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Minutes 06-07-22 Community Redevelopment Agency Special Board Meeting Tuesday, June 7, 2022 - 5:00 PM GoToWebinar Online Meeting and City Hall Chambers, 100 E. Ocean Avenue PRESENT: Ty Penserga, Chair Thuy Shutt, Executive Director Angela Cruz, Vice Chair Timothy Tack, Assistant Director Woodrow Hay, Commissioner Kathryn Rossmell, Board Counsel Thomas Turkin, Commissioner Aimee Kelley, Commissioner 1. Call to Order Chair Penserga called the meeting to Order at 5:04 p.m. 2. Invocation Board Member Hay gave the invocation. 3. Pledge of Allegiance Board Member Turkin led the Pledge of Allegiance to the Flag. 4. Roll Call Deputy City Clerk Stanzione called the roll. A quorum was present. 5. Agenda Approval A. Additions, Deletions, Corrections to the Agenda B. Adoption of Agenda Motion Board Member Hay moved to approve the agenda. Board Member Turkin seconded the motion. The motion passed unanimously. 6. Legal None. Meeting Minutes Special CRA Board meeting Boynton Beach, Florida June 7, 2022 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 Chair Penserga disclosed that he met with Affiliated Principals, Jeff Burns, Nick Rojo and their Counsel, Michael Weiner. Board Member Kelley disclosed that she spoke with Jeff Burns. Board Member Turkin disclosed that he spoke with Nick Rojo. Vice Chair Cruz disclosed that she spoke with both Jeff Burns and Nick Rojo. Board Member Hay had no disclosures to make. 8. Public Comments Chair Penserga opened Public Comments. No one came forward, Public Comments was closed. 9. Old Business A. Discussion and Approval of the Purchase and Development Agreement, the Tax Increment Revenue Funding Agreement (TIRFA), and the Parking Lease Agreement between the CRA and Affiliated Development, LLC for the 115 N. Federal Hwy Infill Mixed Use Redevelopment Project. Thuy Shutt, Executive Director, summarized that at the March 9th meeting, the prior Board asked staff to reevaluate the terms and conditions, and on April 12th, the Board asked for additional time to become acquainted with the project. She stated that on May 10th, the Board met and several concessions were made by the developers regarding affordable units and how long they would remain affordable, and in return, TIF was capped at$7M to supplement that. She commented that the 150 parking spaces, required by the RFP/RFQ, is above what is required by the project, and at the May 10th meeting, the Board directed those spaces to be used in the parking calculations for the project. She said that to-date, those three agreements have been negotiated and materially agreed on, which is in the revised document, and there are three remaining outstanding items from the May 10th meeting. Ms. Shutt noted that there is an associated maintenance and operations costs because the CRA will be leasing the spaces from Affiliated, which they will be building as part of the cost of the land, which is $5.515M. She said that staff feels that if those spaces were to be counted towards the parking count for the project, the operational costs should be subtracted, because the CRA should not be paying for the spaces they are using. She stated that since the spaces are required by the RFP, 2 Meeting Minutes Special CRA Board meeting Boynton Beach, Florida June 7, 2022 staff requested that the Board waive the requirements or inconsistencies with the RFP/RFQ, which is already incorporated in the motion. She explained the timeline for the project, and the requirements in the agreement. She requested that if the Board wanted to do this in less time, it be done during the budget process. She explained that the CRA will receive TIF information in late June, which is used in the budget planning process, and they do not know the amount, but that if is similar to last year, they would be close to having a deficit. She further explained that in order for the CRA to not be in default and be unable to turn the land over to the developer when they close, they may need an extension from Affiliated. She advised that the City Commission needs to approve the disposition of the land because it is below fair market value, and they need to approve a parking lease agreement because it is a tri-partied agreement. She noted items 4 A, 5 A and 7 B are the latest agreements negotiated between staff, legal counsel and the developer. She reviewed the three options contained in the agenda item. Kathryn Rossmell, Board Counsel, explained the closing process and the need to possibly extend the closing, to satisfy the mortgage. She stated that staff believes it can be accomplished no later than December 2024. She noted that in regards to the parking, it is staff's position that for any spaces the developer uses to meet Code, staff should not pay operation and maintenance on because the developer would have been required to pay for them anyway. She explained that another option is to put a cap on the number of spaces the developer could use towards meeting Code, and she provided an example. She noted that there are two minor errors she wanted to correct: she clarified that Affiliated can adjust their site plan to increase their residential units or commercial square footage without coming back to the Board; and the other is to clarify language pertaining to if the CRA, with the consent of the developer, enters into leases that extend past closing, they will turn over those leases to the developer. Jeff Burns, Affiliated Development, discussed the timeline, and explained that they structured their agreement to move as quickly as they can, and to have checks and balances to do so. He suggested that it should be discussed during this meeting and with the budget. He explained in regard to parking, that they are meeting the provisions of the RFP/RFQ and are providing 150 parking spaces in addition to what is required for the residential and commercial components. He further explained that per their lease, they have no rights to those spaces, and what is being proposed is if they had a tenant that required an extra few spaces, they would look to the parking lease to accommodate the tenant and it would be reasonable to pay the operating expenses for those spaces. Mr. Burns stated that he was not comfortable having a cap, because they do not know what it will be and it is generally done during the site plan approval. Chair Penserga commented that the fourth item needs to be addressed at the City Commission level. He stated that the parking has to do with Code, and that is the role of the City and they will go with that process. He asked the applicant if there is a discrepancy and the Code requires them to use some of the CRA's 150 parking spaces, if they are willing to cover the operation and maintenance of those spaces. 3 Meeting Minutes Special CRA Board meeting Boynton Beach, Florida June 7, 2022 Mr. Burns responded they would. Attorney Rossmell asked if they would be subtracting those spaces from the 150 that the CRA has access to. Mr. Burns responded it was. Attorney Rossmell clarified that in the event Affiliated determines that they need additional parking spaces, they can approach the CRA and pay the operation and maintenance on those spaces, and they would no longer be public parking spaces. She stated that this is different than what staff is proposing, which is for the difference in the number of spaces between what the Code requires and what Affiliated feels are needed. She mentioned that they pay the operation and maintenance on the spaces, regardless of if they are used. Mr. Burns explained that they have a lease agreement, and if they feel that they need more spaces, they have to appear before the Board and amend the agreement. He explained that their bank will not allow them to under park commercial space, and he was confident that the parking would exceed the Code requirements. He stated that if the CRA approved for Affiliated to "take back" 10 of those spaces, the CRA would no longer own them. Board Member Kelley stated that she was comfortable with if the applicant using some of CRA's spaces as long as the CRA would not be responsible for them anymore. Vice Chair Cruz and Board Member Turkin also agreed. Board Member Hay reluctantly agreed, but asked if Affiliated needed additional spaces from the CRA, and there was an event, if the public could use those 10 spaces. Mr. Burns commented he thought there would be more than enough parking, but that he was fine with coming back to the Board. Vice Chair Cruz noted that the next paragraph was significant, which she read, pertaining to the maintenance costs. Mr. Burns explained that the paragraph pertains to any operating expenses in that parking garage, over a certain dollar amount, would be covered by Affiliated. He noted that the CRA can generate significant revenue from those spaces and is agreeing to pay its pro rata share of operating expenses associated with maintaining a garage. He stated that they agreed to negotiate with the City and CRA to cap that, so that in the event their expenses get out of hand, the CRA is capped at a certain amount of exposure. 4 Meeting Minutes Special CRA Board meeting Boynton Beach, Florida June 7, 2022 Vice Chair Cruz noted the contract says the cost could be up to $50 per space, per month, and she supported lowering the $50 per month cap. Mr. Burns explained how they developed the cost per space, and it is possible to reduce it, but he was not comfortable reducing it right now, as the project needs to be underwritten by their lender. He summarized that the agreement has deadlines, not timelines, and they are in place to ensure that the project moves along expeditiously and the timeline is as fast as they can. Board Member Hay commented that he did not support a project that would take nine years and supported four to five years. Mr. Burns explained depending on timing and on permitting, they may be able to get the permits, close at the end of next year and it is not unreasonable that they could break ground at the end of next year. He reviewed timelines of other projects similar to this project, and anticipated completion, in a best-case scenario, in fall/winter 2023. Attorney Rossmell explained that the contract allows for them to take up to 9.5 years from now, which is not a problem, but the only thing binding is the contract. There was discussion regarding extending the closing deadline, and CRA funding being addressed at the budget workshop. Mr. Burns explained that the reason for timeframes is because they are investing millions of dollars to get the project going, and they need to be given every opportunity to do so, and that they act as fiduciaries. Board Member Turkin did not want an extension to kill the project. He stated that he and Board Member Hay agreed that the issue should be discussed at the budget hearings. Vice Chair Cruz also agreed, but hoped it would be without the need for an extension and pointed out that it would depend on the public need at the time. Attorney Rossmell requested clarification and stated if Affiliated asks for the 150 spaces from the CRA, and it comes back to the Board, will the Board have absolute authority to approve or deny it. Mr. Burns was fine with approval or denial at the full authority of the Board, depending on the need at the time. Attorney Rossmell further recapped the discussion as follows: the provision regarding 9.5 years to complete construction in the contract will remain unchanged; the CRA will pay operation and maintenance on all 150 spaces and there will be no cap on the number of spaces that Affiliated can use, to meet Code requirements; if Affiliated would like to dip 5 Meeting Minutes Special CRA Board meeting Boynton Beach, Florida June 7, 2022 into the CRA spaces, they have to appear before the Board, and the CRA can approve or deny the request in their sole and absolute discretion, and for any spaces taken over by Affiliated, they will also assume maintenance and operation of those spaces; the CRA will retain the right to use those spaces for events in a form to be worked out; as to the Section 9.6 of the Purchase and Development Agreement, it will be amended and she will change the word Sellers to Purchasers to make it clear which type of leases can be handed to the developer on closing; and in Section 3.1 of the TERFA, they will make clear that Affiliated can increase the number of units or square footage without further CRA approval, but would require CRA approval if they decreased the number of units or square footage, and the agreement will not include a closing date extension that is available to the CRA. There was Board consensus on Attorney Rossmell's recap. Vice Chair Cruz asked if they were discussing the maintenance cost cap or not. Brief discussion followed, and an example was given that West Palm Beach and Delray Beach pay $100 and $300 a month respectively. There was Board consensus that the $50 per month will remain unchanged. Chair Penserga opened public comments. An unidentified man commented on the space that is supposed to be for a parking structure next to City Hall, and suggested a property exchange. Mr. Katz was online and was unable to speak. Chair Penserga closed public comments. Chair Penserga asked for a motion to approve the Purchase and Development Agreement, the TERFA Agreement and Parking Lease agreements as presented, waiving any inconsistencies with the public RFP/RFQ, and authorizing the Board Chair to execute the agreement subject to final legal review and consistent with the direction given by the Board tonight, as stated by legal counsel. Motion Vice Chair Cruz so moved. Board Member Kelley seconded the motion. The motion passed unanimously. 10. Adjournment 6 Meeting Minutes Special CRA Board meeting Boynton Beach, Florida June 7, 2022 Motion Vice Chair Cruz moved to adjourn the meeting. Board Member Hay seconded the motion. The motion passed unanimously. The meeting was adjourned at 6:04 p.m. dj,-U&Wy�—dy14"', Catherine Cherry Minutes Specialist 7