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Minutes 03-09-22 Minutes of the Community Redevelopment Agency Board Meeting Held on Wednesday, March 9, 2022, at 5:30 p.m. Online Via GoToWebinar and In-Person in the City Hall Commission Chambers 100 E. Ocean Avenue, Boynton Beach, Florida PRESENT: Steven Grant, Chair Thuy Shutt, Executive Director Woodrow Hay, Vice Chair Tim Tack, Assistant Director Christina Romelus, Board Member Tara Duhy, Board Counsel Ty Penserga, Board Member ABSENT: Justin Katz, Board Member 1. Call to Order Chair Grant called the meeting to order at 5:45 p.m. 2. Invocation Chair Grant gave the invocation 3. Pledge of Allegiance The members recited the Pledge to the Flag. 4. Roll Call A quorum was physically present and the Board allowed Board Member Romelus to appear virtually. 5. Agenda Approval A. Additions, Deletions, Corrections to the Agenda Thuy Shutt, Executive Director, explained two letters were received. One was from Mr. Fitzpatrick regarding item 16B. He was withdrawing his offer to sell the properties in a bundle. The second letter was item 16F, a lease extension request by Mr. Ruderrow was withdrawn. He found a new place to live and vacated the property. The item could be removed from the agenda. Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Chair Grant requested moving up item 16A, 17D, and 17E to after Consent Agenda and before CRA projects in process. B. Adoption of Agenda Motion Vice Chair Hay moved to approve the agenda as amended. Board Member Penserga seconded the motion. The motion passed unanimously. 5. Legal None 7. Informational Items and Disclosures by Board Members and CRA Staff: A. Disclosure of Conflicts, Contacts, and Relationships for Items Presented to the CRA Board on Agenda Board Member Romelus disclosed she had contact with Jeff Burns, Affiliated Development, but did not speak on any agenda related item. She had no other disclosures. She apologized to the Board and public for not appearing. She injured herself and cannot sit or stand for prolonged periods of time. She thanked all for their thoughts and prayers. Board Member Penserga met with Jeff Burns and Nick Rojo regarding their agenda item. Vice Chair Hay had a discussion with Jeff Burns Affiliated. Chair Grant met with Affiliated Development and was present for the Centennial Management ground breaking ceremony. Chair Gran requested moving Anthony Barber's item to before CRA projects and process, item 16 C. Motion Vice Chair Hay move to approve the agenda as reconsidered. Board Member Penserga seconded the motion. The motion passed unanimously. 8. Announcements and Awards A. Appreciation Presentation for Outgoing Board Members 2 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Ms. Shutt stated the CRA staff and legal counsel thanked Chair Grant and the outgoing Board members for six terrific years. Their leadership and support for CRA staff made a lot of things happen. Projects that have been waiting for several RFPs and RFQs are moving forward and coming to fruition. The CRA presented Chair Grant with a plaque to help him remember all they have accomplished under their leadership. Chair Grant thanked the staff and requested a photo opp. He explained he just gives direction, but staff moves the CRA forward. He was very pleased how the CRA is today compared to years ago. He appreciated working with all of the staff. B. 6th Annual Boynton Beach Blarney Bash Announcement Mercedes Coppin, Business Promotions and Events Manager, reviewed the above event to be held on March 12 from 4 to 9 p.m. The CRA is hosting the above at Centennial and E Ocean Avenue and SE 1St Avenue between Seacrest and SE 1st Street. The free event will have parking available along the event site. There will be live music and entertainment including three live bands, bag pipers Erin's Moore Academy of Irish dance, games and activities for children and adults, a costume contest and more. Patrons are encouraged to stop by CRA booth to spin the Wheel of Luck for a chance to win gift certificates from six CRA businesses and promotional Blarney Bash items. C. Rock the Plaza at Ocean Plaza on March 26, 2022, from 3:00 p.m. to 6:00 p.m. Ms. Coppin reviewed the above event. The event will take place at 640 E Ocean Avenue. There will be live music from the Holidays. Community members would be encouraged to connect with plaza vendors and take advantage of a special Boynton Beach Bucks promotion. Free parking is available at various locations which Ms. Coppin listed. 9. Information Only A. Public Relations Articles Associated with the CRA B. Public Comment Log 10. Public Comments Ernest Mignoli, 710 NE 7th Street, Unit 407, stated 42 years ago the project built by the current Board president's father has major problems. He noted the CRA is concerned about buying and developing land, building high rises, creating jobs and roof top bars, and improving businesses and residences. He commented a neighbor lives on 7th Avenue and with new approvals, commercial building is up to 50% and there Is construction in the street. There is noise and they say they are creating more jobs. He thought the CRA Board for the last six years should be looked at by the county and state because when he comes to the meeting, there is almost no public comment, no 3 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 one knows or likes what is going on and no one can comment. What they think the city needs is far from what the residents think is needed. He thought not involving the public was a little disgraceful. The few times the public does show up, the Board votes against them and everything is political. He had to wait 10 minutes at an intersection to get here. Board Member Romelus stated for the record she did not interfere with Mr. Mignoli's comments. She attended virtually and there was interference while Mr. Mignoli was speaking, but it was not from here. No one else coming forward, public comment was closed. 11. CRA Advisory Board A. CRA Advisory Board Meeting Minutes - November 4, 2021 B. CRA Advisory Board Meeting Minutes - February 3, 2022 C. Pending Assignments Ms. Shutt advised the CRA Advisory Board met on February 3rd and was asked to weigh in on several available properties through the market or property representatives. She commented out of the five properties, there were two properties the CRA Advisory Board recommended pursuing which was the 2821 S. Federal Highway property by Homing Inn that is for sale, which can be considered a blighted property. The second property is 1213 NW 4th Street, which is the Cherry Hill Mart. The CRA Advisory Board recommended pursing the property to land bank. The price is $400K. Chair Grant thought they should speak to the listing agent, get an appraisal, see if they have the funds and see if they want to discuss pursuing it at the next meeting. Vicki Hill, Finance Director, stated funds are tight now but funds were coming soon. They have $400K, but they have payments for the Oyer property that must be completed. Ms. Shutt noted they can look at it because they no longer have the project on 1St Street. There are obligations for the 217 N Seacrest property for $1.4M and debt service. They would love to pursue the Cherry Hill Mart, but there is a lease. She wanted the Board to direct staff to work with their attorney because there is 18 years left on the operators lease. There was consensus to proceed to pursue the property. D. Reports on Pending Assignments 1. Review of Commercial Properties within the CRA Area 12. Consent Agenda A. Approval of CRA Special Board Meeting Minutes - November 30, 2021 4 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 B. Approval of CRA Board Meeting Minutes - January 10, 2022 C. Approval of CRA Special Board Meeting Minutes - February 1, 2022 D. CRA Financial Report Periods Ending January 31, 2022 and February 28, 2022 E. Approval of Third Amendment to the Granicus, LLC Agreement for Website Design, Build and Maintenance Services F. Approval of a 6-Month Extension to the Commercial Rent Reimbursement Grant Program in the Amount of$5,784 for H. Longo Insurance Associates, Inc. d/b/a Allstate Insurance Located in Gulfstream Professional Building at 500 Gulfstream Boulevard, Unit 201 G. Approval of a 6-Month Extension to the Commercial Rent Reimbursement Grant Program in the Amount of$5,871 for Premier Medical Center of Boynton Beach, LLC located at 326 W. Boynton Beach Boulevard H. Approval of Commercial Property Improvement Grant Program in the Amount of $25,000 for Southern Golf Cars, Inc. located at 425 NE 4t" Street I. Approval of Commercial Property Improvement Grant Program in the Amount of $25,000 for Southern Golf Cars, Inc. located at 501 N. Federal Highway J. Approval of Commercial Property Improvement Grant Program in the Amount of $25,000 for Southern Golf Cars, Inc. located at 507 N. Federal Highway K. Approval of Commercial Property Improvement Grant Program in the Amount of $25,000 for Appliance King of America, Inc. located at 622 N. Federal Highway Motion Vice Chair Hay moved to approve the Consent Agenda. Board Member Penserga seconded the motion. The motion passed unanimously. He congratulated all of the recipients of their commercial grants. 16 A. Execution of the Second Amendment to the Purchase and Development Agreement to the Ocean Breeze East Project (Heard out of Order) Ms. Shutt presented the item and explained the Board directed and approved the amendment to use space on the premises for community uses other than the Neighborhood Officer Program. The CRA budgeted $115K with $65K of it contributed by the CRA and $55K by Centennial Management. One minor change to section 2 H.7. would allow Centennial and the lender to have the final say on the tenants. Chair Grant asked if the Board could receive a presentation from Centennial about what they are 5 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 providing to the community. The CRA would be approving a commercial grant to a for- profit corporation to build out space. Ms. Roque stated they will consult with the CRA before placing them in the unit. Motion Vice Chair Hay moved to approve. Board Member Penserga seconded the motion. The motion passed unanimously. 17. D. Discussion and Consideration of a Consent and Funding Agreement between the CRA, the City of Boynton Beach, TD BANK, N.A., and Centennial Management Corp./Wells Landing Apartments, LLC for the MLK Jr. Boulevard Corridor Mixed Use Project (Heard out of Order) Ms. Shutt explained this item was requested by TD Bank on behalf of Centennial Management. It is the Consent and Funding Agreement needed to close on the loan. Board direction is needed because there will be no recourse for the CRA to recapture funds should the project fail. Attorney Duhy explained Kathryn Rossmell, Attorney, Lewis Longman and Walker, was working on the matter with Centennial. Attorney Rossmell was present and explained there is a set of agreements which are two separate agenda items related to one another, but she will explain them together. The first agreement is the Consent and Funding Agreement and the second is the Subordination Agreement. It subordinates the CRA's remedies in favor of the lender. The first agreement does not substantially change the CRA's obligations beyond what they already agreed to, except to provide for assignment. It would provide the bank with notice if Centennial defaults and the notice would provide the bank notice which would give them the option, but not the obligation to take over the agreement. If that occurred, the CRA would not have much recourse to recoup funds put towards the project. The Subordination is similar to the one signed for Ocean Breeze East with a similar effect. It overrides the CRA's ability to exercise its main remedies, which is the reverter clause. The bank would have the first position to take over the property. Chair Grant asked if they were given the documents regarding the Florida Housing Finance Corporation agreement with Centennial and learned they would. Ms. Shutt explained the $30M for the project is the assurance of preserving the tax credit units for 50 years, and in essence, in perpetuity as it would be refinanced on a tax credit deal. It also supports the units and overages that happened to the cost of materials as presented by Centennial to make the project work. The project is under construction now so the risk is less and the project will likely be done under a year. There are timelines in the original purchase and agreement that holds Centennial to the milestones and the City Commission already approved the design. All is ready to go and the permits are issued. They have started construction. They were waiting for final impact fee credits. Motion 6 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Vice Chair Hay moved to approve the Consent and Funding agreement. Board Member Penserga seconded the motion. The motion passed unanimously. Chair Grant asked for a motion for the Subordination agreement. Motion Vice Chair Hay moved to approve. Board Member Penserga seconded the motion. The motion passed unanimously. 16 C. Discussion and Consideration of a Purchase and Development Agreement with 306 NE 6th Avenue, LLC for CRA-Owned Property Located at 211 E. Ocean Avenue (Heard out of order) Ms. Shutt explained the item is for the Board to review the Purchase and Development Agreement forwarded to Mr. Barber. He and his partner submitted documentation for the 211 E Ocean Avenue property known as the Magnuson House. It is for an entity named 306 NE 6t" Avenue LLC. Staff is waiting for Mr. Barber to provide documents how the Barber family will be part of the entity. The Board approved this to move forward with the Agreement to ensure they assist a local Boynton business to operate a new container restaurant concept on the site. Staff has some information, but needs minor authorization from Mr. Mayo as he is the officer of the new entity and staff needs documentation that $1 M in funding from Mr. Mayo will be dedicated to the project to move it forward. The CRA wants comments from Mr. Barber and partner about issues they may have with the Purchase and Development agreement. Since the Agreement dictates the property will not be turned over until renovations were complete, so site protection and indemnification measures are needed. They are contained in the agenda item cover. Chair Grant was concerned the Letter of Intent was with the Barber Family LLC. Mr. Barber explained they applied for the 211 E Ocean Avenue LLC in September, but the State was backlogged and there was another corporation they decided to use in its place and he forgot to send it to Ms. Shutt He did have documents that show the Barber family and Mr. Mayor joined. Chair Grant noted it lists Mr. Mayo as the manager and he wanted to ensure Mr. Barber was a member. Staff got the financials from Mr. Mayo indicating he has the means to cover $1 M, but staff wants to ensure the contribution to the project is dedicated to the project site. The CRA has the right of first refusal and there is a reverter in place until completion. Mr. Barber is a 50% owner. Chair Grant suggested approving it subject to Legal review and approval of Mr. Barber's ownership documents and approval of ownership and the attorney will weigh in for the indemnification of the 306 LLC, site restoration language, bonding, insurance and financing. They are standard provisions in an agreement and there is language the CRA retains an ownership interest. Motion 7 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Board Member Penserga moved to approve the amended agreement subject to review by Legal. Vice Chair Hay seconded the motion. Chair Grant opened public comment. Mr. Mignoli commented he thought Board Member Romelus would be directly involved as the project is in District III. He thought when there is development in a district, there is a Commissioner. He asked why the public, if they ask questions or find something out from the lawyer or City Clerk, is not involved in the process. He commented they do not know anything until they meet and the Board just approves everything. Mr. Barber stated he is a life-long city resident. He submitted this project in June and it has been on the agenda multiple times. If the public had comments like Mr. Fitzpatrick and Kim Kelly did, these people made public comments about his project. The idea that this is something underhanded or slighted was disrespected. Mr. Mignoli thought the only good thing is these meetings are recorded and the Board allows applicants go after people who have questions. No one else coming forward, public comment was closed. Vote The motion passed unanimously. 13. Pulled Consent Agenda Items 14. CRA Projects in Progress A. Art Walk Event Recap Ms. Coppin presented a recap as contained in the meeting materials. There was rain which affected attendance, but overall, it was a very nice event and Rolando Barerra was happy with the event and the additional exposure. The CRA assisted with advertising the event and providing logistical support for lawn maintenance, cleaning the event site, and booking the entertainment . The Map Dance Theater performed, there was a unique DJ and they procured light towners, Port-O-Lets and tents The CRA will provide additional social media assistance to Mr. Barerra again The CRA added additional light towners on Industrial Avenue, but additional lighting was still needed. There was off-site parking and a trolley service, but the majority of attendees did not use it. She also spoke with the Police Department regarding traffic control or a crossing guard and they approved money for Southern Golf Carts and will see if they can help with shuttles for CRA events. B. Rock the Plaza at Ocean Palm Plaza Event Recap 8 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Ms. Coppin advised the first Rock the Plaza Event of the year was held on Saturday February 26th. There was a Boynton Beach Bucks offer for four plaza business and $5 off any purchase to Amore Bakery. A $10 Boynton Beach Bucks was offered for your CBD store, Wavemax Laundry and Florida Tackle Shop for any purchase. Boynton Beach Bucks are still ongoing. Staff extended them past the event since they were not all redeemed and they can be redeemed up to a maximum of$500. Overall, businesses were satisfied with the exposure. There was not a huge turnout, but attendees were very engaged with the activities they had. Chair Grant thought they should coordinate more with the City as there was a competing event at Sara Sims Park and they are planning more events than they had in the past. C. Social Media & Print Marketing Update Renee Rosario, Social Media and Communications Specialist, reviewed they completed a variety of marketing initiatives as contained in the meeting materials. D. CRA Economic & Business Development Grant Program Update Vicki Curfman, Administrative Assistant, stated they approved six additional grants: four were new businesses and two were six-month extensions. So far, they approved up to $179K in grants. She reviewed her methodology and advised they will reach out to businesses regarding grants and the SMOP program. E. Project Update for the Boynton Beach Boulevard Complete Street - Decorative Pedestrian Lighting Tim Tack, Assistant Director, advised the above projects included a lane width reduction and the expansion of the existing sidewalk on the south side of Boynton Beach Boulevard to 15-foot shared-use path into a nine-foot sidewalk on the north side, the addition of pedestrian lighting and the installation of nine mid-block pedestrian crossings and enhanced connectivity to the Intracoastal Waterway (ICW) and City Marina is proposed by adding shared-lane markings from US 1 to the ICW. Included in the project is shared lane and signage on SW 3rd Street from Ocean Avenue to Boynton Beach Boulevard and on Ocean Avenue between SW 3rd Street and US 1. On January 13, 2022, the City confirmed the elimination of the decorative lighting. Relocation of the existing FPL facilities underground was too expensive and the inclusion of decorative lighting with the existing PL facilities will diminish the aesthetics. There would be too many different types of poles as well as the sidewalk improvement. Using the existing concrete polls will provide synchronization and make them look similar to the same LED fixtures and the same type of arm. They will supplement the north side to ensure they meet the minimum lighting requirements. Chair Grant inquired about the cost. Ms. Shutt responded they do not have the valuation, but thought it would reduce the cost. Mr. Tack explained they would pay more with decorative lights from FPL. It will be the cobra style arm and fixture head affixed on their poles. Ms. Shutt explained they would have leased those poles anyway if they had decorative lights because the City did not 9 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 want to own, install and replace light poles. There would have been a cost to lease the poles. They will have a very good sidewalk that pedestrians and motorists can see. There is some private development coming on board outside the right-of-way and the shared-use path that will have its own site lighting. On the southern half, there would not be a bike lane on the road, it should be part of the shared-use path. Chair Grant commented as part of his work with Transportation Authority he was able to expand the sidewalk west of the project from six feet to eight feet. Technically, it is not considered a shared-use path, however, under Florida Statute, you can drive a golf cart on it because the sidewalk has to be eight feet to do so. 15. Public Hearing 16. Old Business A. Execution of the Second Amendment to the Purchase and Development Agreement to the Ocean Breeze East Project This item was addressed earlier in the meeting. B. Consideration of the Purchase of Green Acres Condominiums and 409 NE 1st Street Properties This item was addressed earlier in the meeting. C. Discussion and Consideration of a Purchase and Development Agreement with 306 NE 6th Avenue, LLC for CRA-Owned Property Located at 211 E. Ocean Avenue This item was addressed earlier in the meeting. D. Approval of Termination of Potential Lease Agreement with C Life C Food, Inc. for the CRA-owned Property located at 401-407 E. Boynton Beach Boulevard Motion Vice Chair Hay moved to approve. Board Member Penserga seconded the motion. The motion passed unanimously. Chair Grant requested the CRA Advisory Board look at this site as a Welcome Center when the parking lot is done. He requested a motion if they want the CRA Advisory Board to explore. He thought they could provide the anticipated cost for a welcome center if it is within the CRA's purview and learned it was. Motion 10 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Board Member Penserga moved to approve the assignment. Vice Chair Hay seconded the motion. The motion passed unanimously. D. Palm Beach County Housing Authority Cherry Hill Lots Auction Results Ms. Shutt advised the final result of the first auction was contained in Attachment 2, which was a property owners list with a map of all the property owners that won the bid and closed on the property. There was a second auction and once again the CRA was outbid. The CRA does not know if the three single-family lots closed. If it is the same agreement they previously had for the prior auction, they would have one additional thirty-day extension. They contacted the Palm Beach County Housing Authority to advise they would be happy to coordinate with them for any future development or improvement in the area or if the six properties do not close, because they want them to continually reinvest in the CRA area. Board Member Romelus asked about the outcome of the letter they sent stating their disappointment in the process the Housing Authority uses. Ms. Shutt explained at the time, the Development Director will come back to the Board and give a report on future opportunities. The Director was open to other products such as for sale products and they were looking to rebrand and looking at more modern ways to operate the Housing Authority. They were open to attending a future Board meeting. Board Member Romelus supported making it happen sooner rather than later. She stated the funds are tax dollars for affordable housing they removed from City residents with no accountability. Ms. Shutt advised she would invite them to the April meeting. Chair Grant noted they still own property in the CRA district. They have houses and tenants when the City gave the Housing Authority the land. He wanted them to give a report of properties they have in the CRA knowing that for them to dispose of property, it goes outside of their control for an auction to not have it as affordable housing and to work with them to see if they can upgrade the houses which must be at least 50 years old. Ms. Shutt stated they will be invited to report on the current properties as well as the current proceeds of the auction at the April meeting. F. Discussion and Consideration of a Second Lease Extension Request for Mr. Scott Rudderow located at 517 1/2 E. Ocean Avenue, Apartment #3 This item was withdrawn. G. Discussion and Consideration of a Term Sheet between the CRA and Affiliated Development, LLC for the 115 N. Federal Hwy Infill Mixed-Use Redevelopment Project Attorney Duhy stated the draft Purchase and Sale and draft TERFA Agreement were attached and reflect their proposed deal and terms. It is divided into four sections which will cover what the project will be. the development time line in both agreements, which works together, more specific terms of the purchase and development, and the TERFA. 11 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Chair Grant looked at cover sheet and inquired if the CRA Board can approve the documents subject to legal approval. Attorney Duhy explained the only document required to be finalized is the garage. The way it is currently worded is the CRA public spaces will be subject to a lease, substantially in the form of an attachment, which the Board does not have. If approved tonight, the language would have to be to subject to a lease and then the Board would have to provide direction that Affiliated would need to agree to and bring the lease forward in the future. Chair Grant wanted move forward with what they can approve tonight subject to Legal approval. Attorney Duhy reviewed the item The RFP noted the affordability will be calculated according to the Boynton Beach Area Median Income (AMI). There were concerns from the developer that because it is not published recently and the lender may have issues with it, that proposed a definition of AMI that would be either the Palm Beach County AMI as published annually, or the City of Boynton Beach if it is published annually, as determined by the lender. Board Member Penserga asked if the Board should know the Boynton Beach AMI first as it may present a financial challenge that would question their calculations for the project. The City does not annually post their AMI. The County publishes the West Palm Beach and the Boca metropolitan numbers. The Housing Authority posts, but for rental projects, it needs to be broken down for the household and broken down for the affordability ranges for rental projects. It can be obtained through HUD. Jeff Burns, Affiliated Development, stated they were comfortable using the Boynton Beach AMI. They wanted options and HUD is a lender they use. They had to have language to have flexibility so they would not exclude lenders that may want to finance the project. They have no issue complying with Boynton Beach AMI, which is approximately $20K less than the West Palm Beach AMI. Board Member Penserga suggested the City put something publish the amounts on a regular basis. Chair Grant was concerned Affiliated was using a much higher data set. Attorney Duhy suggested saying the City of Boynton Beach published AMI unless required to use Palm Beach County's by the lender. The next item is the breakdown of the rental apartment building proposed to include 236 rental units subject to: the units will be rented according to following ratios regardless of how many units are constructed. The words "regardless of how many units are constructed' was added because they may build more units and they wanted to apply those ranges to the additional units as follows: Tier 1 - 3.8% of the total rental units to tenants that earn up to 80% of the AMI; Tier 2 — 22.6% for renters earning up to 100% of the AMI; Tier 3 — 23,6% for the renters earning up to 120% of the AMI; and Tier 4 the remaining units shall be unrestricted. The Tier 1, 2 and 3 units shall be restricted, and the total rental units and affordability requirements may be adjusted as may be required to meet minimum Code requirements for the City's workforce housing program and at no time shall Tier 1, 2 and 3 units be less than the total rental units. The affected units 12 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 shall remain affordable for 15 years. Ten percent of the restricted units shall remain affordable for an additional 10 years following the expiration of the affordability term. Board Member Romelus understood the rates and thought the problem is 10% of the restricted units will continue on for an additional 10 years means only 11 units. She thought it raised a red flag and it was not affordable to residents on an ongoing manner. Mr. Burns explained their original proposal was for 15 years. They are providing half of the units to be restricted. One thing that is different with this project from other affordable projects is this is not funded through tax credits and investor capital is used. They have 15-years because that is what their investors require. A lot of investors have trouble seeing beyond 15 years and it is why affordable housing projects are usually less. Palm Beach County, Broward, Hollywood, West Palm Beach all have 15-year affordability terms. They added additional affordable units for 25 years and he did not feel it would have an impact on funding the project. Mr. Burns was unaware of any housing program that has a requirement for affordable units in perpetuity. The property has to be maintained and that means they need funds to do so. Originally, their term was for the life of the CRA and then reduced to 15 years to match the affordability period. This allows additional revenue for the CRA they can use to help subsidize additional units beyond the 15-year term. Board Member Romelus noted the CRA is an investor as it uses their land for 15 years at 100% of the TERFA. For the first 15 years they get 118 units, but for the next 10 years, there are 11 units out of 236 units. They wanted a mixed-income development, but it is not mixed-income over the long term. Other developers have done this in perpetuity. It has been done. She commented Boynton Beach is still one of the few affordable cities to live in. Chair Grant commented affordable housing is different things to different people. The CRA is subsidizing the units for 15 years, which is their investment for new tenants coming in. The developer is offering what was requested. The CRA subsidized Ocean Breeze East, the Heart of Boynton Village apartments. For 15 years, it will be a mixed- income project subsidized by the CRA to get what they determine is affordable because it is subsidized by the tax payers. After the 15 years, the burden is no longer on the CRA as they are getting the full taxes. Chair Grant commented they are offering housing below market rates and there are not many options available. He asked about the mix of bedrooms would be the same percentage. If they are not moving forward with subsidized housing, there is no alternative, and it is a waiting game for the future. Only one developer in five offered affordable housing in perpetuity, but they did not offer parking which is also a big expense. Board Member Penserga understood housing could be made affordable in perpetuity because of the subsidy. He noted the CRA sunsets in 18 years and they did have another proposal that shows the units could. He asked what the difference was. Mr. Burns explained the developer offering the project in perpetuity is a merchant builder 13 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 who builds and sells to the highest bidder when the project is done. Affiliated is a long- term holder in a qualified opportunity zone. If they had the ability to maintain TIF longer than 15 years, they could look at something longer and on a larger scale, but the economics do not make sense. Board Member Penserga was displeased with the additional 10% and asked if there was wiggle room. Mr. Burns thought they could increase it to more than 10%. Board Member Romelus reiterated she wanted affordable units in perpetuity. Mr. Burns replied they have never done it. In order to appease Board Member Romelus they could agree to keep the 10% in perpetuity, if they go with more units, it all goes pro rata in perpetuity. Chair Grant explained the other 95% would subsidize those units because there would not be TIF. The other units are market rents and the developer would not be charging higher rents to subsidize the affordable units. The 11 units would continue in perpetuity at an affordable rate, split amongst the tiers represented. Board Member Romelus thought these provisions should be included in all developments. Attorney Duhy reviewed the required elements and stated there is a minimum of 16,800 feet of commercial space for restaurant, retail and office. The next required element is a minimum of 150 parking spaces open to the public in perpetuity subject to a lease agreement executed by the parties in a form substantially similar to the agreement as contained in Exhibit D in addition to the number of parking spaces needed for the residential and commercial components to the project. Although the CRA spaces are separate from the parking spaces designated for residential and commercial uses, they shall be included in determining the total number of spaces required for compliance of the residential and commercial units with the minimum Code requirements. There are 25 on-street parking spaces. Board Member Romelus asked about cost. Mr. Burns explained the RFP contemplated the CRA or City owning the entire garage. It would require a Bond issuance. Staff spoke with Bond counsel who thought it was risky. Staff asked if they would build and own the garage and they would do a lease for 150 spaces. It is the same like in Lake Worth and lease the spaces to the CRA. To be able to justify the spaces, it would require an upfront capitalized lease payment with ongoing annual lease payments, which they have done before. After more discussion, the preference was for those 150 spaces to cost as little as possible or no obligation as possible. He noted those spaces could generate revenue. It would be a CRA asset and eventually the City's. Affiliated ran 11 different options showing different payments down to zero payment obligations and the feedback was that was the best option. The City can generate revenue on the 25 on-street parking spaces and the 150 spaces in the garage. It would generate substantial revenues. One idea to lessen the capitalized lease and ongoing lease payments for those spaces was to reduce the purchase price dollar for dollar to pay for it. They wanted parking available for commercial and in addition to more than the City 14 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 required. Affiliated proposed to build the garage for $5.515M with 150 spaces, plus the operation and maintenance costs. It would be a no cost lease payment, but there would be a pro-rata share for operating the garage. It was noted the 25 on-street parking spaces. There were 88 spaces more than Code. The CRA was going to be the owner of the garage and they wanted to lease back spaces. Their proposal changed to address how they would pay for those spaces. They have to lease them or sell them to the City and CRA in some capacity. The 150 spaces will be the CRA's and when it sunsets, they will go to the City in perpetuity. Ms. Shutt explained each space cost $26K to $30K. Affiliated offered to build them at $5.5M. Attorney Duhy explained there is no cost in the agreement associated with the garage. The ongoing payments will be the lease payments of zero dollars plus operating costs. What changed in the proforma from the RFP to the agreements was the RFP anticipated the CRA would float bonds and construct the garage and lease spaces to Affiliated. That changed and their proforma changed. In the initial proposal, Affiliated would pay the CRA $5.5M now with them building the garage, they are now proposing to pay the CRA for the property. The difference in cost as a result of the City being able to build the garage. Board Member Romelus asked if it was financially feasible and prudent for the CRA to do so. Ms. Shutt responded subject to negotiating the parking terms in the parking lease agreement with the City. It is a tri-partied agreement and she cannot speak for the City because the lease term will survive after the CRA sunsets. The Board has to weigh the public benefit of owning 150 spaces for the price offered by Affiliated in return for them paying for the land. It is a Board decision. Board Member Romelus requested City staff speak on the matter. Chair Grant noted the parking garage in Marina Village, Casa Costa is a revenue generator for the CRA. If the CRA entered a lease payment to Affiliated, it could have lower prices so the CRA would have some money up front and then pay over time. Mr. Burns explained Andrew Mack, Assistant City Manager and City Manager Lori LaVerriere were part of the conversation and analysis that led them to this proposal. The lease term would extend beyond the life of the CRA and the City would have to be a party and sign a joinder. The City would inherit the agreement. Vice Chair Hay did not think it would be beneficial because there is no downtown to support it, nor did he think it was a revenue generator. He had questions and concerns. Chair Grant explained they do not have to charge for parking because it will already have been paid. Ms. Shutt explained the option for the parking lease agreement allows the City to charge in the future. The issue at hand was if the Board wants them to build the garage now. The RFP indicated 150 spaces were needed. Ms. Shutt explained the garage will include 423 spaces for all the private development space. If the garage cost $10M, the CRA would pay $5.5M for the 150 spaces, but Affiliated is designing and building it, financing it, and it will be controlled and managed by them. The CRA can eventually have the opportunity to meter it, have pay stations or keep it free for the public. They believe the area will be significant and generate revenue. It could be a potential Brightline stop and the garage would be beneficial. They would lease the spaces and 15 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 their proposal changed. Mr. Burns believed there would be significant demand for parking. He reviewed the history. Attorney Duhy noted language would need to change the lease form has not been approved by the City and there will need to have a joinder. It will also need to reflect there will be a zero dollar a month lease payment and pro-rata share of acceptable operating and maintenance costs. She made a note the language change is to reflect that to be acceptable to City and CRA as she stated. Attorney Duhy explained there are two parts to this project. There are the parts that will be part of the site plan that the developer will go through and the City will have regulatory authority of those. She is not speaking to that. The agreement only speaks to the required elements she just spoke about which they can enforce. The development timeline is the second piece of the project that crosses agreements. The timeline is relevant to both agreements. Attorney Duhy reviewed the effective date is the date the last party signs the agreement. Affiliated would be required to file an application for a site plan within six months of the effective date. The site plan is one of many approvals they will require from the city to construct the project. The land use approvals mean the developer will not close on the property until they receive all of the land approvals, which means site plan, zoning, platting and replatting and any other City approvals they might need to build the project. They are required to use reasonable diligence to obtain the land use approvals she mentioned, but there is no set time frame for them to receive the land use approvals, only to use due diligence after filing the site plan to obtain them all. When they do obtain the land use approvals, they are required to close on the property within 36 months or three years after receiving the land use approvals. Board Member Penserga asked if three years was the normal time frame to close. Mr. Burns explained all the other agreements they have had with the City was between three to five years. Commencement or construction was proposed within three years. They will move as expeditiously as possible. Attorney Duhy advised the Board can only enforce the terms in the agreement. There is an open period of time. As long as they are using due diligence. The Board can enforce it if they feel they are not using good faith and due diligence to receive the land use approvals for the project. After they receive them, it is three years for closing. Commencement of Construction is proposed within 36 months or three years of the closing date. It gives Affiliated approximately one year for land use approvals and give or take three years to close. That is seven years to commence construction. Board Member Penserga noted that was a very long time and Affiliated has the ability to extend for 12-months. Mr. Burns explained the intent was to have a total of five years between purchasing and commencing with construction. If they needed extensions. They can reduce commencement of construction from 36 months to 24 months. They can ask for two, twelve-month extensions to the closing date. The 12-month extension 16 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 is for the period of time they bought and closed on the land. The 24 months goes by and they have not commenced construction, they can approach the Board and apprise them they are continuing to move forward with their plans, renewing permits and taking steps to show they are diligently trying to close the project. The purpose for it was Affiliated will have a tremendous investment in this and they can only get their investment back by completing the project. They wanted ample time to accommodate unforeseen circumstances. They can reduce the commencement of construction from 36 months to 24 months. Attorney Duhy noted they can request two 12-month extensions to the closing date subject to the Board's approval, which shall not be unreasonably withheld as long as they are showing due diligence. Chair Grant asked hypothetically the longest the project could take. Attorney Duhy responded some of it is speculative because of the land use approval process is not set forth because they cannot say how long the City would take. It is a common reason why lots of people do not want to agree to a deadline to obtain approvals. They are required to use due diligence. If they say, for discussion, it would take a year to get all the land use approvals from the City to get a building permit. They would be looking at one and a half years for land use approvals, three years to close, for a total of four and a half years, if they use the two 12-month extensions its six and a half years, then commence construction in two years, that is eight and a half years and if they ask for another extension, it would be nine and a half years before the commence construction maximum. Board Member Penserga commented almost a decade is not acceptable. Mr. Burns stated their goal is to have five years to be able to go and execute on it. The purpose of the extensions should not be included in the math because it can be withheld, provided they are not diligently pursuing the project. If they ask for an extension, they would have to provide evidence they are moving forward and there is a good reason why they are not able to close or commence during that period of time. In his conversations with the City, he was told about six months to obtain approvals. This will be their first project in the City, so they are a little unfamiliar with the time frames as things vary from city to city. Chair Grant noted the effective date is when the contract is signed and the application for Site Plan is to be submitted so within 100 days of the effective date, they will have to submit the plan to the City for approval. Because the City and CRA did not already change the zoning to mixed-use core, the Affiliated has to pay the money upfront to change the zoning. He asked if the other two parcels are part of the block. Mr. Burns responded he is unfamiliar with those procedures with the City. The RFP was unclear whether or not the rezoning was going to occur administratively or be something that was part of their proposal. They can proceed in either direction, but it affects their timeline and the investment amount they would make to obtain the approvals. He commented assuming from the effective date, they would need time to refine the drawings, have meetings with the City to try to understand the procedure, the requirements they would need to adhere to in order to submit an application for site plan approval. Mr. Burns commented they were fine with 36 months with one 12-month 17 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 extension and then they reduce 36 months to 24 months for commencement and have the one ability to extend for 12 months. Mr. Burns explained they do not benefit until they close on the project, have a financial closing and they are underway. The Board has a reverter. They cannot buy the land and sell it to anyone. They have to start the project and they will be out a great deal of time and money if they do not do that. They are also purchasing the property on Federal Highway. Chair Grant commented Hurricane Alley will only have to move once. They will try to impact businesses as little as possible and it will be a phased project, with the parking garage being built first, then the northern commercial project and then demolishing Hurricane Alley. She would not have to close Hurricane Alley. Vice Chair Hay stated if they proceed, they should operate as a team. If they approach the Board with reasonable request for extensions, they will work together. The Board wants the project to be a success and they do not have a second bite of the apple. Board Member Romelus offered a friendly amendment to Vice Chair Hay's comments about making a mistake. She commented they did not make a mistake, they just worked with a developer who was worthy of keeping his word. They have always had the best interests of the City and residents in mind. Completion of Construction is defined as receipt of a temporary Certificate of Occupancy and it shall be issued within 36 months or three years of construction with the ability to extend for 12 months subject to CRA approval, which shall not be unreasonably withheld, so long as developer is using good faith and due diligence. Final Certificate of Occupancy has no deadline for the receipt for final CO but there is a requirement that the developer shall use good faith and due diligence to obtain the final certificate of occupancy. Attorney Duhy explained the above were the milestones they could enforce as part of these agreements. She reviewed the below: The terms of the Purchase and Development Agreement was reviewed. The price for the purchase was $100 and the deposit is $10K, which is generally required if an issue arises prior to closing. The conditions to close was receipt of land use approvals, the closing to occur within 36 months or three years after receipt of land use approvals. As for tenants, the purchaser will assume all leases. As to Hurricane Alley, the purchaser acknowledges that a current tenant of the property is Hurricane Alley. Purchaser will make reasonable efforts to relocate Hurricane Alley to the project and shall use reasonable efforts to work with Hurricane Alley to phase construction activities of the project in order to minimize, in the exercise of commercial reasonableness, the time frame between demolition of Hurricane Alley current premises and construction and delivery of Hurricane Alley's new premises within the project. Attorney Duhy reviewed the reverter clause. The property will revert to the CRA if the purchaser fails to commence construction as provided for in the agreement. At the 18 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 time, if they exercise the reverter, the CRA will pay the purchase price and out of pocket predevelopment and development costs incurred by buyer and professional service costs. One comment discussed between attorney's was a more concise description of what those costs could be. They want to make sure they are associated with this development and the permit approval and they would receive the benefit of that. Mr. Burns stated in prior agreements, they had to provide invoices and reasonable evidence demonstrating that the costs were pursuant to this project, which they would agree to do. Ms. Shutt inquired if it included anything to be extended to the Ocean Mart store and learned it would not. Commencement of Construction was defined as the date when actual construction activities, including demolition, site clearing, excavation, utility relocation consistent with the City Code and all applicable permits have begun where construction activities continue on a consistent basis to complete construction of the project. He was concerned even if there was just demolition of the current site, clearing could qualify as commencement of construction at which point the reverter would terminate. He was concerned Affiliated would begin, but not finish. Attorney Duhy explained that is an issue for a court to decide. Board Member Penserga suggested removing ambiguity with the project. Mr. Burns noted it very specifically says all applicable permits to complete the project. They will close everything all at once. Attorney Duhy recommended amending the language in the reverter to read "If purchaser fails to commence construction and fails to continue construction activities on a consistent basis to complete construction of the project." It would be taking the language out of the definition and adding it to the reverter. The Board and Mr. Burns agreed to the amended language. Lance Aker, Attorney for Affiliated, had concerns about the language just added to the reverter. He thought it was a subjective standard. Attorney Duhy commented they could add "reasonable diligence, or good faith or diligent efforts." Attorney Aker was concerned the reverter could kick in if the Board was unhappy with the pace of construction. Attorney Duhy explained as written, once they start demolition the reverter opportunity dies. There is an argument she could make that would likely be decided in court based on the language, "continues." If the concern is they want it to go through continuation of construction, that would be the language she proposed. If they stopped using reasonable diligence to achieve completion of construction, they could revert the property. Mr. Burns thought the lender would likely have an issue with the language. If Affiliated failed, the bank would take over and complete the project. He did not think they would want to put the underlying property they would have a loan on at risk. Chair Grant stated they want something that goes past demolition. Mr. Burns suggested adding language that they have executed a construction contract with the lender to complete the project. Once they sign a contract, they are held accountable to the contractor. Their projects are constructed with a guaranteed maximum price. Mr. Burns suggested adding to the definition of construction commencement "to have a fully executed construction contract with the general contractor." Part of the contract would have a schedule, and if they do not perform, Affiliated can pursue them for liquidated 19 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 damages. Attorney Duhy explained they are not a party to the contract, and the CRA cannot enforce it. It is another requirement they get the project further down the road. Attorney Duhy noted there is a Force Majeure clause which is an act of God which extends timeframes and requirements in all of the agreements. She suggested adding language that provided it is subject to terms and conditions of the terms of the loan agreement with the construction lender. She liked the language "fails to continue construction activities on a consistent basis to complete construction of the project with the addition of reasonable and good faith efforts." Their concern is it would allow the CRA to exercise the reverter past a certain point. Mr. Burns suggested adding language, as they are not a party to the loan agreement with the construction lender, subject to the terms and conditions of their construction loan agreement with their lender. They may have it if they commence construction and stop for some reason, they will step in and finish the project as the project is their collateral. Their lender will require a guarantee. Either way, the project will be constructed. Board Member Penserga wanted a legal document that assured they will not have a worst-case scenario by building only a fraction of the project. Attorney Duhy understood they do not want to have the reverter clause go to completion of construction. The language she proposed was a bit better than that because it does not hold them to a time frame, it holds them to reasonable diligence and they did not agree to it. What Affiliated proposed was to provide a construction loan, but in order for the CRA to have anything enforceable other than them showing the CRA a verified construction loan is to say what would have to be in it and that was an area in which she did not want to be part. Mr. Burns explained when they reach financial closing, the lender will require they will have a guaranteed to maximum price contractor with the contractor to close on the financing and the building permit. The guaranteed maximum price contract will contain a number of different provisions that hold the general contractor accountable to complete construction of the project within the time frames needed. They would also provide a performance bond to the bank to ensure the project gets built. If a subcontractor goes out of business, they call the bonding company who then comes in, replaces the contractor and finishes the work. Mr. Burns advised he would share those documents with Legal. Once they achieve financial closing and they begin construction, the project will be built. He and Mr. Rojo will have personal completion guarantees with the lender which creates a significant alignment of interest. There are also about 20 other safeguards that those involved that have a lot at risk will insure. They are talking about closing on a loan to close on a project in its entirety. Mr. Burns thought they should provide proof of financial closing to complete and close the entire project. In the past, for that to occur, the title company that handles the closing, once all the funds and documents are signed and recorded, sends out an email. Mr. Aker explained they have financial closing which has defined terms which could be referred too. Chair Grant agreed with that language. Financial closing can be defined as the date on which all agreements and loan documents for the financing of the project have been executed and all required conditions contained in such agreements and loan documents have been satisfied as determined by the lender and the developer. 20 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Attorney Duhy stated it does not say a lot to the CRA because the lender and developer will have closed, but it is proof of it. She did not think it got them any further. Chair Grant thought the language was fine because commencement of construction can mean demolition of one building out of the entire project. The CRA wants something more than that where if they get a $50M loan as defined in the contract, that is it. If they do not do anything and got the $50M loan and they run out, the $50M loan has clauses that say the lender will get the property and they will have assurances they get their money back, they build the project, they are not out $50M and the CRA is not out the land. Attorney Duhy commented it would not hurt to add that language. It was noted Attorney Duhy was providing the worst-case scenario. Chair Grant commented after they have built six or seven mixed-use projects, public/private partnerships and they decide to leave the country with no extradition laws, the CRA has to draw the line there is the possibility it could occur, but it is extremely unlikely. Because of the finance agreement they have with the lender, they have to have a max price with the general contractor, so the general contractor will go after them as well. Board Member Penserga reiterated he wanted something in writing to prevent a worst- case scenario. Chair Grant responded they could see the completed financing agreement as it would contain that information. Attorney Duhy stated she added language because Affiliated did agree to it, " . . . . fails to commence construction and has provided adequate proof of financial closing." The additional language was acceptable to Affiliated. The title company sends out an email when all is signed and completed. Attorney Duhy read the definition of Termination. For a default by purchaser after closing, the CRA's sole remedy is the reverter. Attorney Duhy announced the Purchase and Sale Agreement amendments were finished. Attorney Duhy read the Assignment definitions. Assignment to an unrelated CRA party requires CRA consent. Attorney Duhy explained all the documents will have a final technical review. Attorney Duhy reviewed the Miscellaneous provisions and advised they have a Force Majeure clause which stated Affiliated's definition included pandemics. It was noted that construction is an essential service. Mr. Burns explained in other contracts, they have a provision they would have to give notice of their intent to use the Force Majeure clause within a certain period of time. They cannot wait after some pandemic occurring 12 months from now, and they are just now bringing it to their attention. Attorney Aker suggested epidemic and pandemic provisions apply only to the extent they are required by applicable law when the government requires them to stop. Attorney Duhy suggested those two triggers be included. The period would be 90 days. Attorney Duhy advised this is an unusual Purchase and Development Agreement as there will be tenants in the project. The one issue is a clause that says no new leases or extensions will be approved without purchaser approval. She recommended they do not approve 21 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 any new leases, renewals or extensions that extend beyond closing without approval. They will bring it back for final review When the CRA purchased the Oyer property, Affiliated agreed to protect the Oyer Insurance sign so they added a clause to reflect Affiliated will make best efforts to preserve it. Attorney Duhy reviewed the TERFA. The Board already discussed the terms that require the project be constructed as set forth above and pursuant to the timeline. The Public Benefit section provides for job fairs and apprenticeships, it requires that prior to and during construction of the project, Affiliated will hold two job fairs with the City and include requirements 'With contractors to use good faith efforts to participate in an apprenticeship program. Chair Grant asked what a good faith effort would be. Mr. Burns responded diligently working with or making an effort to work with other programs. He advised they are already doing that in West Palm Beach with Moss who has an apprenticeship program. Each City is different so Moss works with different organizations, agencies and non-profits. Chair Grant asked how many apprenticeships there were. They used the language in Affiliated's contracts because Moss has control over it. After discussion there was agreement to say commercially reasonable. There are no time frames in the current agreement. Mr. Burns explained they have up until completion of the project. Chair Grant suggested having at least one job fair. Mr. Burns explained they host job fairs right before a certain trade is needed because people who attend job fairs need a job the next day. They will hold the fairs in the City of Boynton Beach after commencement and before completion of construction and they hold at least two job fairs. The hold job fairs within 90 days of that particular trade commencing work on the project site. Board Member Romelus asked if there are job fairs already occurring, if Affiliated would send a representative and learned they would do so. She made the request because there are multiple job fairs held by Career Source and others and she requested the positions be available to those entities in addition to the two held by Affiliated provided it is applicable to the project within a 15-mile radius. Career Source will notify Affiliated of upcoming job fairs. The project will achieve National Green Building Standards (NGBS), Bronze level with evidence of the same. Ms. Shutt explained most of the time in Florida, it has to do with heat gain. It was learned Affiliated uses a company, EDI who reviews the early designs to ensure they are compliant with NGBS. They look at things like insulation, windows, and energy efficient appliances including a bike program. Ms. Shutt asked if they would explore the benefit of using chilled water from the City's District Energy Plant. It was explained it provides chilled water instead of each building having its own HVAC System. It is available now. They could have done 500 Ocean, but because it is on the other side of Federal Highway, it was not feasible because of the distance the water has to travel and back. It should achieve at least the Bronze level. As for Electric Vehicle Charge stations, they will have two right off the bat and when building the garage, they 22 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 can provide the conduits for the CRA to provide charging at a later time. Board Member Romelus asked if they could have a living wall on the parking garage. It was noted the Public Art fee can pay for the Wall. Ms. Shutt recommended Attorney Duhy's suggested language there be commercially reasonable efforts to incorporate a green wall into the parking garage consistent with City Code. Attorney Duhy reviewed the criteria to be eligible for the TERFA for the 15 years. The amount is 100% of the TIF for 15 years, and several things had to be included. The conditions to be met before TERFA will be paid is the project will be completed as evidenced by the last Certificate of Occupancy. All elements of the project have been placed on the tax role, the CRA will have received TERFA from the project, and the annual performance report, which requires them to report their compliance with the terms of the agreement is received and found to be sufficient by the CRA, which findings shall not be unreasonably withheld and developer is not in default under the agreement. The Annual Report is required in April of each year to determine compliance. The deadline for the annual report is the last day of April of the preceding year. The CRA will add language it will commence one year from that date. Vice Chair Hay commented when using TERFA funds, there is always something that goes to the developers and some to the CRA to have other TERFA projects. He was concerned they are giving away 100% on one project. After the term, the CRA will get all the TERFA. The reason why they needed the amount is the difference between affordable housing. Without the TERFA, they would lose up to $1 M a year. The TERFA subsidizes the units. They would get about $400K a year if the property is assessed much higher, they will be paying the TERFA. The TERFA is only a portion. The expenses they will pay negates that increase. They have to offset their expenses. Ms. Shutt explained staff would never recommend that much, but they need a catalyst. These are all conservative estimates of what they get back and they have never gone over 6%. The $6.1 M that they asked to subsidize the gap for the affordability was a little over 8% of the entire project cost of$73M. Usually the CRA assembles and buys properties, and they spent about $8M to assemble the land in the hope to spur redevelopment or provide a public benefit. If they do not have any portion of the TIF back from the project, the CRA's ability to have other CRA related items will be limited. It is the Board's prerogative to determine if the 11 units in perpetuity justified the assistance to have the gap. It was explained the TERFA is not covering the units in perpetuity. It is covering the 15 years to have half the building at a workforce rate. He provided numbers showing how they are losing $1 M a year by having such reduced rents on half the building The TERFA was only covering 40% of that and they would take a loss on the rest. Mr. Burns explained for the level of affordability they are providing, this is the lowest amount of incentive they have ever received on any project. Palm Beach County offers $75K per multi-family unit in order to address workforce housing, which is paid up front. West Palm Beach provided $65K per affordable unit. With this project, by getting 100% of the TIF and with Affiliated having to finance the 23 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 project, it is about $25K per unit in subsidy. The Palm Beach County program provides up to $75K. He noted those programs provide the funds up front. Chair Grant asked what the number was. Mr. Burns explained the reason they do address a number is because property taxes could go through the roof, and it would increase their expenses on the property and they have to be able to recapture it. Chair Grant asked what Affiliated can give the CRA out of the 15 years at 100% of TERFA with the average subsidy being $50K per unit. He further inquired if Affiliated could cap it if Affiliated reached its number at year 13. It was thought there could be an opportunity for a windfall. Affiliated advised they can put a cap of$8.5 with the lender. Affiliated would include a deed restriction so the units stay affordable. West Palm Beach gave funds up front which negated the need for a full TERFA. In this instance, they are financing the construction of the workforce units on their credit. They will not see a dime in TERFA until the project hits the tax rolls. Chair Grant asked if Affiliated could give a number in TERFA, it goes down to 50%. Mr. Burns understood once they hit a certain threshold whatever the amount may be, then 50% goes to that. It was similar to the Infrastructure Sales Tax. Chair Grant responded they would expect the funds but if they did it before that, the Infrastructure Sales Tax expires. Mr. Burns inquired what happened if the deal went the other way. Chair Grant responded they would get the 100% with the same deal. There was a cap on the upside and no guaranteeing the downside. Affiliated responded they could cap the deal at $8.5M Attorney Duhy reviewed the Default by Purchaser clause. If there is a default by the purchaser, the developer is not entitled to a payment of TERFA for any period during which it is in default and has not cured. She explained if there is an instance, in the 15- year term, and they submit their annual report in May rather than April, it is a default. If they do not cure it in 30 days, they would default and they are not entitled to the funds. Once it is cured they can get TERFA for the remaining years of the term. It does not add years to the term. The CRA cannot terminate if the developer is in default for this reason, but the agreement will automatically terminate after the 15-year term. This is important because if a developer defaults in year six, and they do not cure, if they did not have an automatic termination at the end of the 15-year term and they did not have the ability to default, the agreement would never be able to be terminated. Termination will automatically end on the last disbursement of revenue due to the developer on the expiration at the end of the 15-year term or on failure to commence construction when the reverter will trigger. Listen, if they did not have the ability at the end of year 15, its automatically terminated and on the last disbursement of TIF revenue or failure to commence construction. Same language as the other one. Board Member Romelus asked about the parking proposed by Affiliated for $5.5M and if the City and CRA would be in agreement to it. Andrew Mack, Assistant City Manager, responded most of the discussions were centered around a parking lease agreement, the monthly payment and whether they would finance it. The construction value was not fully discussed, but they did discuss a standard number for a parking spot which was 24 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 about $25K per space. Mr. Burns commented they discussed those options early on. The last option, which was selected was the City and CRA wants as little ongoing payment or no payment obligation as possible and the last option which was chosen to reduce the purchase price down and in order to pay for the garage and it would be a City and CRA asset. The one best for the CRA was to have a parking agreement they could assign to the city and they would be the CRA ongoing maintenance. She asked when the CRA sunsets, the City could take over the liability. Mr. Mack recalled the discussion was $50 per space, there would be enough revenue to handle that. The hardest part is in the beginning of the project. Attorney Duhy reviewed page 7, of the agreement, 6.11, they would add language, The CRA hereby agrees to pledge and assign to developer pursuant to the terms of this agreement an annual amount which equals 100% of the Tax increment revenue for a 15-year term, not to exceed a total of $8.5M. Mr. Burns recalled they discussed sharing the revenue after they reached the cap. It was a 50/50 split after reaching the cap. Chair Grant looked at the original plan for the 18 years was $7.3M. Mr. Aker stated it was an estimate and they did not know what the tax assessor would do. He asked if it could be 95% or 90%. He explained 95% of the TERFA would go to Affiliated. They would keep the cap at $8.5M. The TERFA was 95% to the project and 5% to the CRA. Vice Chair Hay thought the CRA should not carry their risk or guaranteeing the down side. Their rents on the subsidized units are hundreds of dollars less each month and to offset that, they have the TERFA. Chair Grant explained how the CRA subsidized the project. Vice Chair Hay thought there was a lot of subsidy compared to other projects they look at. Chair Grant explained Affiliated included the Ocean Mart and the Oyer properties which is over $6M that Related Urban did not. Mr. Burns explained they offer the greatest level of affordability in terms of the number of units. They build workforce housing and this is their level of subsidy. They usually receive up front funds and grants from other municipalities. They were day one dollars. This project did not have that and will use TIF. He thought offering 118 units was meaningful. Ms. Shutt noted they originally needed $7.3M. She asked if they would cap it, and they would give 25% above what they need at $6.1 M. and cap it at $7.6M. Mr. Burns responded they would not as they received $9M upfront. Affiliated would be financed for years until the TERFA begins. Board Member Romelus stated they spent two hours on this item. She thought this may not be the best match. She thought there are still other proposers that can give them a product. They are not obligated to make any commitment. Mr. Burns stated they have acquiesced every single step of the way. They submitted a very detailed proposal and this is consistent with that proposal. They will build this 25 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 project. He thought it was unfair to say they are unwilling and they are agreeing to everything. He commented affordability is very important because it is what they do. Chair Grant inquired what her concern was that the CRA is not giving away 100% of the TIF. Board Member Romelus responded they are writing contract that she did not think should be so difficult. She did not think their numbers matched up. Chair Grant recalled Board Member Romelus ranked Affiliated as second. He explained what they are trying to do is similar to the Purchase and Sale Agreement they had with Mr. Oyer, they are trying to negotiate the best deal. He announced the CRA is doing this project with the Ocean Mart and the Oyer property. This developer was the only one able to do that. They are working together to get the best deal they can for the CRA. Board Member Penserga had mixed feelings. He agreed and commented the funds are going to subsidize the affordability of the units. He thought 100% of TERFA was unheard of. Chair Grant noted they did it with the MLK project. He asked if they were willing to make a concessions. Mr. Burns stated they are very happy with what they have done tonight. They were willing to cap the TIF as suggested at 95% instead of 100% for 15 years not to exceed $8.5M with no split after that. Ms. Shutt explained the Ocean Mart was brought into it for $3M and it was his cost upfront. Ms. Shutt preferred $8M, which .Mr. Bruns agreed to. It was lower but she wanted to cap it because they don't know if they would get higher cost and if the $8M is accomplished in the third year it is capped and they no longer have to pay TIF. Instead of 100%, they are asking 95% which was fair. If they are positive in their estimate they will not receive more than what they need up front, but it was still more than they would rather have. The Ocean Mart purchase was for the store and the buy-out of the lease. Vice Chair Hay did not want to rush the matter. If this is a good match, he was not there yet. Lori LaVerriere, City Manager, agreed that there are a lot of issues that need to be worked out and she would not rush to a decision. They need time to work out some issues and if it is a deal that can be struck beneficial to both parties. They need more time. She supported Ms. Shutt and thought they needed time to do more work. She recommended not negotiating from the public dais. Board Member Romelus said this was highly inappropriate with Ms. Shutt proposing a number to the developer and this is her issue with her conversation tonight She did not think the process was feasible. They have been bitten hard. She wanted to table the item or vote it down. She thought there would be other opportunities. She did not want to proceed. 26 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Mr. Burns commented they were asked to put these agreements together and work with staff expeditiously and that is what they did. This was a priority. They have been at this project for over 1.5 years. They have worked with the community. The proposal they have is consistent with their interests. They are happy to work together with Ms. Shutt for as long as it takes to ensure all gets an equitable deal to get a product all can be proud of. It is a public/private partnership. They do not want to make anyone uncomfortable and they are happy to work with the Board and the City as much as is required to get a good deal. David Katz, 67 Midwood Lane, agreed with Board Member Romelus's and Vice Chair Hay's concerns. He commented this is the chosen developer who decided not to include and will tear down the Oyer property. To tear it down is a shame. He thought if they do not keep the building, they are the wrong developer Chair Grant commented it is weird to have a project on the doorstep of the CRA that gets pulled back. It reminded him of the Cottage District. A Board Member commented they have better options and now they have four vacant acres and it is unknown what will occur next. The Oyer building is in need of serious need of repair and it is in such bad repair, the family decided the only thing salvageable was the sign. There is a reason why it was never historically designated. Two members of the CRA did not meet in February to discuss this item and for the Board to say it was better for the next CRA Board to make these decisions, it hurts and if they do not have three members wanting to move forward, they do not have a motion that passes. Vice Chair Hay wanted more time. Motion Board Member Romelus moved to stop negotiations and go to the next applicant on the list. Motion died for lack of a second. Motion Vice Chair Hay moved table it to try to see if they can make it work. Board Member Penserga seconded the motion. The motion passed unanimously. Ms. Shutt will negotiate the best deal for the CRA and the City. Board Member Romelus suggested bringing back a comparison chart comparing the other proposals. Ms. Shutt commented she has not vetted Related Urban's proposal, but it was reviewed by Mr. Abramson, the CRA's Financial Analyst. Related Urban did have a proposal that gave the CRA $536K annually under the market rate with 30% of the units at 80% to 100% AMI, 63 units, and option two was the tax credit at 4% or 9%, which would provide 97 units, 46% in total for perpetuity and in the lower percentage bracket at 40% to 100%. The upfront costs for either of those options was less than what was proposed for affiliated including the 150 spaces. She recalled there was a concern 27 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 some of the units did not include three-bedroom units, but Related stated they could make some of the larger units to fruition and as far as Hurricane Alley and the historical component, they agreed to put $1.25M towards preservation of the Oyer building and they could negotiate how to fit Kim Kelly, but they did not do so unless they got direction from the Board for this negotiation. Board Member Romelus stated that was her plea to the Board to look at the numbers as they made sense. She stated they could make the decision to cease negotiations with Affiliated and start with Related. Still gives us 30% up front start negotiating with related. Related had 30% of their units for workforce and 63 units affordable in perpetuity. The Board had compared proposals. Related's option was not a purchase option. It was a land lease. Chair Grant recommended the decision goes to the next Board. He commended Affiliated for all they have done and recognized the project is far and beyond reflecting why they have received so many awards in so many cities and it shows why no other construction projects have occurred in Boynton Beach because it is very difficult to work with a Board that does not always agree on things. He thanked them for their time and effort and hoped the new Board would support the project and see things the way he did, having all of Ocean Avenue as part of the project. Chair Grant recessed the meeting for a short break at 10:32 p.m. and reconvened the meeting at 10:42 p.m. 17. New Business A. Audited Financial Statements - FY 20-21, Fiscal Year Ended September 30, 2021 Vicki Hill, Finance Director, stated their auditor, Sansone Kline Giacaimino and Tandoc, representative was out of town. She reviewed their financial audit and announced there were no internal control deficiencies found, no findings of non- compliance issues or adjustments found. Their cash position remains strong and all funds had sufficient fund balance for working capital and ongoing project funding. She noted this was the 13th year in a row they received a clean audit opinion for the financial operations of the agency. She thanked their auditing firm and Jobara Jenkins, Accounting and Finance Manager, who worked tirelessly to ensure they were in compliance. Motion Board Member Penserga moved to approve the Audited Financial Statement. Vice Chair Hay seconded the motion. The motion passed unanimously. Board Member Romelus commended Ms. Hill and Ms. Jenkins B. Discussion and Consideration of a Letter of Intent from Habitat for Humanity of South Palm Beach County for the Boynton Beach CRA-owned Properties located at 402 and 404 NW 12th Avenue 28 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 Ms. Shutt presented the item for infill housing. The request was to transfer the land to Habitat for Humanity. This was the property they acquired at the last auction. This is the property down the street from the property they previously gave Habitat. Motion Board Member Penserga moved to approve. Vice Chair Hay seconded the motion. The motion passed unanimously. C. Consideration of Modifications to the Terms of the Homebuyer Assistance Program Grant Agreement between Ian and Tosi Rigby and the CRA Mr. Tack commented the Board had previously approved this award to the above for $50K for a new home at 717 NW 2nd Street. They have been in the home for 13 years. On January 6, 2020, they approved a sale and waived a promissory note if they would try to sell property to an income qualified buyer. On February 28th, the CRA received a letter for the CRA to consider a waiver or change to the promissory note to allow them to refinance the home without repayment of the entire principal balance and interest and use a small portion of the equity to pay debts, bills and outstanding obligations. Under the note, there were conditions that apply if they want to refinance the property. If they refinance, they have to repay the entire principal balance in full to the lender with 4% interest per annum calculated from the time of purchase of the property and if the CRA approved the refinance, the CRA will have to execute a subordination agreement. Under the terms of the subordination policy, the CRA does not support the owner using the equity for anything other than the house. If the purpose of the loan is home improvements or maintenance of the property, the property has to be inspected by a CRA staff member and a contract for the proposed repairs must be provided by the homeowner. The CRA will not subordinate its mortgage for owners attempting to attain a line of credit or consolidate debt as this will enable them to increase their debt for purposes other than home improvement. If the owner wants to refinance the first mortgage for a lower rate or shorter term, they can do so under certain conditions which he read. The individual has to own the home for 30 years. This is a legacy thing. Chair Grant requested the Board remove the second lien on the property so they can do what they like. Motion Vice Chair Hay so moved. Board Member Romelus seconded the motion. The motion passed unanimously. The Board forgave the principal and did not collect on the interest. D. Discussion and Consideration of a Consent and Funding Agreement between the CRA, the City of Boynton Beach, TD BANK, N.A., and Centennial Management Corp./Wells Landing Apartments, LLC for the MLK Jr. Boulevard Corridor Mixed Use Project 29 Meeting Minutes CRA Board Boynton Beach. Florida March 9, 2022 This item was addressed earlier in the meeting. E. Discussion and Consideration of a Subordination Agreement between the CRA, TD BANK, N.A., and Centennial Management Corp./Wells Landing Apartments, LLC for the MLK Jr. Boulevard Corridor Mixed Use Project This item was addressed earlier in the meeting. Ms. Shutt introduced new staff member Amanda Meyer, the Business Promotion and Marketing Coordinator. She has extensive experience in business analytics and graphic design in the private sector. She will help the CRA to promote businesses. The Board welcomed her. Board Member Romelus suggested staff put this under Announcements and Awards for new staff introductions. 18. Future Agenda Items 19. Adjournment Board Member Romelus thanked the staff and her colleagues for all they have done. There being no further business to discuss, Chair Grant adjourned the meeting at 10:56 p.m. Catherine Cherry Minutes Specialist 30