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Minutes 01-13-09 MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY BOARD MEETING HELD ON TUESDAY, JANUARY 13, 2009 AT 6:30 P.M. IN CITY COMMSSION CHAMBERS, BOYNTON BEACH, FLORIDA PRESENT: Jerry Taylor, Chair Lisa Bright, Executive Director Jose Rodriguez, Vice Chair James Cherof, Board Attorney Woodrow L. Hay Marlene Ross Ron Weiland I. Call to Order – Chair Jerry Taylor Chair Taylor called the meeting to order at 6:30 p.m. II. Pledge to the Flag and Invocation Mr. Hay offered the invocation followed by the Pledge of Allegiance to the Flag. III. Roll Call The Recording Secretary called the roll, and a quorum was present. IV. Agenda Approval: A. Additions, Deletions, Corrections to the Agenda Mr. Hay requested Item A. "Presentation of Audited Financial Statements for FY 2007- 2008," under XII. New Business be addressed by 7:30 p.m. Chair Taylor suggested the item be heard at 7:30 p.m. or sooner. Mr. Weiland noted, if Item XII. A. were to be moved up, he wished to pull Item G, "Approval of Piggy-backing on Agreement between Delray Beach CRA and PMG Associates to Conduct Project Development, Financial and Real Estate Market Analysis" under VI. Consent Agenda, to XII. New Business. Chair Taylor suggested Item G be placed under New Business as Item F. Lisa Bright, Executive Director, questioned whether Item G on the Consent Agenda should be discussed under XI. Old Business. 1 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Attorney Cherof believed Ms. Bright was also stating it should be considered together with the Master Development Agreement. Chair Taylor suggested Item G. be discussed in conjunction with Item XI. Chair Taylor pulled Item C, "Approval of Updated Administrative Policy Manual," under VI. Consent Agenda, as Attorney Cherof desired to discuss this further with staff. Ms. Ross pulled for discussion Item E, "Approval of Sponsoring the Palm Beach County Business Development Board's 2009 Familiarization Program (FAM)," under VI. Consent Agenda. B. Adoption of Agenda Motion Mr. Hay moved to approve the agenda as amended. Vice Chair Rodriguez seconded the motion that passed unanimously. V. Announcements & Awards A. Oceanfront Concert Series – January 16, 2009 from 6:00 p.m. to 9:00 p.m. Kathy Biscuiti, Special Events Director, announced the first Oceanfront Concert would be held at Oceanfront Park, and would feature the R&B music of Tony and Totall Kontrol. Parking was accessible at Bank of America, with continuous shuttle service provided. Food and beverages would be available. She encouraged everyone to attend. VI. Consent Agenda: A. Approval of Minutes – CRA Board Meeting, December 9, 2008 B. Approval of Period-Ended December 31, 2008 Financial Report Vice Chair Rodriguez pulled this item for discussion. C. Approval of Updated Administrative Policy Manual Chair Taylor pulled Item C, as Attorney Cherof wished to further discuss this item with staff. He requested the item be tabled at the Consent Agenda portion of the meeting. 2 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 D.Approval of Updated Procurement Policy Vice Chair Rodriguez pulled this item for discussion. E. Approval of Sponsoring the Palm Beach County Business Development Board's 2009 Familiarization Program (FAM) Ms. Ross pulled Item E for discussion. F. Approval of Listing Agreement with Prakas Brothers for the Sale of the Alcoholic Beverage License Owned by the CRA G. Approval of Piggy-backing on Agreement between Delray Beach CRA and PMG Associates to Conduct Project Development, Financial and Real Estate Market Analysis Mr. Weiland pulled this item to be placed under XII. New Business as Item F. H. Approval of the Amendment/Authorization to Proceed for Work Order #07-124.6710 in the amount of $9,900 with MCSW, Inc. for the Production of Marina Slip Renovation Construction Drawings I. Approval of Funding up to $21,000 from the Homebuyers Assistance program to Kyza Green Motion Ms. Ross moved to approve the Consent Agenda, with the exception of the items pulled. Mr. Hay seconded the motion that passed unanimously. VIII. Pulled Consent Agenda Items: (Taken out of order) B. Approval of Period-Ended December 31, 2008 Financial Report Vice Chair Rodriguez inquired as to the funds unencumbered for the Homebuyers' Assistance Program (HAP) line item. Susan Harris, Finance Director, noted of the $300,000 from bond #2 proceeds for the Homebuyers' Assistance Program (HAP) in this year's budget, $100,000 had been encumbered. She believed there was an item on the Consent Agenda that would be encumbered as well. Approximately $175,000 remained available. 3 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Mr. Weiland inquired whether the $400,000 designated for RTG Construction, Inc. had been approved. Ms. Harris responded it had been approved in the budget process. Ms. Bright noted the expenditure had been approved by the Board prior to the budget, and was formally approved during the budget process. While this item was also budgeted for the Homebuyers' Assistance Program (HAP), some monies were designated specifically for RTG. Other Board-approved homeowners' assistance funds would be allocated from the proceeds remaining from bond #2. Motion Vice Chair Rodriguez moved approval. Mr. Hay seconded the motion that passed unanimously. C. Approval of Updated Administrative Policy Manual Chair Taylor noted Attorney Cherof wished to work with staff to make minor revisions to the document, which would subsequently be brought back before the Board. He requested a motion to table. Motion Vice Chair Rodriguez moved to table. Mr. Hay seconded the motion that passed unanimously. D. Approval of Updated Procurement Policy Vice Chair Rodriguez inquired as to the previous dollar amount that could be approved by the Executive Director prior to the $25,000 procurement baseline. Ms. Harris responded any purchase under $10,000 could be approved by the Executive Director. The review of the policy had been part of the extensive process when all of the administrative and financial procedures were reviewed for the 2008 audit. Staff was aware the approval levels were outdated. Ms. Harris reviewed other CRA approval levels and conferred with the CRA's auditor. It had been determined that the CRA mirrored the City's approval level. In line with the previous policy and the growth in the CRA, the approval levels were required to be updated. Vice Chair Rodriguez asserted he was not comfortable increasing the approval level from $10,000 to $25,000. It was noted that while the City Manager was authorized to approve any purchase under $25,000, he provided a report of the items procured for the Board's review as part of the Consent Agenda. Vice Chair Rodriguez inquired whether it was the Board's desire for the Executive Director to provide a report as well. Chair Taylor and Mr. Hay concurred. 4 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Motion Vice Chair Rodriguez moved the Board approve this purchasing policy, with the addition that a monthly report be provided to this Board by the Executive Director outlining all those expenditures under $25,000. Mr. Weiland seconded the motion that passed unanimously. E. Approval of Sponsoring the Palm Beach County Business Development Board's 2009 Familiarization Program (FAM) Ms. Ross noted she was pleased the CRA and the City were sharing the expense for the $2,000 sponsorship. She inquired whether CRA Board members were involved or whether this pertained to staff participation. Ms. Bright explained the CRA had been approached by the City Commission, through the City Manager, to split the cost of the $5,000 membership ($2,500 to be paid by both the CRA and the City). Splitting the cost allowed for the participation of the City Manager and two Commissioners. Membership was key to the CRA as an economic development engine. Vice Chair Rodriguez pointed out the event was not included within the membership previously approved by the Board and inquired whether this item had been budgeted. It was noted the item had not been budgeted and funds would be required to be allocated from contingency. Chair Taylor noted staff was recommending the Board sponsor the event at a cost of $1,000 and requesting the City contribute the remaining $1,000. Ms. Ross questioned the resolution included with the meeting materials which had been adopted by the previous CRA Board on November 14, 2006. Ms. Bright noted the resolution had been included in error. Vice Chair Rodriguez believed the sponsorship benefits for the event were wonderful, but did not feel the event was necessary. He felt the dollars could be put to better use. Ms. Bright pointed out that while the CRA had membership in the County Business Development Board, staff did not serve on the Board. Opportunities for CRA participation were always in addition to the membership and corresponded to the CRA's mission. Vice Chair Rodriguez felt the issue should be discussed during the budget process. Chair Taylor noted the Board's sponsorship could be approved at this meeting, and a request could be made to the City Commission for its share. 5 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Mr. Hay requested the two Commissioners designated be identified. Ms. Bright believed Chair Taylor had been asked by Glenn Jergensen to participate in the opening reception. Chair Taylor commented he had he been invited, along with Commissioner Ross and Vice Chair Rodriguez, but any CRA Board member wishing to attend could do so. Ms. Ross added she was hopeful this issue could be resolved. Chair Taylor believed it was important for the CRA to participate in the sponsorship and to have representation at the event. Motion Vice Chair Rodriguez moved to deny. Mr. Weiland seconded the motion for purposes of further discussion. Mr. Weiland articulated in addition to the event, support was requested by the Boynton Woman's Club and Boynton Chamber of Commerce Dinner Dance. He expressed concern for the City as well as the CRA. Previous discussions for funding included the Heart of Boynton and Heritage Celebration. While he believed the event was worthwhile, he could not support the expenditure. Chair Taylor believed it was important to maintain active membership in the County Business Development Board and participate in the event, as economic development was crucial to the City and CRA. Ms. Ross also believed economic development was important to the CRA and the City. The sum of $1,000 would be coming from the CRA budget's contingency line item, and a request would be made for the remaining $1,000 to the City Commission. Vote The motion to deny failed 3-2 (Chair Taylor, Ms. Ross and Mr. Hay dissenting). Motion Ms. Ross moved to approve. Mr. Hay seconded the motion that passed 3-2 (Vice Chair Rodriguez and Mr. Weiland dissenting). VII. Information Only A. CRA Policing Activity Report for the Months of November and December, 2008 and District Statistics for the Months of November and December, 2008 6 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 B.Boynton Beach CRA and Trolley Website Updates C.Planning and Development Board Meeting Agenda – December 12, 2008 D.Boynton Beach Named Best Practice in South Florida Workforce Housing Needs Assessment In response to Ms. Ross' inquiry, Ms. Bright noted this was the second time FIU Metropolitan Center had recognized the City and the CRA for the integrated Workforce Housing Program. E.Hold High School Transfer F.Agreements with DSS Restaurant Management to Provide Dumpster, Restroom and Electrical Services to the CRA's Boynton Harbor Marina IX. Public Comments: (Note: comments are limited to 3 minutes in duration) Chair Taylor opened the public comments. No one came forward, and Chair Taylor closed the public comments. X. Public Hearing: Old Business: New Business: IX. Old Business: Chair Taylor inquired whether the Board wished to discuss Item XII. G., "Approval of Piggy-backing on Agreement between Delray Beach CRA and PMG Associates to Conduct Project Development, Financial and Real Estate Market Analysis" ahead of Item A. "Consideration of Master Development Agreement with Auburn Development." Mr. Weiland suggested the Board discuss Item G. on the backside of the Master Development Agreement. Vice Chair Rodriquez supported the suggestion, which should be followed by the financials. 7 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 A. Consideration of Master Development Agreement with Auburn Development th Nancy Chandler, 914 NE 7 Street, advised the Inlet Cove Association (INCA) had been approached by the Auburn Group to meet regarding the development. INCA's president sent an email to Tom Hinners, of the Auburn Group, advising that it would not be possible for Auburn to make a presentation to INCA prior to this CRA meeting, and invited Auburn to attend INCA's general meeting at 6:00 p.m. on February 11, 2009 at the Intracoastal Park Clubhouse. Inlet Cove Association (INCA) believed it was prudent for the City to request an independent third-party review of Auburn's financial records Herb Suss, 1711 Wood Fern Drive, inquired whether David Katz was currently a lobbyist for Auburn. Chair Taylor noted paperwork indicated Mr. Katz currently served as a lobbyist for Auburn. Mr. Suss did not believe a six-month delay of the agreement was of major concern. In light of the current political climate and the "cloud" over West Palm Beach and Delray Beach, he believed Auburn's financial records should be obtained. th Brian Edwards, 629 NE 9 Avenue, felt the CRA and the City had always encouraged developers to be proactive in meeting with the communities. He looked forward to the development of the Heart of Boynton, but favored height limitations. Buck Buchanan, 807 Ocean Inlet Drive, advised his major concern was the structure of the contract under consideration, as it did not appear to be a typical development contract. Guarantees to the developer would encumber CRA Tax Increment Financing (TIF) revenues and halt other redevelopment. The contract should be in standard form to generate additional redevelopment and Tax Increment Financing (TIF) revenues. Cito Berguirstain, Auburn Group, advised Auburn had worked with CRA staff to address protections for the CRA, including the review of Auburn's financials, phases addressing zoning and height regulations, and whether the CRA had adequate funding for the project. Mr. Weiland disclosed he met with the developer yesterday. Mr. Berguirstain reviewed sections of the Master Development Agreement pertaining to CRA protections. Section 7: If the CRA did not have the funds for Phase 3 or Phase 4, neither phase would go forward. The phases would be developed in order. 8 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Section 24: The CRA's obligation to provide any funds would be contingent upon Auburn providing a tax-based statement representing Auburn's financial condition. The CRA would have the sole discretion of determining whether Auburn had the financial ability to commence and complete the phase for which funding was requested. If not, the CRA could terminate the agreement by providing notice of termination within 15 days of receipt of the financial statement. Within 45 days, Auburn would convey to the CRA all the land for the project it previously acquired. Section 18: For Phase 1, Auburn could request the CRA to advance up to $1.5 million from the funds designated for Phase 2, which would reduce the funds available for Phase 2 by the same amount. If requested for Phase 1, the funds would be paid at the time the developer closed on its Phase 1 construction financing. The CRA would never be required to provide funding or land without a firm bank commitment. Phase 2: One hundred sixty affordable senior rental units would be built, to include a 4,500 square foot satellite senior center. Benefits to the CRA included increased development and taxes, leveraging CRA investment with the private sector, removal of blight, increased crime prevention and a cornerstone to the Downtown Plan. Auburn was requesting $1,920,000 for an infrastructure loan and $300,000 for demolition. Section 24.1: Phase 2 was intended to be a housing credit senior community of up to 160 apartments and a senior center. If Auburn was unable to obtain an award of housing credits from the Florida Housing Finance Corporation by December 31, 2012, the CRA would have the option of terminating the agreement by providing written notice. Auburn could not delay the construction of the grocery store for six months because the application for State funding for the affordable rental housing could only be made once a year. It was crucial the grocery store be constructed in time to file the application by March of next year. The CRA could terminate the agreement by providing written notice to Auburn. After 45 days of receipt of the notice, Auburn would convey to the CRA all the land in the project it acquired, with marketable title, free and clear of any encumbrances. At the time of the conveyance, the CRA would pay Auburn the amount Auburn paid for the land, less any CRA contributions, and all obligations would cease. Section 19.1: The CRA would not convey anything to Auburn until Auburn provided notice of a closing on construction financing. After Auburn closed, the City or CRA would convey to Auburn the Phase 2 land acquired by the City or CRA after the effective date of the agreement for the price of $10, with marketable title in accordance with Florida Statutes, free of encumbrances. The CRA would pay Auburn up to $1,920,000, less any monies expended by the CRA for the acquisition of land. If Auburn received $2 million in grant funds from another governmental agency, the CRA 9 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 would not be required to make any contribution. Funding received by Auburn that had to be repaid would not take the place of a grant provided by the CRA. Phase 3: Two hundred thirty-seven single-family townhouses and condominiums would be created with 25% workforce units and a central "green" area. The CRA's tax base would increase. Section 20.1: The CRA would not provide any money to Auburn until Auburn had secured and closed on its construction financing, and the CRA would have 45 days to review Auburn's financials. Phase 4: The value created by the construction of the condominiums, townhouses, and retail space would increase Tax Increment Financing (TIF) revenues. Auburn was proposing 200 public parking spaces and 20% workforce housing. The sum of $13 million would be required by the CRA for this phase after Auburn's delivery of affordable homes. The CRA would receive additional protection from this phase. Section 21.2: The two buildings on the west side of Phase 4 would consist of two or three floors of structured parking and five or six stories of residential units above the parking structures, with no more than a total of eight stories. Construction would not commence on the parking structures until Auburn had completed Phase 1 and Phase 2, acquired all Phase 4 parcels and sold 75% of the Phase 3 units to third-party buyers. Auburn would construct, at its expense, all residential units above the parking structures. Section 21.2: The CRA would not provide any funding to Auburn until the bank commitments had been received. Section 21.3: CRA funding for Phase 4 was contingent upon bond financing approval in a bond validation proceeding. If bond financing was not permitted for the parking garages, the loan contemplated for the parking garages would be designated for the construction of the workforce housing units. Auburn would like to bond validate that the development include 200 parking spaces and 20% workforce units. A reference should also be made to a possible park designated as a potential customer transportation spot. These two items would require language revisions. Vice Chair Rodriguez inquired whether Inlet Cove Association (INCA) and other organizations would have ample opportunity to provide input on the site plan. Mr. Berguirstain responded affirmatively, as the site plan process would likely require four or five years to complete. Auburn would work closely with the Inlet Cove Association (INCA) as well as other neighborhood organizations. 10 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Chair Taylor inquired whether a tenant had been recruited for the grocery store, as there had been some concern as to who would be responsible for securing the tenants for the retail operation. Mr. Berguirstain emphasized this would be Auburn's responsibility. Mr. Hay pointed out staff had discussed the difference in Tax Increment Financing (TIF) revenues between a major store and a "Mom and Pop" operation. He requested the status of this item. Vivian Brooks, Assistant Director, noted the City and CRA staff met with Auburn and a commercial developer regarding a joint venture possibility. The developer introduced to the CRA a site selection person for a national grocery store chain interested in the site. Staff felt it might be a good opportunity for the City, CRA, Auburn and the community to create a 60,000 square-foot retail development with a 20,000-30,000 square-foot grocery store anchor and other ancillary retail. It was Ms. Brooks' understanding there would be discussions between Auburn and the commercial developer as to how that might be structured and the expectations of the return on investment. She did not believe there had been any further communication between Auburn and the commercial developer to date. Mr. Berguirstain advised Auburn had not had any further discussions, but believed there was serious interest in the project. Ms. Brooks pointed out, when dealing with grocery store chains, the site selection process was more stringent and did not proceed quickly. The grocery store chain representatives were interested in the demographics reflected in the analysis, a low-to- moderate-income neighborhood. The site selection process, however, would not correspond to the timeline sought by Auburn for the 2009 tax credit financing, nor was the funding guaranteed. Ms. Brooks noted the commercial developer's location of choice was MLK and Seacrest Boulevards, a major intersection with excellent visibility. Consideration had also been given to creating a retail node by building on both sides of the intersection. Mr. Berguirstain advised the phasing order had been changed to reflect the grocery store as Phase 1 and the senior rental community as Phase 2, as Auburn could not win the tax credits for the senior rental community without building the grocery store first. Ms. Bright pointed out if an aggressive stand was not taken to develop a grocery store within the next 12 months, Auburn would not make the universal cycle next year for the tax credits for a senior rental community. Vice Chair Rodriguez inquired whether there had been any studies to determine how much retail space could be sustained in the area. Mr. Berguirstain noted opinions 11 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 varied, indicating retail space ranging from 6,000 to 20,000 square feet could be effectively managed. In response to Ms. Ross's inquiry, Mr. Berguirstain articulated the bank commitment letters circulated to the Board were for the Villages at Delray. Ms. Ross inquired as to the status of Auburn with the Delray Housing Authority. Mr. Berguirstain responded Auburn was honoring its Master Development Agreement with the Delray Housing Authority and would move forward with the development. Mr. Hay inquired whether the senior rental community was required to be built on a parcel contiguous to the hotel or high-rise on Federal Highway. Section 5 of the agreement required both the first phase, planned for a gated senior rental community, and the fourth phase, planned for condominium buildings, had to be built on contiguous parcels. Mr. Berguirstain explained the language meant the lots for the senior rental and the condominium communities were to be built on contiguous parcels. Attorney Cherof provided his revised comments on the Master Development Agreement to Susan Motley, attorney for the developers, staff and to the Board. As the document was a tri-party agreement, it would have to be addressed and formally approved by the City Commission. His comments were not business points, as the CRA and City staff could advise the Board on those points. Attorney Cherof opined the agreement was consistent with the direction provided by the CRA Board to date, and in response to the presentations made by the Executive Director outlining specific points of the agreement on which she requested policy direction. Attorney Cherof's comments reflected in the revised document dealt with the language and use of language, as well as the structure of the document itself, with two exceptions. In Section 8, dealing with the CRA and City land, Attorney Cherof added language to provide conveyances would contain the customary clause previously used at the City level, which ensured the properties were used for the purposes intended and were consistent with the goals of the CRA. In Section 11, Land Use, the developer had included a provision indicating the City, in its administrative review of the land use and zoning approvals, would try to accomplish that task by June 1, 2009. In conferring with City staff, he included in the section that the applications required to be made by the developer to obtain the appropriate land use and zoning designations would be made within 30 days of approval of the agreement. Attorney Cherof would defer to City staff and Auburn regarding the timeframe. Attorney Cherof reiterated the balance of the agreement was consistent with the direction provided by the CRA Board to date. City staff was continuing to review the agreement and would have additional administrative comments. He believed the City 12 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Manager would address the business points either at this meeting or when the matter was addressed at the City Commission level. Attorney Cherof was in accord with the revised agreement in its current state, which was sent out at the end of last week and included his comments which were reflected as red-lined changes. He also believed the agreement was the best the Board could expect at this stage of the redevelopment project because there were no specifics. In addressing a business point in the agreement, Mr. Berguirstain noted Auburn suggested it would reduce the overall financial requirement of the CRA for any grants received from a third party. Any loans received from a bank which had to be repaid would not reduce the CRA's financial requirement. Chair Taylor inquired whether Mr. Berguirstain was in agreement with Attorney Cherof's comments and revisions to the basic agreement. Mr. Berguirstain replied in the affirmative, but reiterated it would be necessary for Attorney Michael Weiner to review the agreement from the land use perspective. Attorney Susan Motley might have comments, but they would likely not be business-point related. Kurt Bressner, City Manager, advised he was filling in for Quintus Greene, Development Director. One of the major concerns of City staff was that the CRA and the City had the financial wherewithal to complete the terms of the agreement as contemplated. While he understood Auburn's comments that the agreement could be modified or terminated at any time, he still believed assurance of the City and CRA's funding ability was necessary. The projections provided three years ago for the CRA's tax increments for the next five to seven years would likely not bear out. He had not seen a re-verification of the figures to determine the ability of the City and CRA to meet the contractual financial obligations set forth in the agreement. Mr. Weiland questioned whether the Strand Decision would enhance the City and CRA's future bonding ability. Mr. Bressner agreed the Strand Decision helped, but it was imperative the City and CRA had the ability to bond or borrow additional monies under the Strand Decision. As to specifics and business terms of the agreement, while Mr. Bressner appreciated Auburn's comments concerning the senior center, the City sought absolute verification that neither the City nor the CRA would bear any operation and maintenance expenses for that facility. Mr. Bressner felt the satellite senior center was a duplicate of the existing facility built by the City for all of its citizens. City staff sought further dialogue with Auburn on this issue. In the event it was determined the senior center was an integral part of the agreement and was absolutely necessary, any financial obligations for the long-term operation and maintenance of that facility should be borne by the 13 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 private sector. Attorney Cherof noted the agreement did not specifically address the maintenance issue for the senior center. Mr. Berguirstain noted Auburn would agree to pay for all expenses for maintenance and staff for the center for 50 years. Mr. Bressner noted Section 20.2 made reference to the CRA paying a maximum of $1 million to the City for streetscape improvements under Phase 3. If the City was going to design and construct the streetscape improvements, Mr. Bressner believed the City should be reimbursed for the cost of the improvement, and the exact figure should be included in the agreement. Attorney Cherof noted language could be revised so that an agreed-upon amount could be negotiated by the CRA and the City at a later date. Mr. Berguirstain had no objection to the suggested revision. (Mr. Weiland left the dais at 8:09 p.m. and returned at 8: 12 p.m.) Mr. Bressner referred to Section 21.1 regarding the demolition grant of $150,000 and was uncertain as to the manner in which the $150,000 would be covered and whether it would be adequate. Mr. Bressner requested verification of any financial obligations of the City. Attorney Cherof suggested if the demolition costs exceeded $150,000, language could be added to address whether the CRA or the developer would make up the difference. Vice Chair Rodriguez believed if the costs were below $150,000, the developer should receive a credit, and if the costs exceeded $150,000, the developer should pay the difference. Mr. Bressner was pleased to observe the addition of language requiring a bond validation proceeding. Ms. Bright commented the CRA had previously provided policy direction and on December 9, 2008, she stressed that with the reversal of the Strand Decision, bond financing was a policy decision for the Board. The CRA never sought bond advancements. Projects had typically been funded by Tax Increment Financing (TIF) agreements predicated upon excellent financial and construction backing. She believed there might not be a need for the CRA to advance a $13 million bond for Phase 4 in the event financing was not available for the construction of the garage. Ms. Bright did not have the ability at this time to calculate the exit costs. Other than that, she believed the agreement reflected the Board's previous direction. Mr. Hay made it clear that if Auburn did not work with the Inlet Cove Association (INCA) and other involved neighborhood associations, he would not lend his support for the project. He requested references to "the parties" be clarified. In many instances property owners in the area would not sell to Auburn. Mr. Hay questioned what Mr. 14 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Berguirstain believed would be a worst-case scenario. Mr. Berguirstain replied the majority of the properties were under contract or had an understanding that if the CRA entered into an agreement with Auburn, an agreed-upon price would be determined. The units for Phase 1 and Phase 2 were already under contract, as was a large portion of Phase 3. Mr. Hay requested clarification on the phrase, "substantially complete" as particularly, used in the section on "Phased Development." Attorney Cherof noted he would provide a definition. The phrase, while vague, was used often in construction contracts when Certificates of Occupancy were ready to be issued and all Building Department reviews had been completed. "Phased Development" also referred to the taxing power of the CRA. Mr. Hay pointed out the CRA did not have taxing power. Attorney Cherof noted that clause had been deleted. Mr. Hay inquired whether Auburn would move the development south in the event Auburn could not acquire the property going north on Federal Highway. Mr. Berguirstain noted if approval from the Florida East Coast Railway (FEC) could not be secured for a bridge connecting the buildings on Federal Highway to the buildings on the west side of the railroad tracks, the phases would still be constructed. Site plan approval would be required. Mr. Hay requested clarification regarding the renovation of the exterior of St. Paul’s AME Church. Mr. Berguirstain noted Auburn felt it would be inappropriate to tear down the 100-year-old building. Input received from the community, indicated an interest in the enhancement of the Church's appearance. Auburn believed the building had historical significance and was relevant to the people residing in the area. With regard to streetscape improvements, Mr. Hay believed it was the City, and not the CRA, that would be required to substantially complete the streetscape improvements. Mr. Berguirstain explained this was a typographical error which would be corrected. Section 23, "Permits," required the City or CRA to designate a specific Building Department representative to assist in processing building permits for the project. In response to Mr. Hay's inquiry, it was noted the representative to be designated was currently on staff. In response to Mr. Hay's inquiry, Attorney Cherof advised the signatories on the Master Development Agreement were the Mayor on behalf of the City, and the CRA Board Chair on behalf of the CRA. 15 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Chair Taylor expressed concerns as follows. ?The Board members had not yet received Attorney Cherof's revised version of the agreement. ?The CRA was asked to enter into a 12-year agreement and provide up to $23.5 million that the CRA did not have. ?The CRA would design and construct the Town Circle streetscape including the renovation of the exterior of St. Paul’s AME Church. He was not certain the Board ever agreed to this and questioned why the expense would be borne by the CRA. ?The construction of the grocery store remained an issue. ?The housing to be built in Phase 2 or Phase 3 would consist of four stories in a single-family residential area. ?The CRA was required to lease retail space from Auburn in an amount sufficient to cover their lender's required debt coverage ratio. ?While Mr. Berguirstain agreed Auburn would be responsible for recruiting the tenants for the retail operation, this was not reflected in the agreement. Chair Taylor objected to paying Auburn's overhead costs. Attorney Cherof noted the section entitled "Termination by CRA," provided overhead costs would be reimbursed if the City or the CRA terminated the agreement without cause. While Chair Taylor had no doubt Auburn was a good developer, the CRA did not have the funding available at this time. He believed the developer, and not the CRA, should be responsible for the $11 million to construct the parking garage. Additionally, Attorney Cherof was awaiting a decision from the judge as to whether or not the garage served a public purpose. While Chair Taylor appreciated Auburn's generosity in funding the City's special events, he had concerns as previously addressed about whether a conflict existed. He sent a letter to the State's Commission on Ethics as to the propriety of the Board's voting on the agreement and was awaiting a response. Chair Taylor suggested the item be tabled based upon his concerns and pending a response from the State's Commission on Ethics. Mr. Weiland believed the Board could move forward as the agreement was still required to be brought before the City Commission. Vice Chair Rodriguez pointed out he had not sent a letter to the Commission on Ethics because he had not benefited from Auburn's 16 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 sponsorship of the special events. As such, he would have no problem voting on the agreement. He believed the project should move forward, as the contingencies built into the Agreement protected the City and the CRA. Mr. Weiland concurred. Mr. Hay's position was to move forward, but with caution and contingencies. He noted the agreement contained no provision for price caps on property acquisitions. He wanted to be assured Auburn would meet with the Inlet Cove Association (INCA) and other neighborhood associations to obtain their input. Ms. Ross believed there was too much uncertainty. The budgets for the next year or two would be seriously impacted by the current economic climate, and the CRA did not have the $23.5 million for the project. She expressed concern for the provision by the CRA of three or four demolition grants totaling at least $600,000, and payment by the CRA to the City of up to $1 million for streetscape improvements. Mr. Weiland noted the third-party review of Auburn's financial records provided a good degree of comfort, as the CRA would not be required to provide any funds until the developer's finances were in place. Ms. Bright indicated the third-party verification was to determine the financial wherewithal of Auburn and to address the concerns of Mr. Bressner and CRA staff. In order for the financial analysis to be undertaken expeditiously, the CRA piggybacked on an existing contract with PMG associates and the City of Delray Beach for the same type of service. There had been no consensus as to the timeframe for receipt of the financial analysis, and the item was placed back on the agenda for a determination. If the Board agreed to go forward with the financial analysis, it was staff's wish that both Auburn and the CRA's capacity to fund be evaluated. Attorney Cherof noted while the ability to provide the financial verification was built into the agreement, the timing was not. Attorney Cherof suggested a motion be made to direct the preparation of a final version of the agreement. A date specific could be included for a joint meeting with the City Commission to vote on the document. This would satisfy the comments to move the matter forward and would address Chair Taylor's concerns that the matter not be voted on until he had received an opinion from the Commission on Ethics. Attorney Cherof would have a draft by tomorrow of the comments made at this meeting, and if staff's comments were ready, a joint meeting could be held with the City Commission on January 20, 2009. Chair Taylor noted he wished to hear the comments from the third-party entity as to the timeframe. 17 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Phil Gonot, PMG Associates, advised the total analysis should be completed within four to six weeks. Auburn should anticipate a normal return on investment for this project. A Gap Analysis would identify current conditions, site conditions and how much of a subsidy or incentive would be required to ensure a normal rate of return for Auburn. The analysis would also determine the bonding capacity of the CRA and future Tax Increment Financing (TIF) revenues. Mr. Berguirstain noted Auburn would have a significant conflict of interest with PMG Associates. He would have no objection to a State agency providing financial reviews. Michael Weiner, attorney, discussed the conflict of interest raised by Mr. Berguirstain. PMG had done nothing incorrect, but had previously formed opinions about Auburn for other projects in Delray Beach. Neither he nor Mr. Berguirstain believed the Board would be provided with the best decision on an independent audit if conclusions had been reached regarding previous projects. Mr. Gonot advised PMG Associates had been engaged by the Delray Beach CRA to review a project on which Auburn was the only bidder. PMG Associates raised the issue for the CRA to review. Certain information had been requested from Auburn, and an issue evolved regarding previous financial statements. One item in particular, debt equity ratio, caused concern. Auburn's debt, rather than decreasing, had increased each year. Motion Vice Chair Rodriguez offered a motion to move forward in preparing a final document for review and approval in a joint meeting with the CRA/City Commission on January 20, 2009. The final document would be based on all of the discussion tonight including the issue of moving forward with the third-party review. Mr. Weiland seconded the motion. Attorney Cherof noted moving forward with the third-party review would not delay the matter but could result in an end to the agreement. Vote The motion passed unanimously. G. Approval of Piggy-backing on Agreement between Delray Beach CRA and PMG Associates to Conduct Project Development, Financial and Real Estate Market Analysis (This item was pulled and moved forward) 18 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Ms. Brooks noted the Florida Housing Finance firm referred to by Auburn considered only the capacity of the developer and not the Agency's capacity to bond. Additionally, the firm did not prepare either a Tax Increment Financing (TIF) analysis or a Gap Analysis. The Board wished to engage a firm that would test both the CRA and Auburn's capacity to fund the project. Chair Taylor suggested Ms. Bright provide options for the selection of a firm on January 20, 2009. Ms. Bright clarified what she believed was the Board's direction. PMG Associates would no longer be considered. Staff would expeditiously piggyback on a contract for a firm that could provide a comprehensive Tax Increment Financing (TIF) analysis, including a Gap Analysis for Auburn and the CRA's ability to fund the project according to the timelines, as well as the CRA's bonding capacity. She would advise the Board when staff came across an appropriate piggyback contract. She noted in the event it was not possible to piggyback, the process could take longer than four to six weeks. The Board confirmed its direction as set forth by Ms. Bright. B. CRA Staffing Plan (Tabled December 9, 2008) Motion Mr. Hay moved to remove the item from the table. Ms. Ross seconded the motion that passed unanimously. Ms. Bright noted the item had been added by Vice Chair Rodriguez at the November 5, 2008 meeting, indicating Ms. Bright misled the Board in using the term "eliminating the position of Administrative Assistant." Ms. Bright prepared a response for the December 9, 2009 meeting. Vice Chair Rodriguez requested the item be tabled, and the Board agreed. No action was required on this item. XII. New Business: A. Presentation of Audited Financial Statements for FY 2007-2008 Ms. Harris noted the auditor was present to discuss the firm's audit procedures and findings. Richie Tandoc, Partner, Sanson Kline Jacomino & Company, LLP, noted he was in charge of the CRA's audit engagement for September 30, 2008. He thanked Ms. Harris and Ms. Bright for their cooperation, as it facilitated a timely completion of the audit. 19 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 He provided the results of the 2008 audit and required communications, a copy of which is on file in the City Clerk's Office. With regard to the auditor's responsibilities under Generally Accepted Auditing Standards and Government Auditing Standards, the firm had issued their unqualified "clean" opinion on the financial statements for the year ended September 30 2008. This provided the CRA Board and staff reasonable assurance that the financial statements were free of material misstatement. The firm also issued their report on the CRA's internal control over financial reporting and on compliance in other matters for the year ended September 30, 2008. They noted no material weaknesses or material non-compliance issues. Both reports were dated November 19, 2008. The CRA's significant accounting policies were included in the financial statements. The accounting principles selected were consistent with those prescribed by Government Accounting Standards, and the Agency's findings and related disclosures were presented in a completed format. With regard to accounting estimates for fiscal year ended September 30, 2008, management's judgment was called upon to establish the useful life of capital assets. They determined such estimates were reasonable. The firm did not identify transactions regarding methods of accounting for significant or unusual transactions, or for controversial or emerging areas. The firm did not identify any significant and/or unadjusted audit adjustments during their audit of the financial statements for fiscal year ended September 30, 2008. This was a rarity in a governmental agency. The firm was not aware of any fraud or illegal acts that occurred during the fiscal year involving senior management, or any employees that would cause a material misstatement of the financial statements. The firm had not encountered any disagreements or difficulties with management. No major issues were discussed with management prior to the firm's retention as the CRA's auditors. There were no relationships between the firm and the CRA or the City that that could reasonably be thought to impede the firm's independence. With regard to the audit of the Agency as of September 30, 2008, the firm was independent and had not performed any non-audit services for the CRA during the period or thereafter. The firm issued a management letter dated November 19, 2008, which was attached to the financial statements in accordance with the Rules of the Auditor General of Florida. Three new observations were noted in the management letter for the current year, none of which were considered significant deficiencies or material weaknesses. 20 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 Chair Taylor complimented the CRA staff on an impressive audit. B. Consideration of Request from Weiss Memorial Chapel for use of CRA Property for Parking Ms. Brooks informed the Board Gloria Weiss, owner of Weiss Memorial Chapel, 202 E. Boynton Beach Boulevard, inquired whether she could use the CRA parcel for parking behind the Chapel. The CRA owned vacant land, and the City's Code required the land be paved, lighted and landscaped for parking purposes. Ms. Brooks inquired whether this was an expense the Board wished to undertake in order to lease the lot to Weiss Memorial Chapel. Ms. Weiss agreed to pay for the parking use, but did not stipulate an amount. Mr. Weiland pointed out the question of liability. Weiss Memorial had not provided any certificate of insurance to indemnify and hold the CRA harmless. He would be willing, at the appropriate time, to make a motion to deny the request. Vice Chair Rodriguez did not believe there was a problem with the Chapel's use of the land, but wanted to be assured the Chapel secured a policy indemnifying the CRA. Ms. Brooks noted the Code did not allow the use of vacant land for parking. She had observed cars parked on the land, but this had not been authorized by the CRA. If the CRA were to enter into a formal agreement for parking, it would be necessary for the land to meet the requirements of the City's Code. She requested direction from the Board. Neither Chair Taylor nor Mr. Hay felt the Board should expend funds to create a formal parking lot. The Board consensus was for Ms. Brooks to inform Mr. and Mrs. Weiss that at this time the CRA was not in a position to lease the land, as it was not a parking lot. th C. Boynton Woman's Club Request for Donation for the Club's 100 Year Celebration Ms. Bright reported the request was given to the CRA staff to be placed on the agenda for January. It had been brought to the attention of Vice Chair Rodriguez that the CRA was participating both financially and by providing the CRA's marketing and special events media list. While Vice Chair Rodriguez wanted to help the Woman's Club, he expressed concerns regarding the request. This was the second consecutive meeting at which projects not approved by the Board were discussed. Personal relationships were involved that had not been disclosed to the Board. The request was received in September and had never appeared under "Future Agenda Items." The Board was being asked to vote on a 21 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 request for which a commitment had already been made. He asked that requests of this nature come before the Board for approval before a commitment was made. Other groups from the Heart of Boynton had been denied requests for support because the items had not been budgeted. Chair Taylor commented the relationship referred to had been disclosed to the Board in March 2007. The Executive Director had the authorization to approve requests of this nature up to $10,000. Chair Taylor believed the questions put forth by Vice Chair Rodriguez amounted to "nit-picking," and the Executive Director should be able to manage the department. Vice Chair Rodriguez noted his concern regarding the CRA's expenditures. This item had not been budgeted and had not been brought to the Board prior to a commitment having been made. Ms. Bright advised she had not disbursed any funds. The resolution setting the sponsorship amounts had been approved by the former CRA Board in November 2006 and provided Ms. Bright with the authority to bring requests for community sponsorship before the Board prior to disbursement. The September discussion between Ms. Biscuiti and representatives from the Boynton Woman's Club pertained to the media advisory press release. Ms. Bright had received a letter from the Woman's Club requesting $700 to sponsor the Copeland Davis event. According to the Rules of Governance and the existing resolution, Ms. Bright had done nothing improper. She suggested the policy and resolution be reviewed. Administrative issues were brought before the Board. If the Board did not approve the request, the Woman's Club would be advised the CRA would not be supporting the financial request. Vice Chair Rodriguez expressed concern that the request had not been brought before the Board until a week prior to the event. The procedures clearly indicated requests of this nature required Board approval. Mr. Weiland agreed the Board's support should have been sought well in advance. If the item had been brought to the Board's attention in September, the Board could have been polled. Ms. Ross believed it would be commendable for the Board to offer a contribution to pianist Copeland Davis for his performance on January 25, 2009. . Motion Mr. Hay moved to approve. Ms. Ross seconded the motion that passed unanimously. 22 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 D. Consideration of Supporting the Greater Boynton Beach Chamber of Commerce Dinner Dance Chair Taylor believed the City Manager covered the cost of the event. Vice Chair Rodriguez felt the item should not have been placed on the agenda as it had not been budgeted. Ms. Bright noted costs for events of this nature were usually shared with the City. Vice Chair Rodriguez believed the Board had the only authority to allocate monies from the contingency fund. Mr. Weiland believed if contingency funds were used, it should be clear what they would be used for and the amount necessary. E.Consideration of Exercising right of First Refusal on Property located at 3675 S. Federal Highway The item pertained to a first right of refusal to purchase the property from 3600 Holdings as part of the reversion to commercial zoning in the area. Staff was supportive of allowing the purchase contract to go forward. It would benefit the CRA to have a site for a full commercial venture. Attorney Cherof noted each time the owners attempted to sell the property, the CRA would be offered the right of first refusal until the property was sold. The Board was required to render a decision within 14 days from the time notice was provided to staff. A decision would, therefore, be required at this meeting, or a special meeting. It was staff's recommendation that it would not be beneficial for the CRA to exercise the right of first refusal. If the Board agreed, a motion to deny would be in order. Motion Vice Chair Rodriguez moved to deny. Ms. Ross seconded the motion that passed unanimously. XIII. Future Agenda Items None XIV. Comments by Staff Ms. Brooks commented the Downtown Master Plan would be brought before the City Commission for adoption and to amend the CRA Plan. She inquired whether the Board members wished to be provided with a hard copy of the Downtown Master Plan, or if they would prefer she posted it to the File Transfer Protocol (FTP) site. She would include in the packet the old and revised pages for the City Commission packet. There was consensus for Ms. Brooks to post the document. 23 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 With regard to the discussion on the Woman's Club, and in the interest of transparency, Ms. Brooks wished to disclose that her mother had donated ten years of her time to the City, even though her mother did not reside in Boynton Beach. No personal benefit would inure to Ms. Brooks as a result of her mother's volunteer efforts. While Ms. Brooks was not legally required to disclose this information, she did so for the record upon the advice of her attorney. She wished to make it clear that she was not subject to the same scrutiny as an elected or appointed official. Ms. Biscuiti provided an Oceanfront Concert expense and funding report. She had attempted to reduce the expenses as much as possible. It was likely an additional $200 would be needed for updates to signs. In the funding category, Chair Taylor and Commissioners Hay and Ross donated monies to make up the first $2,000. The Palm Beach Post provided $2,000, and a donation had been received by County Commissioner Greene. The concession income from the Holiday Concert was $1,255.20. As there was a $3,000 overage, Ms. Bright requested approval from the Board to allocate $700 to the Woman's Club, rather than taking the monies from contingency. Vice Chair Rodriguez inquired whether the concession income was a planned budget item. Ms. Biscuiti replied it was surplus. Ms. Bright noted there currently was no budget for concession income. Staff had been working with a new vendor who provided a percentage of the proceeds. The Board agreed the concession income would now be included in the official budget, and also agreed to the $700 allocation for the Woman's Club. XV. Comments by Executive Director None XVI. Comments by CRA Attorney Attorney Cherof advised the CRA had filed suit against the Boynton Delray Academy and others who had an interest in the property. He would keep the Board advised on the status of the case as the defendants asserted their answers and responses. XVII. Comments by CRA Board Vice Chair Rodriguez felt requiring the Executive Director to document any approved expenditures under $25,000 was beneficial to the Board. The City Manager had provided weekly updates to the Board, and he requested the Board consider having Ms. Bright or her staff provide weekly or biweekly updates on CRA activities. Chair Taylor commented he met weekly with Ms. Bright, and she had regularly provided him with updates. Ms. Ross also met weekly with Ms. Bright. 24 Meeting Minutes Community Redevelopment Agency Board Meeting Boynton Beach, FL January 13, 2009 XVIII. Adjournment There being no further business to discuss, Chair Taylor properly adjourned the meeting at 9:43 p.m. ~'..~., (--)/ C//tr-~~ ~ Stephanie D. Kahn Recording Secretary 011408 25