 would go immediately to the City when the grant was received. With regard to the purchase of land for $1.3 million, Mr. Weiland would like the City to deal with the developer. Chair Taylor explained that if the CRA bought the land from the City for $1.3 million, they would give it to the developer. The City has contingency funds to fall back on and the CRA does not. The City Manager has worked hard not to use contingency. Originally, $4.5 million was needed to balance the City budget. The City Manager reworked the numbers and brought back a budget that reduced that $4.5 million to $3.75 million from contingency. Chair Taylor reiterated for Ms. Ross that the CRA had agreed to buy the land the City owns in the HOB area (approximately six lots) which the City purchased for $60,000. There was discussion about a three-party agreement among the City, the CRA and the Auburn Group; however, it was decided to make it a two-party agreement. Appraisals valued the land at $1.3 million once developed and the City has asked for $1.3 million for the land. The CRA does not have that money. The CRA has to come up with $1.9 in 2009/10 and the $1.3 would be part of it. Ms. Bright explained that CRA staff had supported the board initiative initially and she let Chair Taylor know at one of their one-on-one meetings that she was no longer willing to continue that support. The reason she expected to have the money was the $586,000 between last year and next year that would go to the City versus the CRAs. She then changed her recommendation of supporting the acquisition of this property. The CRA would not only be paying this money, but also lost the $586,000 because the board was not willing to retro the money for the CRA to secure it from the City. The City received that additional $586,000 from the CRA, not specifically for this acquisition, but money that was due the CRA. (End of transcription by Janet Prainito at 7:54 p.m.) A-2. Review of the Draft MLK corridor Development Agreement for Policy Direction (7:55 p.m. begin transcription by C. Cherry) Cito Berguirstain, Auburn Development, thanked the board for reviewing some of the discussion in support of funding the MLK redevelopment. MLK would be a legacy project which would be impressive in Phase I and more so at the last phase. At the budget workshop it was discussed whether Auburn Development could wait until 2010 for development to occur, and there were concerns about timing. The timing for creating a tax credit development was excellent partly because when developers get involved when the market was down, they 10 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12,2008 receive a better deal. Part of the reason Auburn wanted to start in 2009 was because they signed purchase agreements for 12 lots and they would have 30 contracts within the next few weeks. Mr. Berguirstain provided the purchase contracts to Ms. Bright. Mr. Berguirstain reported they had the ability to put the first phase of the site under control which previously was a concern. He advised Auburn was seeing a tremendous amount of support for the project which made it easier to get property under contract. There were rumors about changing the density in the first three phases of the project and he clarified they were not changing the density. In 2007, Auburn became the selected developer after negotiations with Intown failed. They submitted a second Development Agreement which was currently being reviewed by counsel and they were waiting for a red-line draft to be returned. He hoped to receive it soon and advised counsel had already engaged in discussion aboutjt. As to the timing to apply for funding from the State of Florida, Auburn needed site control which could be in the form of a purchase agreement or Master Development Agreement for the City and CRA properties. The site control was what drove the timing of applying for the funds. While construction may not start until 2010, Auburn would need to purchase and close on those properties and begin the demolition process so when the tax credit underwriting was complete, they could start the process. Mr. Berguirstain reported Phase II appeared to pay for itself in terms of generating enough general revenue. He clarified when they spoke of bonding, it was for the final phase of the development. Currently, they were ready to move forward and needed only zoning. The current zoning and land use in the area was not consistent with the four-story senior development planned for the area and when they apply for the tax credits from Florida, the zoning must be in place. Part of the reason they moved forward to put the properties under contract was because City staff had indicted they needed 51% site control of Phase I for them to begin rezoning. Now there was an indication they wanted the Master Development Agreement completed before initiating any changes. If they did not have the land use in place by March of next year, they may miss the opportunity to apply for the Tax Credit Funding since it is being a once-a-year application cycle. He stressed the zoning was important, but the path was in place by the CRA setting aside $1.9M in funding. Auburn Development had participated in a conference call with the City and they requested the CRA begin the process of having town meetings, which already occurred. They discussed modifying the HOB plan so when they changed the land use and zoning, it would be consistent with the plan. It was intended those actions occur concurrently. Mr. Berguirstain explained he thought the City was looking for direction regarding the zoning. There were reservations on the part of City staff to change the zoning without a Development Agreement and without changing the HOB plan. He believed they were looking for cooperation from the CRA regarding modifying the plan to match the development plan that would be presented. Mr. Weiland noted if the City and CRA directed staff to move forward with the zoning, it would alleviate issues. The time frame for all four phases was discussed. Mr. Berguirstain explained there was a concern about having the Development Agreement in place for 20 years. He noted 20 years 11 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 was the maximum duration allowed under Florida Law. They had timetables and all the financing had to be in place for Phase I by January 1, 2011, which was about two years from when Auburn anticipated the Development Agreement would be done. In the event Auburn did not receive funding from the State, the CRA would have the option to require Auburn to give the land and money back to them with interest. Auburn needed the Master Development Agreement which included having the rights to the land being transferred when they closed. When they closed on the rest of the property, the CRA would also convey its land into the joint venture which was anticipated to occur in November of 2009. The land did not need to be transferred to them until that time, but they needed site control. The Master Development Agreement would contain provisions for transfer and site control of the property as required by the State. The physical site control was needed no later than March of 2009. The $1.9M was needed by November of 2009 as was the Agreement. One reason for having funds available was to accommodate opportunities to acquire property before November 2009 due to unique circumstances such as foreclosures. It would help expedite the project. The Development Agreement was discussed. Ideally it would be better to have the agreement include all phases of the development. It was pointed out they would build Phase I or II and the balance of the property would rise in value thereby making it more difficult for Auburn to execute the final phase. Mr. Berguirstain thought that it would be fiscally prudent to have the Agreement include all the phases so they could enter into a contract before any increases in values would occur. He explained he did not anticipate the plan would take 20 years to develop and the Development Agreement only contained the maximum amount of time under the law and could be changed. He thought if they received direction regarding funds that have been made available so they could fund the development of MLK, it would help. Staff had already viewed the initial draft and modifications would be forthcoming. He hoped to have the Agreement finished within 30 to 60 days. Auburn explained they may start Phase III prior to Phase I because they needed a grocery store large enough to facilitate the winning of tax credits. It would be Phase III on Seacrest and part of the retail component of the plan. In Phase II they would like to construct housing across from Phase I simultaneously. The issue was the timing of the funding with the CRA and their ability to provide down payment assistance. The City owned much of the land and because it could be conveyed, it was potentially possible to construct part of Phase II with Phase I so both sides of a portion of the street would be done at the same time. It was noted the zoning for Phase II was not an issue. In terms of the 51 % of site control, that requirement was for the first phase where the senior development would be located. Mr. Berguirstain explained the project would be no greater than four stories on any part of the development. Some parts of MLK may be two stories. Many designs were still not final but they would not go above the four stories except along Federal Highway. There was reference made to an email about density that caused some concern. Quintus Greene, Development Director, explained he wrote the email last week that explained Development staff had a concern because staff was asked to initiate a land use and zoning change in the area that would be inappropriate without the developer having land control or a 12 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12,2008 Development Agreement. There was already an adopted HOB plan. He explained if staff was directed by the City Commission and/or CRA to do so, they would proceed. Staff should not initiate the changes with elements missing. Mr. Greene explained there needed to be both a land use and zoning change. In Phase I, the land use change would require a small scale amendment, but with the zoning, it would need a minimum of four months. The zoning categories the City had in Phase I would likely be a Mixed-Use land classification and Mixed-Use Low II zoning category which wouid accommodate 30-40 dwelling units per acre (du/ac). When he reviewed the draft Development Agreement, it was not clear how Auburn Development wanted to see the zoning proceed, i.e. should it proceed phase by phase or for the entire project. Mr. Berguirstain confirmed they were looking for the changes for Phase I initially. Mr. Greene explained the further phases could be problematic because they were looking at 304 units on five acres which equated to 60 du/ac. The only category the City had which could accommodate that many units was Mixed-Use High and the only location that designation was allowed was in the core of the Central Business District. There was dialogue with the City the land use and zoning changes would be required throughout the project. The Mixed-Use zoning categories and the current zoning on the site was a mix of Commercial and R-2. The R-2 designation had a maximum density of 9.8 du/ac and it was not consistent with what Auburn was proposing. Mr. Berguirstain explained they could start with Phase I; however, there was concern they needed to have the path established. Staff expressed the need for the plan to reflect what was being done which was slightly different from what was adopted. Mr. Greene did not have an answer regarding how to increase the density. He expressed City staff could work with Auburn on Phase I, but later Phase IV would be more difficult. Attorney Cherof advised the CRA could give preliminary direction to staff, which the City Commission would also have to do to address the zoning specifically and finally in conjunction with the approval of the Development Agreement, which was approximately 60 days away. Both Mr. Greene and Mr. Berguirstain acknowledged that time would put them very close to Auburn Development's application deadline. Mr. Berguirstain requested staff start the paperwork, but not necessarily institute the change. He also offered Auburn's land use counsel to the assist the City. If Phase IV presents zoning issues that were known earlier, it would be a challenge; however, Mr. Berguirstain expressed if the City and CRA wanted to have the land use there, they would find a mechanism to put the development in place. There was a question about the $1.9M being needed by November 2009 and if funds could be encumbered for that length of time to which Ms. Bright responded they could. Ms. Ross also asked whether they would have a wellness center. Mr. Berguirstain explained they would incorporate non-profit commercial retail space into the Agreement and the CRA would put whatever they wanted into it. Additionally, there would not be a police officer hired to patrol the project. 13 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 Chair Taylor asked whether there was consensus to move forward with the zoning prior to the Master Plan or if the members wanted to wait. There was agreement to begin working on the zoning. A. Selection of Respondent to RFQ for Economic Analysis Services The staff recommendation was to put this item off. Ms. Bright expressed they would not want to conduct an analysis for a City Hall site and the Town Square Plan at this time. By the time they were ready to move forward, the data would be antiquated. B. Approval to Allow Staff to Negotiate a Professional Services Agreement for the Provision of Economic Analysis Services not to exceed $50K This item was not addressed due to the prior item being put on hold. Ms. Brooks noted she and Scott Cline, a consultant, ranked the proposals based on the criteria in the RFQ. C. Consideration of Amending CRA Boundaries at Split Streets. Ms. Brooks explained the item arose from a board member's comments at a prior meeting about streets having the boundary running down the middle of the street. These streets were parts of Seacrest, Ocean Avenue, parts of SE 2nd Street and NE 4th Street. Mr. LaTour raised the issue and noted an individual who lived on the east side of NE 4th could apply for a rehabilitation grant but not homeowners on the west side. Staff conducted a financial analysis for the City and CRA if the boundaries were pushed mid block. If the board decided to institute a change this year, it would not take effect until next year, which would be the base year. If that occurred, the City would collect $123,337 annually and the CRA would not get TIF revenues on the property until fiscal years 2011/2012 in the amount of $3,356. The financial impact on TIF and general revenue was minimal. Ms. Brooks reviewed a map showing the impacted properties. The issue that could be reasonably raised was now there would be a boundary running between homes as opposed to the street. Last year there was an inquiry about adding 4th Street into the CRA and the answer was no. Ms. Brooks pointed out by adding the majority of the properties, the CRA would be adding properties looking for funding from the CRA. The potential impact for individuals asking for funds would potentially exceed the $300K they had set aside. She noted the City has a rehabilitation program that was better than theirs and whoever applied to the CRA and was income qualified could also approach the City. The consensus was to not move forward with changing the boundary lines, with one comment noted that it was better to have the boundary in the backyard because properties faced one another. Additionally, individuals in the CRA area could layer funding and apply and receive City funds for rehabilitation projects as well. Motion Mr. Weiland moved to accept staff's recommendation to deny. Mr. Hay seconded the motion that unanimously passed. 14 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida .. August 12,2008 D. Presentation on Ocean Breeze Funding Options - American Realty Ms. Brooks explained the Community Housing Workforce Innovation Pilot Program (CWHIP) on the State level has been discontinued and the CRA has been working with American Realty to move their project forward. Frank Chirkinian, American Realty, had previously provided an update and announced American Realty did not receive the CWHIP funds for the west side project. They were determining whether they could move forward with the project, and had committed to developing the west side. In an effort to find a new way to accomplish their goal, they were in contact with The Rel~ted Croup (TRC) Room to Grow (RTG) who was doing work on Sea crest. They were building eight new homes behind Sea crest. Of those eight homes, :mG RTG received 50 phone calls for them. In addition to American Realty not receiving the CWHIP funds and the market changing, they determined the townhomes would not be realistic on the west side. There was already a saturation of townhomes in the market and there was a desire for single-family homes. He gave a presentation and explained there was nothing unusual about the homes which were consistent with Delray Beach's Community Land Trust area. The homes would be situated on 40 foot lots and there would be 32 units as opposed to 56 townhomes. The two models of homes ranged from 1,300 square feet to 1,400 square feet and both had one-car garages. With the garage space included, the total square footage under roof would be up to 1,525 and 1,625. The price for the lesser model was $194K and $205K for the larger model. American Realty conducted an affordability analysis based on an individual earning about $39K. The analysis showed they would need $107K in down payment subsidies. If the income increased, the subsidy would be less. The subsidy would require County and State exceed Initiative Plan (SHIP) funds in addition to Housing Assistance Plan (HAP) and a CRA match. The builder would only charge the construction price and would mitigate their developer's fee. American Realty explained they had to retool the land deal and in their proforma they committed to spending $20K per land unit on the west side for the 32 units. As each property was sold, the monies would be returned as HAP. Ms. Brooks explained some buyers would not need the HAP at all. Ms. Ross, Chair Taylor and Mr. Weiland disclosed they met with the developer. Ms. Brooks advised there was no money involved in the transaction, basically it was the land. An appraisal made about six months ago for both land parcels and the value of both properties was for $7.2M together. The builder needed half that amount. The time frame for construction on the west side was anticipated to occur in the first quarter of next year. A site plan had been prepared already and the front yard setbacks would not be as depicted on Mr. Chirkinian's presentation, but would be more similar to a PUD. They would buffer the homes along Seacrest and the homes faced one another in order to give more of a community feeling as opposed to a linear design. Vice Chair Rodriguez left the dais at 8:52 p.m. 15 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12,2008 The discount :mG RTG was giving the project was they would charge $90 per square foot as opposed to $95 per square foot. The program was conceptual. SHIP funds were critical and they would approach the County for a set aside. Most of the SHIP funds would be for low- income applicants. Ms. Brooks thought obtaining a set aside would be a challenge for the moderate-income applicants; however, they would know within the next few months whether the set aside for SHIP on the City and County level was doable. Vice Chair Rodriguez returned to the dais at 8:57 p.m. Discussion about how the project would compare with the Auburn Development took place. Mr. Chirkinian explained it was consistent with the plan and the Floribbean design project. A concern was raised about so many subsidies being required; however, Ms. Brooks explained it was typical with affordable housing. In the Preserve, the subsidy amount was about $100K. She explained using a bell curve, the curve where the income would fall would be about $35K and there was still a gap of about $100K. Another concern was how an applicant would maintain the home. Ms. Brooks explained, as a proponent of affordable housing, she was in favor of installing a 50- year roof on the home as opposed to a 10-year roof, and to ensure they have a garage to store equipment needed to maintain the home. The market in the HOB area was not anticipated to be pulling individuals making $75K or more because there was not enough activity in the community to support that income range. The next round of housing could include higher income individuals. American Realty had used 60% Average Median Income (AMI) for their homes and as that percentage increased, the percentage of subsidy reduces. It was noted $66K was considered the average income. There was consensus to move ahead with the project by giving American Realty the land. Staff also supported the request which was to develop the property on the west side. Ms. Brooks noted the contract would have to be redone and the item would come back to the board. Additionally, they would need to figure out details about how to develop the project on land they did not own. E. Dumpster Art Program Status and Request for seven additional dumpsters. Chair Taylor explained 10 dumpsters were painted so far and there was a balance in the project fund of $4,312.66. The options were to paint seven more dumpsters or discontinue the program. There was discussion the program did not address the mission of the CRA to eliminate blight and with the cuts, the funds should be used for something else. Conversely, it was argued it did help with blight and the program should be completed. It was suggested using local high school students to paint in the future. 16 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 Motion Vice Chair Rodriguez moved to approve the additional garbage dumpster painting program. Ms. Ross seconded the motion that passed 3-2. (Chair Taylor and Mr. Weiland dissenting.) XII. New Business A. Consideration of request by the Cornerstone Group to amend the Homebuyers Assistance Program (HAP) to 140% of AMI. Ms. Brooks explained this was a request from the Cornerstone Group, who received CWHIP funds for the Preserve project. They requested the CRA amend the HAP program to move to 140% of median household income where previously it was 120%. The housing study conducted revealed the City's median income was much less than the County's and staff did not feel it would address the population to be served if it was increased to 140% when the Commission had voted to keep it at 120%. Cornerstone was requesting going to 140% AMI in the case where there were CWHIP funds used. Ms. Brooks explained Cornerstone indicated that CWHIP funds would be used to reduce the price of the units. The market was putting downward pressure on prices and Ms. Brooks was concerned the subsidy would not be secured. She explained if they reduced the price of the home to support the security on the subsidy, it was acceptable to staff, but only for projects with CWHIP funds. Mike Weiner, 209 S. Sea crest, explained the applicant, Ms. Mades, could not attend the meeting. He read the justification for her request which was that the qualification for CWHIP funds lowers the price of the unit, that the qualification for CWHIP made them reduce the price of the unit and that gives buyers who qualified for the subsidy, the ability to receive the subsidy. In that way it reduced the price. This would only coordinate the City's program with the SHIP program which was at 140% and it could subsidize families earning up to $79K. The change did not mean the CRA would be requested to contribute more money. It was just a City-wide change to the ordinance that assisted all developers of affordable housing and Mr. Weiner suggested if the board did not think it was a good idea, to allow Ms. Mades to speak. Chair Taylor explained there was only enough money to help about six more people. If they made the change, more people would apply and they would not be able to be helped. Ms. Brooks explained the CRA had a Direct Incentive Funding Agreement (DIFA) with Cornerstone and about 30 Housing Assistance Plan subsidies were given to buyers there. There had been quite a bit of money put into the project. In this instance, if the CRA had not done anything else for the project, she could agree to the request. Motion Mr. Hay moved to not go to the 140% on the HAP program. Mr. Weiland seconded the motion that unanimously passed. 17 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 XIII. Future Agenda Items Chair Taylor explained Ms. Ross wanted to continue to fund the Green Market and the board eliminated the $50K for the economic analysis. Vice Chair Rodriguez explained he thought the members should go through the budget again with the changes they made. He indicated he was supposed to receive information from Ms. Harris regarding additional budget details and did not. Ms. Bright explained each board member should respond directly and privately with Ms. Harris and she would meet one-on-one with them. The operations budget was the subject budget to review. Discussion ensued about having a future discussion on the budget on September 2, 2008 and having a balanced budget. Ms. Bright suggested having individual meetings would be the most efficient way to review the budget and announced the budget details would be delivered on Friday. Ms. Ross agreed to wait on the Green Market item until September 2, 2008. XIV. Comments by Staff None. XV. Comments by the Executive Director Ms. Bright wanted to publically address the board on a matter which arose at the budget workshop. Several board members have had scheduling conflicts and there had not been any one-on-one meetings before the board meetings. She announced she and her staff were available and she would like to continue the meetings because they were important. It made the meetings efficient and the board members aware of staff's logic. She expressed the board members were missing that piece and they keep revisiting items. The board needed to be aware how different the CRA program was and the fiduciary responsibility. She expressed she did not want to go to the International Downtown Association (IDA) Conference in Calgary, Canada. The board approved programs and budgets, and the travel was approved a year ago. She expressed she did not want to be criticized for approved travel. She explained she comes to the dais with items she thinks was approved and then gets caught off guard for them. Another thing that upset her was the City Manager's actions at the last workshop. He put an item before the board and said he balanced the CRA budget. She asserted the CRA budget workshop was her workshop. Mr. Bressner would not allow her to speak at his budget hearing, taking over or making recommendations and asking for money. Now the board was reconsidering the workshop decisions. The City Manager had sent an email regarding the IDA conference and she inquired whether the members would want to keep the trip and travel arrangements the way it was or not. 18 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida August 12, 2008 There was no formal policy that CRA board members of City Commissioners cannot travel together. It was a suggestion made by the City Manager for security purposes. Discussion followed about traveling together. Chair Taylor explained he has flown with City Commissioners all the time and there was no such policy where one or more Commissioners could not fly together. He explained to do so would create a problem with timing and expense. It was noted in business, staff members do not fly all together in the event something happened and the suggestion pertained to the majority of the Commission flying together. Vice Chair Rodriguez advised he would change his flight. Ms. Bright explained the price for a taxi was $35 for three members to travel with luggage. There was a request for value pricing a car service which would cost $69.50. She had previously authorized the same type of expense and was chastised. She asked how the board wanted her to proceed. Vice Chair Rodriguez suggested taking a van so all the members could go and they would save money as opposed to spending money. Mr. Berguirstain inquired about the MLK funds and the CRA giving direction to staff about splitting half the funds with the City and the CRA for a project. He inquired whether the entire amount of monies for 4th Street was now available. Ms. Brooks explained they did not encumber the entire amount, only approximately $800K. Ms. Brooks explained the funds would be paid in the future. The balance for the project would move over to 2011, the year the City Manager indicated he would be willing to wait for payment. She explained they did not gain revenue. As to how this would affect Auburn Development, it was agreed they would wait until September 2, 2008 after the members had the opportunity to speak with Ms. Harris. XV. Comments by CRA Board Attorney None XVI. Comments by CRA Board Vice Chair Rodriguez explained the board had discussed the noise ordinance. Ms. Bright explained the ordinance would be heard on the City level and a debriefing would occur next month. He recalled the CRA would make a recommendation to the City Commission. Ms. Bright explained this needed to encompass the entire City. XVII. Adjournment There being no further business to discuss, the CRA adjourned at 9:34 p.m. (End Transcription by C Cherry at 9:34 p.m.) futJuJcVKi (\ ~- . Catherine Cherry Recording Secretary (All Transcription from one recording - transcribed on 8/13/08) 19