MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETING OF JUNE 8, 2004, AT 3:00 P.M. PRESENT: Chair Richard F. Martin, Vice Chair Mary Anne Servian, Members Fredd "Glossie" Atkins, Danny Bilyeu, and Lou Ann R. Palmer, Executive Director Michael A. McNees, Secretary Billy E. Robinson, and Attorney Robert M. Fournier ABSENT: None PRESIDING: Chair Martin Chair Martin called the Special meeting of the Community Redevelopment Agency (CRA) to order at 3:00 p.m. Secretary Robinson gave the invocation followed by the Pledge of Allegiance. 1. APPROVAL RE: MINUTES OF THE SPECIAL COMMUNITY REDEVELOPMENT AGENCY MEETING OF MAY 17, 2004 = APPROVED (AGENDA ITEM CRA-1) CD 3:06 through 3:07 Chair Martin asked if the Community Redevelopment Agency (CRA) has any changes to the minutes of the May 17, 2004, Special CRA meeting? Chair Martin stated that hearing no changes, the minutes of the May 17, 2004, Special CRA meeting are approved by unanimous consent. 2. REPORT RE: : COMMUNITY REDEVELOPMENT AGENCY ADVISORY BOARD ' S REGULAR MEETING OF MAY 27, 2004 RECEIVED REPORT (AGENDA ITEM CRA-2) CD 3:07 through 3:14 Chair Martin stated that John Tylee, Chair, Community Redevelopment Agency (CRA) Advisory Board, will not be present; that no member of the CRA Advisory Board is present; and requested that Staff come forward for the presentation. John Burg, Chief Planner, Planning and Redevelopment Department, came before the CRA. Mr. Burg stated that no member of the CRA Advisory Board is present to report to the CRA; that the assumption was Mr. Tylee was aware of the meeting and would be in attendance, but upon notification it was learned he had another commitment. BOOK TWO Page 1373 06/08/04 3:00 P.M. BOOK TWO Page 1374 06/08/04 3:00 P.M. Mr. Burg continued that the CRA Advisory Board thoroughly discussed the Plaza Verdi project at the May 27, 2004, CRA Advisory Board meeting; that the issue was divided into categories; that each category was discussed at some Length; that the following motions were made at the conclusion of the May 27, 2004, CRA Advisory Board meeting: On motion of Member Githler and second of Member Robbins, it was moved to recommend approval of the Plaza Verdi Term Sheet for Phase One and Phase Two of the project as presented. Mr. Burg stated further that Phase One and Phase Two is the entire project including the Sarasota Opera and Golden Apple Dinner Theatre; that the motion passed 5 to 1 with all members except Member Wood voting in the affirmative; that the second motion was: On motion of Vice Chair Quale and second of Member Githler, it was moved to recommend to the CRA approval of the alternative plan, which is just Phase One, in the event the developer is not able to reach an agreement with the Golden Apple Dinner Theatre and Sarasota Opera. Mr. Burg further stated that the vote was 5 to 1 with Member Wood dissenting on the vote. Chair Martin stated that the minutes of the May 27, 2004, CRA Advisory Board meeting are not available due to time constraints. Member Palmer asked if the minutes of the May 27, 2004, CRA Advisory Board meeting minutes are available in draft as an idea of the discussion would be beneficial. Chair Martin stated that the thought was Chair Tylee would be in attendance to provide additional information; that Staff may be in a position to summarize some of the specific points. Mr. Burg stated that the discussion was lengthy and included numerous issues; that all the issues discussed are included in the Agenda backup material; that extraneous issues which arose are included in the Term Sheet. Member Bilyeu stated that the City's Advisory Boards are in place for good reasons; that significant information can be learned from the discussions of the CRA Advisory Board and the manner in which the vote was derived; that the Agenda backup material contains comprehensive data; that having the minutes would be of benefit; that Chair Tylee's attendance would be of benefit as well; that rescheduling the meeting is supported. Vice Chair Servian stated that the suggestion is to provide a copy of the tape if a CRA Advisory Board meeting is scheduled sO close to a CRA meeting; that being aware of the discussion would have been helpful; that the rationale behind the votes and the length and details of the discussion would be beneficial; that the suggestion of Member Bilyeu to have the minutes or a copy of the tape is supported. Robert M. Fournier, Attorney, City Attorney's Office, stated that the Request for Proposal (RFP) provides a period of 90 days in which a tentative agreement with the developer would be reached; that the possibility of hearing from the Sarasota Opera and the Golden Apple Dinner Theatre would be of assistance. Member Atkins stated that reviewing the tapes or minutes would have been helpful; that enough information is before the CRA to proceed; that the meeting can be continued to obtain further information if necessary. Vice Chair Servian requested the date of the 90-day deadline. Attorney Fournier stated June 17, 2004. Vice Chair Servian stated that information could be gathered at the current meeting; and asked if the 90-day deadline would expire if time were taken to review the minutes upon completion? Attorney Fournier stated that the CRA has the authority to extend the contract by making a motion to extend the 90-day period. Member Bilyeu stated that he is ready to proceed. 3. APPROVAL RE: : PLAZA VERDI REDEVELOPMENT PROJECT TERM SHEET AND TAX INCREMENT FINANCING REQUEST OF APPROXIMATELY $4 MILLION - EXTENDED THE 90-DAY PERIOD IN THE RFP BY 15 DAYS BEGINNING JUNE 17, 2004, THROUGH JULY 2, 2004; BOOK TWO Page 1375 06/08/04 3:00 P.M. BOOK TWO Page 1376 06/08/04 3:00 P.M. CONTINUED NEGOTIATIONS ON THE PLAZA VERDI TERM SHEET, - REMOVED THE ALTERNATIVE PLAN, AND DIRECTED STAFF TO PROCEED WITH THE DIRECTION PROVIDED TO ATTORNEY FOURNIER AND STAFF ; RECEIVE THE BOARD REPORT FROM THE MAY 27, 2004, CRA ADVISORY BOARD MEETING (AGENDA ITEM CRA-3) CD 3:14 through 5:54 John Burg, Chief Planner, Karin Murphy, Redevelopment Specialist, Planning & Redevelopment Department, Robert M. Fournier, Attorney, City Attorney's Office, and Patrick Phillips, Economic Research Associates, came before the Commission. Mr. Burg stated that introductory remarks will be provided; that the developer will then come forward; that the policy direction provided for the Plaza Verdi project is included in the Community Redevelopment Agency's (CRA) adopted Request for Proposal (RFP) of October 9, 2003; that two policy documents exist; that the first is an RFP which has received significant attention; that the second document is the Tax Increment Financing (TIF) policy adopted on October 9, 2003; that Staff will provide direction for the documents; that seven objectives exist in the RFP; that the first objective is to provide a minimum of 300 parking spaces which will accommodate the required spaces for the Sarasota Opera and surrounding businesses; that the factors were based on a Tindale & Oliver survey of day and evening parking requirements which was completed immediately prior to the RFP; that the second objective is compliance with the Development and Design Standards of the 2003 Drait Downtown Code and the existing Commercial, Central Business District (C-CBD) Zone District; that the third objective is to include an arcade; that the fourth objective is to perform exemplary architecture with high quality, active street frontages along Palm and Cocoanut Avenues; that the fifth objective is as an element of the project, to provide dwelling units at a lower cost to users than the ones proposed in the response to the RFP rather than public subsidy which will not be considered; that the developer addressed the issue by proposing one-third of the units in Phase One be priced at less than $300,000; that the sixth objective is to provide the public parking which was discussed, and any other public amenity which is a cost to the City or the CRA which does not exceed the appraised market value of the property to the developer; that the analysis performed prior to the RFP did not include the concept of the municipal parking spaces which share a portion of the land costs; that Mr. Phillips will provide a complete analysis and overview of TIF; that the last objective is to include an agreement for operating and maintaining the public parking spaces at a cost not to exceed revenues generated by the parking with provisions for control of the parking by the City and provisions for the City to share parking revenues in the long term. Mr. Burg continued that a significant amount of information is being obtained regarding No. 7, operation and maintenance; that the City does not have parking structures which are managed at the present time; that receiving parking revenues will certainly relate to the amount the CRA and the Commission desire to charge for parking; that the RFP acknowledges projects considered which include the assemblage of other adjacent parcels; that an addendum to the RFP explicitly offered various developers the opportunity to share parking with the Sarasota Opera; that as noted in the May 12, 2004, CRA Workshop, Ersa Grae Corporation's proposal submitted on December 17, 2003, focuses primarily on a project which includes both the Sarasota Opera and the Golden Apple Dinner Theatre; however, the proposal also included and continues to include an alternative to develop on only the City owned land in the event agreements are not reached with both the Sarasota Opera and the Golden Apple Dinner Theatre; that the priority the CRA places on the two projects should be discussed; that the total project includes the current parcels of the Sarasota Opera, the Golden Apple Dinner Theatre, and an alternative project which is on City-owned land. Mr. Burg stated further that Attorney Fournier explained earlier the RFP did include the 90-day negotiation period; that the 90-day negotiation period should be discussed at the conclusion of the meeting if the CRA is not able to arrive at a motion to proceed with the Term Sheet; that the focus of the current meeting is on broad issues which will be outlined; that two distinct projects have been submitted by Ersa Grae Corporation; that the amount of priority the CRA desires to provide the developer in terms of negotiating with the Sarasota Opera and Golden Apple Dinner Theatre and the importance of the more aggressive project must be determined; that a second issue is parking supply and design; that the 300 parking spaces should be consistent with the RFP and designed in a manner which meets the City's requirements; that the subject was discussed at some length at the May 12, 2004, CRA Workshop. BOOK TWO Page 1377 06/08/04 3:00 P.M. BOOK TWO Page 1378 06/08/04 3:00 P.M. Mr. Burg further stated that the CRA must make a policy decision regarding the acceptable building height for the Pineapple Avenue parcel; that the developers proposed a 16-story, 180 foot building on the parcel; that at the May 12, 2004, CRA Workshop, the developer proposed the building be allowed a maximum height of 18 stories as allowed in the Downtown Bayfront (DTB) Zone District; that implications in terms of the developer's ability to negotiate with the Sarasota Opera and Golden Apple Dinner Theatre is the additional height provides additional revenue which would make negotiations more successful; that pros and cons may also exist with regard to the additional height; that the use of TIF funds require the terms outlined in the Term Sheet should be consistent with the CRA adopted policy for the use of TIF funds; that the manner in which the increased cost and scope for Eive Points Park impact the terms will be addressed; that Ms. Murphy will review the criteria with the CRA; that Mr. Phillips will provide an analysis of the use of TIF funds; that the entire issue of parking maintenance has been a learning process; that work is being conducted with the consultant on the Downtown Parking Master Plan; that a Scope of Services and an Outline of Issues have been received from the consultant; that the intent is to study the issues in the upcoming weeks; that the issues will be used in formulating a Development Agreement with the developer assuming an agreement to move forward is reached; that the issues will be adequately addressed. Mr. Burg stated further that Attorney Fournier will address the issues from a legal perspective such as assuring the language in the Term Sheet protects the City's interest; that Attorney Fournier will review the language with the CRA at the present time and provide an outline from a legal perspective. Attorney Fournier stated that building height, parking, and the alternate plan which has been submitted will be discussed; that a May 24, 2004, memorandum from Economic Research Associates to Ms. Murphy, the Project Manager on the Term Sheet, indicated some concerns; that a significant number of issues raised in the memorandum have been resolved and are misleading due to the time constraints; that most of the changes would already be incorporated into the Term Sheet if more time had been available; that the issues raised have been discussed with the developer's representatives and counsel at some length; that substantial progress has been made toward resolving most of the issues; that the choices available to the CRA will be explained. Attorney Fournier continued that the RFP clearly provides the height limitation would be 10 stories for the 2.25 acre site on Palm Avenue, which is consistent with the proposed Downtown Core (DTC) Zone District; that the DTC Zone District is proposed on the site on the conceptual map in the new City of Sarasota Downtown Code (Downtown Code); ; that a height issue must be resolved with respect to the property on Pineapple Avenue which is occupied by the Golden Apple Dinner Theatre and the Sarasota Opera pavilion; that currently under the conceptual map, the property on Pineapple Avenue is scheduled for rezoning to the DTC Zone District which would also be limited to 10 stories; that the developer has requested a building up to 18 stories; that several ways to achieve the desired building height have been proposed; that a summary of the manner in which to achieve desired building height and the choices available to the CRA will be explained. Attorney Fournier stated further that one manner in which additional height could be achieved would be to rezone to the DTC Zone District and amend the City's Comprehensive Plan, also called the Sarasota City Plan, 1998 Edition (City's Comprehensive Plan) to expand the boundaries of the area in which two buildings would be allowed to exceed the 10 story height limitation; that the property on which the 18 story building would be located is immediately on the other side of Pineapple Avenue; that the CRA should be made aware of the two practical limitations in amending the City's Comprehensive Plan; that the time for making an amendment to the City's Comprehensive Plan is prohibitive; that the process is lengthy and would interfere with the developer's schedule; that the height of the two new buildings is limited to 180 feet according to the new Downtown Code which has been adopted; that the developer desires to construct up to 18 stories which would be allowed under the DTB Zone District; that conceivably the building could exceed the 180 foot limitation; that the building has not been designed at the present time; that no plans have been drafted; that discussions have been held about a 210 foot building which would exceed the 180 feet limitation by 30 feet; that the amendment to the City's Comprehensive Plan would not work. Attorney Fournier further stated that the developer ultimately desires a building which exceeds 180 feet in height. BOOK TWO Page 1379 06/08/04 3:00 P.M. BOOK TWO Page 1380 06/08/04 3:00 P.M. Vice Chair Servian stated that the other limiting factor in the new Downtown Code is the two 18-story buildings must have at least 50 percent or more commercial occupancy with no variance. Attorney Fournier stated that is correct; that the language was added upon adoption; that the other option is the Downtown Bayfront (DTB) Zone District which would allow 18 stories; that contract zoning issues have been a concerni that the City is not in a position to assure any developer of property being rezoned to the DTB Zone District; that a hearing would be required prior to a zone district change; that provisions for setting up the City-initiated application process can be arranged; that the CRA could indicate discomfort with the issue and an unwillingness to proceed if a high level of discomfort exists with a 210 foot building or a building which could be allowed under the DTB Zone District; that the developer and Staff are better off being aware of the unwillingness of the CRA to allow such a building at this time rather than in the future. Member Palmer asked if a compromise could be reached such as restricting the height of a building rezoned to DTB Zone District? Attorney Fournier stated that an agreement can be reached if a proffered arrangement exists; that rezoning petitions filed by private landowners frequently reach similar agreements; that the other alternative is not necessarily recommended by Staff which is to leave the site in the C-CBD Zone District enabling the erection of a 180-foot structure; that a 180-foot building would be allowed if the site plan was filed while the property was still zoned C-CBD; that the building would be non-conforming if the property was rezoned to the DTC Zone District as the height limit would be 10 stories; that the DTB Zone District is the best solution from the developer's perspective; that the Commission should decide the issue. Vice Chair Servian asked if the Zone District change would be inconsistent with the RFP? Attorney Fournier stated no; that the height limitation was restricted to the 2.25 acre piece on Palm Avenue with a frontage on Cocoanut Avenue; that the non-City owned sites on Pineapple Avenue do not apply. Vice Chair Servian stated that the developer's Term Sheet was reviewed; that the number of stories is either approved or not; that the developer is not willing to construct the second phase if a level of comfort cannot be provided to move forward and rezone the property to allow 18 stories. Attorney Fournier agreed; and stated that the developer should be asked the question; that a relationship undeniably exists between the allowable height on the Pineapple Avenue parcel and the extent to which Ersa Grae Corporation will be willing and able to facilitate the relocation of the Sarasota Opera pavilion and the Golden Apple Dinner Theatre; that the renovation performed at the Sarasota Opera to a large extent depends on the type of building the developer is able to build on the Pineapple Avenue site; that a relationship exists between the two; that the contracts the developer contemplates with the two private parties may not actually be finalized until the ultimate rezoning of the site is completed. Attorney Fournier continued that the next point to address is the parking; that a provision exists under the RFP which indicates if the zoning regulations or standards in the existing C-CBD Zone District are more restrictive, the standards will prevail over the new Downtown Code; that the requirement was included primarily to address parking; that the parking requirements are greater under the existing C-CBD Zone District regulations than under the new Downtown Code; that the development will meet all the parking standards which are applicable in the C-CBD Zone District; that the RFP indicated the City would provide parking spaces for the Sarasota Opera out of the 300 parking spaces; that the Golden Apple Dinner Theatre requires discussion; that no similar provision was present in the RFP; that the understanding at the present time is the Golden Apple Dinner Theatre has 281 seats; that the standard in the C-CBD Zone District is one parking space for four seats; that approximately 70 parking spaces would be necessaryi that 70 parking spaces are not available; that the Golden Apple Dinner Theatre has approximately five or six parking spaces; that Timothy Litchet, Director of Building, Zoning and Code Enforcement, indicated the new Downtown Code would allow for the grandfathering in of the 65 non-conforming spaces for the existing 281 seats; that no new parking would necessarily be provided if the Golden Apple Dinner Theatre was relocated in the same project; that expansion of the Golden Apple Dinner Theatre to approximately 350 seats is being discussed; that parking would be necessary for the difference between the 350 and the 281 existing seats; that the additional 70 seats divided by four would equate to approximately 18 new parking spaces; that the 18 new parking BOOK TWO Page 1381 06/08/04 3:00 P.M. BOOK TWO Page 1382 06/08/04 3:00 P.M. spaces would have to come out of the spaces in the garage which are the developer's responsibility rather than from the 300 City parking spaces. Attorney Fournier stated further that a deficiency exists in the number of required parking spaces under Phase One which should be addressed; that two different ideas may exist on the exact action of the CRA back in March 2004 with respect to the alternate plans; that other developers may take the position; that the CRA only chose the developer's primary proposal which includes the Sarasota Opera and the Golden Apple Dinner Theatre; but that the developer could take the position the CRA chose both the primary plan and the backup plan meaning that the CRA actually chose both plans; that the CRA was not explicit; that the action taken in March 2004 was simply to authorize negotiations with the developer to determine if a tentative agreement could be reached within the 90 day period; that a choice must be made if the CRA desires to move forward with an agreement based only on the primary plan which includes the Sarasota Opera and the Golden Apple Dinner Theatre or if the primary plan is only the first choice of two plans; that the developer can go to the alternative plan which does not include the Sarasota Opera or the Golden Apple Dinner Theatre; that the CRA Advisory Board recommends the alternative plan be included. Chair Martin stated that the CRA Advisory Board voted in such a manner in the second motion. Attorney Fournier stated that the Ersa Grae Corporation proposal was appropriate; that the plan was timely submitted in response to the addendum; that the Ersa Grae Corporation has a right to request the CRA accept the backup plan; that the CRA should make a decision if to include the backup plan or not; that the inclusion of the backup plan was appropriate and timely submitted. Member Palmer stated that a deficiency of 30 parking spaces exists under the primary plan based on Phase One. Attorney Fournier continued that a possibility exists in which the required parking spaces during Phase One will not be sufficient; that the shortage of spaces would be made up from the City's 300 parking spaces; that only 270 of the 300 spaces would be required if 30 public spaces are provided in Phase One and the addition of 30 spaces in Phase Two; that issues concerning parking were considered important to mention sO the developer could be asked questions at the current time rather than several months later. Attorney Fournier stated further that the memorandum includes a few other issues; that the provision regarding reimbursement to the developer under certain circumstances for costs for failure to meet the project schedule should be addressed. Ms. Murphy stated that Mr. Burg has provided an overview of the RFP objectives and process; that Attorney Fournier has outlined the issues and concerns to address as policy directions, conditions, or through a subsequent Redevelopment Agreement; that the focus at the current meeting will be on the CRA process, outlines of the policies and procedures, and the Staff analysis by which the project was reviewed; that a draft Term Sheet is before the CRA at the current meeting and is comprised of two different portions; that one portion concerns the acquisition and disposition of property which is tied into the RFP; that the June 17, 2004, deadline to reach a tentative agreement is also mentioned; that the second part involves the tax increment financing (TIF) request; that Staff desires the CRA to decide whether or not to continue with the selected developer or to proceed to the alternate; that secondly, direction for inclusion in the final Term Sheet and associated Redevelopment Agreement is desired if negotiations are to proceed with the selected developer. Ms. Murphy continued that a signature component of the project is the ability to facilitate the relocation of the Sarasota Opera office and the production facilities including the expansion of the Sarasota Opera flytower and the relocation of the Golden Apple Dinner Theatre to new facilities which will be financed by the redevelopment of the existing Sarasota Opera pavilion and the Golden Apple Dinner Theatre parcels and some of the associated air rights; that input from the public and the project team required clarification prior to going to the CRA Advisory Board to assure the motions were clear as to the alternate plan; that the CRA Advisory Board made two motions and endorsed the alternate plan as an option. Ms. Murphy stated further that based upon the tight time frame to review and process the draft Term Sheet, fulfilling the tentative agreement condition of the RFP, and finalizing the selection of the Project T'eam, the luxury of providing the CRA with a draft Redevelopment Agreement is not available; that the right is reserved to ensure items are incorporated in detail in a draft Redevelopment Agreement to protect the City's interest BOOK TWO Page 1383 06/08/04 3:00 P.M. BOOK TWO Page 1384 06/08/04 3:00 P.M. should the CRA opt to proceed with the process; that the process is outlined by the City Attorney and Staff comments found throughout the packet as part of the Agenda backup material; that Staff and the developer have reached an agreement; that 22 versions of a Redevelopment Agreement were reviewed at the time the Whole Foods Market Centre Redevelopment Agreement was prepared; that negotiations have progressed significantly; that the developer's rights and obligations under the current Term Sheet are contingent upon the execution of a contract to purchase the Sarasota Opera and the Golden Apple Dinner Theatre parcels within the 90 days; that the time frame on the Term Sheet can be tightened up at the time discussion on the alternate plan takes place, should the primary plan be chosen. Ms. Murphy further stated that a competitive RFP process is used to determine the project which best meets City redevelopment objectives; that projects must also comply with the State Statutes if involving the sale or lease of City or CRA owned real property; that in January 2004, Economic Research Associates (ERA) from Washington, D.C., was retained by the City to assist in the process of selecting and negotiating with the development partner for the Palm Avenue project in the Downtown; that ERA has completed the following tasks with the Project Team as part of the ongoing process: Assisted the City's evaluation committee in evaluating the economic and financial elements of each of four development proposals provided by the different teams; Analyzed and compared the expected economic impacts associated with the four development proposals and presented the findings to an evaluation committee, the CRA Advisory Board, and the CRA; Assisted in estimating the likely payback of approximately $4.0 million in TIF funds from the City's Redevelopment Trust Fund under various terms for two of the proposals; Assisted the City's evaluation committee and Staff in negotiating the draft Term Sheet for use as a basis for subsequent Redevelopment Agreements with the selected developer, Ersa Grae Corporation; and Completed the Economic Analysis and Risk Assessment of the draft Term Sheet as detailed in the Staff Analysis and found in Appendix C. Ms. Murphy stated that the process adopted by the CRA for TIF funding included both a preliminary and final analysis; that the process is new and was adopted by the City in October 2003; that the RFP process was treated as the preliminary phase; that the criteria in the Staff report is for the final analysis or the risk assessment; that Patrick Phillips of ERA will provide a detailed presentation of the final analysis or the risk assessment; that the Staff report includes the summary as well as the requirements of the adopted procedures based. on the requirements in the report; that the requirements in the report include but are not limited to the following: Whether or not the project or the portion relating to the redevelopment objective would occur "but for" the requested public assistance; and The City priorities and public purpose being served. Ms. Murphy stated that certain criteria is provided in the Staff analysis and Mr. Phillips will provide the economic analysis; that the continued requirements in the report are: The evaluation of the developer's capacity to undertake the project; The development cost to the project; - Identification of the type and amount of all public assistance required; Ms. Murphy stated that criteria as to the public benefit is considered whenever TIE funding under the new process is requested, which will be during the preliminary and final analysis; that the details of the cost must be provided and all criteria must be met; that the analysis must identify any potential negative impacts to the City or the CRA in providing the public assistance, methods to minimize and manage such risks and impacts, and when appropriate, a comparison with the project to other publicly assisted projects such as the Whole Foods Market Centre and New York Times projects with whom agreements have been reached; that the work of the parking consultants will be incorporated into the general parking procedures; that the parking consultants were sent the material available to date relevant to the project; that the material was incorporated and recommendations as to general policy guidelines, operations, and BOOK TWO Page 1385 06/08/04 3:00 P.M. BOOK TWO Page 1386 06/08/04 3:00 P.M. management issues were provided; that Staff desires to continue the process should the CRA determine to proceed with the developer; that the consulting services should be utilized in crafting a Redevelopment Agreement as well as further additional assistance from ERA; that Staff is recommending approval as conditioned in conjunction with ERA's analysis; that Mr. Phillips will provide the specifics on the economics. Member Palmer stated that the Whole Foods Market Centre and the New York Times projects were approved prior to the new "but for" criteria; that assurance should be given of not comparing apples with oranges. Mr. Phillips stated that TIF concepts will be covered initially from the ERA's perspective; that ERA has been involved in many projects nationally; that the projects vary significantly as the State enabling statutes are quite different; that consistent common threads and basic principles exist which are important to revisit at the outset; that the manner in which the Plaza Verdi project fits in with the basic projects and criteria will be discussed; that some observations regarding the overall costs and benefits of the project will be discussed in closing; that dramatic growth in the use of TIF funds has occurred nationally; that numerous cities and towns across the country are presently having similar discussions; that several factors are at playi that the general revival of American Downtowns is one reason; that reviving American Downtowns is difficult; that developing in Downtown locations carries both a cost and a revenue premium; that a financing gap generally necessitates being closed; that TIE is a powerful, adaptable, and flexible tool around the country and assists in closing the gap whether for high land costs or the cost premiums associated with density; that structured parking is an important public objective which raises the cost of development; that another reason for the popularity of TIF is property values have been increasing in the last several years, driven by interest rates and supply and demand. Mr. Phillips continued that TIF is always more popular when rising property values exist; that TIF loses popularity when property values are stagnant or declining; that all the positive considerations are in place in the Cityi that City Staff alluded to some important tests for underwriting any potential TIF deal which can be referred to as the "but for" test, the "net new" test and a proportionality" test; that the tests can be taken singly as the tests apply to the Plaza Verdi project; that the "but for" test is the most important; that the test basically is, but for the public investment, but for the TIF, the private investment would not occur; that the importance of and underlying logic of TIF and the political acceptability of TIF is the notion of not redirecting existing tax revenue to subsidize a new development; that future tax revenue is allocated to support a targeted public investment which enables the private investment to occur; that the distinction is important and should continually be adhered to as the TIF projects are packaged and approved. Mr. Phillips stated further that the "net new" test is related to the "but for" test; that the suggestion is the public benefits can only be counted if the benefits are "net new"; that an existing economic activity producing tax revenue which is simply relocating is not really net new; that the principle is important; that the third proportionality test is more subjective; that the benefits require being viewed in relationship to the costs; that working through a cost benefit equation with each set of policy decisions is required; that typically the projects are analyzed in terms leverage; that the question is the number of private sector dollars which each dollar in public investment leverages; that significant success has occurred in the last 30 years in public/private partnerships which suggests the location of the project on the scale. Mr. Phillips further stated that two factors should be known; that the first factor is if the overall concept is sound; that the project is mixed use, consistent with the Downtown Master Plan 2020 notwithstanding the particular issues of the Zone Districts and the height; that the overall Downtown objectives are advanced and market supportable; that substantial recent experience with the project underway by the same developer on a nearby site suggests the market will accept the site proposed; that the development team is also qualified and capable of financing, building, and marketing a successful project; that the "but for" test will be discussed; that the project includes the replacement of 300 public parking spaces transitioning from surface spaces to structured spaces; that structured spaces are obviously quite expensive; that the parking spaces are definitely expensive if structured like the parking spaces in the Five Points Plaza project; that an additional cost premium is supported above and beyond which may be expected in a standalone structured parking facility; that the City is acquiring a City-owned site in compensation for the developer's obligation to construct the parking spaces; that the City-owned BOOK TWO Page 1387 06/08/04 3:00 P.M. BOOK TWO Page 1388 06/08/04 3:00 P.M. site's assessed value is worth approximately $4.1 million; that the cost of the parking spaces on a basis of $20,000 per space times 300 spaces is $6 million; that the difference between the $6 million to construct the parking and the $4.1 million land benefit which is being received is approximately $1.9 million; that $1.9 million is the amount of the TIF which shall be redirected toward the component of the project; that the balance of the TIF, the $2.1 million, is focused on streetscape improvements, part of which will benefit Plaza Verdi but perhaps most of which will benefit the redevelopment, redesign, and improvement of the surrounding area, Five Points Plaza; that is conceptually the manner in which the economics are working and the role of the TIF in Plaza Verdi. Mr. Phillips continued that the manner in which to test the "but for" concept is to consider the returns to the developer with or without the TIF funding; that whether or not the developer would make the investment without TIF should be considered; that the assumption is the developer will receive free land or market value for the land; that the pro forma analysis was analyzed and the working assumptions were critically reviewed; that some adjustments were made; that the determination is with TIF in place, the cash-on-cash return or profit of approximately 11 percent which is earned; that the returns from the pro forma excluding TIF fell to eight percent; that assuming the developer was paying all the costs, the developer's returns fell to eight percent without TIF; that the interest rate environment, the expectations of both debt and equity investors, a cash-on-cash hurdle rate or return requirement of at least 10 percent is seen; that TIF is 11 percent which is interesting; that a few points below without TIF is eight percent; that eight percent is very risky; that based on the knowledge of the project, the development would not likely occur without TIF; that the land would probably be developed; that the parking garage would likely not be built; that the project most likely would not occur with the structured parking without the TIF contribution. Chair Martin asked for clarification regarding the TIF dollars of $1.9 million or the total $4 million? Mr. Phillips stated that the TIE dollars would be the total $4 million as the entire project is being considered, which includes Phases One and Two; that another question to ask during an analysis is if too rich of a return is being offered with TIE; that the cash-on-cash return as calculated by ERA with the TIF using the pro forma is approximately 11 percent; that the return to the developer is not significant; that the costs will be financed; that a leveraged return will be realized after financing which is somewhat higher; that the suggestion is the "but for" test is passed; that the deal is unlikely to happen without TIF funding; that the developer is receiving a fair but not excessive return with TIF funding; that the "but for" test indicates TIF funding is a meaningful development incentive; that the developer is not receiving excessive returns; that one advantage in terms of evaluating the numbers is a comparable project is underway nearbyi that the assumptions upon which the numbers are based are quite reasonable; that the numbers will change on the cost and revenue side as the project will take a significant amount of time to begin; that growth in selling prices has been evidenced in the City in the past 24 months; that substantial cost inflation has also been evidenced; that the Consumer Price Index and general inflation statistics have not indicated the cost inflation; that people involved in construction realize the price of steel is up approximately 70 percent for 2004; that fluctuations on the cost and revenue side will exist; that the project appears to pass the "but for" test. Mr. Phillips continued that the "net new" test asks if the development would occur elsewhere in the City; that the test is difficult as the development could occur elsewhere; however, the location is highly strategic considering the objectives for the Downtown Master Plan 2020 and the Lower part of Main Street; that substantial benefits exist Downtown besides the replacement of the parking spaces; that the base plan includes the potential growth of the cultural amenities Downtown, the improvements to a public open space, and substantial buying power with new households, office workers, and hotel guests Downtown; that the Plaza Verdi project can only be constructed on the current site; that the economic contribution and fiscal benefits associated with the Golden Apple Dinner Theatre and the Sarasota Opera will be netted out of the equation; that the anticipation is for a fully functional new space, an increase in Downtown activity, and for some incremental benefits; that the incremental benefits have been excluded from ERA's equation; that some incremental benefits will happen due to the investment and should be recognized due to the investment. Mr. Phillips further stated that the third test is proportionality; that the view is somewhat subjective; that TIF of $4 million represents approximately three percent of the total development cost; that $35 is leveraged in private BOOK TWO Page 1389 06/08/04 3:00 P.M. BOOK TWO Page 1390 06/08/04 3:00 P.M. investment for every $1 in public investment; that TIFs in the past several years have resulted in public investment of over 10 percent, and in one case 30 percent, of the total project cost; that three percent is a nominal percentage in ERA's experience across the country in terms of the proportion the TIF represents of the total cost; that the leverage ratio is high as a result; that the Federal government at one time provided gap financing with underwriting guidelines which suggested from one to 10 percent was successful; that TIF represents a relatively small proportion of the project; that many State enabling statutes allow TIF funding for private mprovements; that Florida is restricted to public improvements; that the public receives a direct benefit from TIF funds such as public parking and public space improvements. Mr. Phillips stated further that the last issue is the cash flow; that sufficient TIF funds must be available to finance the improvements; that the amount of TIF must be supportable; that a meeting took place with the Finance Director to establish a range of coverage on the relationship between the incremental tax revenues coming in and the magnitude of the TIF requested; that the total project value upon completion has an estimated market value of $166 million which includes Phases One and T'wo; that the Golden Apple Dinner Theatre, the Sarasota Opera, and the public parking are excluded from the amount; that the Golden Apple Dinner Theatre and the Sarasota Opera are already occurring elsewhere and would not be "net new"; that the public parking has been considered not taxable which is a conservative position; that the annual property tax is computed at $983,000 based on the $161 million amount; that $983,000 would be sufficient to support a TIF bond of approximately $7.4 million if funds were borrowed on the revenue stream at approximately 5.5 percent interest over a 10-year amortization period with relatively short term notes; that $7.4 million is substantially more than the $4 million which is requested. Mr. Phillips stated that the same relationship of cost and value would be used if Phase One was built with no Golden Apple Dinner Theatre or Sarasota Opera parcel; that the project would be much smaller; that the market value would be approximately $106 million; that the same formula would be applied; that an annual property tax payment of $634,000 would be sufficient to support a TIF bond of approximately $4.8 million; that the numbers require further analysis; that more funds could be removed off the top to the General Fund; that the proportion of return is still above the amount being requested; that the analysis suggests the proportion of return is between the low and high cases; that the relationship of the two TIF components is related to the provision of the parking spaces on the Plaza Verdi site; that another component of the $2.1 million is related to streetscapes, utility extension work, etc.; that a portion of the $2.1 million is designed to improve Five Points Park; that the improvements to Five Points Park will increase the value of Plaza Verdi which is consistent with the logic of TIF funding; that TIE funding logic involves the public investment creating value which makes the project happen. Mr. Phillips continued that other properties also derive value from the improvements at Five Points Park; that Eurther analysis may be warranted to consider alternative funding opportunities for a portion of the Five Points Park improvements by utilizing other revenue sources through the City's Capital Improvement Program (CIP), General Obligation (GO) Bonds, or other funding sources; that incremental taxes achieved from adjacent properties which benefit from Five Points Park improvements, such as the TIF District, may be a potential source of funds; that the annual payment is sufficient to support the debt service on bonds exceeding the value requested even utilizing the alternate plan of the project. Mr. Phillips further stated that in summary, substantial benefits to the public are derived from the project utilizing the TIF funds supplemented by net parking revenue, employee and retail sales related benefits, and a broad range of other potential redevelopment benefits; that the incremental property taxes appear to comfortably cover the public costs; that the return to the developer is fair but not excessive; that a strong public return on the investment is provided at a reasonable risk. Vice Chair Servian stated that the pro forma which has been provided delineates the prices of the condominiums, office and retail space; and asked for the amount of control the City would have in assuring the numbers do not change dramatically if the City approved the project and the TIF funding? Mr. Phillips stated that the likelihood of prices changing to reflect market demand is high; that the City must rely on the City's and developer's team to establish reasonable and acceptable price ranges; that the understanding is a criterion which specifically relates to pricing and affordability of the BOOK TWO Page 1391 06/08/04 3:00 P.M. BOOK TWO Page 1392 06/08/04 3:00 P.M. units is addressed in response to the RFP which provides some leeway to establish controls on the figures; that the practice is common in other regions. Attorney Fournier stated that the language in the RFP indicates an element of the project is to provide dwelling units at a lower cost than currently being provided Downtown; that a benchmark of the average cost of dwelling units being provided should be consistent with the RFP; that the manner in which to attain the consistency is unknown. Vice Chair Servian stated that the development of a tracking mechanism to provide an average of the value of commercial, retail, and residential space would be beneficial; that the project should be monitored. Mr. Phillips stated that other jurisdictions are typically connected with the well-developed affordable housing criteria in existence; that usually a percentage of the area median income is utilized; that the units are designed in accordance with the figures; that the calculations are based on buyer income; that a situation is unknown which benchmarks prices against prevailing market prices; that a proportion of units could be sold for "X" percent of the average; that an index could be developed for the purpose. Vice Chair Servian stated that affordable housing was not specifically addressed as the CRA Advisory Board and the CRA determined building affordable housing in the Downtown is difficult due to the higher costs associated with Downtown. Mr. Phillips stated that the financing difference is increased to the extent the selling price of the units are restricted; that the pressure on TIF funding would be increased; that developer returns would be decreased. Member Palmer stated that clarification is necessaryi that the proposal is for over 50 units; that the calculation is 17 of the 50 condominiums would be based on 30 or 33 percent; that one-third of the units would be less than $300,000; that $300,000 is not affordable to many people; that the unit coverage will be less than two bedrooms; that some commitment should be present in the development agreement to actually follow through; that the City would have to assure the follow through occurred. Attorney Fournier stated that is correct if the RFP is followed through. Chair Martin stated that the Term Sheet indicates a permitted change is to increase or decrease the condominium units by 35 units; that the true definition of one-third would then change. Member Palmer stated that the bond financing request requires clarification. Member Atkins stated that the understanding of the vote on the primary project was for the entire project, Phases One and Two; that the alternate plan is of no interest; that the manner in which the project will be implemented and if the project will proceed are the concerns. Chair Martin stated that Member Atkins has made a valid point; that the question should be addressed; that recommendations have been received; that the CRA has made choices based on projects presented to the CRA; that Ersa Grae Corporation was the chosen developer; that Member Atkins has expressed support for the primary plan rather than the alternate plan. Member Palmer stated that the primary plan is supported. Vice Chair Servian stated that the necessity for a building height of 18 stories in order to utilize the primary plan is a concern; that commitment to a building height of 18 stories is not supported. Member Atkins stated that he disagreed with the height restriction being the issue. Vice Chair Servian stated that the desire is to hear an indication of the height of the building not being the issue; that nothing has been read or heard to provide comfort regarding the height issue; that the underlying goal of moving forward with the project is the 18-story building requirement. Chair Martin stated that the CRA must make the decision; that the primary plan can proceed with the consideration provided. Vice Chair Servian stated that the documentation indicates the development group cannot justify funding the Golden Apple Dinner BOOK TWO Page 1393 06/08/04 3:00 P.M. BOOK TWO Page 1394 06/08/04 3:00 P.M. Theatre and the Sarasota Opera without the height to assist in offsetting the costs. Executive Director McNees stated that the CRA must decide which decision to make first; that the CRA must decide if the alternate plan is acceptable; that the primary plan only will be discussed if the alternate plan is not acceptable; that the CRA must decide if keeping the alternate plan is necessary in the event the primary plan does not work; that the CRA can make the decision without committing to any specific configuration of the initial proposal; that the first should be made. Chair Martin stated that deciding the first issue will allow the CRA to focus on the other considerations. Member Palmer stated that Vice Chair Servian's point is certainly relevant; that the original proposal had the height at 16 stories; that the proposal included the information concerning the height; that an additional two stories is being requested; that the DTB Zone District could allow for the additional building height; that the City Attorney was asked to research consideration of an agreement with the developer regarding the height issue; that Staff indicated the possibility existed to reach an agreement. Attorney Fournier stated that the developer should be provided the opportunity to respond to the allowable height issue and potential ramifications of the height limit. Member Palmer stated that the issues must be addressed sO the developer has knowledge of the concerns of the CRA; that a few other concerns exist. Member Bilyeu stated that TIF was explained rather well; that the numbers are different; that the figure increased from $140 million to $166 million. Mr. Phillips stated that the ultimate taxable value of the project is debatable; that $140 million represents the development costs, net of land, and the development cost to the developer; that $166 million has been provided by the developer as the ultimate market value; that $140 million would not include developer profits and growth in the value once the buyers begin purchasing; that the ending figure will be indicated by the appraiser. Member Bilyeu stated that three percent of $4 million of TIF funds decreases the profit by almost 50 percent; that the $4 million was analyzed; that the City is not providing the developer with anything; that the personal choice is to sell the land for $4 million and have the developer construct a building; that a parking garage could be built in another location; that the general public should be aware of the project. Mr. Phillips stated that the summarization is correct; that $4 million takes the returns from a marginal amount to an acceptable amount for the developer; that the developer must determine if the project is ultimately acceptable; that the project is hovering around the 10 percent range which is clearly a decision point; that selling the land was considered; that land in Downtown is scarce and expensive; that the project could probably be built somewhere near the Sarasota-Bradenton International Airport. Member Bilyeu stated that real estate is owned in other areas of the Cityi that building an independent parking garage would be less expensive than constructing a parking garage inside a building. Mr. Phillips stated that all the funds would likely be spent even if the City had the land and built a parking garage; that the parking garage would not be integrated into the Downtown fabric as will the Plaza Verdi parking garage. Member Bilyeu stated that the project is supported; that the City is not really giving away $4 million; that the return is in the form of an investment; that a return is generated. Executive Director McNees stated that other factors are involved with the issue of building an independent parking garage; that a significant parking deficit exists at the specific location; that the parking frustrations Downtown will be eased; that the funds can be utilized to build a parking garage several blocks away; that a parking deficit exists which is the major reason the project is before the CRA. Member Bilyeu stated that Andres Duany, Principal, FAIA, Duany Plater-Zyberk and Company, indicated the parking should not be on-site; that the two to four blocks could be walked; that the BOOK TWO Page 1395 06/08/04 3:00 P.M. BOOK TWO Page 1396 06/08/04 3:00 P.M. most significant concern is for the public being aware the $4 million is an investment. Chair Martin stated that misunderstandings occur even though the explanation is broadcast to the public; that misunderstanding and confusion occurs concerning the source of TIF funding. Member Palmer stated that TIF funding provides a public benefit; that all the TIF funding identified thus far is exclusively for providing a public benefit; that the City could perform the renovations to Five Points Park without becoming involved with a private developer; that the City could independently perform the improvements to the infrastructure and the streetscape on Palm Avenue, etc.; that the purpose of the public partnership is to accomplish the improvements in conjunction with the development which results in profit to the City based on the future tax increment; that the "but for" evaluation is accurate; that the Five Points Park renovation will not be performed if the City does not provide the funding; that the project will not occuri that the improvements will not occur without the benefit of the TIF funding; that TIF funding is an investment; that the investment will be repaid repeatedly over the life of the project; however, one of the questions deal with the pro forma. Member Palmer continued that the pro forma for the Plaza Verdi project requests $772,898 in hard costs for the project; that the developer requests City permit and impact fees be waived which is a concerni that an indication is no taxes will be paid on the property until the development is completed at the time the conveyance of the property to the developer occurs; that the original Term Sheet includes a developer's statement indicating the construction included in Phase One; that a 96-suite condominium or condominium hotel is included; that the language should be clarified; that the RFP which was supported included a hotel and not additional condominiums; that 16 versus 18 floors is a concern; that the number of below market units indicated require clarification; that the assumption is the entire project is being constructed; that the questions are based on Phases One and Two through completion; that the agreement regarding concessions and the rights to concessions at Five Points Park is a significant concerni that no private developer has been given concessions over public land; that the developers can respond to the concessions issue; that the street and alley vacations were not in the original RFP; that a number of street and alley vacations between the Sarasota Opera and the Golden Apple Dinner Theatre and the property for Phase One exist. Member Palmer stated further that the issue of the reimbursements to the developer for delays requires clarification; that one issue is if the City is responsible for the delays; that another issue is if the developer is responsible for the delays or if the City is not moving as fast as the developer desires; that the developer has an aggressive marketing plan and desires to move forward expeditiously: however, the language as stated is a concern; that up front financing through utility bonds or other methods is another issue requiring clarification; that the total repayment of TIF funding by 2016 or earlier based on absorption requires discussion; that Mr. Phillips believes the TIF increment at $983,000 will easily be paid before the 2016 date assuming the entire project is implemented; that the tax increment begins in 2009 as indicated in the report. Mr. Phillips stated that the understanding is the first payment will be made on December 31, 2008. Member Palmer stated that the first payment would then begin; that the delineation of operations and maintenance costs regarding the City and Sarasota Opera parking and the flexible parking spaces require clarification; that the reduction of parking from 300 to 270 spaces in Phase Two is a concern; that another issue requiring clarification is the 270 parking spaces which will be constructed during Phase One and the additional parking spaces being constructed in Phase T'wo; that an explanation as to the reason the parking is not being constructed at the same time would be beneficial; that the primary purpose of the project is to acquire the 300 public parking spaces; that the City should not have to wait until Phase Two to receive all the parking spaces. Carl Meyer, 5110 Brywill Circle (34234), came before the Commission and stated that the CRA voted to support the entire project; that the perception of the direction of the project is a concern; that the CRA Advisory Board meeting indicated the crux of the situation is the negotiations between the Golden Apple Dinner Theatre, the Sarasota Opera, and the developer; that a level playing field and good faith are necessary during negotiations; that CRA Advisory Board Member Charles Githler indicated at the May 27, 2004, CRA Advisory Board meeting not to miss the obvious; that any terms with the developer should indicate negotiations between the Golden Apple Dinner Theatre BOOK TWO Page 1397 06/08/04 3:00 P.M. BOOK TWO Page 1398 06/08/04 3:00 P.M. and the Sarasota Opera and the developer are conducted in the presence of a mediator to assure good faith negotiations; that the mediator should have the sanction from the CRA to arbitrate the ultimate decision; that negotiations should be on a fair, equitable basis. Chair Martin asked if the desire is for the arbitrator to set forth the conditions and all parties be bound by the conditions? Mr. Meyer stated that the desire is for the developer being bound by the conditions; that the Golden Apple Dinner Theatre or the Sarasota Opera could vacate the agreement if the arbitrator's decision was unacceptable; that the developer would be held to the arbitration. V. Peter Schneider, Deputy City Manager, came before the CRA, and stated that no such language was included in the RFP; that direction from the City Attorney may be necessaryi that caution is in order. Chair Martin stated that the proposal allows for an alternate plan to take place if agreements are not reached; that the CRA seems interested in the entire project. Attorney Fournier stated that an arbitration makes sense for a potential breach of contract; that an arbitration cannot be used as a vehicle to get two parties together to force a contract; that a contract by definition is a voluntary agreement between two parties. Chair Martin stated that the proposal came forward with some willingness among the parties. Attorney Fournier stated that the contracts are private. Chair Martin requested the developer's representatives to come forward. Charles Bailey, Jr., Attorney, law firm of Williams, Parker, Harrison, Dietz & Getzen, Ali Ebrahammi, President, Ersa Grae Corporation, and Andrew Dorr, Project Manager, Plaza Verdi, Ersa Grae Corporation, and Bruce Franklin, Principal, President, The ADP Group, came before the CRA. Mr. Ebrahammi stated that the initial response consisted of two proposals; that one proposal was to build the project on City property; that the other proposal was to include the Golden Apple Dinner Theatre and the Sarasota Opera; that the primary project includes Phases One and Two; that the alternative project has only one phase; that two proposals were provided and accepted; that the primary project was promoted due to the importance of the intangible issues; that having the buildings being connected and working together are important; that the primary project involves successful negotiations with the Golden Apple Dinner Theatre and the Sarasota Opera; that the developer is placed in a weak situation negotiating with the Golden Apple Dinner Theatre and the Sarasota Opera without approving the alternative plan; that complicated negotiations are ahead; that a disputed contract must be in place before an arbitration can occuri that a nonbinding arbitrator or mediator to supervise the negotiations is acceptable if a hidden motive is suspected. Vice Chair Servian stated that a neutral party may assist with the negotiations; that a mediator could help bring the negotiations to a more expeditious conclusion. Mr. Ebrahammi stated that a mediator chosen by the City would be acceptable; that $400,000 has been spent promoting and preparing plans for the primary plan; that the CRA is urged to choose either both plans or none due to the difficult negotiations ahead; that the primary plan will be temporarily short of 30 parking spaces until Phase Two is completed. Mr. Franklin stated that the 300 public spaces will be delivered in Phase One; that 30 plus parking spaces will not be available until Phase Two if Phase One is built according to C-CBD Zone District standards; that a certain amount of square footage could be delayed being built until Phase Two; that the project would then meet the parking standards. Member Palmer asked if the 300 parking spaces will be provided in Phase One? Mr. Franklin stated that is correct. Vice Chair Servian stated that the parking would be deficient by the Zoning Code (2002 Ed.) only. Mr. Ebrahammi stated that the Zoning Code (2002 Ed.) will not be violated and no parking deficiency will exist; that the question of building height was included in the original response; that BOOK TWO Page 1399 06/08/04 3:00 P.M. BOOK TWO Page 1400 06/08/04 3:00 P.M. the building height is an important aspect of the proposal; that negotiations with the Golden Apple Dinner Theatre and the Sarasota Opera are transparent; that the monetary and non- monetary offerings are located in the pro formas; that nothing is hidden; that the total amount offered is $10 million which is $330 per square foot for the land; that $330 per square foot is approximately three times the normal market rate; that the offer is structured in such a manner due to the intangible benefits; that the rate of return on the money actually decreases with the alternative plan; that the primary plan would increase profit and would require more investment. Mr. Franklin stated that the request for the 18-story building on the Pineapple Avenue parcel was included in the response to the RFP; that the indication was the City may wish to expand the DTB Zone District boundary to include the two parcels thus permitting a building of up to 18 stories; that one manner in which to help ameliorate the cost of relocating the Golden Apple Dinner Theatre is to create a higher value in the property if the City desires to promote the primary plan; that the height difference is 30 feet; that a site plan will be processed later in the summer which limits the height; that the height would be voluntarily limited even if the property is placed in the DTB Zone District; that the additional two stories or 30 feet provides the additional value to assist in achieving the primary plan, which includes Phases One and Two. Vice Chair Servian stated that the project would be limited to 10 stories under the Downtown Code. Mr. Franklin stated that the height limit is 180 feet under the existing zoning; that the site plan would proceed under C-CBD zoning to preserve the 16 story, 180 foot height allowance; that the additional financial incentive is requested to help ameliorate the cost of the Golden Apple Dinner Theatre relocation. Vice Chair Servian stated that the report indicates the CRA unanimously accepted the additional two stories which is incorrect; that the vote was 3 to 2; that height was part of the issue. Member Palmer stated that the CRA is not privy to the negotiations between the Golden Apple Dinner Theatre and the Sarasota Opera; that the CRA does not know the financial terms involved; that the height is a concern; that the CRA is unaware if the height is the breaking point in negotiations with the Golden Apple Dinner Theatre and the Sarasota Opera; that financial information describing the reason the density is necessary to offset the expenses would be beneficial. Mr. Ebrahammi stated that discussions have been held regarding the height; that negotiations are difficult until the content of the letter of intent is known; that draft letters of intent have been prepared for the Golden Apple Dinner Theatre and the Sarasota Opera. Member Palmer stated that the requirement for additional height to offset the cost of the Golden Apple Dinner Theatre and Sarasota Opera requires clarification. Mr. Ebrahammi stated that the proposed deal with the Golden Apple Dinner Theatre and the Sarasota Opera are located in the RFP; that the negotiations are transparent; that the negotiations totally rely on good faith; that the numbers can be observed by all; that the Golden Apple Dinner Theatre is being offered a newer, shinier, slightly larger theater with the possibility of more seating, plus a certain amount of funds for the interior development; that the same concept is being offered to the Sarasota Opera; that the basic deal is in place; that final negotiations are necessary. Member Palmer asked if only one conversation has been held with the Golden Apple Dinner Theatre and the Sarasota Opera? Mr. Ebrahammi stated yes; that the offer is in the proposal and is public record; that negotiations will begin immediately if the project is approved at the current meeting; that the Term Sheet will be prepared for submission to begin the process. Member Palmer stated that the decisions are based on the costs and whether adding two floors can be justified to increase the profits. Mr. Ebrahammi stated that an estimate can be provided based on the response to the RFP; that the cost is approximately $10 million; that the information is contained in the response to the RFP; that the information is not new or unknown; that good faith negotiations will occur with the Golden Apple Dinner Theatre and the Sarasota Opera; that concessions will be BOOK TWO Page 1401 06/08/04 3:00 P.M. BOOK TWO Page 1402 06/08/04 3:00 P.M. provided; that the primary project will then begin; that the alternate project will begin if negotiations are not reached. Mr. Franklin stated that the $10 million which is in the pro forma is based on the value created by constructing an 18-story building; that being able to construct an 18-story building would provide a margin for negotiations; that the ability for flexibility is somewhat reduced; that 30 feet is negligible in terms of the benefits derived; that a reduced budget reduces the margin in which to negotiate with the Sarasota Opera and Golden Apple Dinner Theatre which is the project the City and developer both desire. Chair Martin stated that the negotiations are delicate and transparent; and asked the confidence level of successful negotiations with the Sarasota Opera and the Golden Apple Dinner Theatre based on the initial discussions? Mr. Ebrahammi stated that negotiating involves guessing; that a 50/50 chance exists for successful negotiations; that the developer's negotiating position must remain intact; that the delay in paying property taxes is only during the time the property remains in the City's ownership; that the Term Sheet contemplates the ownership being transferred at a certain point; that the taxes will be paid by the developer from the point of transference; that no taxes would be paid while in the public ownership. Vice Chair Servian asked if ownership would transfer to the developer as soon as the property Closes and before construction begins? Mr. Ebrahammi stated that the City should desire assurance of not deeding the property to the developer without the developer being 100 percent committed to the project; that such occurs when a construction loan is closed; that the construction lender wants to assure the land is collateralized to the lender. Vice Chair Servian asked the time frame anticipated to close on the construction loan? Mr. Ebrahammi stated that the closing on the construction loan would be in approximately 15 or 16 months. Mr. Franklin stated that the estimated closing date is included in a schedule; that the schedule contains the information concerning construction documents, permitting, issuance of the permits, and the closed construction loan simultaneously with the land closing. Mr. Ebrahammi stated that the only fee for which the developer is requesting exemption is the parking fee; that the City granted the same exemption to the Five Points Plaza project. Mr. Franklin stated that the impact fee is no longer being negotiated; that the impact fee issue was explored with several other projects; that the TIF funding will be limited to the public benefit; that the parking fee issue involves required payment for the temporary loss of parking. Vice Chair Servian stated that the loss of the off-street parking fee was waived for the Five Points Plaza project. Executive Director McNees stated that the fee is actually for right-of-way use and parking mitigation. Mr. Ebrahammi stated that the concessions at Five Points Park are not for the purpose of making a profit; that Five Points Park is envisioned as becoming the center for all the adjacent buildings and for future buildings; that a festive atmosphere is desired with outdoor retail including kiosks; that the desire is for control of the actual items and the quality of items sold; that the developer will be happy to reimburse the City for any profits made from the operation; that the issue is quality control. Member Palmer stated that the concessions issue can be addressed at a later time; that the issue could be discussed at a Five Points Park charrette; that the concessions issue is a concern. Mr. Ebrahammi stated that concessions are a non-issue; that the concession kiosks should be aesthetically pleasing. Chair Martin stated that Five Points Park is a public space; that regulating use privately or patrolling the area from a police standpoint is a concerni that the City desires full control over Five Points Park; that Five Points Park is for the public use. Attorney Bailey stated that another issue is the proximity of vendors; that vendors cannot be within 500 feet of a certain BOOK TWO Page 1403 06/08/04 3:00 P.M. BOOK TWO Page 1404 06/08/04 3:00 P.M. distance; that consideration for some relaxation of the proximity requirements may be necessary if the vendors are not in competition. Mr. Franklin stated that a special district could be created; that the area is now regulated; that the question is the manner in which to regulate the area; that special criteria could be created regarding licensure and management of the concessionaires in the area. Chair Martin stated that the desire is not for control of the area but for control of the concessionaires. Mr. Franklin stated that control of the concessionaires is to ensure quality control. Member Palmer asked for clarification regarding regulation of the area. Mr. Franklin stated that the concessionaires will be licensed. Mr. Ebrahammi stated that another issue is the alley vacation; that most of the street vacations were requested in the proposal. Mr. Dorr stated that a request was made in the original proposal for vacations of public rights-of-way or an encroachment on Palm and Cocoanut Avenues, the alley between the redevelopment parcel and the Sarasota Opera, the east/west alley behind the Main Street businesses, Pineapple Avenue, and within Five Points Park; that the requests in the original proposal were quite specific; that the RFP specifically asked the respondents to create arcades and utilize the concept of the public vacation of the right-of-way to allow the arcade with three stories of habitable space. Chair Martin stated that a street vacation was mentioned within Five Points Park. Mr. Dorr stated that performing upgrades at Five Points Park was mentioned; that all four streets and the two alleys which would be affected during construction were listed. Vice Chair Servian stated that the developer is not requesting an encroachment. Ms. Murphy stated that the developer should address the condominium versus condominium/hotel issue and the ability to interchange the two; that the cost of the moderately priced units requires clarification; that reimbursements for delays require some clarification. Member Palmer stated that another issue is the total repayment of TIF by 2016 based on absorption; that delineation of operations and maintenance costs regarding the City and flexible parking is another issue. Mr. Ebrahammi stated that the buyers of the hotel/condondominiums have a choice of placing the condominium into a rental program; that a fancy name and significant national operator will be provided to operate the program; that a detailed study must be performed to assure feasibility; that the condominiums will not be operated as rentals if not feasible; that the hotel option is desired but is not definite; that the operators will perform detailed studies to ensure the occupancies, etc., are appropriate and workable. Chair Martin stated that the buyers of the condominium units would be given the option to provide the condominiums as hotel rental units for certain parts of the year. Mr. Ebrahammi stated that buyers could not be required to rent the units; that the developer would control the furnishings once the decision is made to enter the rental program. Vice Chair Servian stated that the understanding from the RFP was the rental program would begin if feasible; that the program would include a condominium hotel rather than a stand alone hotel or would revert to condominium only if a stand alone hotel is not economically feasible; that questions arose from Member Githler on the CRA Advisory Board concerning the price points and the feasibility of the rental program. Mr. Franklin stated that the condominium hotel issue relates directly to the feasibility. Mr. Ebrahammi stated that 16 condominium units will be available under $300,000, subject to some escalation due to inflation. BOOK TWO Page 1405 06/08/04 3:00 P.M. BOOK TWO Page 1406 06/08/04 3:00 P.M. Mr. Franklin stated that the moderately priced condominiums were presented by providing an inventory of the pricing in the current marketplace; that the presentation was provided to the selection committee; that the average range of pricing was considered for 20 different residential products on the market; that the target was for one-third of the units being under $300,000; that steel prices have increased by 70 percent; that concrete prices have increased; that issues in the market are prevailing which can cause fluctuations; that the intent is to meet the commitment with at least one-third of the units being lower priced than available in the current market. Attorney Fournier stated that the reimbursement for delays issue should be addressed; that specific direction is necessary; that a provision existed in the Whole Foods Market Centre Redevelopment Agreement which indicated the City would be responsible to reimburse the developer for costs incurred for planning, design, and engineering if delays occurred in the rezoning, street vacations, or site plan approval applications; that the matters are directly in the City's control; that the costs would be reimbursable if Whole Foods Market Centre pulled out of their lease due to the City's failure to adhere to the schedule; that the provision in the current project is much broader; that specific direction was necessary regarding the reimbursement issue to the extent such a broad provision shall be included in the agreement; that the parameters which should be set are matters totally within the City's control; that the City has a good faith obligation to process the applications in accordance with the project schedule; that the City should determine at which point the desired parking spaces will be conveyed; that a penalty provision should correspond if the property is not delivered within a reasonable time. Mr. Ebrahammi stated that the Whole Foods Market Centre needed to schedule an opening date which resulted in a deadline; that the Plaza Verdi project does not have a deadline; that a reasonable schedule for implementation will be developed with the City; however, approximately $5 or $6 million is spent for the developer to obtain a closing date; that the money is lost if closing does not occur. Attorney Fournier stated that adherence to the project schedule is certainly important and unnecessary delays are costlyi that accelerating the project schedule could cause a problem if a penalty or reimbursement fee occurred as a result. Mr. Ebrahammi stated that the important thing is the City planning and permitting process should remain consistent with the development agreement. Attorney Bailey stated that the issue of contract zoning was raised; that some provision should exist acknowledging the fact the Commission as opposed to the CRA which is a regulatory body has certain responsibilities; that the CRA has certain commitments as proprietor of the property; that the CRA should indicate if some aspect of the project will not be acceptable. Mr. Ebrahammi stated that acknowledgement can be provided between now and the time the Development Agreement is signed. Mr. Franklin asked if any questions existed regarding repayment of the TIF either through guaranteed payment or bonding the loan and paying the developer as the project proceeds? Attorney Bailey stated that the decision can be made at a later time; that direction would be of assistance. Executive Director McNees stated that the two options are for the City or the developer to pay in advance; that bonding is a misnomer for such a significant amount of money; that. bonds are probably not the answer; that some sort of debt instrument is the manner in which to proceed; that making a decision at the current meeting is not required; that the cost of issuance, carrying cost, and the interest must be determined; that the financing which works out best for the City will be recommended. Attorney Fournier stated that the Term Sheet should be clear. Executive Director McNees stated that the project will not be supported if the project does not cover the debt; that the feeling is the TIF funding will be covered; that the decision can be considered in the future. Chair Martin stated that the CRA's consideration is the fiscal implications of the City bonding the project which is not a significant concerni that the decision does not require consideration at the current meeting. Member Palmer stated that another issue is the operation and maintenance cost regarding the City and flexible parking, the BOOK TWO Page 1407 06/08/04 3:00 P.M. BOOK TWO Page 1408 06/08/04 3:00 P.M. Homeowner's Association, and the manner in which the two will integrate. Mr. Franklin stated that the City's obligation is for the 300 parking spaces onlyi that the cost to operate and maintain all the parking spaces will be the responsibility of the developer or future owners the project acquires. Member Palmer asked if the City will be responsible for the flexible parking at any time? Mr. Franklin stated no. Member Palmer stated that the issue regarding the parking for the Sarasota Opera requires clarification; and asked if the parking which is being provided the Sarasota Opera is automatic? Mr. Franklin stated that the developer is not working on the parking for the Sarasota Opera; that the parking arrangements are between the City and the Sarasota Opera; that parking for the Opera is included in the City's 300 parking spaces. Attorney Fournier stated that the parking arrangements are in progress; that a contingency exists in the Term Sheet regarding the developer's right to approve the parking arrangements; that the primary concern is for the land being conveyed free of the easement; that the payment for maintenance and operational charges is a concerni that the developer most likely desires assurance charges assessed against the Sarasota Opera are paid to the City sO the developer only looks to the City for payment. Vice Chair Servian stated that the height issue requires clarification; that at the time Attorney Fournier, first presented the project, the indication was the property on Pineapple Avenue is limited to 10 stories. Attorney Fournier stated that the height is not limited to 10 stories at the present time; that the property is zoned the C-CBD Zone District; that the conceptual map which was incorporated into the new Downtown Code and in the Downtown Master Plan 2020 indicates the property would become zoned in the DTC Zone District rather than the DTB Zone District; that the building would be limited to 10 stories in the DTC Zone District. Vice Chair Servian asked if the rezoning would occur prior to the submittal of the applications? Attorney Fournier stated that a site plan can be submitted under the existing zoning before the properties are rezoned to one of the new Downtown Zone Districts. Vice Chair Servian asked the deadline for submittal? Attorney Fournier stated that the deadline would be the date the property was rezoned to a zone district other than the C-CBD Zone District; that February 2005 is the planned date at the present time. Mr. Franklin stated that the developer would understand the City has not relinquished discretion; that the developer would have a backup plan if the City did not approve the rezoning; that the two stories would be lost and the C-CBD Zone District would be utilized; and asked if a site plan can be processed with a rezoning to the DTB Zone District for processing; Member Palmer stated that C-CBD allows for 18 stories. Mr. Franklin stated that 180 feet is only 16 stories; that only 16 stories can be physically achieved in 180 feet. Member Palmer stated that is correct, including the parking requirements and open space, etc. Mr. Franklin stated that the DTB Zone District is adjacent to the property; that an indication would be beneficial to the developer's ability to negotiate successfully with the Sarasota Opera and the Golden Apple Dinner Theatre. Vice Chair Servian asked if a site plan will be submitted by the February 2005 date to preserve the C-CBD Zone District? Mr. Franklin stated yes. Member Bilyeu asked if the rezonings would begin or conclude in February 2005? Attorney Fournier stated that Staff indicated the rezoning should be completed by February 2005. Vice Chair Servian asked the time frame of the rezoning? BOOK TWO Page 1409 06/08/04 3:00 P.M. BOOK TWO Page 1410 06/08/04 3:00 P.M. Mr. Bailey stated that the overall rezoning of 1,800 Downtown parcels would be concluded in February 2005. Attorney Fournier asked if an application would be submitted which would allow for the rezoning to the DTB Zone District prior to February 2005? Mr. Franklin stated that addressing the procedural issues at the current meeting is not required; that the site plan will be filed under the C-CBD Zone District if the extra 30 feet is feasible to the CRA; that flexibility will be available to add the two stories if rezoned to the DTB Zone District; that Phases One and Two and the height issues assist in helping to understand the basis of the developer's position to negotiate with the Golden Apple Dinner Theatre and the Sarasota Opera. Chair Martin stated that direction will be provided by the CRA. Mr. Franklin stated that Phase One only was included in the response to the RFP; that the negotiations with the Sarasota Opera and the Golden Apple Dinner Theatre cannot be guaranteed; that the primary project is desired; that the developer would basically be severely limited from a negotiating perspective if the CRA does not provide for a motion for an alternate plan in the event the primary project does not go through similar to the CRA Advisory Board. Member Palmer asked the result of the TIF requests in the event the alternate plan was utilized? Mr. Ebrahammi stated that TIF funds would still obviously be of use. Mr. Franklin stated that the entire project connects Five Points Park with the Plaza Verdi. Mr. Ebrahammi stated that the $1.9 million will not change; that the $2.1 million would obviously be reduced. Mr. Phillips stated that the statements made by Executive Director McNees regarding the likely financing alternatives for the TIF contribution are supported. Commissioner Bilyeu stated that TIF funds are not available at this time; that TIE funds must be borrowed; that the City will never get the funds back if a precedence is set to keep borrowing TIF funds. Mr. Phillips stated that TIF funding is a risk; that the CRA's role is to assess the risk relative to the likely return and to ask the difficult questions of the development team to determine revenue streamsi that a delay generally occurs in the receipt of TIF funds; that the risk is associated with the return on the investment. Vice Chair Servian asked the ratio of return for the City on TIF funding utilizing the primary plan versus the alternative plan? Mr. Phillips stated that the answer would depend on if the $1.9 million level was used for the alternate plan or the $4 million level is used for the primary plan. Vice Chair Servian stated that the alternative plan would be $1.9 million to complete. Mr. Phillips stated that Phase One would be approximately $100 million; that the TIF would be either two percent or four percent; that the ratio is 1 to 50 if $2 million leverages $100 million; that the ratio is 1 to 25 if $4 million leverages $100 million. Vice Chair Servian stated that the leverage of the TIF funding would be better constructing the alternative project. Mr. Phillips stated that the alternative project utilizes the $1.9 million; that the question is the manner in which the money to upgrade Five Points Park is raised; that TIE funds could be downsized in such a manner. Chair Martin stated that a number of questions have arose regarding revenue which is an unknown; that the permitted changes in the Term Sheet indicate the possibility of an increase or decrease by 30,000 square feet of office retail; that the condominium units could potentially decrease by 35 units; that the revenue stream would be affected; that the revenues decrease when certain factors are considered which is a concern. Mr. Phillips stated that the factors will require continued analysis; that the assessed value can be lower than portrayed or BOOK TWO Page 1411 06/08/04 3:00 P.M. BOOK TWO Page 1412 06/08/04 3:00 P.M. lower than replacement costs; that much of the discussion has related to factors which would decrease the fiscal impact. Vice Chair Servian asked if the increase in interest rates has been factored into the entire picture? Mr. Phillips stated that interest rates have not been factored in; that the interest rates are a risk factor associated with the developer. Vice Chair Servian stated that the risk is on all sides; that interest rates will surely rise. Attorney Fournier stated that Mr. Meyer's correspondence has been reviewed and understood; that his meaning is understood; that contracts between the developer, the Golden Apple Dinner Theatre and the Sarasota Opera are necessary for the City to attain the benefits from the primary project; that the parties could be given 90 days; that a neutral third party could become involved if a voluntary contract has not been reached in 90 days; that the parties would have to voluntarily agree to a mediator; that a contract is voluntarily entered into by nature. Chair Martin stated that the decisions which are required involve the primary or alternative project, the height issue, and consideration of TIF funds. Member Palmer stated that Mr. Ebrahammi agreed to a mediator; that participation from the Golden Apple Dinner Theatre and the Sarasota Opera regarding agreement to a mediator would be helpful; that the three parties should discuss the idea. Attorney Fournier stated that the mediator should only be used for a period after negotiations are attempted; that negotiations may be successfully concluded without a mediator. Member Palmer stated that the mediator would be appropriate if the negotiations are not successful. Chair Martin stated that the partners are willing to utilize a mediator; that the CRA should be notified at the earliest opportunity if negotiations are unsuccessful; and asked if Staff of the City Attorney's Office would discuss the issue with the parties? Attorney Fournier stated that the Term Sheet could be revised; that the meeting could be continued and the 90-day period could be extended under the RFP for 15 days until the July 4th weekend; that the beginning of July 2004 would provide Staff the time necessary to revise the Term Sheet; that the important revisions could be considered then; that 15 days is not an unreasonable extension. Chair Martin stated that 15 days is probably a reasonable extension. Attorney Fournier stated that another Special CRA meeting would be required. Secretary Robinson stated that a Regular Commission meeting is scheduled for Tuesday, July 6, 2004; that budget meetings are scheduled the remainder of the week; that the Commission requested no meetings for the remainder of July 2004. Member Palmer stated that the last week in June 2004 could be scheduled. Chair Martin stated that the position of the CRA is for support of the primary plan; that the approval was based upon the primary plan, which includes Phases One and Two; that the Applicant requires direction on the project; that the height issue is related to the primary plan; that the two items can be discussed and direction can be provided. Member Palmer stated that the primary plan includes two phases; that the language should be understood. Attorney Fournier stated that the original plan was Phase One; that an addendum to the RFP invited the proposers to discuss plans for expansion with the Sarasota Opera; that the larger plan then became the primary plan. Member Palmer stated that the primary plan is the grandiose plan which is supported. Attorney Fournier stated that submitting both plans was appropriate. Member Palmer stated that the primary plan is preferred; that the developer is placed in an awkward position of having no alternate plan if negotiations are not successful; that support BOOK TWO Page 1413 06/08/04 3:00 P.M. BOOK TWO Page 1414 06/08/04 3:00 P.M. and the original vote was for the primary plan which included the Golden Apple Dinner Theatre, the Sarasota Opera, and Five Points Park. Attorney Bailey stated that the RFP had a minimum requirement, that the alternative plan responds to the minimum requirement; that the primary plan was the only proposal submitted which included a grandiose plan; that the other four projects previously submitted with the minimal plan will come before the CRA if the primary plan is selected and cannot be done; that the minimum requirements were met; that the primary plan met the requirements and more; that the minutes of the CRA meeting were reviewed; that Commissioner Atkins indicated the intent to choose one plan; that exclusion of the alternate plan was not apparent; that the minutes could have been misread. Member Atkins stated that the minutes must have been misread; that the personal position was to support the primary or grandiose plan; that the primary plan addressed all the necessary requirements Downtown; that the alternative plan would require reanalysis; that his position has not changed. Vice Chair Servian stated that the projects were ranked; that the primary or grandiose plan was too much project for the location; that the other proposers are being treated unfairly by being eliminated if the primary plan does not go forward; that all the developers would be back on an even footage; that the smaller scale plan was originally supported; that the vote of the CRA was in support of the primary plan; that the CRA would reconsider the four projects if the primary plan cannot be done. Member Bilyeu stated that the feeling is the Golden Apple Dinner Theatre, the Sarasota Opera, and the developer can get together and work out an agreement; that discussing 30 feet in height is not important after approving a new Zone District which allows buildings as high as 300 feet along the Bayfront; that 210 feet is 30 feet above 180 feet; that people are aware of the personal preference for tall buildings; that meeting code requirements regarding the four-story setbacks is a concerni that the map indicated the property was adjacent to the DTB Zone District; that the height is supported. Chair Martin stated that the CRA should indicate if the primary or grandiose plan is the one which was originally selected or if the alternative plan would be chosen if the primary plan does not work. Member Bilyeu stated that the feeling is the project will work; that the primary plan is supported; that the smaller plan is satistactory; that the parties involved will make the project happen and the project will be successful; that the quality of life will be better. Chair Martin stated that the main focus is the primary plan; that the grandiose plan did gain the highest ranking with the CRA Advisory Board and the CRA; that the other proposers requested to alter the proposals to include the Golden Apple Dinner Theatre and the Sarasota Opera upon realization of the City's interest; that the other proposers missed the opportunity to do so; that Vice Chair Servian indicated the manner in which the plan was chosen should be discussed if the primary plan does not go forward; that the proposer responded to the RFP; that the developer is in the position of negotiating with two other parties which may or may not be willing leaving the developer in a difficult position; that the developer is being requested to make the deal; that the deal may not be possible; that the views expressed by Vice Chair Servian and Member Atkins in support of the primary plan are shared; that the City should offer whatever assistance necessary to make the primary plan successful. Member Palmer stated that an understanding of the developer's position is necessary; that the desire is for a partnership with all three entities; that the significant message is the desire of the City for the parties to reach an agreement; that the rankings must be reevaluated if the primary plan does not go forward. Member Bilyeu stated that every developer had a chance to present a grandiose project; that the developer before the CRA presented such a project; that the developer held discussions with the Golden Apple Dinner Theatre, the Sarasota Opera, local developers and citizens. Chair Martin stated that the height issue regarding the primary plan requires discussion. Member Atkins stated that the City has an opportunity to construct a wonderful project; that the belief is the additional 30 feet should be provided if considered a deal breaker; that the participating parties in the negotiation should realize the importance of cooperation; that the entire project can be BOOK TWO Page 1415 06/08/04 3:00 P.M. BOOK TWO Page 1416 06/08/04 3:00 P.M. wonderful for the City; that the City will suffer if the former developers attempt to undercut the arrangement and make the situation difficult; that the situation should be remedied which would be in the best interest of the City; that cooperation is encouraged. Chair Martin stated that Member Bilyeu indicated the height issue is supported as far as making the project work. Member Palmer stated that personal feelings regarding the height have been made clear; that the project must be made to work; that Mr. Franklin indicated a request for development under the C-CBD Zone District would take the building up to 180 feet along with the additional features on top of the building; that the Ritz-Carlton Hotel and condominiums is 262 feet high and is 185 feet over FEMA of habitable space; that increasing height is generally not supported; however, if height is the deal breaker, the deal should not be broken. Vice Chair Servian stated that 30 feet is hardly discernable; that 30 feet is supported if 30 feet will make the project work. Chair Martin stated that the CRA is unanimous regarding the height issue; that the conclusion of the height issue may encourage the other three parties to come together and realize the importance of the project for the City. Attorney Fournier stated that the Term Sheet should proceed on the primary plan only; that the City would include the parcel in the City-initiated rezoning of the DTB Zone District; that the developer has the right to come in with a petition in the meantime. Chair Martin asked if the issue concerning the TIF funding should be included in the motion? Attorney Fournier stated that the TIF funding would be approved upon approval of the Term Sheet. On motion of Member Palmer and second of Vice Chair Servian, it was moved to extend the 90-day period in the RFP by 15 days beginning June 17, 2004, through July 2, 2004. Motion carried unanimously (5 to 0): Atkins, yes; Bilyeu, yesi Palmer, yes; Servian, yes; Martin, yes. On motion of Member Palmer and second of Vice Chair Servian, it was moved to continue negotiations on the Plaza Verdi Term Sheet, to remove the alternative plan, and proceed with the direction provided to Attorney Fournier and Staff. Ms. Murphy stated that Staff has a thorough understanding of the issues; that a response will be provided in the 15 days after June 17, 2004; that the CRA Advisory Board minutes will be included in the Agenda backup material; that notes have been taken for items to incorporate into the Term Sheet; that the development team will create a revised Term Sheet. Chair Martin asked if an additional Staff Analysis will be provided? Executive Director McNees stated that given the policy direction and decisions made at the current meeting, Staff will continue to negotiate the necessary items sO the Staff Analysis will probably be overcome by events and may be of limited value; that the hope would be to reach an agreement on many of the items before coming back to Staff. Chair Martin stated that many of the issues have been resolved; that documents which have been updated since the current meeting should be included. Executive Director McNees stated that the process should advance as much as possible in the next several weeks. Chair Martin restated and called for a vote on the motion to continue negotiations on the Plaza Verdi Term Sheet, to remove the alternative plan, and proceed with the direction provided to Attorney Fournier and Staff. Motion carried unanimously (5 to 0): Atkins, yes; Bilyeu, yes; Palmer, yes; Servian, yes; Martin, yes. On motion of Member Bilyeu and second of Member Atkins, it was moved to receive the Board Report from the May 27, 2004, CRA Advisory Board meeting. Motion carried unanimously (5 to 0) : Atkins, yes; Bilyeu, yesi Palmer, yes; Servian, yes; Martin, yes. BOOK TWO Page 1417 06/08/04 3:00 P.M. BOOK TWO Page 1418 06/08/04 3:00 P.M. 4. ADJOURN (AGENDA ITEM CRA-6) CD 5:54 There being no further business, Chair Martin adjourned the Special meeting of the Community Redevelopment Agency of June 8, 2004, at 5:54 p.m. Pukaa dlartirn RICHARD F. MARTIN, CHAIR ATTEST: 13lE Robinson BILL YAE. ROBINSON, SECRETARY