BOOK 2 Page 1186 04/08/02 6:00 P.M. MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETING OF APRIL 8, 2002, AT 3:00 P.M. PRESENT: : Chair Carolyn J. Mason, Vice Chair Mary J. Quillin, Members Richard F. Martin and Mary Anne Servian, City Manager Michael A. McNees, Secretary Billy E. Robinson, and City Attorney Richard J. Taylor ABSENT: : Member Lou Ann R. Palmer PRESIDING: Chair Mason Chairman Mason called the meeting of the Community Redevelopment Agency (CRA) to order at 3:10 p.m. Secretary Robinson gave the Invocation followed by the Pledge of Allegiance. 1. APPROVAL RE: MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETINGS OF FEBRUARY 12, 2002, AND FEBRUARY 22, 2002 APPROVED (AGENDA ITEMS I AND II) CD 3:11 through 3:11 Chair Mason asked if the CRA had any changes to the minutes? Chair Mason stated that hearing no changes, the minutes of the February 12 and 22, 2002, Special meetings of the CRA are approved by unanimous consent. 2. APPROVAL RE: AUTHORIZE STAFF TO DEVELOP A SECOND AMENDMENT TO THE AGREEMENT FOR DISPOSITION AND DEVELOPMENT OF THE PALM WALK PROPERTY - TERMINATED THE AGREEMENT FOR THE DISPOSITION AND DEVELOPMENT OF PROPERTY FOR THE PALM WALK PROJECT (AGENDA ITEM III) CD 3:11 through 3:41 Karen Hartman, Director of Downtown Redevelopment, Department of Redevelopment and Development Services, came before the CRA, displayed a document on the Chambers monitor indicating the Palm Walk Project and stated that at its February 12, 2002, CRA meeting, the CRA approved the First Amendment to the Agreement for Disposition and Development of Property (Agreement) between the City, the CRA, and the Palm Walk Group, L.L.L.P. (Palm Walk) i that the original proposal for the Palm Walk Project included 72 residential dwelling units, 72 high quality, boutique hotel rooms, and 90,000 square feet of office, retail, boutique hotel rooms, and 90,000 square feet of office, retail, and restaurant floor area including a possible theater and club/banquet facility; that additionally, the initial proposal included a provision for off-street parking and a centralized system of refuse collection along the alley and storefronts abutting Main Street; that the initial proposal was dependent upon the conveyance of approximately 2.25. acres of City-owned land in exchange for the provision of a total of 450 public parking spaces and a share of the net operating income from 375 of the 450 public parking spaces for the first 20 years. Ms. Hartman continued that on December 1, 2001, the developer failed to submit a schematic design, development, and conceptual plan to the CRA as required by the Agreement; therefore, a written notice was provided to Palm Walk on December 28, 2001, for failure to submit the mentioned plans; that a compliance period of 60 days was provided to Palm Walk; that at the February 12, 2002, Special CRA meeting, the CRA discussed varied issues inclusive of the Community Development Block Grant (CDBG), Tax Increment Financing (TIF), and impact fees to fund the project; that the total public funding request was $6.7 million; that CRA approved Staff to prepare the Agreement to extend the timeframe for submission of the development plans. Ms. Hartman further stated that on February 22, 2002, the CRA approved the First Amendment to the Agreement which was executed by the Palm Walk; however, the Amendment has been altered by Palm Walk; that the alteration to the Amendment resulted in the following changes: 1. 68 residential units 2. 60 high quality, boutique hotel rooms 3. 86,137 square feet of office, retail, and restaurant Michael Connolly, Attorney, City Attorney's Office, came before the CRA and stated that on February 22, 2002, the CRA approved the First Amendment to the Agreement after discussion at the February 12 and February 22, 2002, Special CRA meetings; that the Amendment was mailed from the Office of the City Auditor and Clerk to the developer on February 26, 2002, for execution by Palm Walk. Attorney Connolly distributed a letter dated April 3, 2002, from David Band, law firm of Abel, Band, Russell, Collier, Pitchford & Gordon, and Partner, Palm Walk Group, L.L.L.C., to the City Manager regarding the Palm Walk Project and stated that the returned signed Amendment had significant modifications; that BOOK 2 Page 1187 04/08/02 6:00 P.M. BOOK 2 Page 1188 04/08/02 6:00 P.M. the Amendment is null and void as the document signed and returned to the City Auditor and Clerk is not consistent with the terms approved by the CRA; that the CRA could decide to amend the Agreement based on terms and conditions provided by the developer or decide the default notice signed by the City Manager on December 28, 2001, controls and terminates the contract. Vice Chair Quillin asked if the City and Palm Walk have returned to the negotiation stage which occurred in February 2002? Attorney Connolly stated yes. Vice Chair Quillin stated that the cure period has expired. Attorney Connolly stated that is correct; that the cure period was 60 days; that the date of notice was December 28, 2001; that the 60 days expired at the beginning of March 2002. Vice Chair Quillin stated that receiving a copy of the April 3, 2002, letter would be appreciated. Attorney Connolly stated that copies will be provided. Vice Chair Quillin stated that the CRA approved and signed the Agreement. Attorney Connolly stated that the Agreement had not yet been signed by the Secretary and the Chair of the CRA; that the execution procedure is to send duplicate originals to the Office of the City Auditor and Clerk which forwarded the duplicate originals to Palm Walk; that Palm Walk would have been required to sign the Agreement first; that the Chair and Secretary of the CRA would then sign the Agreement. Vice Chair Quillin asked the date the Agreement was sent to Palm Walk? Attorney Connolly stated that the Agreement was sent to Palm Walk on February 26, 2002. Vice Chair Quillin asked the date the Agreement was returned with modifications? Attorney Connolly stated that the Agreement with modifications was received by the City Attorney's Office on April 5, 2002; that the Office of the City Auditor and Clerk sent the signed Agreement as modified with a cover letter dated April 4, 2002, to the City Attorney's Office; that the letter from Palm Walk is dated April 3, 2002; that the exact date of receipt of the Agreement as modified is not known. Vice Chair Quillin stated that the CRA extended the Agreement 45 days to accommodate the City and Staff and not the developer; that returning the Agreement after the extension date of 45 days is unacceptable. Secretary Robinson distributed the April 3, 2002, letter from Palm Walk to the CRA members. Member Servian asked the scope of the modifications to the Amendment? Attorney Connolly stated that three modifications to the Agreement were made, which in the opinion of the City Attorney's Office are significantly different than the originally approved Amendment; that the Amendment document provided by Staff on the recommendation of the CRA indicated the following: . the documents to be provided by the developer are the documents deemed necessary by Staff to investigate the appropriateness of the project... Attorney Connolly continued that the first modification by Palm Walk to the Amendment is: the developer at his discretion agrees to provide Staff... Attorney Connolly further stated that the second modification is removal of the requirement to provide financial documentation the CRA requested; that the financial documentation was relevant since the developer indicated a desire to utilize public financing for Palm Walk; that the request for public financing has been subsequently withdrawn; that the CRA also indicated a desire to assure the developer is financially capable of completing the development project prior to closing if City property is sold. Attorney Connolly stated further that the third modification concerns the parking spaces; that the CRA previously requested a BOOK 2 Page 1189 04/08/02 6:00 P.M. BOOK 2 Page 1190 04/08/02 6:00 P.M. study regarding the viability of shared parking concepts in determining the number of parking spaces the Zoning Code (1998 ed.) would require for the project; that the language in the Agreement with Palm Walk approved by the CRA is: all documents and information necessary to establish the necessary number of parking spaces for the Project. Attorney Connolly stated that the language modification to the Agreement by Palm Walk is: the number of parking spaces designed by the developer. Attorney Connolly continued that the language modification indicates the CRA will only be provided the documents deemed necessary by Palm Walk. Member Servian asked if the developer is unwilling to provide documentation regarding the financial viability of developing the Palm Walk project? Attorney Connolly stated that the language Palm Walk wished to remove from the Amendment is: said staff documents with regard to all financial issues regarding the operation of the Project and regarding the financing of the Project... Attorney Connolly continued that documents regarding the financing of the project are irrelevant since the developer withdrew the request for City assistance with financing; however, documents regarding the financial ability of Palm Walk to complete the Palm Walk Project are relevant to the Agreement as a condition precedent to closing on the contract for sale of the city-owned property. Vice Chair Quillin stated that financial viability was a concern during developer selection; that some developers were not able to provide assurance of financial viability during the presentations at the Request for Proposal (RFP) process. On motion of Vice Chair Quillin and second of Member Servian, it was moved to terminate the Agreement for the Deposition and Development of Property for the Palm Walk Project. Vice Chair Quillin stated that the Palm Walk Project has been eagerly anticipated; however, further evaluation of the Palm Walk Project is required; that the community may be better served if the property is developed by the City for public parking; that the modifications to the Agreement are displeasing. City Manager McNees stated that the modifications by Palm Walk were not necessarily arbitrary; that the issue of financing through public funding was discussed with Palm Walk and discarded; that some financial disclosures requested in the Amendment are therefore no longer necessary; however, the CRA must decide if Palm Walk went beyond the parameters set by the CRA; that discussion regarding the amount of parking revenue revealed the accounting involved may be more trouble over time than would be worthwhile to the City; that the modifications provided by Palm Walk may have been pursuant to conversations with Staff. Vice Chair Quillin stated that Staff has kept the CRA well informed; that the modifications to the Amendment changes the intent of the CRA's 45-day extension for Palm Walk; that the City should be assured Palm Walk has the financial resources necessary to complete the Palm Walk Project; that the CRA and Staff have not received any assurance of adequate financial resources to complete the Palm Walk Project; that financial data regarding the planned shared parking spaces has not been received. Member Servian stated that Palm Walk has strayed from the original intent of the Palm Walk Project which is a major concern; that the planned intensity is creating some of the problem; that the developer approached the City regarding conduit financing; that the developer never requested a loan or other funding assistance from the City; that the developer should discontinue the Palm Walk Project if the requests in the original agreement are not met. Member Martin stated that an analysis of the shared parking was conducted by Tindale Oliver and Associates, Inc. (Tindale Oliver) i and asked if Palm Walk has responded to the issues presented in the analysis? BOOK 2 Page 1191 04/08/02 6:00 P.M. BOOK 2 Page 1192 04/08/02 6:00 P.M. Ms. Hartman stated that a one-page document summary of the Tindale Oliver analysis by Palm Walk was received just prior to the current meeting; that Palm Walk created another deck to the parking facility on the site plan originally submitted to the City to accommodate the shortfall of 40 parking spaces; that a new site plan was provided to Staff on April 6, 2002; that Staff has attempted to evaluate the information provided in the site plan; that the one-page document summarizes required parking including the 450 public parking spaces which are the objective of the Agreement; that Palm Walk can better explain the one-page summary document at this time due to the document's late receipt. Member Martin stated that part of the frustration is the documentation which has not been available for Staff and CRA review prior to the current meeting; that Duany Plater-Zyberk & Company (DPZ) was requested by Staff to review the site plan and proposal for the Palm Walk Project; that DPZ provided suggestions to Staff; and asked if Palm Walk will comply with the suggestions of DPZ by altering the Project. Ms. Hartman stated that the street-level accommodation to create the urban atmosphere and the shallow arcade concerns have been considered by Palm Walk; that the suggestion to orient the condominium units at a 45 degree angle to the street frontage to achieve better views is also under consideration. Member Martin asked if a bank or financial lender has provided documentation indicating Palm Walk has permanent lending status? Ms. Hartman distributed a letter dated April 4, 2002, from Susan Brown, Senior Vice President of Commercial Real Estate, SunTrust Bank, Gulf Coast, (SunTrust) to David Band and Dr. Mark Kauffman, representing Palm Walk, indicating financing availability for the Palm Walk Project. Member Martin stated that the April 4, 2002, letter is not a commitment of lending; that SunTrust is only indicating a desire to further discuss the Palm Walk Project; and asked if an agreement between Palm Walk and the Sarasota Opera House regarding the easement issue has been reached? Attorney Connolly stated that an initial draft of an agreement between Palm Walk and the Sarasota Opera House has been reviewed; that Staff is of the opinion the CRA would have no issues with the agreement; that some language modifications which would not affect the intent of the agreement would be necessary; that progress is being made; however, no signed agreement has been received. Member Martin asked if the agreement between Palm Walk and the Sarasota Opera House is acceptable? Attorney Connolly stated that the agreement is a draft of the easement documentation prepared by the attorney for the Sarasota Opera House and is acceptable to the Palm Walk attorney; that the concept is acceptable to City Staff; however, some language concerning the previous easement agreement requires modification. Chair Mason stated that the modifications to the Amendment are a concern; that the reason for the modifications to the Amendment are unknown; that the modifications are inconsistent with the CRA's wishes expressed at the February 22, 2002, CRA Special meeting; that the Palm Walk Project was an exciting proposal as initially presented; that the City was eager to make the Palm Walk Project work. Chair Mason called for a vote on the motion to terminate the Agreement for Deposition and Development of Property for the Palm Walk Project. Motion carried unanimously (4 to 0) : Martin, yes; Quillin, yes; Servian, yes; Mason, yes. 3. PRESENTATION AND DISCUSSION RE: REAL ESTATE RESEARCH CONSULTANT'; S FINAL REPORT REGARDING THE PROPOSED PROJECT INCLUDING A 26,000-SQUARE- - FOOT WHOLE FOODS MARKET, 4,000 SQUARE FEET OF RETAIL WITH A CAFE AND 180 RENTAL UNITS AT THE LOCATION OF RINGLING BOULEVARD AND OSPREY AVENUE (AGENDA ITEM IV) CD 3:41 through 4:14 Karen Hartman, Director of Downtown Redevelopment, Department of Redevelopment and Development Services, came before the CRA and BOOK 2 Page 1193 04/08/02 6:00 P.M. BOOK 2 Page 1194 04/08/02 6:00 P.M. stated that the CRA authorized Staff to retain the services of Real Estate Research Consultants (RERC) to explore a proposed project which includes a 2,000-square-foote Whole Foods Market containing 4,000 square feet of retail with a café and 180 rental units at Ringling Boulevard and Osprey Avenue; that the scope and location of the original proposed project has changed since presented to Staff; however, the findings contained in the report address service demand implications of moving the concept to alternative locations in the Downtown area. William Owen, CRE, President, and David Darcy, Vice President, Real Estate Research Consultants (RERC), came before the CRA. Mr. Owen stated that presenting the findings of the analysis of the proposed project to the CRA is pleasing; that the analysis was initially performed for the originally proposed location of Ringling Boulevard, Main Street, and Osprey Avenue; however, a permanent location has not been decided; that the information prepared will be helpful in evaluating similar future proposals; that the analysis has been prepared in two sections; that the first section addresses the market opportunity for rental apartment development in the Downtown area; that the second section addresses the opportunities to support the Whole Foods Market; that the market analysis for rental apartment development has been generalized sO the research is applicable to other locations beyond the Ringling Boulevard and Osprey Avenue site. Mr. Darcy stated that the objective of the assignment was to determine the market demand for a proposed Whole Foods Market and rental apartments in the Downtown area to include the following: 1. A 25,000- to 30,000-square-foot Whole Foods Market 2. 180 rental apartments above the retail space 3. 4,000 square feet of supporting retail space Mr. Darcy continued that RERC was also requested to provide illustrative examples of potential public incentives to entice private development within specific areas; that the process utilized to determine the potential of the proposed project was to: 1. Meet with Staff to confirm goals, expectations, and needs 2. Evaluate historic demographic trends and patterns locally and regionally 3. Conduct site analysis 4. Identify and profile competitive and comparable food stores and rental apartments 5. Determine implications for Downtown 6. Comment on alternative development sites in the Downtown area 7. Create illustrative examples of public development incentives based on experience of other communities Mr. Darcy further stated that the site initially analyzed was at Ringling Boulevard, Main Street and Osprey Avenue on two acres of land, the majority of which is currently vacant; that storefronts along Main Street could become part of the site if the developer chooses; that the site is in an excellent location due to the activity level of the area, would complement the other uses along Main Street, and is within walking distance of the Hollywood 20 Theater; that Five Points is four to five blocks to the west; that the Palm Avenue retail area and the Sarasota Quay on US 41 are also in close proximity; that the nearby employment centers should enhance the potential success of the project; that access to the site is convenient from Main Street, Fruitville Road, US 301, and US 41; that the site has good visibility from both Main Street and Ringling Boulevard. Mr. Darcy continued that the 25,000- to 30,000-square-foot Whole Foods Market would occupy the ground floor of the proposed project; that a small amount of supporting retail space would also be located on the ground floor; that a total of 180 rental apartments would be located in approximately five stories above the retail section; that the majority of the rental apartments would be one- and two-bedroom units which are common in urban settings; that the average rental apartment size would be approximately 1,063 square feet; that the average rental cost would be approximately $1.06 per square foot, which is slightly higher than other comparable products; however, rents are almost always higher for a Downtown rental apartment than one in the suburbs. Mr. Darcy further stated that a rental apartment complex analysis for the entire County was performed; that 5,000 rental BOOK 2 Page 1195 04/08/02 6:00 P.M. BOOK 2 Page 1196 04/08/02 6:00 P.M. apartments have been added to the County since 1990; that the rental apartment growth is just under 6 percent per year; that County rental apartment development is growing faster than the State average which was just under 4 percent per year; that much of the rental apartment development has occurred since 1998; that the occupancy rate of rental apartments has only changed within the range of one to two percent in the last five to six years; that the occupancy rate for rental apartments is approximately 97 percent; that the cost of rental rates has risen at a rate of approximately 3 percent per year over the last five to six years which is a strong growth rate. Mr. Darcy continued that RERC profiled 17 rental apartment projects in several market areas in the County totaling 4,400 units or approximately 40 percent of the total rental apartment market; that no comparable rental apartment projects are located within the Downtown core sO the analysis was expanded to include Interstate ()-75/University Parkway, I-75/Fruitville Road, and apartments located near Downtown; that the data provided information regarding current market conditions at complexes of various ages and location. Mr. Darcy further stated that the analysis indicated new apartments are not being built in the heart of Downtown Sarasota due to the relatively high land cost compared to suburban property; that the Downtown area has a significant number of residents living in condominiums; that the rental apartment product is high-rise and upper-end; that rents generally range from $1,500 to $2,500 per month; that approximately 200 to 400 rental condominiums are located in the Downtown area; that the majority of rental condominiums are leased sO very little rental product is available; that rental condominiums are generally much more expensive than the proposed project's rental apartments; that urban rental products are generally less available than suburban rental products; that consumers pay a higher price per square foot to live in a Downtown environment; that the price difference is not significant enough to hamper the proposed project's rental aparcments; that average income levels in the area should be high enough to make the proposed project's rental apartments affordable to a significant percentage of the population. Mr. Darcy continued that RERC expects the proposed project's rental apartments will compete effectively in the area market and could be fully leased in a 9- to 12-month period; that demand estimates for the proposed project could also be applied to other locations in the Downtown core if similar in visibility and access to the amenities and employment activities in the Downtown area. Mr. Darcy further stated that RERC utilized a proprietary retail model to estimate demand for a food/grocery store in the area of a three- to five-mile radius; that most of the comparable retail stores were in the three-mile radius; that 21 grocery stores were analyzed; that health food stores were also analyzed for competitiveness but did not compete well with the Whole Foods Market, which would be larger and a step above the grocery stores found locally; that the analysis indicates a demand for a grocery store in the defined market; that demand levels could accommodate a traditional grocery store or a Whole Foods concept; that Whole Foods is still proceeding with an independent market analysis but has not reached a final conclusion to enter the Sarasota market. Mr. Darcy continued that RERC believes the Whole Foods Market is a good concept for Downtown; that the Whole Foods Market product is differentiated from a standard grocery store and fits well with the upscale image the Downtown would like to enhance; that other sites in Downtown could accommodate a grocery store concept; that access, visibility on major street frontage, and a location proximate to the demand levels of employment or activity centers should be similar. Mr. Darcy further stated that the analysis also focused on property taxes; that RERC assumes the property tax revenues could be refunded in some manner to developers to reduce effective land costs; that three time periods for property tax payback are: Payback Period Supportive Incentives Short-Term 5 Years $4,500/Unit Mid-Term 10 Years $9,000/Unit Long-Term 15 Years $13,500/Unit Mr. Darcy continued that the illustration assumes land costs of $25 per square foot, development costs of $125,000 per unit, density as proposed by the developer, and current tax millage rates; that between 5 to 10 years of benefits will subsidize costs to approximate suburban levels; that 10 to 15 years of benefits would completely underwrite land costs; that the City BOOK 2 Page 1197 04/08/02 6:00 P.M. BOOK 2 Page 1198 04/08/02 6:00 P.M. could require the developer to meet certain conditions for eligibility for public incentives such as: 1. Establishment of minimum equity contributions 2. Establishment of a timeframe for developer fee payments based upon certain project leasing milestones 3. Payment of a nominal fee of the amount provided as incentives to cover City administrative expenses Mr. Darcy further stated that the increase in property tax revenue generated by the project will provide the primary and largest source of public incentives; that a public incentive plan was implemented in Orlando, Florida, and helped stimulate the development of 1,500 apartment complexes in Downtown Orlando. Vice Chair Quillin asked if the apartment complexes developed in Orlando are in a Tax Increment Financing (TIF) District? Mr. Darcy stated yes. Vice Chair Quillin stated that the understanding is refunding development costs through tax incentives is difficult. Ms. Hartman stated that an objective of the CRA Advisory Board will be to review refunding through tax incentives and develop a public/private policy recommendation for the CRA's S consideration; that each jurisdiction is different due to the level of TIF funds available. Vice Chair Quillin stated that the limitations of TIF funding are known. Mr. Owens stated that the City's basis for bonded indebtedness for the existing tax roll with growth is unknown; that refunding may work if the project experiences extraordinary growth beyond the amount projected and the refunds are allocated as received; that grants for impact fees and incentives tied to parking and incentives paid out over a period of time can be refunded to the developer for a portion of property taxes. Vice Chair Quillin stated that the impact to the City's infrastructure and the City's investment in a particular area will require evaluation; that redevelopment is occurring in the Downtown core. Mr. Owens stated that RERC is providing concepts the City may be able to utilize. Mr. Darcy stated that similar analyses to the rental apartment analysis were projected for tax incentive plans for the grocery store; that the incentives generated by grocery stores would be substantially lower than apartments based on the lower development costs of the grocery store; that a grocery store will generate less money from a property tax perspective; that any tax incentives may not be sufficient to attract a grocery store; that alternative measures such as waiving impact fees or assisting with parking structures may be required; that a mixed-use project assists in spreading the burden of land costs over more than one land use; that the City is encouraged to pursue mixed-use projects rather than single-use projects. Member Servian asked the point at which a development becomes financially neutral to develop in the Downtown core rather than in the suburbs? Mr. Darcy stated that development in the Downtown core becomes financially neutral in 5 to 10 years. Vice Chair Quillin stated that the report provided by RERC is helpful; that more rental units in the Downtown area are needed; and asked if cooperatives are being utilized in Florida? Mr. Darcy stated no. Vice Chair Quillin continued that cooperatives are allowed in the State; however, cities have not pursued cooperatives; that major employers are having difficulty finding employees; that rather than have employers build dwellings for employees, a master developer could own the property and sell individual units; that individuals with low paying employment are being pushed further and further away from the Downtown core; that the City does not want Downtown employees pushed to find housing in the suburbs; that housing developed to fill the requirements of existing employers is required; and asked the manner in which other communities address the high interest periods as development slows? Mr. Owens stated that housing ownership increases as interest rates fall; that a higher percentage of the market seeks rental BOOK 2 Page 1199 04/08/02 6:00 P.M. BOOK 2 Page 1200 04/08/02 6:00 P.M. apartments as interest rates rise due to the difficulty of financing. Vice Chair Quillin asked for methods the City could use to encourage developers to provide low-interest financing? Mr. Owens stated that the CRA could write down the interest which is a more complicated financial structure for a developer attempting to obtain financing unless the City owns the land; that the net investment will often increase as the City must purchase land at urban prices and add the cost to the development; that refunding the taxes provides the developer the means to amortize the land costs. Vice Chair Quillin stated that employees in service positions cannot afford rent of $700 to $800 per month. Mr. Owens stated that a new project is being developed in Orlando along I-4; that 40 percent of the units will be controlled-rental apartments; that Orlando made various contributions and traded land with the developer to consolidate some blocks and save assembly costs; that Orlando provided parking. Member Servian stated that the analysis indicated the retail space was not required for the success of the proposed project at Ringling Boulevard and Osprey Avenue. Mr. Darcy stated that is correct; that the retail space is a complement to the proposed project but is not large enough for consideration as a key component of the project. Member Servian asked if a portion of the rental apartments in the proposed project can be made into for-sale apartments? Mr. Darcy stated no. Member Servian stated that making a portion of the proposed project into for-sale apartments would reduce the overall costs of the development and reduce the term in which the City would be required to provide support incentives. Mr. Owens stated that the overall costs of the development would be reduced if premium rates are paid for the for-sale apartments; that supporting retail space is important for the entire community; that the retail premium space will benefit from the value of the grocery store and offer other supportive services; that mixed-use development increases the scale and payback of the project, allows amortization of the costs over a larger project, creates a built-in market for the retail use, and built-in amenities for the residents of the rental apartments. Member Servian stated that the financial analysis by Whole Foods indicated a less than excited attitude; and asked the reason? Mr. Owens stated that Whole Foods typically operates in much larger, denser markets than the City; that Whole Foods will attempt to bring a grocery store to the City; that the projection of generated sales did not rank high in the pyramid of store performance; that Whole Foods Markets are sought by urban areas; that Whole Foods is looking for the greatest opportunity for success. Mr. Darcy stated that the 4,000 square feet of retail space is not required for success of the proposed project; however, the grocery store is important. 4. REPORT RE: : UPDATE ON CRA LEGISLATION CD 4:14 through 4:17 City Attorney Taylor distributed a document entitled Legislation Summary from David Cardwell, Special Legal Counsel to the CRA, and stated that Attorney Cardwell is not at the current meeting due to illness but was to provide a report concerning the recent legislation regarding community redevelopment; that the document is a clear analysis of the new legislation; that Attorney Cardwell will be in the City for a conference from May 22 through 25, 2002 and will be available to speak to the CRA, if desired. Vice Chair Quillin stated that three members of CRA will be in Houston, Texas, from May 22 through 25, 2002, for a conference. Chair Mason asked if questions or concerns regarding the Legislation Summary could be provided to Attorney Cardwell by Staff? City Attorney Taylor stated yes. 5. CITIZENS' INPUT CONCERNING CRA TOPICS (AGENDA ITEM VI) CD 4:17 through 4:19 The following person came before the CRA: BOOK 2 Page 1201 04/08/02 6:00 P.M. BOOK 2 Page 1202 04/08/02 6:00 P.M. Mark Kauffman, representing Palm Walk Group, L.L.L.P., 455 Longboat Club Road, Longboat Key (34228), stated that the CRA is held in high regard; however, the CRA did a disservice to the City and to the Palm Walk Group, L.L.L.P. (Palm Walk); that Palm Walk never requested money, the elimination of impact fees, or relief from permit fees; that financing has been obtained for the Palm Walk Project; that significant time has been spent with the banks constructing a difficult loan; that the density was lowered; that the parking and private investment was increased; that two years and $300,000 has been spent on developing the Palm Walk Project; that industrial revenue bonds were a portion of the original agreement in the response to the Request for Proposal; that industrial revenue bonds proved too little an amount and too cumbersome and regulatory to impact the Palm Walk Project; that private investors made up the difference in financing; that the sudden termination of the Palm Walk Project is surprising; that the CRA's position not to allow Palm Walk to speak to illustrate the manner in which the CRA's demands were met is ill-mannered; that the Palm Walk Project is a public/private project; that the CRA should have assisted Palm Walk as a deal-maker, not a deal-breaker; that reconsideration with the developer's participation and input would be appropriate. 6. REMARKS OF MEMBERS, / ANNOUNCEMENTS AND ITEMS FOR NEXT AGENDA CD 4:19 through 4:26 VICE CHAIR QUILLIN: A. stated that the CRA Advisory Board, has been approved; and asked the timeframe regarding receipt of applications and CRA Advisory Board meetings. Secretary Robinson stated that an advertisement has been placed in the Bulletin and Tempo newspapers for April 11, 2002, as well as the Sunday Sarasota Herald-Tribune for April 14, 2002; that one application has been received; that requests for applications have been received. B. stated that the anguish of the Palm Walk Group, L.L.L.P. (Palm Walk) is understood; that procedures should be instituted for the return of time-sensitive documents to protect the City's interest; that the City attempted to provide a First Amendment to the Agreement for Disposition and Development of Property (Agreement) to assist in keeping Palm Walk from default; that the Agreement document underwent substantial changes prior to being sent back to the Office of the City Auditor and Clerk; that the developer was in default prior to the issuance of the Agreement; that the Agreement was not returned in a timely manner. Secretary Robinson stated that a problem exists with documents being signed in general; that a committee is meeting regarding document signing; that the committee will be directed to work on time-sensitive documents also. City Manager McNees stated that a default notice was issued; that 60 days to cure was provided; that the Amendment was approved during the 60-day period which provided an extra 45 days; that the problem arose as the Amendment was not returned in the original form; that a problem would not have arisen if the Amendment was returned in original form; that a new concept was provided just prior to the current meeting which may have added parking spaces to the Palm Walk Project; that time to evaluate the new concept was not available; that procedures for the signing of time-sensitive documents may not have assisted in the disposition of the Palm Walk Project; however, procedures for the signing of time-sensitive documents is supported. Vice Chair Quillin stated that 45 days should not pass prior to the return of a significantly altered document; that the original proposal and the intent of the original Request for Proposal (RFP) should have been met; that the Palm Walk Project was straying away from the original intent of the RFP; that Staff and the developer put significant time and effort into planning the Palm Walk Project; that the development of the Palm Walk site should be re-addressed. 7. ADJOURN (AGENDA ITEM VIII) CD 4:26 There being no further business, Chair Mason adjourned the Special meeting of April 8, 2002, at 4:26 p.m. BOOK 2 Page 1203 04/08/02 6:00 P.M. BOOK 2 Page 1204 04/08/02 6:00 P.M. Ruet - CAROLYN J. MASON, CHAIR I A ATTEST: LL C Ro 7 BILLY Es OBINSON, SECRETARY