BOOK 2 Page 1594 2/16/05 3:00 P.M. MINUTES OF THE SPECIAL COMMONITY REDEVELOPMENT AGENCY MEETING OF FEBRUARY 16, 2005, IMMEDIATELY FOLLOWING THE 3:00 P.M. JOINT WORKSHOP OF THE COMMUNITY REDEVELOPMENT AGENCY AND THE COMMUNITY REDEVELOPMENT AGENCY ADVISORY BOARD PRESENT: Chair Richard F. Martin, Vice Chair Mary Anne Servian, Members Fredd "Glossie" Atkins, Danny Bilyeu, and Lou Ann R. Palmer, Secretary Billy E. Robinson, Attorney Robert M. Fournier, and Deputy City Manager V. Peter Schneider ABSENT: Executive Director Michael A. McNees PRESIDING: Chair Martin Chair Martin called the Special meeting of the Community Redevelopment Agency (CRA) to order at 4:30 p.m. 1. APPROVAL RE: MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETING OF JANUARY 18, 2005 = APPROVED (AGENDA ITEM CRA-1) CD 4:30 Chair Martin asked if the CRA has any changes to the minutes of the January 18, 2005, Special CRA meeting? Chair Martin stated that hearing no changes, the minutes of the January 18, 2005, Special CRA meeting are approved by unanimous consent. 2. REPORT RE: : COMMUNITY REDEVELOPMENT AGENCY ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004 RECEIVED AND ACCEPTED THE COMMUNITY REDEVELOPMENT AGENCY ANNUAL FINANCIAL REPORT (AGENDA ITEM CRA-2) CD 4:30 through 4:36 Chair Martin stated that the item is a report concerning the Community Redevelopment Agency (CRA) Financial Report for the fiscal year (F/Y) ended September 30, 2004. Gibson Mitchell, Director of Finance, came before the Commission and stated that the CRA Annual Financial Report for the F/Y ended September 30, 2004, must be formally presented to the CRA; that revenues for 2004 totaled $4,612,739 which was $722, 477 higher than 2003; that the increase is the result of the increase in the value of property in the Community Redevelopment Area from $1,004,980,748 in 2003 to $1,114,539,970, which is an increase of 10.9 percent. Mr. Mitchell continued that expenditures totaled $882,566, of which $394,000 was for developer incentives for the Whole Foods Market Centre, $159,339 for the Cultural District Master Plan consultants, $62,966 for the Downtown Parking Master Plan consultants, and $117,565 for improvements to and rental of a parking lot on Orange Avenue. Mr. Mitchell further stated that operating transfers out totaled $1,876,631 of which $999,145 was for the 1992 Special Obligation Bonds debt service, $295,651 was for the First Florida Governmental Financing Commission, Series 2001, loan, and $294,717 for the First Florida Bonds, Series 2003, loan; that the CRA Special Revenue Fund has a fund balance of $619,575 as of September 30, 2004, versus a deficit of $1,233,967 as of September 30, 2003; that all the funds have previously been committed; that the receipt and acceptance of the CRA Annual Financial Report is requested. On motion of Member Atkins and second of Vice Chair Servian, it was moved to receive and accept the Community Redevelopment Agency Annual Financial Report for the fiscal year ended September 30, 2004. Member Atkins stated that moving toward a higher fund balance is pleasing. Chair Martin called for a vote on the motion. Motion carried unanimously (5 to 0): Atkins; yes; Bilyeu, yesi Palmer, yesi Servian, yesi Martin, yes. Mr. Mitchell stated that as Chairman of the First Florida Governmental Financing Commission, the morning of February 16, 2005, was spent in St. Petersburg, Florida, marketing $13,215,000 in bonds on which the City is obtaining a loan of $5.5 million; that interest rates increased during the morning of Eebruary 16, 2005; however, marketing the bonds was successful and the City's share of $5,545,000 is the total loan with a true interest cost 3.39 percent; that the highest debt service payment in any one year is $667,787.50 which is BOOK 2 Page 1595 2/16/05 3:00 P.M. BOOK 2 Page 1596 2/16/05 3:00 P.M. approximately $33,000 less than previously estimated; that a good rate was received despite rising interest rates. Mayor Martin stated that the success is due to the City's bond rating and the financial health of the community. Mr. Mitchell stated that is correct; that every member of the First Florida Governmental Financing Commission must have a high bond rating to be a member. 3. PRESENTATION RE : PLAZA VERDI STATUS OF TERM SHEET WITH SARASOTA OPERA, UPDATE ON PROJECT DESIGN, POSSIBILITY OF ADDITIONAL PARKING DECK, F AND PROJECT SCHEDULE PRESENTATION GIVEN (AGENDA ITEM CRA-3) CD 4:36 through 5:26 Ali Ebrahimi, President, Ersa Grae Corporation, Andrew Dorr, Project Manager, Plaza Verdi, Ersa Grae Corporation, and Susan Danis, Executive Director, Sarasota Opera, came before the Commission. Mr. Ebrahimi stated that Sarasota Opera has completed the design for a world-class international-level opera facility and has determined requirements for the next several decades; that subsequent to the determination, a mutual design which would fit the spaces for the Plaza Verdi project and the Sarasota Opera together must be determined; that resolution of numerous issues and many adjustments were required; that a project now exists which fits Sarasota Opera's current space in addition to the space which will be provided by Ersa Grae; that the spaces work and fit together and a design acceptable to both parties has been developed; that subsequently, negotiation was necessary to determine the corresponding scope of each party's obligation, for which agreements have been reached; that issues existed regarding the manner of conveyance of the property and the security for the lenders; that all the issues have been resolved with the exception of the monetary compensation; that the basic arrangement is the Sarasota Opera will contribute the land and Ersa Grae will provide the Sarasota Opera space in addition to funds to improve the space which has not yet occurred; that a determination to establish the amount of. required funds is necessaryi that an agreement has not been reached; that additional time will be required. Ms. Danis stated that the effort and energy over the past six weeks by both parties to obtain a design to meet both parties' requirements were significant. Chair Martin asked if the Sarasota Opera Board of Directors is in agreement with the results of the negotiations? Ms. Danis stated yes. Chair Martin stated that issues were building coordination and capital perspectives. Ms. Danis stated that a previous concern was the assurance to move forward confidently to attain the fundraising goals to accomplish the project; that the Season is a better time to assess the potential funds which can be raised; that the Sarasota Opera has been successful in fundraising despite the difficulty of attempting to sell a project which has not yet been designed; that the Sarasota Opera has experienced good success and is confident in the ability to reach fundraising goals. Mr. Dorr referred to renderings of the proposed project displayed on the Chamber monitors; and stated that the Sarasota Opera has completed a facility analysis; that the current facility is 84,000 square feet; that the strategic need is for 135,000 square feet; that an initial proposal did not fit with the Plaza Verdi project; that the thought was a complete impasse existed; that compromising was encouraged to create a project sO the main goals of the project would remain intact; that the Sarasota Opera hired architectural and opera management teams from Toronto, Canada, and San Antonio, Texas; that approximately $100,000 was expended in architectural work; that through a series of compromises and resolution of issues, the strategic vision has been combined with the Plaza Verdi vision; that a pedestrian arcade, the relocation of the Golden Apple Dinner Theatre, and the retail space along Palm and Pineapple Avenues fit together on the site; that approximately 6,000 square feet of space from the Plaza Verdi project will be provided for the Sarasota Opera's needs; that the Sarasota Opera designed a compact tower for the fly tower which contains most of the Sarasota Opera space but will be designed in a manner consistent with the character of Plaza Verdi; that the second floor of Plaza Verdi continues to have all of the Sarasota Opera space contiguous and working around the major features of Plaza Verdi BOOK 2 Page 1597 2/16/05 3:00 P.M. BOOK 2 Page 1598 2/16/05 3:00 P.M. and contains the balance of the space required to complete the Sarasota Opera strategic plan within the project; that the project can be completed in a phased manner which works with the Sarasota Opera capital and was key to the success of the project; that development and engineering drawings will be presented to Staff. Mr. Ebrahimi stated that drafting legal documents will begin at the time six steps are completed, the first three of which are: 1. A Term Sheet is signed between Ersa Grae and the City, which has occurred; 2. A Term Sheet is signed by Ersa Grae and the Golden Apple Dinner Theatre, which has occurred; 3. A Term Sheet between Ersa Grae and Sarasota Opera, concerning which a good understanding has been reached except for one issue, is signed. Chair Martin stated that an impasse has not been reached; that details regarding funds must be determined. Mr. Ebrahimi stated that is correct; that the City's participation may be required at times; that the help of the City will be sought. Mayor Martin asked for clarification regarding the City's assistance required. Mr. Ebrahimi stated that the remainder of the six steps are: 4. An agreement must be reached between the City and Sarasota Opera to begin preparation of legal documents; 5. The deed restriction on the property must be removed, which will occur at the earliest the first week of April 2005; and 6. Several issues in the agreement with the Golden Apple Dinner Theatre involving the City's permission or agreement have been submitted to the City and must be resolved similar issues with Sarasota Opera will be submitted to the City. Mr. Ebrahimi stated that the estimate is four months will be required to have all the Term Sheets and agreements finalized in a legal form which can be recorded; that subsequently a final design will be developed; that four months from April 2005 will be required to draft and finalize all the legal documents; that subsequently drawings, engineering, and marketing will commencei that construction will begin in 2006. Attorney Fournier stated that a provision in the Stipulated Final Judgment between the City and the previous owner, the Montgomery Roberts Association, at the time the property was acquired enabled the partners in the Montgomery Roberts Association to make a charitable contribution of a portion of the value of the property as the sale price was less than the appraised value; that the provision was the property would be used for the public good; that typically, the phrase used is "for a public purpose"; that no legal distinction exists between the so-called public good and a public purpose; that likely, the provision can be stricken from the Stipulated Final Judgment or an affirmative ruling providing a community redevelopment project is for a public purpose can be obtained from the Court, which is consistent with the Community Redevelopment Statute; that seeking a formal modification of the Stipulated Final Judgment was delayed as the hope was to obtain an agreement from all four partners of the Montgomery Roberts Association sO a document could be filed indicating everyone is in accord; that a contested hearing is not necessary, that a proposed Order could be submitted which currently is not possible; that one of the partners still has some misgivings; that a hearing has been scheduled for April 1, 2005; that the time required to receive a ruling is not known; that the Court could rule on April 1, 2005, which is the earliest a ruling would be received. Attorney Fournier continued that a Term Sheet has been executed between Ersa Grae and the Golden Apple Dinner Theatre; that a Term Sheet between Ersa Grae and the Sarasota Opera is being discussed; that the Term Sheet between the CRA and Ersa Grae contains conditions precedent to the execution of a redevelopment agreement between the CRA and Ersa Grae; and asked if four months is required to prepare agreements? Mr. Ebrahimi stated yes. Attorney Fournier stated that the Term Sheet between the CRA and Ersa Grae provides Ersa Grae must have a binding agreement to acquire the properties from the Golden Apple Dinner Theatre and the Sarasota Opera; that the Term Sheet is a reasonable manner of BOOK 2 Page 1599 2/16/05 3:00 P.M. BOOK 2 Page 1600 2/16/05 3:00 P.M. initially outlining the terms and conditions in a non-binding Term Sheet; that a legally binding agreement can then be developed. Mr. Ebrahimi stated that each agreement will be signed subject to the execution of the other agreements. Attorney Fournier stated that the expectation is consistent with the Term Sheet with the CRA; that the agreements will be executed with the Sarasota Opera and the Golden Apple Dinner Theatre prior to the execution of the redevelopment agreement with the CRA. Mr. Ebrahimi stated that is correct. Chair Martin asked for clarification regarding the agreement between the City and the Sarasota Opera. Attorney Fournier stated that the agreement has been drafted for some time; that a few provisions may require refinement; that the agreement is 90 to 95 percent complete unless something has happened since initial drafting resulting in a change; that a February 28, 2005, meeting has been scheduled with Staff and the Administration to review the agreement; that representatives of the Sarasota Opera will attend the meeting. Ms. Danis stated that she has not reviewed the draft agreement; however, the draft agreement has been reviewed by the Sarasota Opera's attorneys; that the February 28, 2005, meeting will provide a good opportunity for review. Attorney Fournier stated that a review will indicate if any outstanding issues which could be problematic exist. Chair Martin stated that the City's obligations will be based on the Court's ruling from the April 1 2005, hearing; that an additional two weeks will be required for preparation. Attorney Fournier agreed and stated that the timing is consistent with the timing of the execution of the Term Sheets as well. Chair Martin stated that a question is the CRA's and the City's approval of the Term Sheet with Ersa Grae, the Golden Apple Dinner Theatre, and the City. Attorney Fournier stated that issues between Ersa Grae and the CRA in the Term Sheet must be resolved before moving forward. Mr. Ebrahimi stated that the issues have been submitted to the City; that the changes concern variances. Attorney Fournier stated that the assumption is issues may exist in the Term Sheet between Ersa Grae and the CRA; that no technical deviations from the Engineering Design Criteria Manual are required. Mr. Dorr stated that the Golden Apple Dinner Theatre asked Ersa Grae to raise four issues on behalf of the Golden Apple Dinner Theatre; that the issues have been shared with Staff; that Staff is working with Ersa Grae to resolve the issues. Mr. Ebrahimi stated that the desire is not to have a written resolution but an understanding with the City the issues can be resolved between now and April 15, 2005. Member Palmer stated that the deadline should be known; that knowing if the project will move forward or not is necessaryi that the community and the CRA are waiting for a determination. Mr. Ebrahimi stated that the most reasonable time considering the six issues and the April 1, 2005, hearing is mid-April 2005. Member Palmer stated that a CRA meeting should be scheduled in mid-April 2005 at which time a determination will be made. Ms. Danis stated that Plaza Verdi is an extremely complex project; that a municipality, a for-profit arts organization, a commercial developer, and a not-for-profit organization are involved and must be brought together at the most basic level to understand each other's language; that a significant learning curve exists; that the wrong decision will be detrimental for the City and anyone else involved; that the CRA's understanding is requested; that building a theater is considered to involve the same complexity as building a hospital; that only one development structure is not being contemplated; that the project has complexities of serving a multiplicity of purposes in meeting the demands of the Request for Proposals (RFP); that everyone is attempting to work as fast as possible; that the project is highly complex. BOOK 2 Page 1601 2/16/05 3:00 P.M. BOOK 2 Page 1602 2/16/05 3:00 P.M. Member Palmer stated that the project has been in progress for a significant period of time; that the City requires finality if the project is to proceed; that a commitment is required although issues remain; that a commitment has been received from the Golden Apple Dinner Theatre; that a commitment is required from the Sarasota Opera and Ersa Grae indicating all the parties are in concert; that the City obviously has to work with Ersa Grae; that two of the six issues are basically resolved; that the issue involving the Montgomery Roberts Association must be settled by the Court; that the hope is a determination will be indicated at a mid-April 2005 meeting; that obtaining a commitment is the desire. Mr. Dorr stated that a significant amount of effort for resolution of issues has been expended; that at times more problems such as placement of utilities which may be an added cost are encountered; that Ersa Grae is working as hard as possible to complete the preparation expeditiously: that no one wants to build the project more quickly than the three parties involved. Member Bilyeu stated that the progress being made is pleasing; that being finished is as close as ever; that all the hard work is appreciated; that the timing is progressing; that the issues are complex; that he is positive and optimistic; that the issues are moving forward; that Staff's hard work is also appreciated. Vice Chair Servian stated that the hope is the source of the CRA's frustration is understood; that an extremely complex series of negotiations is occurring; that one reason for initial reluctance by some members of the CRA to move forward with the project was recognizing the project was complex and perhaps not feasible; that time is running; that developing is becoming more expensive; that prices are escalating; that in the meantime, the needs of City residents are being left by the wayside; that the residents beleaguer the Commissioners regarding bringing the parking to fruition on a daily basis; that the issues are not being diminished; that the situation is difficult; however, the City is going through a difficult time in dealing with the issues; that people are concerned about the reason the developer has not reached a decision; that a decision must be made to move forward or not; that the City is being as patient as possible. Member Atkins stated that a friend often asks the reason he does not speak to some issues; that the reply at times is the issues have already" been addressed; that the understanding from the beginning was the Plaza Verdi project would be a significant task; that supporting a grandiose project would be a monumental task which was known; that the participation which has come forth is appreciated; that the Commission should be applauded for moving the process forward; that the progress is pleasing; that nothing will happen to impede the project; that continuing the process is desired; that the project could be amazing; that the City has worked and suffered sO long; that people and businesses in the neighborhood have bombarded the Commissioners and the secretaries in the offices due to being in limbo; that an answer should be provided as soon as possible is the desire; that the CRA encourages finishing the process as expeditiously as possible. Mr. Ebrahimi stated that the frustration is understood. Chair Martin stated that everyone made a significant investment in the project; that he is encouraged as some breakthroughs in the major challenges have apparently occurred; that the hope is decisive information will be presented at the April 2005 meeting to provide closure to the CRA. Attorney Fournier stated that he has heard from time to time a title problem is associated with the property which is not correct; that no infirmity in the City's title to the property exists; that a requirement as to the use of the property exists; that the City could have acquired the property by eminent domain if not acquired for a public purpose.. Member Palmer stated that a meeting should be scheduled for mid- April 2005. Chair Martin stated that hearing no objections, a CRA meeting will be scheduled for mid-April 2005; that the progress is pleasing; that continuing to progress is the desire; that everyone is working toward the same effort which is appreciated; that another issue is the possibility of adding an additional level of parking to the project. Karin Murphy, Redevelopment Specialist, Planning and Redevelopment Department, came before the Commission and stated that Staff's BOOK 2 Page 1603 2/16/05 3:00 P.M. BOOK 2 Page 1604 2/16/05 3:00 P.M. recommendation is to report back to the CRA with an official recommendation. Mr. Dorr stated that the currently proposed Plaza Verdi project has 837 parking spaces; that 42 on-street parking spaces around the project were achieved; that all the discussion regarding parking was carefully considered; that he serves on the Downtown Partnership of Sarasota Parking Committee and closely follows the master planning effort; that a significant section of the Term Sheet involves six articles which deal with parking; that a presentation by the City's consultants indicated four garages are recommended in the next five years prompting the question if the Plaza Verdi garage, which is one of the four, is the right size for the City; that going backwards is not possible once significant funds for engineering and architectural design have been expended; that floors cannot be added nor the building changed without substantial loss of time and money; that the question is if a 300-car public garage is the right size; that a study indicated a typical floor could add 200 spaces; that liner buildings which disguise the parking garage are around the periphery. Mr. Dorr continued that an idea shared with Staff was to add an additional floor to the project by either using a basement level or an attic space or constructing an 11-story rather than a 10-story building; that the additional floor would allow an increase of the public garage from 300 to 450 spaces; that some spaces would be required to serve and be paid for by the liner building residential units; that the City can decide to construct the garage to contain the original 300 parking spaces as stipulated or 450; that the question should be asked now and considered prior to the expenditure of design and engineering costs for the project to ensure the investment is in the proper location; that some of the recommended parking sites are potentially problematic; that adding an additional floor to a project the scale of Plaza Verdi will not require additional time; that the recommendation is to study the proposal for a month to determine if the proposal makes sense, if financially feasible and if the CRA desires to make the expenditure. Ms. Murphy stated that Staff has received some input and has met to consider the positives and negatives; that input will be gathered; that some questions regarding the RFP may exist; that remaining consistent with the RFP is required; that input will be solicited from the parking consultants and other departments; that subsequently, Staff will again meet and report back and provide a recommendation; that an April 2005 meeting would bê a good time to come back with the official recommendation. Vice Chair Servian stated that the RFP must be reviewed. Attorney Fournier stated that consistency with the RFP is a significant concern. Vice Chair Servian agreed. Ms. Murphy stated that the CRA will be informed if the additional floor is not possible due to the RFP or if found not feasible. Vice Chair Servian asked the cost to the City of the additional floor? Mr. Dorr stated that the cost will be approximately $3 million. Chair Martin stated that $20,000 multiplied by 150 is $3 million. Mr. Dorr stated that some cost savings may exist; that the original proposal included land costs, etc.; that the cost model must be revisited. Vice Chair Servian stated that the cost should be less than $20,000. Mr. Dorr stated that $20,000 was used as a benchmark to evaluate the feasibility. Mr. Ebrahimi stated that the cost will be less than $20,000 per space; however, how much less is not known. Chair Martin stated that parking is the major question, demand, and complaint; that the City has undertaken a parking study; that the major area of need for parking is known; that adding an additional level for parking is an issue which should not be summarily discounted. Ms. Murphy stated that the issue is complex; however, the issue should be reviewed. BOOK 2 Page 1605 2/16/05 3:00 P.M. BOOK 2 Page 1606 2/16/05 3:00 P.M. Chair Martin stated that Tindale-Oliver & Associates can contribute as their work is appreciated by the City. Ms. Murphy stated that is correct; that Tindale-Oliver & Associates has provided preliminary comments and will report back; that an administrative recommendation will be presented. Chair Martin stated that a better understanding of the public parking spaces is required; that a main concern about an additional level is, after a certain number of floors, people are hesitant to use the higher floors. Mr. Dorr stated that misunderstandings exist regarding the garage; that a speed ramp from Cocoanut Avenue to the fourth level is the location of all the gate controls, the fare machines, and the ticket machines; that three levels of joint parking is provided for all the commercial space, the public space, and the retail space; that the added floor will increase the garage from a three-level garage to a four-level garage; that some people indicate the garage as being a five, six, or seven story garage which is not the case; however, the garage is a large multi-functional garage; that the garage is currently designed for three levels with 534 spaces in the flexible zone; that the additional level will provide 702 spaces in the flexible zone; that the garage would increase from three levels to four. Chair Martin stated that people are hesitant to use the upper floors in parking garages. Mr. Ebrahimi stated that some parking spaces are event-oriented; that during events, people are more willing to use the upper spaces than the daily or two hour patrons. Mr. Dorr stated that the Sarasota Opera would provide employee parking at the top level, leaving public parking available on the lower levels. Member Palmer stated that she was surprised at the time the proposal was initially presented as problems with the previous project were too much parking and too much mixed-use in one location was anticipated; that the new parking study indicates the demand is greater than as indicated in a previous study; that 300 spaces were determined appropriate; that the demand for 450 parking spaces should be explored; that one discussion was if 300 spaces are appropriate in the area; that the final parking study may indicate a need for 450 spaces in one place. Ms. Murphy stated that positives and negatives exist; that input will be considered to make a recommendation; that the April 2005 meeting will be a good opportunity to report back. Chair Martin stated that the legal question regarding the RFP should be addressed. Member Palmer stated that four to five months after mid-April 2005 will be required to develop construction drawings. Mr. Ebrahimi stated that four to five months will be required for the preparation of legal documents. Member Palmer asked the tentative schedule of the time construction will begin and the facility opened? Mr. Ebrahimi stated that the construction will begin the third quarter of 2006. Chair Martin stated that the question is the time parking will be available. Mr. Ebrahimi stated that parking will be available in 2008. Attorney Fournier stated that the parking issue is between the City and the Sarasota Opera; that the issue could be placed on a Commission Agenda prior to the CRA meeting in April 2005. Chair Martin agreed and stated that any items which are ready to bring Eorward will be placed on a future CRA Agenda; that no one has to wait until mid-April 2005 to move forward; that resolving some issues will create confidence in the community and with the CRA. 4. ADJOURN (AGENDA ITEM CRA-4) CD 5:26 There being no further business, Chair Martin adjourned the Special meeting of the Community Redevelopment Agency of February 16, 2005, at 5:26 p.m. BOOK 2 Page 1607 2/16/05 3:00 P.M. BOOK 2 Page 1608 2/16/05 3:00 P.M. dlrhr Ruckas RICHARD F. MARTIN, CHAIR SOT4S ATTEST!" / 13ill E Rebenoon BILLY,E "ROBINSON, SECRETARY