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HomeMy WebLinkAboutMinutes_Special Meeting_06/16/1994VILLAGE OF TEQUESTA Post Office Box 3273 357 Tequesta Drive Tequesta, Florida 33469-0273 (407) 575-6200 Fax: (407) 575-6203 VILLAGE OF TEQUESTA VILLAGE COUNCIL SPECIAL MEETING MINUTES JUNE 16, 1994 I. CALL TO ORDER AND ROLL CALL The Tequesta Village Council held a Special Meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Thursday, June 16, 1994. The meeting was called to order at 7:02 P.M. by Mayor Ron T. Mackail. A roll call was taken by Betty Laur, the Recording Secretary. Council members present were: Mayor Ron T. Mackail, Elizabeth A. Schauer, Earl L. Collings, Joseph N. Capretta, and Vice Mayor William E. Burckart. Also in attendance were: Village Manager Thomas G. Bradford, Village Attorney John C. Randolph, Village Clerk Joann Manganiello, and Department Heads. II. APPROVAL OF AGENDA o Councilmember Collings and Councilmember Capretta both asked to discuss items under Item IV ANY OTHER MATTERS. Vice Mayor Burckart moved to approve the Agenda as amended. Councilmember Schauer seconded the motion. The vote on the motion was: Ron T. Mackail - for William E. Burckart - for Elizabeth A. Schauer - for Earl L. Collings - for Joseph N. Capretta - for The motion was therefore passed and adopted and the Agenda was approved as amended. III. PRESENTATION OF FINDINGS OF THE FINANCIAL FEASIBILITY STUDY PERFORMED BY PMG ASSOCIATES, INC. RELATIVE TO THE CHRISTOPHER~S VILLAGE FOUNDATION, INC. TOWN CENTER CONCEPT PLAN. PHIL GONOT, PMG ASSOCIATES, INC. IZecucled Patter Village Council Special Meeting Minutes June 16, 1994 Page 2 ----------------------- Phil Gonot, Vice President of PMG Associates, explained that the purpose of the study performed for the Village was to assist the Village of Tequesta in determining the viability of the overall concept of the Christopher's Village Project and also to prepare an analysis that would identify the limits of potential participation in this project by the Village. The report covered a review of the concept, demand analysis, identification of costs, determination of benefits, an impact analysis, and a discussion of the organization and significant issues. The target area boundaries used were Loxahatchee River on the south, the ocean on the east, the turnpike on the west, and the northern boundary was approximately one mile into Martin County. The demand analysis encompassed the absorption rate and the price. If the price fell during the absorption time it was because there was no demand, and if the price increased, the potential for demand increased. The demand analysis of single family homes [detached housing, approximately 2600 square feet, estimated selling cost $185,000] concluded these could be absorbed in 2-3 years. Criteria used was (1) projected population in the traffic analysis zone, approximately a mile radius from the site, and (2) looking at the approved housing projects for that area. Only four projects were found to have direct competition to this new project: Palm Gardens, Jupiter Cove, Pennock Point Estates and Loxahatchee Point. The demand analysis of apartments used the criteria of a general rental apartment of approximately 1200 square feet and a smaller rental unit, primarily for students of the institute, of approximately 888 square feet, and concluded these could be absorbed in 2-3 years. The rental units were expected to be occupied by approximately half retirees and half employed persons. The demand analysis of office buildings concluded these could be absorbed in 2-3 years. General office and medical complex were two separate concepts in the original Christopher's Village plan which were combined for purposes of this study. Two types of office buildings were used as criteria: Type A, high-rise glass buildings with many amenities, and type B, office buildings without all the Village Council Special Meeting Minutes June 16, 1994 Page 3 ---------------------------- services and amenities. Vacancy rates of both types were studied. The current vacancy rate for offices in the Northern Palm Beach County area is 13.7, which reflects a 22$ reduction in the past year. The rents per square foot on Class A increased from $14.40 per sq.ft. to $18.10 per sq.ft. during the past year, the largest increase in any area in South Florida, as well as the lowest vacancy rate in South Florida (which includes Dade, Broward and Palm Beach Counties.) Relocation of existing offices within the project area would be necessary. This would involve a phased program where the new office would be built, the tenant would move, and the old office would be razed in order to build a new portion of the project. If relocation did not occur, absorption would take a much longer time, possibly 5 years, which would reduce the economic viability of the project. The demand analysis of commercial retail spaces servicing °~ local shopping needs concluded these could be absorbed in 2- 3 years. Half of the proposed 133,000 square foot retail would come from relocation of existing shopping facilities within the target area. Other criteria used was the rate of growth in population expected in this area, and completion of the 150 single family homes and the 253 apartments first to generate demand for commercial retail. If any of these did not occur, demand would be reduced. The demand analysis for a 120-room ACLF facility concluded occupancy would be dependent on the type of facility and that there is strong demand. Criteria used was assisted living for elderly persons who have some physical disability, which might just be old age, and based on the number of beds per capita of the population 65 and over. Only two facilities currently exist in this area, a 6-unit facility and an 8-unit facility, both in Jupiter. Demand in the current time frame would be 144 beds, which extended to the year 2005 with 175 beds. The demand analysis for a hotel concluded there is no demand for a hotel at this time because of the vacancy rate in existing hotels. Since the occupancy rate of hotels in the area has steadily increased during the past few years, there should be future demand. Criteria used was equal to the quality of a Holiday Inn. Village Council Special Meeting Minutes June 16, 1994 Page 4 ------------------------------- The Art Institute would be a college-level art training educational facility. The demand analysis conducted for this facility concluded demand is very high for accredited, transferrable degree programs, and continuing education programs are also in demand. Both Britt and Lighthouse Gallery are supportive of the institute program, however, cost would be their criteria for joining. Architecture enrollment was found to be declining. Mayor Mackail questioned the use of comparison with Mizner Park in Boca Raton to this project because of different geological locations and different job markets. Mr. Gonot responded that Mizner Park was the closest comparable redevelopment project from which to learn the pitfalls and what can be achieved, that the household incomes in both areas are very close, and that there were features that were comparable, such as the apartments over the retail units. 75~ of those apartments were leased before they even had a brochure; and were leased in large portion to theater people who moved down from New York. Mayor Mackail's ideas of what would attract people to live in Tequesta were police services, fire-rescue, very low crime rate, country feeling with access to major arteries, and the feeling of security of a small community. Mr. Gonot stated a very agressive marketing program would be necessary, that the project would have to be done in phases in order to keep existing tenants, that this would require a developer who is very good at organization, construction, and project management. Mayor Mackail voiced concern over how this project could make a profit. Mr. Gonot agreed this was an expensive land acquisition, $26,000,000 estimated in their report, or approximately $200,000 per acre, which included either purchase or condemnation and associated legal fees and leasehold purchase costs. Mizner Park's leasehold purchase cost was over $5,000,000; since this is a smaller area with shorter lease times PMG Associates estimated the leasehold purchase cost for this project at approximately $2,500,000. They used the percentage of sales price over assessed value for all the commercial properties in this area, and added 10% to cover eminent domain; however, this would not cover any landowner contesting the condemnation--the taking, not the amount. Legal fees contesting the taking of one piece of land in the Mizner Park project were $1,200,000. Because only 10~ of debt service could come from leases under tax Village Council Special Meeting Minutes June 16, 1994 Page 5 ------------------------------- increment financing, the Village could not make a profit until the bonds were paid off; also, before the Village would commit its resources it would have to determine whether the developer had the capacity to manage the property. Mr. Gonot stated they had estimated the absolute maximum on the amount of bonds the Village could support without raising taxes would be $9.9 million dollars, using tax increment financing. This would be phased in and would require some capitalized interest and other bridge financing methods, and more likely would be $4-5 million. Land acquisition cost was estimated at $26 million, infrastructure cost was estimated at $10 million, construction cost $66.2 million, civic buildings $3.2 to $8.8 million, and impact fees $1.7 million, for a total project cost of approximately $110,000,000. Mr. Gonot stated that Christopher's Village Foundation must have firm commitments on the financing for the land acquisition and construction efforts, and determined by using 10~ of the development costs, 2 years operation to be sure the non- profit organization can function, and 2 years debt service that the developer would need approximately $5 million cash in hand for the institute portion of the project. Mr. Gonot listed benefits of the project as: increase in the taxable value of the project land, $60 million; increase in the taxable value of land surrounding the project, $2.2 million, funds available through tax increment financing, $879,000 at build-out, increase in shared revenues such as sales tax, gas tax, etc, $124,700 at build-out. Potential increases in taxable value could come from increased density of the project and the elimination of the tax exemption for the arts institute. Mr. Gonot recommended the Village create a Community Redevelopment Agency as an organizational structure to continue progress on this project. The CRA would permit tax increment financing, would focus efforts on the redevelopment project, and could take advantage of new legislation regarding selection of developers. Other factors for consideration were that the CRA is not required to undertake a project, and the CRA is not required to use tax increment financing. Another approach would be using the CRA as a regulatory organization to facilitate a plan developed by the Village which would impose architectural, design, and landscaping controls in order to require Village Council Special Meeting Minutes June 16, 1994 Page 6 ------------------------------- individual property owners to develop according to that plan. This approach would mean less risk but would also reduce rewards. The CRA could also be used to create a revolving loan fund. In response to a question by Councilmember Collings, Mr. Gonot explained that Northern Palm Beach County Water Control District could issue their own bonds to develop the infrastructure which would not impact a CRA since they create an assessment unit wherein property owners in the project area would be assessed for the costs of the project. If the Village leased the project to a private developer, that developer would be liable for assessments and ad valorem taxes. Mr. Gonot offered three options in addition to a CRA: (1) Operating under existing powers as a Village Council, the Council could condemn property, issue bonds, establish development rules, zoning classes, and land use classes; however would be limited to revenue bonds as a means of financing, and the ad valorem rate of the Village could be affected. (2) Operating as a Community Development District under Florida Statutes Chapter 190, the governing board would have to be made up of qualified people living within the district, and could issue bonds, undertake projects, assess property owners through direct assessments or ad valorem taxes to recover costs, and could have a higher assessment within the CDD. (3) Operating as a Downtown Development Authority under Florida Statutes Chapter 162, the Village Council could be the governing board, otherwise this structure would be basically the same as the CDD. None of these structures would allow tax increment financing, reversal of the selection of the developer and the issuing of the bonds, and condemnation of property available under a CRA; however, the disadvantage of a CRA would be that the improvement in the taxable base could not be used in the general fund of the Village until the bonds were paid off. Mr. Gonot agreed with Councilmember Collings that limiting the size of the CRA to be as small as practically possible so that development would be sparked would make the entire village more desirable for growth. Mr. Gonot advised that the best mechanism for the Village to use would have to be based on what the Village can afford. If it were necessary to acquire the land in phases, Mr. Village Council Special Meeting Minutes June 16, 1994 Page 7 ------------------------------- Gonot suggested that there should be a joint agreement regarding what would be built first and how the phasing would work, and proof of financing for each phase be secured by a letter of commitment from the partner, a letter of credit, or a joint participation agreement with the partner. Mr. Gonot suggested the Village might want to become a member of the Florida Redevelopment Association at a cost of $150 per year, which offers a consultation service from people who have been through a redevelopment and would come before the Village Council to present their experiences of what went well and what did not go well. Howard Morton reported that Mr. DiVosta's option to purchase property could provide another avenue by Mr. DiVosta developing that property which would cost the Village nothing. Councilmember Capretta responded that since Mr. DiVosta's purchase was of the very land on which the Institute would be built under Mr. Benjamin's plan that this project may no longer be possible unless Mr. DiVosta would participate. Mr. Morton stated under Mr. Benjamin's plan the institute would have zero tax base for the village and the existing area for municipal buildings would be multiplied for a village that would stay the same size. Betty Nagey, 26 Shay Place, asked how much space for municipal buildings was needed and why existing structures could not still be used. Mayor Mackail responded that a study by Gee and Jensen had recommended 40,000 square feet and existing facilities have 15,000. He explained that he was very concerned that existing facilities not become vacant, and that the best way to expand had not been determined. Councilmember Collings responded to Ms. Nagey's question whether the Mizner Project was now in financial trouble that their initial bond issue had been too large. She proposed development by Mr. Van Brock and Mr. DiVosta, which would cost the Village nothing. She also questioned why Palm Beach Post did not put the notices of the meetings in the newspaper under the notices of meetings section and was told the Post was notified but did not always place the information in that section of the paper. Steven Harris stated his position that this project is not viable for this area because half the population goes North ~.,,. for approximately six months of the year and the half that Village Council Special Meeting June 16, 1994 Page 8 --------------- Minutes is left could not pay the higher prices that would be required to support the proposed commercial retail establishments. He felt many people would challenge taking of their property under eminent domain. He suggested the old K-Mart building might be used as a municipal facility. Mr. Benjamin stated he hoped that the Village Council would allow his Foundation to make a presentation if they desired to proceed with the project. He stated he felt PMG Associates had mistakenly overstated the current assessed value by $6,000,000 and that he could tell them which property they had included in their assessed valuation that should not have been included, and that project costs would be much less. Robert Cook stated he was the attorney for the Port of Palm Beach and was involved with the CRA to develop Riviera Beach. He stated the CRA would give the greatest flexibility for doing this project, but that the Village Council needed to be aware that establishing a CRA would create an expense, since a director would need to be hired and possibly support staff . He felt the Council should wait to learn Mr. DiVosta's plan before establishing a CRA. Susan Emily commented on PMG Associates' report by asking whether retirees would want to live above a store where there was activity until 10 p.m., how a business would be forced to relocate, that the cost of a 2600 sq. ft. home was estimated to sell for $185, 000 which she felt would be a lot higher, how the infrastructure would be paid for and maintained if not from taxes. ~, IV. ANY OTHER MATTERS Councilmember Capretta stated for many years citizens had (1) requested the Council do something about the downtown area, and (2) asked what the Village was going to do to prevent one of the most valuable assets in Tequesta, Lighthouse Gallery, from moving out of the Village. Over the years many developers had presented plans before the Council but then did not have the financing to complete their projects, and the project being presented by Mr. Benjamin would have to have enough financing. He invited citizens to tour the Village quarters to see for themselves the working conditions and that more space is needed. He Village Council Special Meeting Minutes June 16, 1994 Page 9 ------------------------------- stated Mr. DiVosta would be encouraged to develop the land he has contracted. Many citizens had asked that an ACLF be built. Anew library has been considered for the downtown area. The biggest problem has been lack of money for redevelopment, and the Village does not contemplate going into heavy debt. Councilmember Capretta stressed that redevelopment meetings had been going on for years, and that now developers are able to get loans again and Mr. DiVosta will be doing something. He asked the citizens to remember the Council is well aware that no one wants a large tax increase and is very receptive to their ideas, and that improving the downtown and retaining cultural entities and making the whole Village a better place to live is very complicated. Councilmember Collings addressed the Village Council, stating that because of the Sunshine Law prohibiting Council members from talking to each other they cannot act as businessmen, which has resulted in lack of progress with the downtown redevelopment. He stated the Village Council is now faced with a situation of 3 or 4 major players and 4 small landowners, and that Mr. Benjamin's plan could save both Lighthouse Gallery and BRIT from moving by incorporating both within an art institute. He suggested the Village Manager be directed to proceed with a presentation he feels is viable for the Council to work on and establish a meeting of the major players. Councilmember Capretta stated the Council members know the things the Village wants in the downtown area, and suggested moving ahead with the developers who have expressed interest. Mayor Mackail directed Village Manager Bradford to rethink what he has heard regarding downtown redevelopment and to formulate a plan to present to the Village Council. Village Manager Bradford was also directed to call an evening meeting of the Redevelopment Committee inviting Mr. Benjamin, Mr. Van Brock and Mr. DiVosta to attend to discuss their ideas for the downtown and to let them know the Village's plan, and inviting representatives from BRIT and Lighthouse Gallery so that the parties who have an interest will know the direction the Council is going to take. V. COMMUNICATION FROM CITIZENS ,.. Village Council Special Meeting Minutes June 16, 1994 Page l0 ------------------------------- Communications from citizens were taken under Agenda Item III. VI. ADJOUfRNMENT Councilmember Collings moved that the meeting be adjourned. Councilmember Capretta seconded the motion. The vote on the motion was: Ron T. Mackail - for William E. Burckart - for Elizabeth A. Schauer - for Earl L. Collings - for Joseph N. Capretta - for The motion was therefore passed and adopted and the meeting was adjourned at 9:20 P.M. Respectfully submitted, `~~ C~~x-~t~ Betty Laur Recording Secretary ATTEST: J ann Mangan' to Village Clerk DATE APPROVED: ~~