BOOK TWO Page 1338 03/19/04 4:00 P.M. MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETING OF MARCH 19, 2004, AT 4:00 P.M. PRESENT: Chair Lou Ann R. Palmer, Vice Chair Richard F. Martin, Members Fredd "Glossie" Atkins, Danny Bilyeu, and Mary Anne Servian, Executive Director Michael A. McNees, Secretary Billy E. Robinson, and City Attorney Richard J. Taylor ABSENT: : None PRESIDING: Chair Palmer Chair Palmer called the Special meeting of the Community Redevelopment Agency (CRA) to order at 4:03 p.m. 1. APPROVAL RE : MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETING OF FEBRUARY 17, 2004 APPROVED (AGENDA ITEM I) CD 4:03 Chair Palmer. asked if the CRA had any changes to the minutes of the February 17, 2004, Special CRA meeting; and hearing none, stated that the minutes of the February 17, 2004, Special CRA meeting are approved by consensus. 2. BOARD REPORT RE: CRA ADVISORY BOARD'S REGULAR MEETING OF FEBRUARY 26, 2005 : RECEIVED REPORT (AGENDA ITEM III) CD. 4:03 through 4:06 Charles Githler III, Member, CRA Advisory Board, and John Burg, Chief Planner, Planning and Redevelopment Department, came before the Commission. Mr. Githler stated that at its February 26, 2004, meeting, the CRA Advisory Board voted 6 to 0 to endorse the ranking of the Palm Avenue Project Evaluation Committee and recommend the CRA scrutinize the issue of required net public parking in the area. On motion of Member Servian and second of Vice Chair Martin, it was moved to receive the February 26, 2004, report of the CRA Advisory Board. Motion carried unanimously (5 to 0): Atkins, yes; Bilyeu, yes; Martin, yes; Servian, yes; Palmer, yes. Chair Palmer requested that Mr. Githler remain at the table throughout the meeting to be available to answer any questions. 3. PRESENTATION AND DISCUSSION RE: PALM AVENUE PROJECT RFP #04-03E RECOMMENDED THE CRA NOT RECEIVE ORAL PRESENTATIONS FROM THE PROPOSERS AND TO CONTINUE THE SELECTION PROCESS (AGENDA ITEM IV) CD 4:06 through 4:26 John Burg, Chief Planner, Planning and Redevelopment Department, and Pamela Hayes, Purchasing Manager, General Services Department, came before the CRA. Mr. Burg stated that the. question is if the CRA desires to hear oral presentations for the four short-listed development teams which submitted responses to Request for Proposals (RFP) No. 04- 03E concerning development on the City-owned Palm Avenue site. Ms. Hayes stated that the CRA could hear oral presentations, which is an option for the CRA; that if received, oral presentations should be limited to information received as of December 17, 2003; that the CRA can also choose not to hear oral presentations. Ms. Hayes referred to her February 5, 2004, memorandum to the Evaluation Committee and the consultant concerning oral presentations and stated that the memorandum provides cautions in the hearing of oral presentations; that from a procurement and a Staff perspective, a danger in the CRA's hearing proposals from the short-listed teams could exist; that oral presentations were received by the Evaluation Committee on January 30, 2004; that two of the proposers added information at the oral presentations which was not originally submitted as a part of their written response the to the RFP as of December 17, 2003; that as a result, the memorandum was forwarded to the Evaluation Committee and Thomas Lavash of Economics Research Associates regarding the concerns presented. Ms. Hayes read into the record her memorandum dated February 5, 2004, indicating the responses to the Request for Proposal for the City-owned property located on Palm Avenue was due at 4:00 p.m. on December 17, 2003; that additional information may not be submitted subsequent to 4:00 p.m., December 17, 2003, unless requested by the Evaluation Committee; that any additional BOOK TWO Page 1339 03/19/04 4:00 P.M. BOOK TWO Page 1340 03/19/04 4:00 P.M. information must be responsive to questions or requests for information the Evaluation Committee requires for clarification and evaluation of the original proposals received; that pro formas were requested from the short-listed development teams; that Economics Research Associates assisted Staff in the evaluation of the pro formas resulting in requesting and receiving additional information as of February 4, 2004, which was distributed to the Evaluation Committee; that interviews with the respondents were conducted January 30, 2004; that only clarifying information received from the proposers pertaining to the original proposal could be evaluated; that information provided in writing or during the oral presentations which deviated significantly from the original proposal could not be considered; that only information providing clarification and information addressing the original proposal will be evaluated; that Economics Research Associates assisted in ensuring the pro formas and the subsequent presentations and responses were limited to the original proposal. Ms. Hayes further stated that significant danger exists in allowing oral presentations at this time; that the integrity of the Request for Proposal process is important not only for the current Request for Proposals; that allowing oral presentations could be precedent setting for the process involving with Requests for Proposals in the future. Ms. Hayes referred to the Administrative Regulation concerning RFPS 024.A007.0195) and stated that the Administrative Regulation indicates the purpose and intent is to ensure fair, equitable, and uniform treatment for all persons who deal with the City's procurement system; that the Administration Regulation provides safeguards for maintaining a procurement system of quality and integrity; that the Administrative Regulation provides RFPs shall state the relative importance of price and other evaluation criteria and discussion may be conducted with responsible offerers who submit proposals determined reasonably likely of being selected for award and clarification to assure full understanding of and responsiveness to the solicitation requirements; that offerers shall be afforded fair and equal treatment; that in conducting discussions, no disclosure may be made of any information derived from proposals submitted by competing offerers; that the Administrative Regulation indicates no other factors or criteria shall be used in the evaluation. Ms. Hayes stated further that the process involving Requests for Proposals which was developed in accordance with the Florida Statutes and the Florida Administrative Code provides a fair and level playing field; that opening the process for additional discussions at this time could have serious ramifications which could involve changing the intent of the process. Chair Palmer asked the chronology of the current RFP process? Mr. Burg stated that the chronology is as follows: October 9, 2003 Request for Proposal was approved by the CRA November 10, 2003 Pre-submittal was conducted during which a discussion was held regarding the opportunity for the proposers to partner with The Sarasota Opera House November 20, 2003 Addendum I which contained information regarding The Sarasota Opera House was forwarded to the proposers; that the Addendum November 26, 2003 Addendum II was forwarded to the proposers indicating the appraisal of the property December 17, 2003 Request for Proposals due date Chair Palmer asked the attendees at the November 10, 2003, pre- submittal meeting? Ms. Hayes stated that representatives from Arcadia Land Company, Benderson Development Company, Inc., and Ersa Grae Corporation attended the pre-submittal meeting. Chair Palmer stated that Addendum I relating to issues discussed November 10, 2003, was forwarded to the proposers on November 20, 2003.. Ms. Hayes stated that is correct. Member Servian stated that the pre-submittal conference is an optional conference. Ms. Hayes stated that is correct. Chair Palmer asked if the requests to present additional information were received prior to evaluation by Staff or the deadline? BOOK TWO Page 1341 03/19/04 4:00 P.M. BOOK TWO Page 1342 03/19/04 4:00 P.M. Ms. Hayes stated that the requests were received after the evaluation. Mr. Burg stated that the requests were received after evaluation and the short-listing by the Evaluation Committee. Member Servian stated that the Request for Proposals indicates the CRA reserves the right to accept any proposal deemed in the interest of the CRA and to waive any irregularities in any proposal and to re-advertise for new responses; that the Request for Proposals indicates the Evaluation Committee may conduct interviews of any and all of the respondents; that the Evaluation Committee is to rank the proposals and forward recommendations to the CRA Advisory Board subsequent to receiving recommendations from the Evaluation Committee; that the CRA Advisory Board and the CRA will determine the final ranking of the finalist proposers. Ms. Hayes stated that the CRA has the option to change the ranking of the proposals. Member Servian stated that the CRA should not receive presentations from proposers, but rather receive the Staff report. Executive Director McNees stated that the CRA must make a decision regarding hearing oral presentations. Vice Chair Martin stated that Addendum I and Addendum II were forwarded to the RFP recipients approximately three weeks prior to the due date; and asked if requests were received to extend the due date prior to the due date? Ms. Hayes stated no; that a request for an additional presentation dated March 2, 2004, was received from a law firm representing Arcadia Land Company; that a second request for an additional presentation was received February 25, 2004, from the law firm representing the Sarasota Main Street Development Team. Chair Palmer stated that the requests to allow additional presentations were received approximately two months subsequent to the due date; and asked the dates of the evaluation by Staff and the CRA Advisory Board? Mr. Burg stated that interviews were conducted on January 30, 2004, by the Evaluation Committee; that the Evaluation Committee met again on February 18, 2004, to address questions and pro formas which were evaluated by Economics Research Associates; that the February 18, 2004, meeting was continued to February 19, 2004, to determine the short-listing by the Evaluation Committee; that the CRA Advisory Board met on February 26, 2004. Vice Chair Martin asked if the CRA negotiations with the first- ranked proposer can include additional requirements by the CRA? Ms. Hayes stated yes; that the CRA can look to the second-ranked proposer if negotiations with the first ranked proposer are unsuccessful. Vice Chair Martin stated that the CRA has full latitude to require changes in a proposal. Ms. Hayes stated that is correct. Chair Palmer stated that the current meeting is to select the developer; that specifics can be addressed once the selection is made; that the CRA will have continuing conversations if significant changes or adjustments are necessary. Vice Chair Martin stated that the operative words are "full latitude" for the CRA to negotiate with the proposer. Ms. Hayes stated that is correct. On motion of Vice Chair Martin and second of Member Servian, it was moved to recommend the CRA not receive oral presentations from the proposers and to continue the selection process. Vice Chair Martin stated that the issue of fairness is important; that Staff's recommendation not to receive oral presentations is supported; that knowing the opportunity exists to negotiate is pleasing. Member Servian stated that Staff's recommendation is supported to prevent a proposer from attempting to present additional information past the date of submittal which would be problematic and render the selection process cumbersome; that the ability to make adjustments provides a comfort level. Chair Palmer agreed and stated that during future RFP processes, the CRA should be involved in the final evaluation; that development of the Palm Avenue property should not be delayed any longer; that excellent projects have been proposed. BOOK TWO Page 1343 03/19/04 4:00 P.M. BOOK TWO Page 1344 03/19/04 4:00 P.M. Chair Palmer called for a vote on the motion to recommend the CRA not receive oral presentations from the proposers and to continue the selection process. Motion carried unanimously (5 to 0): Atkins, yes; Bilyeu, yes; Martin, yes; Servian, yes; Palmer, yes. 4. APPROVAL RE: AUTHORIZE THE TERMS OF THE ENGAGEMENT AND EXECUTION OF THE ENGAGEMENT LETTER WITH THE CARDWELL LAW FIRM CONCERNING SPECIAL LEGAL COUNSEL SERVICES TO THE COMMUNITY REDEVELOPMENT AGENCY APPROVED WITH CONSIDERATION GIVEN TO ADJUSTING THE NUMBER OF DAYS FOR PAYMENT OF TO ATTORNEY CARDWELL ' S FIRM AND A REQUEST TO RECEIVE A MONTHLY BILLING SUMMARY FROM ATTORNEY CARDWELL 'S FIRM AND THE CITY ATTORNEY'S OFFICE (AGENDA ITEM II) CD 4:26 through 4:31 City Attorney Taylor stated that the determination The Cardwell Law Firm services should be limited to specialty legal service originated from several sources due to legal costs and Staff's concern with Attorney Cardwell's lack of familiarity with the Cityi that the proposed engagement letter, included in the Agenda backup material, will relate back to January 1, 2004; that the terms set forth in the new engagement letter eliminate the retainer which had previously been paid at $2,000 per month; that legal services will be limited but specialized; that Attorney Cardwell has lowered his billing rate from $200 to $175 per hour; that associates will bill at $150 per hour; that the Administration recommends authorizing the terms of the engagement and execution of the engagement letter with The Cardwell Law Firm concerning special legal services for the Community Redevelopment Agency. Member Servian stated that a monthly billing summary from Attorney Cardwell and the City Attorney's Office would be appreciated sO a comparative study can be prepared to determine if more or less money is expended for legal fees; that the engagement letter indicates a penalty interest after 30 days of the statement date will be imposed; and asked if payment within 30 days is feasible due to the City's approval process and if a more reasonable turnaround is possible? City Attorney Taylor stated that the due date for the billing can be negotiated. Chair Palmer stated the engagement letter includes language regarding legal ethics matters and asked for clarification. City Attorney Taylor stated that a conflict of interest may create an ethics issue which must be handled in accordance with the Florida Bar Association's rules and which may include a declaration of interest; that a conflict can be waived after disclosure in certain circumstance if in the best interest of the client to do SO. Chair Palmer asked if the language regarding ethics is standard? City Attorney Taylor stated yes. On motion of Member Atkins and second of Member Servian, it was moved to authorize the terms of the engagement and execution of the engagement letter with The Cardwell Law Firm concerning the process of special legal counsel services for the Community Redevelopment Agency with consideration given to adjusting the number of days for payment of statements and receiving a monthly summary of billings from Attorney Cardwell's firm and the City Attorney's Office. Motion carried unanimously (5 to 0): Atkins, yes; Bilyeu, yes; Martin, yes; Servian, yes; Palmer, yes. 5. PRESENTATION AND DISCUSSION RE: PALM AVENUE PROJECT / RFP #04-03E FINAL RANKING AND AUTHORIZATION TO NEGOTIATE WITH THE TOP-RANKED TEAM - ACCEPTED THE RANKING OF ERSA GRAE CORPORATION AS FIRST, SARASOTA MAIN STREET DEVELOPMENT TEAM AS SECOND, / ARCADIA LAND COMPANY AS THIRD, AND BENDERSON DEVELOPMENT COMPANY, INC., / AS FOURTH (AGENDA ITEM III) CD 4:31 through 6:38 John Burg, Chief Planner, Planning and Redevelopment Department, and Thomas Lavash, Economics Research Associates, came before the CRA. Mr. Burg stated that the responses to the Request for Proposals (RFP) for the City-owned Palm Avenue site contained significant, complex financial issues; that Economics Research Associates was retained to assist Staff in reviewing the short-listed development teams' proposals; that Economics Research Associates suggested questions for additional information and approved questions for a BOOK TWO Page 1345 03/19/04 4:00 P.M. BOOK TWO Page 1346 03/19/04 4:00 P.M. response in writing from each of the remaining short-listed teams; that Economics Research Associates assisted in reviewing the pro formas. Mr. Burg referred to charts displayed on the Chamber monitors throughout the presentation and stated that proposed residential development follows: Arcadia Land Company: 196 housing units - Benderson Development Company, Inc.: 99 housing units Ersa Grae Corporation: 111 housing units Sarasota Main Street Development Team: 240 housing units Mr. Burg continued that Arcadia Land Company and Sarasota Main Street Development Team proposed projects which would involve use of the Downtown Residential Overlay District; that proposed retail use is as follows: Arcadia Land Company: 6,000 square feet Benderson Development Company, Inc.: 24,000 square feet associated with a proposed hotel Ersa Grae Corporation: 52,000 square feet - Sarasota Main Street Development Team: 20,000 square feet Mr. Burg Eurther stated that proposed office use is as follows: Arcadia Land Company: 33,500 square feet - Benderson Development Company, Inc.: None Ersa Grae Corporation: 36,000 square feet Sarasota Main Street Development Team: None Mr. Burg stated further that Arcadia Land Company did not propose hotel use; that Benderson Development Company, Inc., proposed a hotel of 119 rooms; that Ersa Grae Corporation proposed a hotel condominium of 96 rooms; that Sarasota Main Street Development Team did not propose hotel rooms; that Arcadia Land Company and Benderson Development Company, Inc., proposed a partnership with The Sarasota Opera House; that Benderson Development Company, Inc. proposed expanding the stage of The Sarasota Opera House into the alley area but did not propose new space in the pavilion building; that Sarasota Main Street Development Team did not propose a partnership with The Sarasota Opera House; that Arcadia Land Company did not propose to partner with the Golden Apple Dinner Theatre; that Benderson Development Company, Inc., proposed to partner with the Golden Apple Dinner Theatre; that Ersa Grae Corporation proposed to partner with the Golden Apple Dinner Theatre; that Sarasota Main Street Development Team did not propose to partner with the Golden Apple Dinner Theatre. Member Servian asked if correspondence occurred with the proposers regarding consideration of partnering with the Golden Apple Dinner Theatre or if the suggestion was the vague statement regarding the assemblage of properties? Mr. Burg stated that partnering with the Golden Apple Dinner Theatre was a suggestion. Executive Director McNees asked if an Addendum addressed partnering with the Golden Apple Dinner Theatre? Mr. Burg stated that an Addendum addressed only partnering with The Sarasota Opera House. Mr. Burg displayed elevations of the proposed projects on the Chamber monitors and stated that the Arcadia Land Company proposed project includes 800 parking spaces of which 300 are for the public; that Arcadia Land Company indicated construction financing for the 300 public spaces suggests $4.2 million in Tax Increment Financing (TIF) funds would be required; that Arcadia Land Company addressed operation and maintenance costs for the parking garage which start at $120 per space or $46,000 annuallyi; that the Arcadia Land Company proposed project complies with the Commercial Central Business District (CCBD) Zone District standards and the proposed Downtown Code; that Arcadia Land Company proposes to conduct a design charrette with the City if selected. Mr. Burg continued that determining the quality of architectural design is subjective; that architectural design is important to the Cityi that the CRA can determine the appropriateness of the proposed architectural design; that the Arcadia Land Company proposal addresses The Sarasota Opera House redevelopment BOOK TWO Page 1347 03/19/04 4:00 P.M. BOOK TWO Page 1348 03/19/04 4:00 P.M. requirements but does not include redevelopment requirements of the Golden Apple Dinner Theatre. Vice Chair Martin asked if the Arcadia Land Company proposed project includes a stepback in the structure? Mr. Burg stated yes; that a stepback begins at the fourth level. Vice Chair Martin asked if the amount of glass in the structure proposed by Arcadia Land Company complies with the proposed Downtown Code? Mr. Burg stated yes. Chair Palmer stated that the Arcadia Land Company proposal estimates construction of parking spaces at $14,000 per space; that the estimated cost of some of the other projects is less; that the difference in the parking space cost among the projects is not understood; and asked if the $14,000 per space is realistic? Mr. Lavash stated that in mixed-use projects, the cost of constructing parking will vary by location and by the local cost of construction; that the $14,000 estimate is realistic. Chair Palmer stated that Arcadia Land Company is requesting TIF funding; that the cost of the 300 City parking spaces would be the basis upon which to determine the participation of TIF funds if Arcadia Land Company is selected. Mr. Lavash stated that the $14,000 per parking space is a realistic number; that the cost per space can be as high as $20,000. Chair Palmer stated that the Arcadia Land Company proposed project indicates 400 spaces for the condominium project and 300 for the City; that the understanding is 60 parking spaces are provided for The Sarasota Opera House in the current agreement with the City; that additional spaces for The Sarasota Opera House plus 40 spaces at the Golden Apple Dinner Theatre are requested; and asked the parking requirements for The Sarasota Opera House? Mr. Burg stated that a current agreement between the City and The Sarasota Opera House addresses parking; that The Sarasota Opera House parking cannot occur in parking spaces reserved for condominium owners; therefore, drafting a new agreement with The Sarasota Opera House is necessaryi that The Sarasota Opera House has drafted a new agreement for review; that parking for The Sarasota Opera House will come out of the City's portion of public parking; that the City's 300 public parking spaces must satisfy The Sarasota Opera House parking requirements. Chair Palmer asked the number of spaces which will be designated for The Sarasota Opera House? Mr. Burg stated that exclusive use of 25 parking spaces in the parking structure on the development property will be designated continuously for staff of The Sarasota Opera House; that non- exclusive use will be designated on a guaranteed basis of an additional 100 parking spaces 24 hours per day during the opera season. Chair Palmer asked the duration of the opera season? Susan Danis, Executive Director of The Sarasota Opera House, came before the Commission and stated that the opera season is January 2 through the end of March or beginning of April and approximately three weeks in November. Member Servian that the City will receive a net of 185 parking spaces; that the City will not receive the 300 parking spaces as requested; that the only way to satisfy the need of the other people using the retail shops, restaurants, and theaters is to increase the number of public parking spaces. Mr. Burg stated that Staff and a consultant included a parking demand for The Sarasota Opera House in the RFP. Member Servian stated that 25 of the public parking spaces must be set aside for 12 months a year; that 125 parking spaces must be set aside for four to five and one-half months. Mr. Burg stated that is correct. Mr. Githler stated that the proposed agreement with The Sarasota Opera House indicates non-exclusive use of the additional 100 parking spaces. Chair Palmer stated that the 100 parking spaces should be available but not set aside specifically for The Sarasota Opera BOOK TWO Page 1349 03/19/04 4:00 P.M. BOOK TWO Page 1350 03/19/04 4:00 P.M. House; that charging fees for the parking is not precluded; that the understanding is free parking for The Sarasota Opera House is not required. Mr. Lavash stated that an opportunity to share parking may exist; that, for example, an office employee leaving at 5:00 p.m. will allow parking for evening retail, restaurant, or opera performance use. Chair Palmer stated that renting parking spaces on a monthly basis would be an exclusive use for the public; that a concern is netting only 185 parking spaces. Executive Director McNees stated that the term "non-exclusive" indicates dedicated parking is not required in any specific part of the building for The Sarasota Opera House; that not every production of The Sarasota Opera House will require the full 100 parking spaces; that 100 parking spaces is less than the average of any given production. Member Servian asked the manner to determine if an individual is an opera patron? Executive Director McNees stated that a determination will be made through a parking management plan for the parking garage. Chair Palmer stated that the issue is the net parking. Executive Director McNees stated that the parking deficit in the area is approximately 300 parking spaces which includes the uses of The Sarasota Opera House; that the parking spaces demanded in the RFP for allocation to The Sarasota Opera House are being allocated against the defined deficit for the area; that The Sarasota Opera House has a property right to parking spaces. Member Servian asked if the proposed projects will increase the demand for parking? Executive Director McNees that the public parking spaces are in addition to the spaces required for the uses in the building. Member Bilyeu asked the number of parking spaces on the current Palm Avenue parking lot? Mr. Burg stated that the Palm Avenue parking lot has 99 parking spaces. Member Bilyeu stated that a parking deficit of 300 spaces exists. Mr. Burg stated that is correct; that the demand of 300 parking spaces recognized the existing 99 spaces. Chair Palmer stated that the concern is not the number of public parking spaces but rather the net increase in public parking spaces. Executive Director McNees stated that determining the number of required public parking was the result of an exhaustive processi; that a consideration was based on the value of the underlying land contributed by the City; that the business returns on a project which could be built on the size of the site was a consideration; that 300 is the maximum number of parking spaces which can be dedicated to public parking based on the value of the property; that the excessive amount of public parking required was the central factor of the failure of the previous development proposal on the Palm Avenue property. Mr. Burg displayed elevations of the Benderson Development Company, Inc., proposed project on the Chamber monitors and stated that 701 total parking spaces with 341 public parking spaces are contemplated; that Benderson Development Company, Inc., proposed the City retain title to the public portion of the parking garage and proposed tax-free private activity industrial development bonds for construction financing of the public parking spacesi that the proposed project meets the Commercial Central Business District (CCBD) Zone District requirements; that the proposed project conflicts with the proposed Downtown Code regarding the lack of a required recess of the structure on Cocoanut Avenue; that additionally, the form is inconsistent with the prescribed arcade along Palm Avenue; that Staff determined the architectural design of the proposed project is inferior to the competing proposals; that the Benderson Development Company, Inc., proposal addresses The Sarasota Opera House and the Golden Apple Dinner Theatre redevelopment requirements. Mr. Burg displayed elevations of the Ersa Grae Corporation proposed development on the Chamber monitors and stated that the Ersa Grae Corporation proposal includes redevelopment of Five BOOK TWO Page 1351 03/19/04 4:00 P.M. BOOK TWO Page 1352 03/19/04 4:00 P.M. Points Park into a plaza-type area; that the proposal indicates the developer will conduct a public charrette regarding redevelopment of Five Points Park and proposes TIF funding of the upgrade of Five Points Park and the Palm Avenue Streetscape. Chair Palmer stated that the request for TIF funds by the Ersa Grae Corporation project is not for parking. Mr. Burg stated that the majority of the $4.2 million request for TIF funds is for Five Points Park and Palm Avenue Streetscape improvements; that the proposed total of 841 parking spaces includes 300 public spaces; that the developer is seeking an allocation of TIF funds for the difference of the land value and the cost of construction of the 300 public parking spaces; that the value of the land is $4.2 million; that Ersa Grae Corporation proposes financial assistance to pay for the difference if the development costs of the public parking is greater than the value of the land. Member Servian asked the estimated cost of building the 300 parking spaces? Mr. Lavash stated that $14,000 per space is the estimated cost to build the 300 parking spaces, which is the hard cost only; that soft costs such as operating and maintenance will bring the cost to $19,610 per space which equates to approximately $5.9 million; that approximately $1.7 million of the allocation of TIF funds would be to construct parking. Mr. Githler stated that the CRA can stipulate the appropriate soft costs to include. Mr. Burg stated that the RFP indicates parking for The Sarasota Opera House could be in a municipal parking facility; that the RFP did not indicate parking for the Golden Apple Dinner Theatre could be in the municipal parking facility; that the design meets the proposed Downtown Code design standards. Member Servian asked for clarification regarding parking for the Golden Apple Dinner Theatre. Mr. Burg stated that compliance with the parking requirements of the Commercial Central Business District (CCBD) Zone District was based on the offers made in the respective proposals; that the Ersa Grae Corporation proposed project extends beyond the Community Redevelopment Area site; that the project will require an application submitted under the Commercial Central Business District (CCBD) Zone District or the parcel would require rezoning to the Downtown Bayfront Zone District under the proposed Downtown Code. Chair Palmer stated that the proposed Downtown Code allows two buildings up to 180 feet. Mr. Burg stated that the Palm Avenue property is outside the area which allows 180 foot buildings. Chair Palmer stated that the area can be expanded. Mr. Burg stated that expanding the area would require an amendment to the City's Comprehensive Plan, also called the Sarasota City Plan, 1998 Edition (City's Comprehensive Plan). Chair Palmer stated that the City's Comprehensive Plan can be amended; however, an amendment requires significant time. Mr. Burg stated that the Ersa Grae Corporation proposed project is of very high quality architectural design; that the proposed project addresses The Sarasota Opera House and the Golden Apple Dinner Theatre redevelopment requirements. Mr. Burg stated that the Sarasota Main Street Development Team proposed project contemplates a total of 701 parking spaces with 340 spaces for public parking; that the Sarasota Main Street Development Team proposes the City and the CRA participate in petitioning the Sarasota County Appraiser's Office to designate the 340 public parking spaces as tax exempt; that the proposed project complies with Commercial Central Business District (CCBD) Zone District requirements; that the proposed project design complies with the proposed Downtown Code design standards; that the Sarasota Main Street Development Team proposal does not address the redevelopment requirements of The Sarasota Opera House and the Golden Apple Dinner Theatre. Mr. Lavash stated that Economics Research Associates was employed to assist in evaluating the four responses to the RFP; that evaluation efforts involve a three-fold process: 1) reviewing the submissions and focusing specifically on the pro formas to BOOK TWO Page 1353 03/19/04 4:00 P.M. BOOK TWO Page 1354 03/19/04 4:00 P.M. formulate a comparative matrix, 2) preparing an economic impact analysis, and 3) calculating the potential payback to the Tax Increment Financing (TIF) fund as Arcadia Land Company and Ersa Grae Corporation requested TIF funds to assist in financing the parking garage; that Economics Research Associates has participated in meetings regarding the RFP process; that Economics Research Associates will assist the Evaluation Committee in negotiations and developing the Term Sheet for development approval. Mr. Lavash continued that Economics Research Associates is a real estate and economic development consulting firm founded in 1958, has six offices in the United States, and has been involved in the evaluation of in excess of 15,000 projects world-wide; that a hallmark of Economics Research Associates' practice is the ability to understand the: 1) public sector policy objectives, and 2) economic imperatives of the development community. Mr. Lavash referred to computer-generated Slides highlignting the practice of Economics Research Associates displayed on the Chamber monitors throughout the presentation and stated that two of four core practice areas of Economics Research Associates are: 1) development economics, and 2) market and financial feasibility; that Economics Research Associates has been involved in assisting clients in the US in negotiating development agreements for highly complex mixed-use projects; that assistance has been provided on a project in Knoxville, Tennessee, concerning the public building authority for a $380 million project involving the redevelopment of approximately 20 blocks in downtown Knoxville; that assistance has also been provided to a Client in Pittsburg, Pennsylvania, for a 77 acre brownfield redevelopment site; that work is being conducted on an important project with the Port Authority in New York and New Jersey, which includes serving on the redevelopment team for the World Trade Center site; that Economics Research Associates worked with Halcyon, Ltd., which at the time was the development manager for the Sarasota Quay, understands the Sarasota market, and previously conducted an economic analysis of the proposed Downtown Code for the City; that the focus was on five prototype sites in the Commercial Central Business District (CCBD) Zone District in the Downtown; that the previous economic analysis conducted for the City was to provide an understanding of the potential changes in land value resulting from the proposed Downtown Code; that the economic analysis assisted in preparing the current RFP analysis. Mr. Lavash continued that the pro formas were reviewed in an attempt to compare a cross range of market factors such as the sales prices for the affordable and market rate housing and the financing strategies of the two proposers interested in obtaining TIF funds; that the attempt to understand the revenue potentials to the City from each of the projects, specifically the parking garage operation, resulted in difficulties in drawing fair comparisons as diverse conceptions were presented; that another level of analysis is the economic impact; that one developer presented a proposal for only the parking garage which does not allow comparison to other proposers submitting proposals for the entire project; that the economic impact review represents only one component of a series of evaluative components; that the higher density projects generate the greatest amount of economic impacts; that the variables of the proposed project value were measured; that the values ranged from $42 million to $142 million; that the values allowed understanding of the potential leverage would be for the public benefit. Mr. Lavash further stated that for every one dollar requested in TIF funds, the expectation is to leverage a certain amount of funds in private development; that typically, complex mixed-use projects have a ratio of approximately one dollar in public funds to twelve dollars in private funds; that the Benderson Development Company, Inc., ratio is one to ten; that the Ersa Grae Corporation ratio is one to thirty-tour; that the Whole Foods Market Centre ratio is one to seventeen; that the $3 million invested by the City will generate $50 to $55 million in private investment which is an extremely high number. Mr. Lavash stated further that variables in the analysis include construction jobs, permanent employment created by the project, generated retail sales, and property and hotel bed taxes; that 200 to 400 construction jobs will be generated over the next three to five years based on the phasing schedules identified by the developers; that 80 to 500 permanent jobs will be created; that the Ersa Grae Corporation project is illustrative of the benefits of a higher density and the commercial office and retail of approximately 129,000 square feet which will generate the greatest number of permanent jobs; that Benderson Development Company, Inc., did not provide a phasing schedule which resulted in the inability to estimate the number of temporary construction jobs. BOOK TWO Page 1355 03/19/04 4:00 P.M. BOOK TWO Page 1356 03/19/04 4:00 P.M. Vice Chair Martin stated that the Sarasota Main Street Development Team is generating fewer permanent jobs as retail and commercial space is not proposed. Mr. Lavash stated that is correct. Member Servian asked if new jobs will be created or current Downtown employees will be drawn by the appeal of working in a new building? Mr. Lavash stated that the Ersa Grae Corporation proposal identified an anchor bank tenant which will occupy 24,000 square feet of the 36,000 square feet identified for office use; that the bank will attract new employees. Mr. Lavash continued that the previous economic analysis of the proposed Downtown Code revealed the Downtown has absorbed approximately 40,000 square feet of office space annually for the past ten years; that 36,000 square feet will take significant time for absorption as the anchor bank tenant is not secured. Vice Chair Martin asked if requiring significant retail, office, and residential uses has been analyzed. Mr. Lavash stated that the 52,000 square feet of retail space in the Ersa Grae Corporation project is a concern; that the Ersa Grae Corporation's argument is a critical mass is being created necessary to grow the industry; that the space along the arcade area may be difficult space to lease; that the corner spaces will be leased easily; that a challenge for retail is the seasonality of retail in the City. Vice Chair Martin stated that the concern is the concept with the most ambitious plans will generate significant employment impacts may not be realistic. Mr. Lavash stated that an adage is retail follows rooftopsi; that the retail will benefit from added residents and permanent employees. Member Servian stated that a concern is the price of the housing; that the pricing of the units may attract more seasonal residents and fewer full-time Downtown residents which will add to the issue of the seasonality of retail; that keeping the cost of the housing units down is important; and asked if the negative impact on existing retail of adding significant retail space was considered? Mr. Lavash stated no. Member Servian stated that retail should be phased in as the residential units are completed. Mr. Lavash agreed but stated that the developer has a fixed cost; that the base building must be constructed at once. Chair Palmer stated that the total development costs indicated in the proposals range from $96 to $190 per square foot. Mr. Lavash stated that reservations exist regarding the preliminary costs indicated in the Benderson Development Company, Inc., proposal; that the proposal contemplates building a full- service hotel including a restaurant and a gift shop at a cost of $79,000 per room; that typically, the cost of a room in a full- service hotel is $125,000 to $145,000. Mr. Githler stated that the $125,000 to $145,000 figures are an industry rule of thumb for a Downtown hotel; that the rooms in the Ersa Grae Corporation proposed project are 900 to 1,500 square feet; therefore, costs would be significantly more than $125,000 to $150,000 per room; that the average hotel room is approximately 400 square feet; that a daily rate of $100 for a 400 square foot room does not equate to a daily rate of $200 for an 800 square foot room. Mr. Lavash stated that a hotel condominium is similar to a residential condominium project; that each unit is purchased by investors who agree to place the individual units in a pool for lease. Chair Palmer stated that the owners have the right to occupy the units for a specific time yearly. Mr. Lavash stated that is correct. Chair Palmer stated that an estimate of the bed tax was not prepared for the Ersa Grae Corporation project. Mr. Lavash stated that an estimate of the bed was not included as the rates and occupancy level are not known. BOOK TWO Page 1357 03/19/04 4:00 P.M. BOOK TWO Page 1358 03/19/04 4:00 P.M. Member Servian stated that rentals of the Ersa Grae Corporation proposed project will be long-term. Mr. Lavash stated that is correct. Member Servian stated that the cost to develop the condominiums is high; and asked if the retail and office revenues will balance costs of the entire development? Mr. Githler stated yes. Mr. Lavash stated that as the number of premium sites for residential development disappears, the magnitude of the current high rates for residential condominium units will not be achievable. Chair Palmer stated that the respondents were requested to consider lower than market cost housing; that one proposed ten lower cost housing units and one proposed 16 lower cost housing units. Mr. Lavash stated that Sarasota Main Street Development Team proposed 240 lower priced units. Mr. Burg stated that the Sarasota Main Street Development Team units will be priced in the lower $200,000s. Mr. Lavash stated that the Sarasota Main Street Development Team anticipates an aggressive absorption rate of the 240 units due to the lower price. Vice Chair Martin asked for clarification between market rate and affordable rate. Mr. Lavash stated that the 240 units are at market rate; however, the small units are available at a lower price. Chair Palmer stated that the Arcadia Land Company submittal proposed ten units at 100,000; that the units are very small. Member Atkins stated that the Benderson Development Company, Inc., proposal does not indicate any temporary construction jobs. Mr. Lavash stated that Benderson Development Company, Inc., proposal did not indicate a phasing schedule; that construction employment is calculated by considering the number of years to complete the project. Member Atkins asked the possibility of overwhelming the Downtown market with retail and the impact on the existing Downtown retailers? Mr. Lavash stated that cultural institutions such as The Sarasota Opera House and the Golden Apple Dinner Theatre are major engines which draw people Downtown; that the ability of the cultural institutions to grow and attract a greater number of visitors to the Downtown will have a positive impact on the Downtown retailers; that a large anchor such as a book store or cinema will be a positive impact for the Downtown. Member Atkins asked if the anticipated residential units will support the anticipated retail? Mr. Lavash stated yes. Chair Palmer asked the percentage of local employment possibilities? Mr. Lavash stated that the majority, if not 100 percent, of the employees should be from Sarasota and Bradenton. Member Servian stated that large box-shaped retail buildings are not desired in the Downtown. Mr. Githler stated that an additional 52,000 square feet of retail use will create the critical mass required to fill the vacuum in the area; that the developers of the proposed projects understand the necessity to attract magnet type retailers; that the existing retailers are optimistic regarding the additional retail. Mr. Lavash stated that national franchises balance local retail. Mr. Githler stated that national franchises hire local people. Member Servian stated that the Georgetown redevelopment in Washington, DC, has nationally-known franchises in small areas rather than retailers in large box-shaped buildings. Member Bilyeu stated that the Downtown is prepared for additional retail space. BOOK TWO Page 1359 03/19/04 4:00 P.M. BOOK TWO Page 1360 03/19/04 4:00 P.M. Chair Palmer stated that the respondents are knowledgeable regarding the current market and will not recommend projects which will not succeed. Vice Chair Martin agreed; but stated that the public good in the Downtown must be considered; that the possibility of success of a project at the expense of existing retailers is a concern. Chair Palmer stated that the public good in the Downtown must be considered; that the success of a project at the expense of existing retailers is a concern. Chair Palmer stated that the respondents are aware of concerns regarding the existing Downtown retailers. Mr. Lavash stated that employees in downtown areas across the country typically spend approximately $500 per year on general retail and approximately $1,500 yearly for lunch; that the new households will support 6,000 to 28,000 square feet of new retail space; that 75 to 80 percent of consumer spending remains in the local community; that the spending will generate retail sales tax revenues accruing to the City, County, and State; that the proposed projects will generate sales tax revenues between $72,000 to $300,000 annually; that the projection of the Benderson Development Company, Inc., to achieve a 70 percent occupancy rate and $105 per room per night is aggressive; that an estimate of the bed tax for the Ersa Grae Corporation project was not included as the project will be a condominium hotel with an unknown number of units in a rental pool. Mr. Lavash continued that the analysis assumed a stabilized year with all units leased or sold in approximately three to five years; that a growth period will occur in generating property tax revenues for the City and County; that the combined County/City tax rate of $18.29 per $1,000 of assessed valuation was used; that the City's portion is approximately $3.00 of the County/City tax rate which results in approximately $750,000 to $2.5 million in annual property taxes; that the higher the density of the greater the value, the more in property taxes generated. Chair Palmer stated that the total net new taxes generated from each of the projects will replenish the TIF fund. Mr. Lavash stated that the requirement of the amount set aside from the TIF fund was established at $6.78 per $1,000 which is approximately 37 percent of the $18.29 County/City tax; that the payback requirement will be approximately 25 or 26 percent per year of all generated property taxes generated; that the City's latest bond issue carried an approximate 4.3 percent interest rate; that the analysis anticipates a 5.5 percent interest rate for purposes of evaluating the proposed project as interest rates in 2008 cannot be anticipated; that the Arcadia Land Company proposed project will generate $2.3 million annually in property tax revenues of which only approximately 26 percent will require repayment to the TIF fund with the remainder going to the General Fund. Mr. Githler stated that the Arcadia Land Company proposed project will provide a significant tax benefit to the Community Redevelopment Area; and asked the manner in which to issue a bond which will require repayment in eight or nine years? Mr. Lavash stated that a fast absorption rate will assist in repayment. Member Servian asked if 37 percent of revenues generated from the Ersa Grae Corporation proposed project will be applied to the TIF fund? Mr. Lavash stated no; that 37 percent is the millage rate for the TIF fund; that $6.78 per $1,000 is approximately 37 percent of the $18.29 County/City tax; that $639,000 will repay the bond issue for improvements to Five Points Park, the arcade, and the streetscape on Palm Avenue. Chair Palmer stated that the bond issue will offset the cost of the parking structure. Mr. Lavash stated that is correct. Vice Chair Martin asked if proposers other than Ersa Grae Corporation addressed public streetscape improvements? Mr. Burg stated no. Chair Palmer stated that a developer is being selected; that agreements can be negotiated on specific issues. Member Bilyeu stated that the requests of the two developers should be clarified; that one request is for parking and one is BOOK TWO Page 1361 03/19/04 4:00 P.M. BOOK TWO Page 1362 03/19/04 4:00 P.M. for infrastructure and street improvements at Five Points Park; and asked the role of the value of the land? Mr. Lavash stated that Arcadia Land Company will expend up to $4.2 million, which is the assessed value of the land, to the cost of the parking. Member Bilyeu asked the amount of the request for TIE funds? Mr. Lavash stated that the request is for $4.2 million in TIF funds. Member Bilyeu asked if the Ersa Grae Corporation proposal contemplates exchanging the land for parking? Mr. Burg stated yes; that a condition of the Ersa Grae Corporation proposal is TIF funds will be requested for parking if the cost of the parking exceeds $4.2 million. Mr. Lavash stated that Ersa Grae Corporation estimates hard costs are $14,000 for each parking space; that soft costs will bring the cost per parking space to $19,610 per space; that 300 parking spaces at $19,610 equates to approximately $5.88 million; that the difference between $5.88 million and $4.2 million will be an issue of negotiation. Executive Director McNees stated that selecting the Ersa Grae Corporation proposal does not require improvements at Five Points Park; that selecting another developer does not prohibit requiring improvements at Five Points Park. Member Servian stated that the Arcadia Land Company is requesting to utilize the City's borrowing power for leverage to borrow the funds equal to the value of the property to construct the garage with a repayment to the City over the period of the CRA. Mr. Lavash stated that is correct; that Arcadia Land Company assumed an interest rate accruing to the City of four percent; that a 5.5 percent interest rate is more appropriate. Mr. Githler stated that all TIF funds must be utilized for the public benefit; that some proposals request an industrial use be created and a four percent interest rate be assumed; that a commercial/private use being financed by municipal bonds is implied. Mr. Lavash stated that two proposers have assumed the use of tax- free private industrial development activity bonds under a State program. Chair Palmer asked if the issue of the net gain of parking spaces was analyzed? Mr. Lavash stated no; that Economics Research Associates would be happy to analyze parking. Mr. Githler stated that parking is the most important issue. Mr. Lavash stated that marketability issues are related to parking; that high-priced residential units typically command a greater number of parking spaces. Chair Palmer stated that the Arcadia Land Company estimate is $12,500 per parking space or $14,000 considering additional soft costs; and asked the reason for the differences in the costs in parking among the four proposals? Mr. Lavash stated that the other three proposals estimated hard and soft costs in one number; that mixed-use projects are complex; that estimating the cost at this time is difficult. Mr. Githler stated that mixed-use development is difficult; that the Palm Avenue site is a high visibility site for a mixed-use project; that the proposals are excellent. Vice Chair Martin asked for clarification of the proposal of developers to conduct design charrettes. Mr. Burg stated that the Arcadia Land Company indicated a design charrette will be conducted if selected; that Ersa Grae Corporation indicated a charrette with the public will be conducted regarding improvements to Five Points Park. Vice Chair Martin stated that excellent projects have been presented; that the diversity of the proposed projects is interesting; that the Ersa Grae Corporation proposed project is the most ambitious; that Staff ranked the Ersa Grae Corporation BOOK TWO Page 1363 03/19/04 4:00 P.M. BOOK TWO Page 1364 03/19/04 4:00 P.M. the highest; however, the proposed project may be overly ambitious which is a concern; that the previous attempt to develop Palm Avenue failed due to being overly ambitious; that the significant amount of retail is a concern as retail activities may be at the expense of existing retailers; that the success of the hotel condominium units is uncertain; that the Sarasota Main Street Development Team proposal is interesting, particularly regarding the attempt to provide lower priced dwelling units in the Downtown; that lower priced dwelling units are included in the RFP criteria; that the Sarasota Main Street Development Team proposed project provides lower priced dwelling units; that more parking is provided; that TIF funds are not requested; that not proposing to partner with The Sarasota Opera House and the Golden Apple Dinner Theatre may be a fatal flaw; however, partnering can be negotiated subsequent to the selection; that the Arcadia Land Company proposed project is more realistically synchronized with the Downtown; that the personal ranking is: Sarasota Main Street Development Team; - Arcadia Land Company; Ersa Grae Corporation; and Benderson Development Company, Inc. Member Atkins stated that determining the best project is difficult; that the Palm Avenue project is vitally important to the Downtown; that making the best decision possible is desired; that a conclusion will be based on hearing information from individuals with relevant experience. Member Servian stated that a concern regarding the Ersa Grae Corporation is the significant and ambitious components of commercial and retail uses; that significant empty commercial space may occur if the anchor bank is not in place; that 52,000 square feet of retail is overly aggressive; that absorption of the anticipated additional 3,000 Downtown residential units may require ten years; that the Ersa Grae Corporation proposal is incredibly beautiful; that partnering with The Sarasota Opera House and the Golden Apple Dinner Theatre and improving the streetscape and Five Points Park are excellent benefits to the City; that the architecture proposed by the Arcadia Land Company is excellent; however, the prices for the dwelling units are too high; that the Sarasota Main Street Development Team can be asked to partner with The Sarasota Opera House and the Golden Apple Dinner Theatre if selected; that donating 300 parking spaces to the City is a significant positive; that the personal ranking is: Sarasota Main Street Development Team; - Ersa Grae Corporation; Arcadia Land Company; and Benderson Development Company, Inc. Member Bilyeu stated that the proposed projects are overwhelming; that the modern architecture of the Arcadia Land Company proposed project is excellent; that TIF funds should be expended responsibly for infrastructure and the public good; that the retail critical mass is not a concerni that competition is good; that critical mass is necessary to promote retail; that the personal ranking is: Ersa Grae Corporation; - Arcadia Land Companyi - Sarasota Main Street Development Team; and Benderson Development Company, Inc. Member Atkins stated that the artist, Athena Tocha, may take issue with disturbing her artwork at Five Points Park; that a Downtown hotel is preferred to a hotel condominium; that partnering with The Sarasota Opera House and the Golden Apple Dinner Theatre is essential; that the personal ranking is: Ersa Grae Corporation; Sarasota Main Street Development Team; = Arcadia Land Companyi and - Benderson Development Company, Inc. Chair Palmer stated that the Arcadia Land Company's use of Sarasota School of Architecture is wonderful; that the Arcadia Land Company's requested use of TIF funds is a concerni that the Sarasota Main Street Development Team provides more housing; that the Sarasota Main Street Development Team proposed project contemplates the affordable housing issue; that the height of the 16-story Ersa Grae Corporation proposed project is disliked; that mixed-use is a criteria of the RFP; that the costs of the BOOK TWO Page 1365 03/19/04 4:00 P.M. BOOK TWO Page 1366 03/19/04 4:00 P.M. Benderson Development Company, Inc., proposed project are a concern; that the net parking issue is the primary concern; that the Benderson Development Company, Inc., and the Sarasota Main Street Development Team proposed projects propose the most parking which still may not be sufficient; that the personal ranking is: Ersa Grae Corporation; Sarasota Main Street Development Team; Arcadia Land Company; and Benderson Development Company, Inc. City Auditor and Clerk Robinson stated that the CRA voted as follows: First Place Ersa Grae Corporation Chair Palmer Member Atkins Member Bilyeu Sarasota Main Street Vice Chair Martin Development Team Member Servian Second Place Sarasota Main Street Chair Palmer Development Team Member Atkins Arcadia Land Company Vice Chair Martin Member Bilyeu Ersa Grae Corporation Member Servian Third Place Arcadia Land Company Chair Palmer Member Atkins Member Servian Ersa Grae Corporation Vice Chair Martin Sarasota Main Street Member Bilyeu Development Team Fourth Place Benderson Development Chair Palmer Company, Inc. Vice Chair Martin Member Atkins Member Bilyeu Member Servian City Auditor and Clerk Robinson stated that a summary of the ranking is: Ersa Grae Corporation 8 points Sarasota Main Street Development Team 9 points Arcadia Land Company 13 points Benderson Development Company, Inc. 20 points On motion of Member Servian and second of Member Bilyeu, it was moved to accept the ranking of Ersa Grae Corporation as first, Sarasota Main Street Development Team as second, Arcadia Land Company as third, and Benderson Development Company, Inc., as fourth. Chair Palmer stated that developers and Staff are aware of the desires of the CRA; that refinements must be made to the proposed projects. Member Servian thanked Staff; stated that Staff has performed a commendable job on a long and difficult process; that the CRA Advisory Board is thanked; that the development will be successful; and thanked the developers for the proposals. 6. CITIZENS' INPUT CONCERNING CRA TOPICS (AGENDA ITEM VI) There was no one signed up to speak. 7. ADJOURN (AGENDA ITEM VII) CD 6:38 There being no further business, CHair Paimer dh ourped a CRA meeting of March 19, 2004, at 6:38 p.m. LOU ANN R. PALMER, CHAIR ATTEST: BilkE Robenson BILLY E. ROBINSON, SECRETARY - BOOK TWO Page 136'7 03/19/04 4:00 P.M.