BOOK2 Page 1673 12/01/08 2:30 P.M. MINUTES OF THE SPECIAL SARASOTA COMMUNITY REDEVELOPMENT AGENCY MEETING OF DECEMBER 1, 2008 PRESENT: Chair Lou Ann R. Palmer, presiding, Vice Chair Ken Shelin, Members Fredd "Glossie" Atkins, Richard Clapp, and Kelly M. Kirschner, Executive Director Robert J. Bartolotta, Attorney Robert M. Fournier, and Secretary Billy E. Robinson ABSENT: None The meeting of the Community Redevelopment Agency (CRA) was called to order by Chair Palmer at 2:41 p.m. 1. APPROVAL RE: MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETING OF OCTOBER 20, 2008 (AGENDA ITEM CRA-1) Chair Palmer noted CRA consensus to approve the minutes of the Special Community Redevelopment Agency meeting of October 20, 2008. 2. APPOINTMENT RE: COMMUNITY REDEVELOPMENT AGENCY (CRA) ADVISORY BOARD (AGENDA ITEM CRA-2) Secretary Robinson stated that the Community Redevelopment Agency (CRA) Advisory Board has a vacancy due to the resignation of Carl Meyer who was serving in the seat with a requirement for a City resident; that the terms of Ronald McCollough and Lynn Robbins have expired; that Mr. McCollough and Ms. Robbins are eligible for and have expressed an interest in reappointment to the CRA Advisory Board. A motion was made by Vice Chair Shelin, seconded by Member Clapp, and carried by a 5-0 vote to reappoint Ronald McCollough and Lynn Robbins to the Community Redevelopment Agency Advisory Board. Chair Palmer opened the nominations. Vice Chair Shelin nominated Stephen Long for appointment. Member Clapp nominated Valerie Buchand for appointment. Mayor Palmer called for a vote on the nominations. Mr. Long received two votes: Palmer, yes; Shelin, yes. Ms. Buchand received three votes: Atkins, yes; Clapp, yes; Kirschner, yes. Mayor Palmer announced the reappointment of Ronald McCollough and Lynn Robbins and the appointment of Valerie Buchand to the CRA. Advisory Board. 3. APPROVAL RE: REQUEST BY THE NEWTOWN COMMUNITY REDEVELOPMENT AGENCY ADVISORY BOARD TO APPROPRIATE FUNDS TO TRAVEL TO EAST TAMPA TO MEET WITH TAMPA CRA REPRESENTATIVES AND TOUR THE AREA (AGENDA ITEM CRA-3) Neighborhood and Development Services Director Timothy Litchet came before the CRA, gave a presentation concerning allocating funds to allow the Newtown CRA Advisory Board Members to travel to East Tampa to meet with Tampa CRA Representatives and tour the Tampa Community Redevelopment Area, and stated that Staff is suggesting funds be allocated from Tax Increment Financing (TIF) funds; that the Mayor indicated in an electronic correspondence the willingness to allocate the funds from her Commission Travel Budget rather than from TIF funds; that the travel cost will be significantly less than the $1,000 being requested as a City vehicle will be used to travel. Mr. Litchet answered CRA members questions concerning the benefit of traveling to East Tampa and methods to lessen the expense to the City if the allocation of funds is approved. Chair Palmer stated that a member of the CRA should accompany the Newtown CRA Advisory Board Members on the trip to East Tampa. In response to a question by Member Clapp asking how the trip would be handled in accordance with Florida's Govemment-n.heSumaline Law as the trip would be considered a workshop, Secretary Robinson stated that an advisory board cannot have a meeting outside of the City; that the Newtown CRA Advisory Board should ensure the conversation does not reach the extent of recommendations being brought to the CRA for approval; that the public must be given an opportunity to travel with the Newtown CRA Advisory Board to East Tampa if notice is published; that he can work with Staff on organizing the trip. A motion was made by Member Kirschner, seconded by Member Atkins, and carried by a 5-0 vote to approve the allocation of funds up to a maximum of $1,000 to cover the expenses of the Newtown CRA Advisory Board traveling to East Tampa from Mayor Palmer's Commission Travel Budget. 4. REPORT RE: COMMUNITY REDEVELOPMENT AGENCY ADVISORY BOARD SPECIAL MEETING OF NOVEMBER 13, 2008 (AGENDA ITEM CRA-4) Chair Ronald McCollough, CRA Advisory Board, and Chief Planner Steve Stancel, Neighborhood and Development Services Department, came before the CRA. CRA Advisory Board Chair McCollough stated that the CRA Advisory Board was requested to review the requested made to the CRA by New York Times (NYT) Management Services at the October 20, 2008, CRA meeting; that the original request made to the CRA was amended by NYT Management Services at the November 13, 2008, CRA Advisory Board meeting by requesting authority to lease up to a maximum of 15,000 square feet and forego a pro rata share of the Tax Increment Financing (TIF) investment by the City in the coming years; that the CRA Advisory Board voted unanimously to recommend approval of the new proposal made by NYT Management Services. A motion was made by Vice Chair Shelin, seconded by Member Atkins, and carried by a 5-0 vote to receive the report of the November 13, 2008, CRA Advisory Board Special meeting. 5. APPROVAL RE: REQUEST FROM THE NEW YORK TIMES (NYT) MANAGEMENT SERVICES FOR RELEASE FROM RESTRICTION CONTAINED IN ARTICLE 13 OF THE AGREEMENT FOR REDEVELOPMENT OF PROPERTY (SARASOTA HERALD-TRIBUNE PROJECT) BETWEEN NYT MANAGEMENT SERVICES AND THE CRA OF THE CITY OF SARASOTA (AGENDA ITEM CRA-5) Chief Planner Steven Stancel, Neighborhood and Development Services Department, came before the CRA, gave a presentation concerning the proposal made by the New York Times (NYT) Management Services at the November 13, 2008, CRA Advisory Board Special meeting to release NYT Management Services from the restriction of Article 13 of the Agreement for Redevelopment of Property between the CRA and NYT Management Services (Agreement), and stated that the CRA Advisory Board recommends approval of the proposal. Finance Director Christopher Lyons, Financial Administration Department, came before the Commission and gave a presentation concerning the method used to calculate the rebate for CRA payments to NYT Management Services and the 20 percent reduction for each payment proposed by NYT Management Services and stated that the CRA should establish a maximum based on the actual rent collected BOOK2 Page 1674 12/01/08 2:30 P.M. BOOK2 Page 1675 12/01/08 2:30 P.M. compared to the total remaining months and square footage rented to prevent the City repaying up to $768,131 as originally calculated as the current balance owed is $588,482.33; that the amount reimbursed should be reduced commensurately based on rental payments received. Attorney Fournier stated for clarification that the portion of each annual payment credited must be deducted from the total amount due; that the proposal will be corrected to include the language in any amendment to the Agreement. Brenda Patten, Attorney, law firm of Kirk-Pinkerton, representing NYT Management Services, and Diane McFarlin, Publisher, Sarasota Herald-Tribune (Herald Tribune) Media Group, came before the Commission. Ms. Patten stated that Chair Palmer asked if the request by NYT Management Services would infringe on the sharing of facilities with the public as indicated in the original Agreement; that the sharing of the parking spaces, meeting space, lobby area, and outdoor plaza with the public will not be infringed; that the CRA will receive everything as agreed in the original Agreement; that Member Atkins asked if the Herald-Tribune facilities are being utilized as anticipated and if the public is actually participating; that the answer to both questions is yes; that the CRA Advisory Board unanimously approved the request based on the formula presented; that the modification to the formula proposed by Mr. Lyons has not been heard prior to the current meeting; that the Agreement does not list bringing a major employer to the Downtown area as a purpose as indicated by Member Kirschner but rather a purpose of bringing office development to the area among other purposes identified; that an opportunity to discuss the proposed modifications to the formula with the Applicant is requested. Chair Palmer stated that the CRA cannot take any action if additional time to discuss the proposed modifications to the formula is granted; that a special session of the CRA can be scheduled with the December 15, 2008, Regular Commission meeting to continue the discussion concerning the release from the restriction in Article 13 of the Agreement. Chair Palmer noted CRA consensus to schedule a special session of the CRA with the December 15, 2008, Regular Commission meeting. Ms. Patten stated that any leased space will not be eligible for CRA assistance; that the public will continue to receive 100 percent of the benefit under the Agreement. Ms. McFarlin requested permission to briefly discuss the proposed modifications to the formula prior to the conclusion of the special session as prompt CRA action is necessary and the Herald-Tribune must know how to proceed with the operations for 2009. Mr. Fournier stated that he did not hear Mr. Lyons request any modifications to the formula; that the formula appears acceptable; that he understood Mr. Lyons comments were to include language to indicate the new balance owed by the CRA if a decrease in payment results in a fiscal year. Chair Palmer stated that the CRA should adjourn and convene later at a Special December 15, 2008, CRA meeting if possible. Mr. Robinson stated that the CRA is able to recess and reconvene later in the Agenda if desired. Mr. Lyons stated for clarification that the payment to NYT Management Services would be less if a rebate is granted during a fiscal year; however, the balance would reflect a decrease by the amount of the original payment scheduled and not the actual payment made. Mr. Fournier stated that the clarification provided is what he understood and is acceptable. Ms. McFarlin gave a presentation concerning the history and process of the approval of the Agreement to prevent the Herald-Tribune from moving outside of the City limits and stated that the Herald-Tribune has reduced its total workforce by 200 employees including 100 employees who were employed in the Downtown office. The following people spoke: George Spector opposing the request of NYT Management Services for the release of the restriction in Article 13 of the Agreement and indicating his building located at 1800 Main Street has approximately a 25 percent vacancy rate, new development which does not compete with market-rate taxpayers should be encouraged in the Community Redevelopment Area, tenants will not be attracted to an area with a high vacancy rate, and taxpayers who pay real estate taxes are paying to subsidize a publicly traded company in the City of New York. Robert Hillier, representing Center Pointe Properties, inquiring how the market rate is determined for properties in the City and indicating a building in the Downtown area which is approximately three blocks away from Main Street has approximately 240,000 square feet of vacant space, property owners must pay real estate taxes regardless of the vacancy rate of the building, and the Applicant should comply with the original written Agreement. In response to a question by Member Kirschner asking if the 15,000 square feet of requested rental space includes the square footage occupied by SNN as he read a recent article concerning the sale of SNN, Ms. McFarlin stated that NYT Management Services is not in the development business; that NYT Management Services is a media company which is attempting to retain as many employees as possible to provide coverage to the community as desired by the citizens; that SNN will remain in its current location as an Agreement between NYT Management Services and SNN is being negotiated. In response to a question by Member Kirschner asking if SNN will remain as a part of the NYT Management Services group, Ms. McFarlin stated no; that SNN will be owned by LDB Media if an agreement is reached. Ms. Patten stated that Article 13 of the Agreement indicates the site would be used as an office building by the Herald-Tribune or any affiliated business which may include SNN; that SNN will continue to be an affiliated business with the Herald-Tribune even though owned by a different entity; therefore, SNN would remain a party with rights to occupy the building. Member Kirschner stated that a major concern is the rental portion of the building as SNN may decide to join Comcast Cablevision of West Florida, Inc. (Comcast), in going east of Interstate 75 as has been reported as the rent is less; that Article 2, Purpose, Findings, and Intent, of the Agreement indicates completion and operation of the project is contemplated, ultimately enhancing the quality of life and increasing employment in the Downtown which was a key point in the Commission's approval of the Agreement. In response to a question by Vice Chair Shelin asking if the 15,000 square feet figure should be made flexible in case a second staff reduction is necessary, Ms. McFarlin stated that it would be wise to do SO. In response to a question by Chair Palmer asking if NYT Management Services will make another request in the future if the Agreement is changed to allow the 15,000 square feet with the 20 percent reduction, Ms. McFarlin stated that maybe it is wise to leave the square footage open-ended. Member Clapp stated that the square footage for rental space should be limited to 15,000 square feet. A motion was made by' Vice Chair Shelin and seconded by Member Kirschner to approve the request of New York Times Management Services to allow the leasing of up to 15,000 square feet of office space BOOK2 Page 1676 12/01/08 2:30 P.M. BOOK2 Page 1677 12/01/08 2:30 P.M. with the condition the Community Redevelopment Agency payments will be reduced and prorated based on the amount of square footage and the number of months the space is leased annually. In response to a question by Member Kirschner asking how the leases and rental rates will be monitored, Mr. Fournier stated that a condition related to charging rent at the market rate has not been heard; that the City will know when a tenant occupies the facilities as the CRA payment to NYT Management Services would be prorated according the number of months occupied in a fiscal year and the amount of space occupied by the tenant; that language requiring the submission of copies of the leases would have to be added to the document which will be executed by the CRA Chair; that a method to circumvent the submission of the copies of leases would be to approve a flat 20 percent reduction in the payments. A motion was made by Member Kirschner to amend the motion by approving a 20.83 percent reduction from the $588,482.33 sO the submission of the copies of leases would not be required, which died for lack of a second. AI motion was made by Chair Palmer, who passed the gavel, seconded by Member Kirschner and carried by a 5-0 vote to amend the motion to allow the proposed change in the Agreement for Redevelopment of Property with New York Times (NYT) Management Services (Agreement) to provide NYT Management Services the opportunity to lease up to 15,000 square feet of office space in the building with a 20.83 percent reduction up to 2016 based on the amount of leased space in the payment from the Tax Increment Financing (TIF) fund to New York Times Management Services as provided in the Agreement through the life of the Community Redevelopment Area. Chair Palmer called for a vote on the motion to approve the request of New York Times (NYT) Management Services to allow the leasing of up to 15,000 square feet of office space with the condition of reducing and prorating the Community Redevelopment Agency payments based on the amount of square footage and the number of months the space is leased annually including a limitation of 20.83 percent reduction through the life of the Community Redevelopment Area up to 2016, which carried by a 3-2 vote with Members Atkins and Kirschner voting no. 6. ADJOURN Chair Palmer adjourned the meeting at 3:47 p.m. Lou ANN R. PALMER, CHAIR ATTEST: BLE 7 ae BILLYE ROBINSON, SECRETARY