MINUTES OF THE SPECIAL SARASOTA COMMUNITY REDEVELOPMENT AGENCY MEETING OF AUGUST 29, 2013 PRESENT: Chair Shannon Snyder, presiding, Vice Chair Willie Shaw, Members Suzanne Atwell, Paul Caragiulo, and Susan Chapman, Executive Director Thomas Barwin, City Attorney Robert Fournier, and Deputy Secretary Karen McGowan ABSENT: Secretary Pamela Nadalini The Special Sarasota Community Redevelopment Agency (CRA) meeting was called to order by Chair Snyder at 3:01 p.m. 1. APPROVAL RE: APPROVAL RE: MINUTES OF THE SPECIAL SARASOTA COMMUNITY REDEVELOPMENT AGENCY MEETING OF JULY 15, 2013 (AGENDA ITEM CRA-1) Chair Snyder noted CRA consensus to approve the minutes of the July 15, 2013, Special Sarasota Community Redevelopment Agency (CRA) meeting. 2. PRESENTATION AND DISCUSSION RE: PROPOSED MEMORANDUM OF UNDERSTANDING DATED AUGUST 15, 2013 BETWEEN THE CITY OF SARASOTA AND JEBCO VENTURES, INC., TO PROVIDE A MIXED-USE COMPONENT FOR THE PROPOSED PARKING GARAGE ON STATE STREET (AGENDA ITEM CRA-2) Chief Planner Steve Stancel, Neighbornood and Development Services (NDS) Department, Purchasing Manager Mary Tucker, Purchasing Division, Financial Administration Department, Norman Gollub, Downtown Economic Development Coordinator, Greater Sarasota Chamber of Commerce, and lan Black, Principal, lan Black Real Estate, came before the Commission. Mr. Stancel displayed a PowerPoint presentation on the Chamber monitors referencing the anticipated cost of the State Street garage project at $7,279,341, the goals and objectives, Phases I and II of the project, and the timeline of the two phases with a substantial completion date of July 15, 2015; and stated that the project benefits and options are: Option A = "Over-Under" Option B - "Over-Under" Option C - "Pad Site" Mr. Stancel continued the PowerPoint presentation by illustrating the ground-level plans for the options, the project selection process, and comparative analysis of the proposals submitted by: Finergy York Githler and Associates Crown Holdings Jebco Ventures, Inc. Mr. Black read a prepared statement indicating a listing agreement between the City and lan Black Real Estate was signed to sell all the mixed-use space in the proposed State Street parking garage; and stated that the opportunities were exposed to the market; that an offer of memorandum detailing the mixed-use components was sent to 16 parties in June 2013 with a required return date of July 31, 2013; that six offers were received of which one did not contain a monetary offer; and highlighted specifics of the offers. Mr. Black stated that during the month of August 2013, a series of meetings was conducted with the proposers and City Staff and members of the Design-Build Team as appropriate; that based on the meetings, his opinion is the offer of Jebco Ventures, Inc. (Jebco), best meets the Commission's directive at the June 3, 2013, Regular Sarasota City Commission meeting to seek the highest and best use; that the Book 3 Page 31790 08/29/13 3:00 P.M. Book 3 Page 31791 08/29/13 3:00 P.M. terms of the proposed Memorandum of Understanding (MOU) which reflects basic terms and conditions is included in the Agenda backup material. Mr. Stancel continued with the PowerPoint presentation identifying the project benefits and the location of facilities on the site. Mr. Gollub continued with the PowerPoint presentation including the fiscal analysis indicating the economic impact of the proposed project over the first 10 years totals 192 jobs and an expected economic output generating almost $161 million. Mr. Stancel continued with the PowerPoint presentation including a model of the massing of the proposed project, the adjustments potentially required, the balance of the Phase I timeline, and the Phase II timeline indicating a date for substantial completion of July 15, 2015. Ms. Tucker read a prepared statement indicating the City policy is to obtain an appraisal prior to selling any property, the exact boundaries of the property to appraise will not be known until the Commission accepts an offer, two appraisers have been contacted, one indicated the entire cost of the structure would be required and an appraisal could be delivered in four weeks, another indicated assumptions could be made of the value of the construction cost and an appraisal could be delivered in five weeks, and the construction value cannot be determined until a Guaranteed Maximum Price (GMP) is provided. Mr. Black stated that an appraisal is a subjective interpretation of data, i.e., an opinion; that thel benefit to the City of an appraisal is unclear; that tax revenues were evaluated to ensure the City is obtaining the best value; that a wide range of interpretations of value will be based on the offers received; that the project was about bringing housing for young, urban professionals, and others to the Downtown; that the limited service hotel would bring pedestrians to the Downtown for services. In response to a request from City Manager Barwin to clarify the cost of parking for the hotel, Mr. Stancel stated that the proposer would be responsible for paying for the hotel parking which would be added to the purchase price. In response to a comment from Member Caragiulo indicating the transaction is therefore $1.9 million plus the price of the parking spaces, Mr. Stancel stated that is correct. In response to a question from Member Chapman asking if the concept plan being presented was presented at the June 3, 2013, Regular Sarasota City Commission meeting, Mr. Stancel stated that specific heights of buildings were not presented; that instead up and down arrows signified flexibility for floors; that the zoning allows for up to ten stories. In response to a comment from Member Chapman indicating Staff made a statement at the June 3, 2013, Regular Sarasota City Commission meeting, about a concept plan plus several options would be brought back to the Commission, Mr. Stancel stated that the options received are still available; however, the City's representative and Staff have recommended the Jebco Ventures, Inc., plan. Member Chapman quoted from the minutes of the June 3, 2013, Regular Sarasota City Commission meeting as follows: A motion was made by Vice Mayor Shaw, seconded by Commissioner Caragiulo, to move forward with the State Street Garage and Mixed-Use Development Project without selecting an option at the present time Member Chapman stated that the understanding from the June 3, 2013, Regular Sarasota City Commission meeting was all four options for the design remained under consideration; and asked the reason the Commission is being presented with the Memorandum of Understanding included in the Agenda backup material and the economic analysis based on one plan, Mr. Stancel stated that Staff's understanding was all four options remained under consideration; that Staff indicated options or a combination of options would be presented. In response to a question from Member Chapman asking if a ten-story building option was presented at the June 3, 2013, Regular Sarasota City Commission meeting, Mr. Stancel stated that massing plans were presented with arrows indicating the possibility of increasing or decreasing the building height. In response to a question from Member Chapman directed to the City Attorney with concems about moving forward with a Memorandum of Understanding as a concept plan, City Attorney Fournier stated that an explanation is necessary. City Attorney Fournier stated that the recording of the June 3, 2013, Regular Sarasota City Commission meeting was recently reviewed; that the actions taken subsequent to the meeting are different than the understanding at the meeting; that the understanding was concept plans would be brought back for the Commission's consideration and decision; that the Commission was told a decision was not immediately required; however, the understanding was the Commission would have to make a decision at some time due to the contractual relationships associated with the project, specifically with A.D. Morgan, lan Black Real Estate, and Pineapple Square; that his understanding of the result of the June 3, 2013, Regular Sarasota City Commission meeting was another Commission meeting would be held for the Commission to select a concept plan, the contractor could determine the Guaranteed Maximum Price (GMP), and the property would be marketed; that the offering memorandum was supposed to be developed to market the property for sale; that an offer for sale is created if a seller identifies what is for sale; however, if the buyer tells the seller what the buyer proposes, the buyer has flexibility and creativity, and the seller is relying on the buyer to tell the seller what the buyer is proposing; that a line has been crossed, in his opinion, into a Request for Proposals (RFP); that a legal issue has been created which could potentially expose the City to liability from one of the proposers; that other legal issues exist with the proposed Memorandum of Understanding; that at the June 3, 2013, Regular Sarasota City Commission meeting, the reference was always to marketing the property; that the suggestion was the choices would be made on the basis of the development proposal preferred rather than just the best price; that the understanding is a City team had ten meetings and interviewed each of the five proposers twice; that a general consensus was the Jebco proposal was favored; that a Florida Goxemment-ntneSumatine issue develops if a committee indicates a preference or evaluates proposals; that the team clearly expressed a preference; that the offering memorandum could be perceived as an RFP; that the listing agreement to market the property is a conventional listing agreement which suggests the seller identifies the property to sell and the listing agent offers the property for sale; that the listing agent was not retained as the City's purchasing agent; that the legal issues are of concern; that either the original direction should be changed or the Commission should focus on selecting a concept plan, obtain the GMP, : and have the concept plan marketed; that an obligation exists under the Florida State Statutes to publish a notice of the intent to sign a sales contract for property in the redevelopment area; that the sales contract must be made available for public inspection and copying for a 30-day period prior to signing; that the Florida State Statutes also provide a public hearing must be held if a governmental entity proposes to dispose of property for redevelopment purposes for less than the fair market value; that a public hearing should be held if any question exists as to whether the site is being sold for anything less than fair market value. In response to a question from Member Chapman asking if the City has a deadline obligation to Pineapple Square or if a potential to negotiate an extension exists, City Attorney Fournier stated that liability is less of concern under the contract with Pineapple Square; that the response from the attorney for Pineapple Square was concern the project could get delayed due to litigation from a proposer who was not selected; that the attorney indicated the project should be developed in accordance with the rules to obviate the possibility of delay; that Pineapple Square would have to show damages to go to court; that the impression was Pineapple Square is interested in a good faith effort at progress. In response to a comment from Member Chapman indicating waiving the appraisal would be at the City's risk, City Attorney Fournier stated that the concern is in regards to the public hearing requirement; that the suggestion is a public hearing should be held if the appraisal is waived. Book 3 Page 31792 05/06/13 2:30 P.M. Book 3 Page 31793 08/29/13 3:00 P.M. In response to a comment from Chair Snyder asking if a concern regarding Florida's Covemment-n.feSumanne law exists, City Attorney Fournier stated potentially. In response to a comment from Chair Snyder indicating a potential problem exists in not following the RFP process, City Attorney Fournier stated that is correct; that a potential cure could be for the Commission to hear all five presentations; that his understanding from the June 3, 2013, Regular Sarasota City Commission meeting was the next step would be for the Commission to select a plan for a concept with which the Commission feels comfortable. 3. ADJOURN Hearing no further discussion or action, Chair Snyder adjourned the Special Community Redevelopment Agency (CRA) meeting at 3:26 p.m. 8HANNON SNYDER, CHAIR ATTESTX DA a 96 KAREN D. MCGOWKAN, DEPUTY SECRETARY