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HomeMy WebLinkAboutMinutes_Miscellaneous_05/18/1994_Redevelopment Committee c � `��f VILLAGE OF TEQ�JESTA ; , , Post Office Box 3273 • 357 Tequesta Drive `' Tequesta, Florida 33469-0273 • (407) 575-6200 ° - J � Fax: (407) 575-6203 ; o A 4 ���N coUN VILLAGE �F TEQUESTA REDEVELOPMENT COMMITTEE MEETING MINUTES MAY 18, 1994 I. CALL TO ORDER AND ROLL CALL The Tequesta Redevelopment Committee held a scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Wednesday, May 18, 1994. The meeting was called to order at 2:30 P.M. by Mayor Ron T. Mackail. A roll call was taken by Betty Laur, the Recording Secretary. In attendance were: Chairman Ron T. Mackail, Co-Chairman Joseph Capretta, and Earl L. Collings. Village Staff present were: Village Manager, Thomas G. Bradford, and Village Clerk Joann Manganiello. II. APPROVAL OF AGENDA Committee member Collings moved that the Agenda be approved as submitted. Co-Chairman Capretta seconded the motion. The vote on the motion was: Ron T. Mackail - for ��oseph Capretta - for Earl L. Collings - for The motion was therefore passed and adopted and the Agenda was approved as submitted. III. UPDATE OF WORK ACTIVITIES OF PMG ASSOCIATES REGARDING ANALYSIS OF CHRISTOPHER VILLAGE FOUNDATION DEVELOPMENT PROPOSAL. Village Manager Bradford explained that on 4/28/94 the Village Council had approved the proposal of PMG Associates to analyze the financial feasibility of the Christopher Village Foundation Master Plan, to look at the feasibility of the elements within it, and the marketability of those elements, to help Tequesta Village gain an understanding of IZecycled Pr�per Redevelopment Committee Meeting Minutes May 18, 1994 Page 2 ------------------------------- Village participation in the project, and particularly to look at the cost benefit analysis from the Tequesta Village perspective. Phil Gonot, President of PMG Associates, stated their completed report would be ready to present at the next Village Council meeting on June 9, 1994. They are workinq on a demand analysis to determine the demand for owner- occupied residential, rental residential, commercial, retail, office complex including a medical facility, ACLF (adult congregate living facility}, hotel, and school. The analysis will show number of units, amount of square footage, and how much can be absorbed on an annual basis. Commercial will also be analyzed for disposable income which will came from surrounding neighborhoods as well as from the magnet, which in this case is the school. Mr. Gonot had verified with the Palm Beach County Tax Assessor that if property is owned by the Village pf Tequesta it would be subject to ad valorem taxes. The type of operational structure recommended by PMG Associates is to create a Community Redevelopment Agency (CRA). Prior state law required a municipality with a CRA to acquire land first and then select a developer. New legislation passed this spring allows the municipality to select a developer first and then acquire the land, which would save both time and money. Revenue bonds issued for this project would be tax free, and under current IRS code only 10% of the debt service can be paid from private sources; the rest must come from public sources, or the tax-free designation would be lost. Tax increment financing or assessment provisions to obtain debt repayment funds could be implemented through establishment of a CRA. Mr. Gonot stated all of the property must be obtained at one time, and acquisition costs must include (1) value of land at purchase, or if candemnation, cost established by the Court (2) leqal and administrative cost of land valuation, and (3) purchase of leaseholds on existing properties. Mr. Gonot stressed the importance of including provision for legal costs, and related his recent interview of the Mizner Park Project managers in Boca Raton had revealed that their legal acquisition costs were $1,000,000, with one condemnation contested, for which leqal costs were $1,200,000. If a CRA were created, emminent domain could be Redevelopment Committee Meeting Minutes May 18, 1994 Page 3 ------------------------------- used to acquire property i€ public need and underutilization could be shown. If the remaining properties were needed to complete the project they could be acquired under the same condemnation rights. Mr. Gonot stated there were two ways to proceed with this project: (1) selection of a master developer or a developer the Village could work with under a joint venture or partnership; or (2) creating a master plan for the entire site and setting up architectural codes, zoning codes, and other provisions that would require landowners to develop according to the Village's master plan. In response to concerns expressed by Co-Chairman Capretta of needing financial information before deciding how to develop a plan to get the facilities the Village wants, Mr. Gonot stated their analysis would provide dollar figures of cost to the Village, amount of debt service and how the Village could expect to repay the debt; and would tell the Village how much they could afford to contribute in pubiic money compared to what they would receive in additional revenue, so in effect they would know the return on their investment. Mr. Collings verified with Mr. Gonot that establishment of the CRA mechanism as a first step would relieve the Village Council from the responsibility of increasing millage; that appointment of the developer and land acquisition could be done almost concurrently; that the study of blighted (under utilized) property would not take very long; and that the CRA area would be smal.ler than the entire project. Mr. Collings' question regarding market areas was answered by Mr. Gonot that the commercial market area would be smaller than the residential market area. Co-Chairman Capretta felt the first steps necessary would be to place an item on the Council agenda for a decision whether to create a CRA and how they would want to manage it, and if approved--then to obtain an attorney to set up the CRA, and when established, the CRA's management board could determine the land area of the project. Mr. Gonot explained the CRA funding process. He stated the main funding mechanism is tax increment financing under which the taxable value of the target area would be frozen at today's costs. The bonds would be 15-ysar open market Redevelopment Committee Meeting Minutes May 18, 1994 Page 4 ------------------------------- bonds. When the project is completed the assessed valuation of the property would increase, and all the additional taxes go to the CRA to retire their debt service on the bonds to complete the project. The additional school taxes would go to the School Board, but all other taxes would go towards debt service. The Village would be required to guarantee the bonds, estimated to possibly be $25, 000, 000. If sale of a property could not be negotiated, condemnation would be pursued. In response to Chairman Mackail's concern that a single purchase might not fit into a master plan, Mr. Gonot explained the only way to control development of a parcel would be to establish criteria, such as architectural controls with an architectural review committee, that must be followed for any development. Mr. Collings questioned whether the CRA cauld develop a tax- free loan to the adjacent properties to achieve a style consistent with the area developed. Mr. Gonot was unfamiliar with the mechanics but stated this concept was legal within the State of Florida. Co-Chairman Capretta suggested if a large portion of the proposed project were made up of parcels owned by two or three landowners, that once they agreed to participate that could become a core, and small parcels would not have to be included if their owners did not want to participate. Years later when business has all moved to the new area and that landowner's property value has decreased, then that property could be purchased or a loan made to help build the property back up; and since there would be sufficient land within the project, no legal condemnation costs would be incurred. Another concept suggested by Co-Chairman Capretta was ta establish the infrastructure within the master plan. Mr. Gonot clarified that if the CRA boundary were within the project boundary, it would be possible for the CRA to expand at a later date by purchasing land lying outside its boundary but within the project boundary, and that special districts may be established within the CRA boundaries. Village Manager Bradford questioned if the tax increment financing was only available via a CRA, to which Mr. Gonot responded the law referred to that type of agency, and the major reasons for using a CRA were because of the opportunity to now obtain a develaper before land Redevelopment Committee Meeting Minutes May 18, 1994 Page 5 acquisition. Village Manager Bradford stated he would like the whole village to benefit from the new values, and tax increment financing would eliminate that possibility. Mr. Gonot answered if the Village did not use the CRA mechanism but used municipal powers and sold bonds they would have to have some mechanism to pay off the debt, either by special assessment or an increase in the ad valorem rate for the entire village, the problem with assessments on undeveloped properties is many times they are not paid, and a tax sale would be easier to process through the CRA. When the bonds are paid off, all of the increased property values would come back to benefit the Village. Also, the taxes contributed from the County would not be available except through a CRA, and tax increment financing could only be invoked when there exists a project debt to be repaid. Mr. Gonot advised in order to avoid multiple bond issue problems, the Village should get everything in line and cover it all with one bond issue. Discussion of the ACLF component revealed a lack of Alheizmer's units in this area, and that one-half to two-thirds of typical ACLFs are located in the south end of the County. Mr. Gonot responded to Chairman Mackail's question of the amount of funds that the Village would need to set aside to cover debt service as approximately one year's debt service, which could be capitalized into the bonds, and recommended one to two years worth of interest also be capitalized into the bonds since no revenue would be realized during that time. Debt service at today's interest rates on $25,000,000 would be two m.illion to two and one-half million dollars per year, and his analysis showed the purchasing capability of the Village to be $32,000,000. Mr. Capretta suggested the option of a smaller project with the Village purchasing the land and building only the facilities they want, to avoid such a large debt. From Mr. Gonot's presentation and the resulting discussion, it was determined that items to be accomplished would be (A) to have staff outline the steps to implement a CRA, (B) recommend CRA boundaries, and (C) recommend project area boundaries. 1Kotion was made by Committee member Collings to recommend to the Village Council that they proceed with a CRA and have staff outline plan A, B and C in terms of the size of the Redevelopment Committee Meeting Minutes May 18, 1994 Page 6 ------------------------------- project area and the size of the CRA area. Co-Chairman Capretta seconded the motion. The vote on the motion was: Ron T. Mackail - for Joseph Capretta - for Earl L. Collings - for The motion was therefore passed and adopted. IV. ANY OTHER MATTERS There were no other matters to come before the Committee. V. COMMUNICATIONS FROM CITIZENS There were no comments from citizens. VI. ADJOURNMENT Mr. Collings moved that the meeting be adjourned. Co- Chairman Capretta seconded the motion. The vote on the motion was: Ron T. Mackail - for Joseph Capretta - for Earl L. Collings - for The motion was therefore passed and adopted and the meeting was adjourned at 3:37 P.M. �' �.'r i . � „ ., �= � �. Respectfully submitted, . ����, Betty Laur Recording Secretary ATTEST: �„� L� _ _ o OD J ann Mangan llo Village Clerk DATE APPROVED: .�fl_ s ,�995�