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1. 1Call to Order - Roll Call▶ 0:00
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   Hacienda CRA Work Session

   discussed

   Staff briefed the CRA board on the status of grants funding restoration of the Hacienda Hotel ($750,000 Special Category Grant for windows/doors, Small Matching Grant for exterior patio/structural work, and a pending $100,000 grant for mullet stucco) and presented four conceptual options for the property's endgame: single-purpose tax-exempt financing, sale/lease to a boutique hotel operator, an incremental approach, or CRA-led completion. The board discussed the $1.5 million restrictive covenant liability tied to state grants and how it constrains potential deals; no formal action was taken.

   📍Hacienda Hotel📍Sims Park🏢Florida Division of Historic Resources🏢Friends of the Hacienda🏢Hope Windows🏢West Pasco Historical Society👤Bert Bender👤Councilman Phillips👤Mark Keister👤Mr. Iazzoni#$750,000 Special Category Grant#Boynton Beach high school restoration (referenced model)#Hacienda CRA#Historic tax credits#Mullet stucco grant (ranked 11 of 81)#New Market Tax Credits#Restrictive covenant ($1.5M liability)#Rosners lease/option agreement#Single-Purpose Tax Exempt Entity financing#Small Matching Grant

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   [00:00:22] and that's the Hacienda CRA, so go for it. Mr. Mayor, the purpose of the agenda [00:00:29] item before you this evening is to bring you up to date on the status of [00:00:33] grants and their implementation and additionally to present to you some [00:00:40] options related to the continued restoration of the Hacienda and in that [00:00:45] respect Mr. Iazzoni has prepared a PowerPoint presentation. I'll turn it [00:00:51] over to Mr. Iazzoni. Thank you very much City Manager and CRA board. I've been [00:01:00] thinking about this for a long time. It's obviously a beautiful property and we're [00:01:03] trying to really try to give you some just very concise information that you [00:01:07] guys can work with and hopefully I'll be able to answer your questions. And what [00:01:11] we're talking about tonight is is to try to develop a strategy for our end game of [00:01:16] really realizing the Hacienda Hotel as an economic driver for the [00:01:21] City of New Port Richey. But first let me update you on the grant status. [00:01:26] Currently we're in the process of the $750,000 Special Category Grant. I did [00:01:34] reach out to Mr. Bender in terms of his status. We do have an agreement with them, [00:01:38] with documentations going forward, working on our first code report with [00:01:42] them and right now Mr. Bender is in bid document phase for the scope of work and [00:01:48] the $750,000 and has told us that he expects to have all the engineering work [00:01:54] done by February to be able to go out to bid on the windows and doors. We're [00:01:59] looking to, in that scope of work, to do 117 windows. I think there's 38 designs [00:02:05] there, 17 different designs, and then 38 doors. And Bender expects about 15 months [00:02:13] in this process once we, mainly due to the manufacturing, to move forward with [00:02:19] that. But he gave us a whole timeline on that that he would be completing by the [00:02:23] time of the grant close out period. This is a two-year process here, the Special [00:02:28] Category Grant. We actually applied for one for next year, however they said that [00:02:31] this is a two-year time span so we would not qualify for that one. But once that's [00:02:38] closed out then we can go in that direction if need be. [00:02:40] Mary, I'm sorry, so ready February is next February? Yes, yes. 15 months from that time? Yes, that would be, [00:02:50] it's mainly, these are, he's recommending Hope windows, which are what [00:02:57] they call the Cadillac of windows, and so they feel that that could be [00:03:04] six months in manufacturing, but I'm kind of like saying, well, you know, maybe a [00:03:09] little bit longer given that we're seeing that across the boards in terms [00:03:12] of construction, that there might be, that's how long it's just taking our [00:03:15] custom-built windows, they're very high-quality windows, and the doors [00:03:20] likewise. So he's anticipating, you know, that he anticipates closing that grant [00:03:27] process out by the end of two-year period, which would be, what, 18-19. So the 117 [00:03:35] windows and 38 doors is replacing all of the doors and windows in the place, so [00:03:40] they'll all be the uniform custom-designed doors and windows. Right, it's part of [00:03:43] what we call the shelling out strategy, you know, the Department of Interior's [00:03:47] guidelines for rehabilitation says to dry out the building, you know, and so, [00:03:54] you know, the scope of work specifically is to replace those windows and doors, to [00:03:58] make them hurricane-proof, bring them up to code, to Miami-Dade standards. We did [00:04:03] look at leaving the original windows in there, but when, by the time we got through [00:04:07] with putting little hurricane shutters on and doing all that, and remaining [00:04:11] windows, Bertha had basically said that this is, like, we did have, Hope Windows [00:04:19] kind of submit a bid on all that, and the due of them all would be $750,000. [00:04:23] Is there no opportunity to, you know, I'm just thinking of the historic [00:04:28] preservation piece of it, so any of the original ones, like a window, a door [00:04:33] maybe not in the facility, but that we were able to hold on to it, whether it's [00:04:36] put in the museum or someplace, so that, you know, we have that history. We have [00:04:41] one window, and we would love to certainly preserve that window, because it [00:04:46] is the only original window in the entire building. I think you have, the, I [00:04:51] think in the Sims, there is, there's more, there's actually more, there's, there's [00:04:56] the original ones are on the Sims Park facade, and in that one room with the [00:05:02] multiple ones, the wooden ones that are there, the restoration plans call for [00:05:07] actually restoring the wood on those, and those won't be replaced. [00:05:14] There's one on the south end of the building, which is an original metal window, but [00:05:19] there's a couple of them, like over the doorway, some of those transoms are going [00:05:22] to just basically be protected and preserved. Okay, thank you. [00:05:27] I'll show you a picture here. [00:05:36] Small Matching Grant is a one-year grant program. Again, reaching out to Bert, he [00:05:42] said he'll be done the architectural engineering work to go to bid late [00:05:46] December. That's for the restoration of exterior patio, and some of those entries, [00:05:51] like you see, where that one window is on the southeast wing, some of [00:05:58] those foundations that approach the building, those little entryways, we'll be [00:06:01] restoring those also. Historic stairs, and then the structure, the engineer [00:06:09] early on called for a structural beam over the archway. There is no beam in [00:06:12] there, it's just a box that supports that ceiling and feels that that structural [00:06:16] beam is an essential component to that. The dining room archway, it was [00:06:24] actually in the original special credit grant submission, and that would have [00:06:29] been Mark Keister, the engineer that comes with Bert, and he'd recommended [00:06:35] that in the original assessment of the property, and we'd pulled that from that [00:06:39] process because it was too expensive to do. [00:06:43] Real quick, that picture, that photo right there, the first time I saw it was over the [00:06:47] weekend actually on West Pasco Historical Society's Facebook page, popped up in my [00:06:52] feed. Are they, I know the friends of the Hacienda are specifically raising money [00:06:59] for that entryway, are they planning on putting that same Hacienda, like wrought [00:07:02] iron overhang? That would be a second project. I would, you know, I would [00:07:12] like to see. Well, yeah, that's why I kind of put up there, I just came across the [00:07:15] picture also, and what the historic architects have to rely upon is how, you [00:07:20] know, what is the detail in that wall? And, you know, we're trying to make it as [00:07:24] original, authentic as original property. It was added in 1940 for all we know. Well, [00:07:31] this piece here, yeah, yeah, we're probably just mainly working on getting [00:07:36] the wall and getting it stuccoed. We haven't talked about some of the metal [00:07:39] work whatsoever. Maybe that's a second project that we can talk about and kind [00:07:43] of review and consider. It makes the entry. This gate right here, apparently [00:07:48] it was original, and I tend to think in the earlier photos you would have seen [00:07:51] that. I think I've seen some earlier photos, but it's interesting. Again, that's, [00:07:55] that's, but that is not in that wall phase component. We've applied for another [00:08:03] small matching grant program for a fiscal year beginning in 2018. It's the, [00:08:08] what we call a mullet stucco, and below each one of these historic windows you [00:08:13] have the bad stucco design there, and you actually have it in different patches on [00:08:17] the building. And that grant submission, we basically want to come in and rebuild [00:08:23] in below these windows and bring, basically this, this whole hundred [00:08:26] thousand is mainly to make sure that the whole building is complete in terms of a [00:08:31] stucco design pattern. And we, Burt had estimated about 65,000. We've kind of [00:08:37] bumped it up to 75,000 is what that would cost to come in and just make all [00:08:42] this mullet stucco unique in its uniformity. And that grant is ranked [00:08:47] 11th out of 81 submissions Division of Historic Resources. And what we [00:08:53] discovered in our process is that the state tends to fund these small matching [00:08:58] grants completely entire year, because they go county by county. So we feel [00:09:02] pretty comfortable about that grant coming in. And in that also is a [00:09:07] removal of the gate that, what we call the non-conforming gate on the Main [00:09:12] Street side. A couple thousand dollars to take that out, because we think that, we [00:09:18] think that this whole process will complete what we call the shelling out [00:09:20] of the building, plus the contributions of the Friends of the Hacienda and their [00:09:24] work on that wall there. Any questions on the grant? Okay, I'm going to go into [00:09:33] the second components. How do we get to the endgame? You know, and the great good [00:09:39] thing is that we're at least considering this, because this has been a steep hill [00:09:43] to climb. Basically, there are four concepts that we think might be viable [00:09:49] out there. And at, you know, when I started looking at how we can get to the [00:09:54] endgame, we had no, you know, we'd pretty much drawn a, you know, when we put the [00:10:01] last RFP out, we didn't have somebody to come up, maybe except for the Rosners, [00:10:04] that would, that would, you know, buy the property, lease the property or whatever, [00:10:08] and take it back to the original. So I was working on another concept called [00:10:11] the single-purpose tax exempt financing as an alternative, should there be no [00:10:17] operator developer interested in coming in and bringing this property back to [00:10:22] what it originally was like. The second concept I'm going to introduce here is, it's [00:10:27] actually a sales-slash-lease to a hotel boutique operator. We have some interest [00:10:32] in that arena these days. A lot of it has to do with market conditions, improving [00:10:37] market conditions, and the overall improvements of the economy. The third [00:10:42] approach is what we call an incremental approach, and that's pretty much what [00:10:45] we're doing now. We're moving forward with this property, and, you know, we're [00:10:50] going to keep going at it until we get this, this thing open. And the last one is, [00:10:55] is, is, you know, the CRA kind of steps in, which is its role as an economic [00:10:59] development entity, and finishes the property also. I want to point one thing [00:11:05] out here, and this is Division of Historic Resources 1.5 million to a [00:11:09] restrictive covenant against the deed. When the million dollars came in, in [00:11:13] order to get that million dollars, a restrictive covenant had to be filed [00:11:17] against the deed to assure that you just don't put, you know, put the million into [00:11:22] and it sits fallow. Conditions of that is that there's a million-dollar liability [00:11:27] for the first five years, then it's the declining balance, and in the ten years [00:11:31] that restrictive covenant drops off. And now that we've got the other half [00:11:35] million from them, we've kind of had to step it up another five hundred thousand [00:11:38] dollars. But it's under what we call the rehabilitation component, not a [00:11:43] preservation requirement. You just can't ignore the property. You can't let it go [00:11:47] fallow. You can't walk away from it and just let it deteriorate. You know, the [00:11:52] state, and that would make sense, the state wants their money back. But in any [00:11:56] type of arrangement that we're working with, trying to get this, likely [00:12:00] that issue is probably going to come to play at some point. [00:12:03] Mary, does any of those four concepts [00:12:09] conflict with the terms of the agreement for the money that we've already gotten? [00:12:14] Do we need to retain ownership, or can we do anything? It would be this sale of the [00:12:21] property could possibly conflict, but it would only conflict when I actually [00:12:31] asked them about that in a previous arrangement, and it would only conflict, I [00:12:35] think you have to do the renovation in the year after that, then you can [00:12:40] transfer ownership of the property. That's the arrangement we have with [00:12:43] the Rosners, and you know, but you can structure in a way to where [00:12:48] that, I don't think it impacts this, I don't think it impacts this one down [00:12:53] here, but I would have to go back to the Division of Historic Resources, but it [00:12:56] does affect the decision process in terms of trying to bring [00:13:00] money to their property, but it's not prohibited, I don't think, to transfer [00:13:05] title. It's just, there is, I believe what it is, is you can't change title a year [00:13:10] after the grant work is done, so what we did with the Rosners was a lease type of [00:13:16] arrangement, and then they had the option to take ownership once we were out of [00:13:20] the liability stage with the... So where we are now, because the Rosners are no [00:13:25] longer in place, is there any, have we violated any of the piece of, or whatever [00:13:32] the contract was, or whatever the grant, you know... No, we just raised our liability of [00:13:38] half a million dollars, because we took another half a million dollars from them. [00:13:42] Right. So we went from a million if we trip certain thresholds, now we're at a [00:13:47] million five, which I don't know, I don't know how well that was in our process, [00:13:56] because obviously what it does now, all we can do is lease it, run it ourselves, [00:14:03] or go through your single purpose, and I guess the other question always comes [00:14:08] back to is, at what levels do you trigger the recapture? And you know, and then it's, [00:14:16] then it all comes down to semantics. Well, we did this, but it didn't trigger that, [00:14:21] and, or to what degree, so in essence, you know, it pretty much takes, unless you [00:14:31] build it into the purchase price, which isn't the mindset of many people in the [00:14:39] city, many people on council, but over and above, it almost restricts you for a [00:14:46] period of time. Let me just clear that up. The million five is only to leave it lay [00:14:51] fallow. In other words, we put improvements in historic property. The way I [00:14:55] understand it, it's not if you change titles of the property. The liability [00:14:59] would trigger... [00:15:00] If you do change title, then the owner of the property then would be responsible not [00:15:05] to allow it to go fallow. [00:15:08] So it wouldn't trigger the $1.5 million to be paid back to say if it changed ownerships. [00:15:14] But if you sold it and it went into foreclosure in a short period of time, there could be [00:15:20] a situation where the liability is still there. [00:15:25] So for example, if not using the Rosners, but if we use that as a parameter, if they [00:15:33] would have come in or someone similar to them and operated for a year and a half, then walked [00:15:40] away, under our agreement we still had ownership. [00:15:44] But if they did buy it at that point and it went quiet, dark, and didn't anything, it [00:15:51] could trigger that recapture to whatever portion it is. [00:15:57] Is that? [00:15:58] That's correct, yeah. [00:15:59] Unless you get outside of a certain window, and then it becomes a prorated amount as it [00:16:03] goes out to the total 10 years I think is the way it's explained. [00:16:08] It was five years for the full liability, then it declined, and then you lose 20% every [00:16:13] year for the next five years. [00:16:14] I'm so glad we got the $1.5 million. [00:16:16] I understand the pros and cons of whether we sell it or keep it. [00:16:20] But the bottom line is I'll take that risk to get $1.5 million. [00:16:23] Yeah, do you have $1.5 million today? [00:16:25] You got $1.5 million today if something were to happen? [00:16:29] I mean, do we have $1.5 million we could go access today if we got called on the carpet [00:16:34] today because they read things differently and they came to us? [00:16:40] We'd have to basically forestall a number of different things to pay back the $1.5 million. [00:16:43] It would be the equity in the property is what it would be. [00:16:45] Nobody's unhappy we got the money, don't get me wrong. [00:16:48] But it's just like taking a bullet loan or a leverage loan in years ago, maybe in 2005 [00:16:56] back when that seemed to be the magic year for the city when we talked about value and [00:17:03] loans and all that, that the lenders, because of the way it was, they could come back and [00:17:09] basically say your loan's up and you either pay this interest rate or you pay that one. [00:17:15] I'm glad we've had the money because it's kept the ball rolling because I don't think [00:17:19] we could have found it in operating or CRA or millage or anything else. [00:17:27] At least it hasn't sat still, sat still from 2004 to 2012 into 2013 until somebody stepped [00:17:35] up and started taking responsibility for their asset. [00:17:39] That's kind of why I put that note in there. [00:17:40] I just think that the CRA board needs to be aware of that contingency out there in their [00:17:44] property because it does affect whatever negotiation or process occurs. [00:17:49] Obviously, we would be conferring with the state. [00:17:53] I just wanted to make you aware that that item is still out there. [00:17:56] It affects the deal that you can make. [00:17:59] It affects the deal you can make. [00:18:00] It affects the type of group that will come in that understands the liability and the [00:18:07] risk and then over and above that, where they get the return on their investment and [00:18:15] the return on their risk. [00:18:17] That's the way that I kind of see some things, isn't that? [00:18:20] Absolutely correct. [00:18:21] Yeah, Councilman, you're absolutely correct on that and that's why I really want to point [00:18:23] it out because it does come into play. [00:18:27] It limits your players. [00:18:28] It limits your pool just like any time. [00:18:32] Just so I'm clear, you're saying if we transfer ownership, that liability of letting it sit [00:18:37] and deteriorate goes to the new owner, correct? [00:18:39] Absolutely, right. [00:18:40] So we're assuming if someone did want to purchase it, they're not going to purchase it from [00:18:44] the city, just assuming to let it sit idle. [00:18:47] I don't think the investor will go that route, right? [00:18:52] I've always talked with the city manager on why we went forward with the Rosners deal [00:18:55] and the fact that we really wanted ... The benefit of doing that was to get an understanding [00:19:00] of how you can structure an arrangement. [00:19:02] What were the pitfalls? [00:19:03] What were the issues? [00:19:04] What were the thresholds? [00:19:05] That was on the table for the Rosners also and they were willing to assume that liability [00:19:09] if they took ownership. [00:19:11] That deal was worked around that also. [00:19:13] It's just a matter of what's your comfort level as an investor in a property that you're [00:19:17] going to get this done and that you're going to meet the grant fund requirements in terms [00:19:22] of preserving the property. [00:19:23] If I'm the investor, I understand what we're talking about is a liability, but it's also [00:19:28] $1.5 million. [00:19:30] They're not having to put it into the building themselves, correct? [00:19:33] That's correct. [00:19:34] It comes into place if you're going to do financing. [00:19:36] Again, that's the classic ... If we're going to do a bond or some of these other issues [00:19:41] where maybe the CRA is pulling financing, your bank's going to look at that and say, [00:19:46] you know, you've got to cut this thing hanging out there and it becomes kind of a ... What [00:19:52] do you do with that? [00:19:53] How do you address that issue? [00:19:54] That's kind of why I put it out there is that if you ... Some of these scenarios we're talking [00:19:58] about may be doing some financing structures and obviously when you get into having clear [00:20:03] title different things like that, that issue kind of sticks out there and could ... Like [00:20:08] Councilman Phillips says, it could affect the ... [00:20:09] Absolutely. [00:20:10] Yeah, but let's be clear. [00:20:13] Another reason why we considered and we wanted to move forward with the Rosners is because [00:20:19] most of the other deals that were being presented to us back in 2014 I believe, I'm trying to [00:20:26] get my years straight after we've been up here for a while, but one, it was at the tail [00:20:32] end of coming out of a recession base and we knew we wanted to get that asset moving [00:20:37] forward because we saw it as an economic uptick for the city. [00:20:43] Number two, supposedly in our deal they were at least bringing $2 million of their money [00:20:50] to the table. [00:20:52] Every other deal that we talked about or got thrown around there was this exotic math process. [00:21:00] What was it called? [00:21:01] New market tax credits? [00:21:02] Yeah, yeah. [00:21:03] Those and a couple of others, but over and above ... That was advanced math in the first [00:21:07] place and the liability took it even out seven years on that formula, but even more than [00:21:12] that was the element of the other people coming in and wondering us again. [00:21:20] We would have to finance another bottom line or sign off and then previously to ... When [00:21:29] the mayor was city councilman the last time, when the last city manager was here, he wanted [00:21:34] us to do a ... With the former group that was marketing it out of Jacksonville, he actually [00:21:41] wanted us to become a partner and actually oversee the operation and get a return investment [00:21:49] on how they operated. [00:21:50] I kept looking at it like it was going to be either a sitcom or a radio deal. [00:21:56] You would never be able to see where the profits were because there was always so many [00:22:00] layers of expenses. [00:22:03] That's where it was before we took off. [00:22:06] That sat for 10 years walking with that group back and forth out of Jacksonville. [00:22:11] That's the one that kept trying to figure out where they were going to put rooms in [00:22:16] different places. [00:22:17] I remember that. [00:22:19] When you called for this session, I was just trying to find out some ... I was introduced [00:22:29] to a concept down in Boynton Beach where they're restoring an old high school there and they're [00:22:37] trying to seize historic tax credits. [00:22:39] It was an interesting concept and that's what this is. [00:22:42] What they proposed there, it was actually a rather substantial project where they were [00:22:45] building City Hall and other public structures, but in that whole complex was a historic property [00:22:51] down there. [00:22:52] What they were proposing was this called Single Purpose Tax Exempt Entity. [00:23:00] We just took a serious look at this and tried to figure out what it was. [00:23:03] Again, you talk about complicated structures. [00:23:07] This is something that if we had no options on the table, that could be considered. [00:23:12] What would happen here is a hacienda would get deeded to a tax exempt entity. [00:23:17] What it is is an alter ego entity to the city. [00:23:20] You would have a board of directors that would consist of individuals that the CRA board [00:23:25] would think would be relevant that can get the job done. [00:23:29] It takes it out of the city's hands and puts us in this 501c3. [00:23:34] That board would then hire a developer slash operator to come in and restore and renovate [00:23:40] the hotel. [00:23:42] The city manager and I looked into this whole developer-operator concept and sat down and [00:23:47] talked with a group that specifically does this. [00:23:50] They actually have 43 properties throughout the country. [00:23:54] They developed what we call five-star hotels. [00:23:56] We wanted to get an understanding of just what is the internal dynamic. [00:24:00] Should we go in this direction and what the role would be played? [00:24:03] They're rather prominent properties in the country. [00:24:07] We got some insight on that over the weekend. [00:24:10] The developer would come in and restore the property. [00:24:11] The standards are very high-level property. [00:24:15] Then the developer would also operate it based on the depth that they have. [00:24:18] Almost like councilmen, we talked about Hay Creek and what they're involved. [00:24:23] This organization that does these properties, they basically market throughout the entire [00:24:31] nation. [00:24:32] They got 43 properties. [00:24:33] They come into each of these individual properties and build value and execute from there. [00:24:40] This concept here, the profits would pay off whatever revenue bond that would occur for [00:24:45] the financing. [00:24:47] Any excess would go under the CRA. [00:24:52] This is an IRS statute out there called 6320. [00:24:54] I think I put it in one of the handouts here that basically says ... I reached out to a [00:25:01] law firm that kind of structures these things. [00:25:05] What they talk about is you can issue a tax as an entity, no recourse to the bond. [00:25:10] The concern is that this can get expensive. [00:25:15] What was interesting is that the bond would have no recourse back to the city because [00:25:19] it's in a separate entity, but just having been out there doing a lot of lending over [00:25:23] my years, the bank's always going to want to try to secure as much as they can to the [00:25:27] bond. [00:25:28] The city's hanging out there. [00:25:30] That would be a sticking point in the discussion also. [00:25:32] Go back to the screen, the last screen. [00:25:37] Once again, your CPA abilities are far above my head. [00:25:41] Why would someone, why would a developer operator want to do it under this process rather than [00:25:46] just come by themselves with a tax receipt? [00:25:49] He gets a preferred tax status. [00:25:53] He gets internal write-offs depending on what his debts are. [00:25:57] There's a couple of things. [00:25:58] The business model is that they want room counts. [00:26:00] They're not really interested in owning the property and taking stewardship of the property. [00:26:05] They just simply want to make money, and they don't want to be holding the asset. [00:26:11] Something that you spoke with, is that how they've worked their other boutique hotels [00:26:17] around the country? [00:26:18] Yes. [00:26:19] Or did they own some of them and do some based on this model? [00:26:24] They do your standard stuff like Comfort Inn and La Quinta and stuff like that. [00:26:30] They have seven properties in Charleston alone. [00:26:34] Are they boutique hotel properties? [00:26:36] Boutique hotels, yes. [00:26:38] There's one case study. [00:26:41] What they do is they come in, and there's just this value that they see inside the hotel. [00:26:46] They come in, and they make the renovations to a level on which they now want to market [00:26:51] and book. [00:26:53] You're talking about room rates probably in a $250 range, because it would be a five-star [00:26:58] hotel. [00:26:59] They have such a marketing reach. [00:27:03] The executives in this firm and the different staff come from the Cornell School of Hospitality [00:27:08] and Management. [00:27:09] From what I understand, it's one of the best schools in the country to operate. [00:27:12] They're not so much interested. [00:27:14] The business model is different in the fact that they're not really interested. [00:27:19] Maybe at some point, they come and buy the property, and that would be one of the advantages [00:27:22] here. [00:27:23] After the fact. [00:27:24] Right, yeah. [00:27:25] It wouldn't be unusual. [00:27:26] Or to get into a lease-type dynamic. [00:27:30] That's what makes this interesting here. [00:27:32] That's kind of why we looked at this, is that maybe in an RFP phase, they say, we like this [00:27:37] idea so much. [00:27:38] We like the New Port Richey so much that we would go into a lease-type dynamic. [00:27:42] In other words, option number two, they can flip to option number two. [00:27:51] But the specific group that we kind of looked at, I was simply trolling to try to find solutions [00:28:00] here, and they kind of contacted me and said, well, this is who we are, and this is what [00:28:05] we do. [00:28:06] I like the talent and the depth and the type of properties, and the city manager looked [00:28:09] at it and tried to get an understanding. [00:28:10] But it can probably be a more expensive process to go this direction, because if you do the [00:28:16] financing, you're probably going to have to capitalize the interest on the bond. [00:28:21] And to ramp up to a five-star hotel, this is what I learned over the weekend, is probably [00:28:26] another million, million and a half added to the ticket item. [00:28:30] And the challenge with this is right here. [00:28:32] If you do a tax-exempt bond, put in a separate entity, there are city taxpayers that are [00:28:37] concerned about how expensive this project gets. [00:28:40] We estimate that the cost to complete the Hacienda would be about $5 million. [00:28:46] This probably would add anywhere from $1.5 to $3 million on top of that, and so, I mean, [00:28:52] that kind of concerns us, because as the CPA, I'm probably comfortable with maybe the performance [00:28:58] that we have out there, maybe, you know, the $5 million number, but when we begin to push [00:29:04] up there, I get nervous. [00:29:06] And so, I mean, again, we would review this in an RFP process to see if it's relevant. [00:29:13] Under that plan, though, the developer would use the money that we're generating, and the [00:29:18] developer would restore the facility? [00:29:19] You're going to be bringing it up within their image and expertise and experience in terms [00:29:23] of what their concept is, I mean, in terms of what they feel is the best value for their [00:29:30] business model. [00:29:31] You're talking about a very high-end property, very fine dining restaurant, very high ticket [00:29:36] price likely for the property to make it work, so you're looking at, the point I have [00:29:40] on the next slide is it would be very likely a five-star hotel, very unique to the city. [00:29:46] It would be a global destination, if not, you know, it would be something that people [00:29:51] would talk about, just like the other properties that they have. [00:29:54] It's basically an industrial development model, and they are expensive. [00:29:58] Yeah, but the median income... [00:30:00] around here as you know that's going to be a that's going to be a nick and if [00:30:06] they require the city to participate on the revenue bond it's going to take away [00:30:12] from your revenue rating and there's probably three other projects that the [00:30:17] city will be considering in the next five years over and above still trying [00:30:23] to pay off the whatever the balance is was a twelve million dollars we still [00:30:29] like twelve million dollars on the rec centers well I don't know what's all [00:30:32] included in that debt anymore that would have been one of my my questions but if [00:30:36] you do that with the bond rating and anytime they feel any meaning the the [00:30:42] lending institution feels any jeopardy they're going to come to the person that [00:30:47] they believe has the largest pocketbook which is the city and then what is it [00:30:54] would curtail you having lending sources or availability to do the two or three [00:31:00] other projects that you know might be might be on the plate that's great what [00:31:05] I have up here are the issues and yeah the point is right here is it likely [00:31:11] could be more costly from what we learned but and again we talk about now [00:31:16] since it's a 501 c3 it would be available for this tourist development [00:31:19] tax dollars now with in order to be able to take that I guess the cream and the [00:31:23] icing on the cake to get it to the five-star you know you really would [00:31:27] need this to kind of come into play to drive down that risk you know because [00:31:33] the developer you know they're gonna put a lot of money in training staff making [00:31:39] a level of services exceptional the marketing the design that website [00:31:42] there's an awful lot of work that kind of goes into that and they didn't have [00:31:46] any specific numbers but it was pricing so you would almost need this tourist [00:31:50] development dollars to kind of come in and it would qualify because it would be [00:31:53] a 501 c3 and you know we would kind of want you know that money was collected [00:31:57] here and we kind of would like to see someone invested in a property that is [00:32:01] in the county you know we've been able to elevate the Hacienda to the state [00:32:05] level we think it's a beautiful property and certainly when I go to those [00:32:10] historic preservation meetings up in Tallahassee this is a very prominent [00:32:14] property that people are interested in so there's value to the county to be [00:32:17] able to assist us with the Hacienda yeah not been very accommodating to [00:32:27] anything on the west side but again in 25 years of collecting that I'd be [00:32:35] marginal to see if you did a graph or you did a color shade chart on how much [00:32:42] has been reinvested in the west side how much is being invested in the center [00:32:48] and on the and on the east side you know if I and if you can't count on that [00:32:55] money because you can't count on there on where they're going to go with it [00:32:59] that kind of leads to that it's a good that's what it's financing is likely [00:33:04] difficult and like you say councilman complicated if you can't count on it it [00:33:09] just delays this process more and I think that you know you know I think [00:33:14] everybody's very interested in seeing this property active and alive and we [00:33:17] have other scenarios can kind of go through but again that's the point here [00:33:19] is that it gets fairly complicated and but you know having no other solutions [00:33:25] on the table we were looking at this one closely because it pitched it up Boynton [00:33:30] Beach and we thought it would be something to consider whether we go this [00:33:33] route or not though have you engaged anyone at the county level and let them [00:33:38] know other than just what I bring up at NPO meetings and what councilman Davis [00:33:42] might bring up the tourist development meetings whatever the board yes I mean [00:33:46] have you been in contact with with some of the kind of commissioners that [00:33:50] represent the west side and kind of administrator and let them know exactly [00:33:53] what we're trying to do here and see if they'd be willing to partner with such a [00:33:57] cool project I by accident that happened I was sitting in one of our beautiful [00:34:02] little restaurants and I was talking to somebody who is one of our host and a [00:34:07] guides and I said you know next time around if you get elected we would like [00:34:11] a bigger number on the legislative line item for the Hacienda and the kind of [00:34:15] commission was sitting there and I said I would love to see the Florida my [00:34:18] concern with first Velma dollars what I always heard was the Hacienda wouldn't [00:34:21] qualify and I don't agree with that it's on a national register register the [00:34:27] state statute reads that it has to be a museum or Convention Center but I did [00:34:31] there was a county commissioner said said I would support their project all [00:34:35] you got to do is some sort of ordinance I don't know what the detail on that was [00:34:38] but it was just kind of a casual conversation but he said he would [00:34:42] support the project to support funding the project which was really encouraging [00:34:46] and you know and so I think that they're also becoming very acutely aware with [00:34:53] our whole process and the big events that we're having you know they're [00:34:58] really great events the strong interest and I think that they see the value also [00:35:02] in West Pasco of having this this it's a very prominent very historic property [00:35:07] that you know the architect built the Columbia restaurant so I think that you [00:35:12] know to answer your question yeah that that kind of commission it was just [00:35:16] we're just kind of talking he said they would support the project and there was [00:35:19] no doubt about it so I have had discussions with the county [00:35:23] administrator both previous and current and I think that we need to continue to [00:35:30] engage them in discussions and it very well may be a project that they can [00:35:34] justify absolutely just to bring up the speeding of the MPO meetings I do when I [00:35:40] want to get all the commissioners ears sometimes we veer off of roads and [00:35:44] bikeways and and sidewalks and we talk about economic development some of the [00:35:50] projects that we're considering when ranking them should have economic impact [00:35:56] should be one of the factors we're using for ranking and we will talk more about [00:35:59] the one on Thursday that we brought up but for the first time in a long time [00:36:07] and I've been you know doing it the best of my ability I will say that the kind [00:36:11] of commissioners are very receptive I've been kind of painting a picture of what [00:36:15] we're doing here as a city when I get them all up on the dais with me and [00:36:19] things like this come up and and what New Port Richey is doing and the importance [00:36:22] of trying to tie the New Port Richey waterfront and downtown New Port Richey and the positive changes that we're making trying to tie those two [00:36:30] things together in different different ideas and different projects that we [00:36:33] could target to try to spur that that harbors redevelopment plan and and be [00:36:37] honest with you in the last last few meetings have been very receptive so I [00:36:41] know there's been a history in the past where we've been looking for a little [00:36:46] bit more and we've been getting on the west side but I think they're they're [00:36:48] they're starting to see that there's more to more to projects in just East [00:36:53] and West Pasco and we do need some help over here and they've been very [00:36:56] receptive to some ideas we've been throwing around yeah I think that's kind [00:37:00] of what I threw up there I think that that funding I think if we continue to [00:37:04] work there's a possibility there but in this scenario I think it's essential to [00:37:08] bring down the risk you know that non-recourse deal out that's kind of out [00:37:15] there that's kind of written in that report you know I've run these models [00:37:19] here and when you push in six seven eight million dollars or even if you did [00:37:25] five in this type of standpoint they talk about you know using doing a [00:37:30] resolution to well what if you're short cash flow for a year here or that you're [00:37:35] there you could use the CRA to kind of tip to support that somehow in the form [00:37:39] of a resolution they kind of talk about that and again you know I was looking at [00:37:45] what you know the downside the upside is the win for everybody else that's not I [00:37:49] just don't want the downside again this is likely to be a very high-end very [00:37:54] unique and I kind of threw it out there because it's a visionary concept you [00:37:57] know what do you want the Hacienda to be you know do you know because you [00:38:01] certainly would make a statement by by bringing us up to that level in terms of [00:38:05] what your city is let me move on to this sale lease to boutique hotel operator [00:38:11] and I throw a lease out to get Liam rating and Tampa is that dynamic it's a [00:38:15] 60 year lease with a 45 year renewal lease and the big thing there is this [00:38:22] 20% historical tax credit as an incentive out there the advantage here [00:38:28] is that there's additional tax and we've actually been contacted by you know you [00:38:37] know another operator basically says hey this is an interesting project here if [00:38:40] you've got one successful property a pair what's another successful property [00:38:44] you have advantages of scale you have this credit that you can capture and [00:38:48] you have the if you're making money in the other property you have your [00:38:52] investment offsetting that so your tax dollars aren't going to Uncle Sam they're [00:38:56] going into the Hacienda I think I what I wrote in that part two component here [00:39:01] was that you know I you know there's a CPI I always use 35% tax rate if you're [00:39:06] making money in pretty decent business and so you can take a lot of your tax [00:39:10] dollars and turn it back into your capital investment to grow I mean that's [00:39:15] the tax laws are designed that way and so there's some real advantages here the [00:39:20] big thing here is is that it's less complicated okay in the fact you're [00:39:26] dealing with an individual that has restored one property and knows that you [00:39:32] should do a split system versus another system where you get 25% savings has [00:39:39] gone through the permitting process like for example the firewalls that would be [00:39:43] required in the building and how we address those issues all the hard stuff [00:39:47] that I think the Hacienda probably would need as you go through the process and [00:39:53] so we somebody just called us up and say hey what's going on with the Hacienda [00:39:58] and they expressed an interest in considering this and you know it's a [00:40:06] very attractive situation for a variety reasons one is left burden to the city [00:40:11] taxpayer this is somebody else's money come in the city going into property [00:40:15] it's tax dollars being turned back into the property and it's with somebody who's [00:40:19] done the restoration before and has cash flow to do the restoration so don't have [00:40:25] to kind of reach out to the bank very similar to Rosner's type deal and you [00:40:31] know and you can move along fairly quickly if you have your own carpenters [00:40:35] and especially people in house or you have those individuals that you work [00:40:38] with before that know how to do this kind of work and we started looking at [00:40:42] this scenario it got kind of interesting and likely three to four star boutique [00:40:48] hotel again I'm just kind of throwing that out there when you think of that [00:40:54] though maybe you start at this step and then you go from there and obviously the [00:40:58] thing that is very attractive is that you can probably move along fairly [00:41:01] quickly in terms of all the details that's involved because if you've gone [00:41:06] through this once you've made all the mistakes and they're probably just as [00:41:10] painful but you understand it's an interesting scenario to consider and I [00:41:18] think that this is a really strong concept of getting this open fairly [00:41:22] quickly the economic benefit is the property taxes tangible tax and tourism [00:41:28] that would result in the town you know there's just an awful lot of experience [00:41:34] with somebody that's run one of these properties and it's taken from the ground up and has [00:41:38] done a really great job in getting open and making it profitable you're talking [00:41:41] about you know who do you hire for how do you manage it you know how do you [00:41:45] book your rooms what you know we obviously you know how you do your [00:41:49] different events different things like that you you have somebody that's run a [00:41:52] really successful property before and pairing it up it gives them advantage [00:41:56] their economy is a scale but also there's an awful lot of experience [00:41:59] behind the end of those individuals that that have these other properties that [00:42:04] are doing well the only thing about that Mario's in this concept I don't [00:42:09] care what they've done anyplace else if you don't have the development [00:42:12] department and the fire department and everybody's sitting in from day one it [00:42:17] it'll get bogged down it'll be get bogged down big time because of [00:42:23] different elements in the development process and because of the uniqueness of [00:42:27] that facility even though we've known it and we've had bender and all these other [00:42:32] people in and out of it for five six seven years you know if they're not [00:42:37] involved from day one it it will slow down and the sooner it gets done and as [00:42:44] soon as it gets open without any slowdown any negatives anything that [00:42:50] comes along that way it it's a benefit so even more even if they slow down the [00:42:56] process at the front at least it would get through instead of getting bogged [00:43:00] down in the middle because we got plenty of case studies over the last [00:43:04] five years with changes in state legislation County state you know [00:43:11] southeastern building codes and all that stuff so it needs to be on the table up [00:43:16] front that way it the deals well structured it moves through because we [00:43:24] don't we don't we wouldn't you wouldn't need that pothole that ditch to go [00:43:28] through so you know in that concept it's obviously it could be a win-win but [00:43:35] they've got to be on you got to get the other city entities on board early thank [00:43:40] you very much and duly noted the last component here stewardship issue with [00:43:45] the property that that is a concern we obviously want this house the end of an [00:43:49] economic driver in perpetuity and I've talked to the city attorney he's kind of [00:43:53] put some ideas out there that should protect the interest rights there and [00:43:58] should we get to that point that can be a discussion but you know I think the [00:44:03] fears and concerns of this going back to something else has been expressed quite [00:44:07] a bit by council and so there's there's a real need to protect the perpetuity of [00:44:13] this property or somehow design it now that's actually I think my major concern [00:44:18] I don't want to ever see the Hacienda go back to being a ACLF and that's one [00:44:26] of the reasons I like the idea of leasing as opposed to selling because it [00:44:30] ultimately provides us with a hook that if somebody fails on it we have an [00:44:36] opportunity to recover and keep the thing up and get it open again as a [00:44:43] hotel you can actually design a lease where it's the same essentially the same [00:44:47] thing very long-term leases like the Lee Meridian I mean that's a good one to [00:44:54] read because it's pretty much what happened there you know because that's [00:44:58] that's what they're concerned down there in Tampa [00:45:00] I don't, you know, you're talking about a 60-year lease [00:45:02] with a 40-year, a 100-year lease for all practical purposes. [00:45:06] I don't have a problem with that, [00:45:07] so long as there is something that protects the city [00:45:11] and the taxpayers and the residents [00:45:15] from a failure on the part of the operator. [00:45:18] Yeah, I mean, yeah, I'm sorry, go ahead. [00:45:20] I echo that same sentiment. [00:45:22] I think that since I'm on council, [00:45:25] this was a project that started, you know, 10 years ago, [00:45:27] and so I would be really adamant with that. [00:45:32] It's an important point, [00:45:33] and I think the friends of Hacienda, [00:45:35] you know, they certainly enjoyed the property, [00:45:37] and, you know, it comes, it's just a beautiful property, [00:45:42] and it opened for two years, [00:45:43] and it, Great Depression hit, and it kind of hung out there. [00:45:46] I think it's time to realize the beauty and benefit [00:45:48] that it originally was. [00:45:49] It is, too. [00:45:50] Murray, just, I have to get this off my chest. [00:45:52] It's, I know we have a low median income. [00:45:56] Yeah, I know what the demographics are on New Port Richey, [00:45:59] but, you know, they just built a Beef Labradors, [00:46:00] and everyone's like, [00:46:01] well, is the beef going to do all right? [00:46:02] They're packed, you know, and I was saying from day one, [00:46:05] why is there not a brass tap? [00:46:07] Well, there's, we ran the numbers, you know, [00:46:11] the numbers that sustain a brass tap, [00:46:13] and then some other investors come in [00:46:15] and start doing some things around our city. [00:46:17] You know, the Times catches word of it, [00:46:19] and they interview a bunch of people [00:46:21] and do a great article, and then, you know, [00:46:24] I personally got an email from someone [00:46:25] that owns more than one brass tap, [00:46:27] who's all of a sudden very interested in our downtown. [00:46:29] So I think if we have to get over the way things are now, [00:46:33] or nothing's ever going to get redeveloped. [00:46:35] You have to, I think this is the cornerstone [00:46:37] of our redevelopment, and I think that when you're looking [00:46:40] at what's happening in these small downtowns [00:46:42] across the country and across the Southeast, [00:46:44] that's why Frank Starkey's here. [00:46:46] That's why he's putting his money here. [00:46:47] That's why we're getting more interest in the Hacienda [00:46:50] than we were just a few years ago, [00:46:51] before Sims Park was done, [00:46:53] before these new businesses are opening up, [00:46:55] before these higher-end apartments that we're putting in. [00:46:57] We have to think more optimistic that this is, [00:47:00] yeah, we know what the median income is, [00:47:01] but this is going to help increase that median income [00:47:04] because it's going to help spur redevelopment [00:47:06] in downtown New Port Richey. [00:47:07] So I just, I want to get that out [00:47:09] because I'm so sick of hearing the naysayers, [00:47:11] just, you know, all throughout the city. [00:47:13] Well, you know, why would you want a nice hotel? [00:47:15] No one's going to come to it. [00:47:16] I don't believe that. [00:47:17] I think if they put a three or four-star hotel, [00:47:20] people are going to come to it. [00:47:21] It's going to be a destination. [00:47:22] It borders up to a beautiful park [00:47:24] in a beautiful downtown on a city that runs, [00:47:27] a river that runs through our city. [00:47:29] So the naysayers, I don't agree with you. [00:47:33] We are seeing interest in the Hacienda. [00:47:35] If anyone's watching on TV, you know, [00:47:37] you could, people would have said five years ago, [00:47:39] you put a beach down there, it's going to fold, you know, [00:47:41] and that's not what's happening. [00:47:43] We're on the right track, [00:47:44] and this is a very, very crucial, in my opinion, [00:47:48] a very, very crucial piece of the puzzle [00:47:50] for our entire downtown and surrounding area. [00:47:53] And I just think we have to be on that positive track [00:47:57] when we're soliciting ideas to people, [00:47:59] what we think this hotel can do. [00:48:01] And I don't think we'd be seeing interest from investors [00:48:05] if they didn't believe that we're on the right track [00:48:07] with our downtown and that this is a key part of that. [00:48:09] That's an excellent point. [00:48:11] The, you know, the thing that I could point to you [00:48:14] just beyond even B4 Brady's, Kelly Hackman, [00:48:20] with the tearoom, I mean, [00:48:21] who would have ever thought that a tearoom [00:48:23] with the sort of prices she charges [00:48:25] would do well in New Port Richey? [00:48:27] But I guarantee you, if you want to go have tea there, [00:48:29] you better have a reservation [00:48:30] because she is continually full. [00:48:34] And, you know, as we had these, B4 Brady's opened it, [00:48:39] the other restaurants have done well too, [00:48:41] and they have been stepping up quality. [00:48:45] And I've talked to Kelly, [00:48:46] she's not getting her visits, [00:48:50] are not coming from the demographic [00:48:54] of the city of New Port Richey within walking distance. [00:48:58] These are people that are coming up from Pinellas County [00:49:00] and other places and are willing to make the drive, so. [00:49:03] I mean, I think if we get with the people, [00:49:04] like we've talked about in the past up here, [00:49:08] at the Ritchie Suncoast Theater, [00:49:10] and we get more events going on in there, [00:49:11] concerts, things like that, [00:49:13] people will come and stay at the Hacienda Hotel [00:49:15] and go to a concert or a comedy show [00:49:17] or something similar to Ruth Ecker, [00:49:19] but on a smaller scale within walking distance. [00:49:21] I mean, it could be amazing. [00:49:23] Wait for comments, communications, and reports tonight. [00:49:27] Well, thank you, those are two excellent points. [00:49:29] Just to kind of add to that, [00:49:30] we had a market rate analysis done by a firm [00:49:35] that had worked for Price Coopers, [00:49:37] had worked for Mary Chain, 40 years experience, [00:49:40] and that is part of this report. [00:49:42] And in the pro forma, when he called me up [00:49:46] when he was down in Princeton, [00:49:47] Mary was conservative of my figures. [00:49:49] It was $150 room rate, what they kind of came up with. [00:49:52] 78% of that would be the leisure market. [00:49:57] And I was surprised to see that number, [00:49:59] and it really kind of allows for the financing [00:50:02] of the property. [00:50:03] However, just to add to that, [00:50:05] again, that's just one individual and their expertise on it, [00:50:08] which is good expertise. [00:50:09] The developer-operator group that we looked at [00:50:12] that had quite a bit debt in the industry [00:50:13] looked at that same pro forma, [00:50:15] and they thought it was excellent. [00:50:18] They used all their metrics, [00:50:19] they, you know, your common side percentage, [00:50:21] and they thought it was a solid number also. [00:50:23] In fact, they felt that number could be higher. [00:50:25] So that was a second confirmation that pro forma, [00:50:29] like you talk about in terms of there's this undercurrent [00:50:34] of interest in the city, you know, [00:50:38] and you can see it, you know, the millennials [00:50:39] want to be here. [00:50:41] They have a different way of working [00:50:42] and doing different things, [00:50:43] but you make an excellent point there. [00:50:44] And just to kind of add to that, [00:50:46] that pro forma, and it was much higher than I expected. [00:50:52] When this group looked at it, [00:50:53] they couldn't knock any holes in it either, [00:50:55] so it was just another affirmation of the fact [00:50:58] that there is an undercurrent of that out there [00:51:01] that could possibly be realized. [00:51:04] All that was just said, you know, [00:51:06] the other key piece is that this is a historic downtown, [00:51:09] and these properties have the history. [00:51:11] Embracing it as we did with the, [00:51:14] just the event a few months ago, [00:51:16] you know, that is really key. [00:51:18] And I know that it's been proven through the preservation [00:51:21] that it's the history that families, [00:51:24] when you're taking, doing your vacationing or whatever, [00:51:29] that they're looking for small towns like ours [00:51:31] that has, and we have such a wonderful story to tell. [00:51:36] Yeah, when you read about the Main Street Program, [00:51:38] historic preservation's an absolute essential component [00:51:40] of economic development and it's supported. [00:51:43] The last two items here is, [00:51:45] this is kind of the approach we've been taking, [00:51:47] you know, is this whole incremental approach. [00:51:50] You know, when you're looking at trying [00:51:51] to bring this hotel back alive, [00:51:53] you're just trying to find a direction, [00:51:54] and you gotta keep moving forward. [00:51:56] And so we've been taking the life safety approach. [00:51:58] You know, the poor fire chief over there, [00:52:02] you know, we had a huge event there one night, [00:52:04] but we wanna be able to, we can go there [00:52:06] and we just kind of make sure that it's co-compliant. [00:52:10] We can continue to pursue both historic preservation money [00:52:13] and the tourist development grants. [00:52:15] The goal would be to open the first floor [00:52:18] and then maybe lease the restaurant out, [00:52:20] the patio, the east wing. [00:52:22] And Bender talked about preserving the room shapes, [00:52:25] but maybe do retail in there. [00:52:27] So this is kind of like a plan B if we can't go anywhere. [00:52:30] This is how we keep plotting ahead. [00:52:32] And this would be about 1.5 to two million [00:52:35] based on some of their estimates, [00:52:36] which again, you know, it would be a feasible concept, [00:52:39] but it's a forward progress with the property. [00:52:43] Work on, and then you work on remaining renovation. [00:52:46] I mean, we even talked about in the business development week [00:52:49] we almost had the Hacienda open for the vendor event there, [00:52:51] but it was like, hold on a second here. [00:52:53] But you know, there is a demand right now [00:52:55] just to get the building open and accessible [00:52:57] and have the community participate, [00:52:59] which would be a really positive thing. [00:53:02] And the last one here would basically be [00:53:04] very similar to the first one, [00:53:06] which is same as the tax exempt empty, [00:53:08] very similar to enterprise fund. [00:53:10] Financing would be necessary. [00:53:12] It wouldn't be as costly as the other one, [00:53:13] but it's still preservation. [00:53:15] Again, if we preserve the tourist development dollars, [00:53:17] again, I really think we can look at that closely [00:53:20] and hopefully that might happen. [00:53:23] The board of directors would be running the whole project. [00:53:27] And again, we can engage lease or even at some point [00:53:31] sell the property to a hotel operator [00:53:34] and the profits. [00:53:35] Again, I tend to think that if we execute this [00:53:38] fairly effectively, profits could flow out. [00:53:42] Because we paid quite a bit for the property [00:53:45] and really it would be nice to realize [00:53:48] not only economic benefit, but the city's investment [00:53:51] in the property somehow also. [00:53:54] So in that, those are the four concepts [00:53:56] and I'm looking for your guidance [00:53:59] on what our next step should be here. [00:54:01] Mr. Mayor? [00:54:02] Yes, sir. [00:54:03] Just to finish it off, we've got a few people [00:54:04] in the audience, it would be great to hear from them. [00:54:08] I just, in looking at it, [00:54:13] obviously through our budget this year [00:54:16] and the ones previous, we're trying to do some things [00:54:18] that spur growth, but [00:54:24] it was interesting, instead of bogging down [00:54:28] the conversation, because I had eight or nine questions [00:54:30] I'd have loved to have sent to you early, [00:54:33] but obviously I wanted to feel out the concept [00:54:36] and obviously each of us has one-fifth of a vote up here [00:54:41] in our ability to try to understand the facility [00:54:44] and those kind of things. [00:54:47] What I did find interesting, though, [00:54:49] or disappointing, I guess, and it's not on your side, [00:54:52] it's that we allowed the county this year, [00:54:55] the tax assessor, the tax appraiser, [00:54:59] to evaluate this property $60,000 in less value [00:55:03] than it was last year, and we already put [00:55:08] a million seven into it. [00:55:10] Now, I don't know what metrics they're using, [00:55:14] but if I'm a developer and I come in, [00:55:16] one of the first things I'm gonna do [00:55:17] is pull your property tax records. [00:55:20] Now, I'm gonna pull it because that's the deal [00:55:21] I'm gonna go negotiate, and I wanna understand [00:55:25] where the property sits and what the value is, [00:55:27] because obviously it was bought for 2.2 back in 04, [00:55:32] and it's been written down to basically, [00:55:34] I believe, almost nothing on our statement anymore, [00:55:39] but it just, you know, and then you look at it [00:55:44] from a projection standpoint of either in your incremental [00:55:49] or your CRA restoration timeframe, [00:55:52] it looks like with the way things are set, [00:55:55] some of this stuff isn't gonna happen until 2020. [00:55:59] I mean, you know, I'd love to say that's unacceptable, [00:56:04] but nobody wants to hear that I would say [00:56:06] that's unacceptable. [00:56:08] I mean, you know, it's, only from the standpoint [00:56:13] that, yeah, we'd all like to see it happen tomorrow. [00:56:16] We'd all like to be, you know, sitting on the front part [00:56:18] of the bus, but, you know, we aren't, [00:56:21] and what it brings to me, whether it's owned [00:56:26] or not owned, is that we're losing viable revenue [00:56:30] to the downtown. [00:56:32] We're losing payroll tax, we're losing tangible tax, [00:56:36] and if we're willing as a city or as a council [00:56:39] to give away the ad valorem, that's fine, [00:56:44] but obviously that ad valorem would go back into the CRA [00:56:47] because of the way it's structured, [00:56:49] and we get an 80 or 90% return on that ad valorem base, [00:56:53] and you could extrapolate it out over since 05, [00:56:57] how much money that is, and if you add in staff [00:57:00] and time and everything else, [00:57:01] it's a pretty substantial number, [00:57:04] but at the end of the day, we're here where we are today, [00:57:07] so it doesn't do any good to talk about that [00:57:09] even though we like, a lot of people like to compare to 05. [00:57:12] I don't know why, using it as a benchmark, [00:57:16] but at the end of the day, [00:57:17] we've not seen that taxable value. [00:57:21] My thing is, is that if we're investing this money [00:57:26] into this facility, brand new roof, and all this, [00:57:31] I just think we need to be a little stronger [00:57:34] with our tax assessor and our tax appraiser [00:57:36] and say, look, or at least highlighting to them [00:57:39] because we bought it for 2.2, [00:57:42] we've written it all the way down, [00:57:44] they say it's worth 941,000, [00:57:47] a year ago, it was worth 1,000,002,000, [00:57:52] and so I just like to, [00:57:55] if we get a chance to negotiate with somebody, [00:57:58] I'd like to be able to at least feel like the stuff [00:58:01] and the elements that you've promoted [00:58:04] and that have been approved, [00:58:05] that we've gotten the money back from the state, [00:58:08] that it shows up in the overall value of the property [00:58:12] because it obviously is a unique one-off. [00:58:14] I don't know how you get comparables to it, [00:58:17] so, but then again, when you begin to take [00:58:21] all of the numbers that we've had into it [00:58:25] for almost 13 years or not coming out of it, [00:58:29] you know, it gives you that moment of pause [00:58:31] because you wish that it would have been looked at [00:58:35] after they bought it in 06, [00:58:37] they might have done something in 08, [00:58:39] we didn't do anything until 13, [00:58:42] and now we're another four or five years, [00:58:46] and then incrementally with the grants [00:58:48] and the other money that's out there, [00:58:51] I wrote on my paper, [00:58:52] because Mr. Bell Thomas pointed it out, [00:58:55] if you finish up all the stuff you're doing, [00:58:58] it's the end of 2019 at budget session, [00:59:04] because it's 15 months after 18 in March or April, [00:59:08] so you're looking at end of 2019, [00:59:10] so it's really 2020 on the course we're on, [00:59:15] and of course what'll be pressed on that [00:59:17] is to make the bottom floor open [00:59:20] and try to do special events and do all that, [00:59:23] but that creates a whole nother dynamic, [00:59:25] plus it looks like it's a million five [00:59:28] to get into that condition, [00:59:29] so again, I'm not sure which path is best, [00:59:35] I just would think that the more it could be opened [00:59:38] and used and be able to show the possibilities [00:59:43] that people will get more vision [00:59:46] and get more reality to maybe come in [00:59:49] and do an incremental or a CRA situation, [00:59:53] but those are my thoughts, [00:59:56] and obviously we'd like to hear from you. [01:00:00] it here tomorrow, but it is, I guess, a slower approach. We'll at least let [01:00:04] people know that we haven't turned a blind's eye to it, as was in the past. [01:00:10] Because now if we turn a blind's eye to it, we've got a million five liability [01:00:15] that could get triggered. Thank you. Yeah, to Mr. Phillips' point, I'm curious too, [01:00:24] how could they have, you know, I think we were told in a separate meeting across [01:00:28] the board, the city properties have gone up. We have girded the the building. We [01:00:34] have made improvements to it. It just seems that it should be in a better [01:00:37] place now than then. And it's not difficult to understand. I know that [01:00:41] sometimes properties, piece by piece, that they have missed points or whatever. So I [01:00:47] really would like to know how they determined that piece of it. I actually had a [01:00:51] conversation with the tax assessor on that a couple years back. And the other [01:00:58] piece of it is, I think I'd like to digest this. Some of the, you brought [01:01:04] us four viable opportunities or concepts. I would like to explore a couple. There [01:01:09] have been some folks who've contacted me that are interested in that, that I [01:01:13] haven't had a chance to share with you. But I would love if we could have a copy [01:01:17] of this PowerPoint that you gave us. And then if we can just chew on it a little [01:01:23] bit. But I like especially the idea of making it a viable property so that we [01:01:31] can continue to do, you know, some people don't have the vision and can't see [01:01:36] what it could be. But if we're giving them snippets of it, again, in the, like [01:01:40] the opportunity that we had a few months ago, people then are getting [01:01:45] re-engaged and can understand that we're moving in the right direction. The [01:01:50] idea that truly is a key element in our economic redevelopment. All the other [01:01:59] things that we're doing are all wonderful. And I believe that they are, [01:02:03] you know, we're coming to this point now because we're recognizing that the city [01:02:07] of New Port Richey has a unique history, a unique place, and it is a unique place. [01:02:13] And that these other projects that we're doing, we're retaining what it is. So I [01:02:21] think that's where I'm coming from. [01:02:24] Thank you. Certainly continue with option three, which is the incremental [01:02:28] continue to fix things up. My preference, and it's primarily for the same [01:02:34] reasons I think that Mr. Phillips has expressed as well, would be to, if we can [01:02:41] find a developer and go with the second option with some sort of lease [01:02:47] arrangement that would get the place open sooner than we're going to be able [01:02:51] to do on the incremental basis, then I would certainly be willing to entertain [01:02:56] that. It has sat empty for far too long, and I just love to see it back in [01:03:03] productive use. [01:03:05] Are you looking for direction this evening as to, I mean, it sounds like [01:03:09] you want to put out for RFP again. Is that correct? [01:03:11] That's correct. [01:03:12] Like tomorrow, a month from now? So other people you want to speak to before we [01:03:17] approve that? Mr. Bell-Thomas would like to digest what you saw tonight? [01:03:22] And to that point, I am not interested in dragging this out. I want to just look [01:03:29] at these concepts based on some of what information that I've gotten just over [01:03:33] the last couple of days. [01:03:34] Today's the 17th? [01:03:36] It is. [01:03:36] Then why don't we, you know, including as looking for a game plan, or say we [01:03:43] give it 30 days, February or November 15th. Why don't we talk about it being a [01:03:48] big Thanksgiving rollout or something? I mean, in essence, what we, I think it [01:03:56] collectively would like to be able to do is say, here's our plan, and we can [01:04:01] solicit other ideas or they can go to Mr. Iazzoni with those ideas. But that's [01:04:07] the biggest thing that people have had questions about over the last year or so [01:04:12] are, where are you going? What route are you taking? And when we sit here [01:04:18] individually and we see them and we go, well, this is what I think. Jeff, you [01:04:23] say, this is what I think. And then they start comparing. They go, well, I guess [01:04:28] they really don't have a plan. And the more you can at least have some [01:04:32] framework, I think it's better off not only for you, it's public, all those [01:04:38] kind of things. So I'm with you, Jeff. I think that's the question you're asking [01:04:41] was, you know, give ourselves a couple of weeks. You know, we know one and two [01:04:48] are game changer, down the road kind of concepts, which aren't always not bad to [01:04:56] look at, but be able to come back in 30 days and say, here's what we see the [01:05:02] next go. You could roll it out and have them have them come in right after the [01:05:08] new year, which would be similar to kind of what we did last year, I think. But [01:05:12] I mean, however, that would work. I mean, that's kind of my thoughts. I agree. [01:05:16] But do you feel the timing is right for the RFP and based on the individuals [01:05:20] and people you've been speaking with? Yeah, I think that time is right. And I [01:05:25] don't want to put up for RFP and not have qualified people come to the table. That [01:05:28] doesn't help, I don't think. No, I mean, I'm totally okay with Mr. [01:05:35] Phil's proposal. Issue it in 30 days? Do we have to have another CRA meeting? We [01:05:40] would need to have a formal CRA meeting. This is just a workshop, so we can't [01:05:43] actually do anything, but we could schedule a CRA meeting for [01:05:49] immediately before or after either the first or the second. It works. Early [01:05:58] November would be a really good time to do that. You know a lot more about what's [01:06:03] going on behind the scenes than I do, than we do. So, I mean, at some point, like [01:06:07] we discussed a couple of meetings back when the Hacienda came up, you know, we [01:06:11] have to determine if we're gonna have an investor come in with money and start [01:06:13] redeveloping it, or are we gonna want to start doing it ourselves and get the [01:06:16] downstairs open to a restaurant, bar type, whatever, whatever, whether it's [01:06:21] retail on the east side or what, but are we just gonna keep waiting, waiting, or [01:06:25] are we gonna start putting our own money in to go that route? [01:06:27] Mario's Theory of Economic Development. You've heard me say this for the [01:06:31] longest time. I have A, B, and C. A, people are talking about kicking the tires and [01:06:35] thinking about it and tell me what they think they want to do. B is, you know, this [01:06:40] has some plausibility and we might be able to get there, and C is we can we can [01:06:45] see the endgame. I've got one B and one C knocking on the doors. [01:06:50] All qualified B's and C's. Absolutely, and also I think what happens, I just think [01:06:56] that, you know, you just can feel, you know, I can talk about the brass tap and, you [01:07:03] know, the feel and the vibe Newport Riches have, and it just feels different [01:07:07] this time, and, you know, I think a lot of us were still processing the recession, [01:07:12] where the money's gonna go, and stuff like that, and there's just been some very, [01:07:16] very strong interest in this property recently, and I think we need to at least [01:07:22] take that interest under consideration and consider ARP for that, and I [01:07:27] think it might shake the trees from other individuals that we've been [01:07:31] talking to for the past two years that have really strong connections. We've [01:07:35] built a strong relationship in the architectural community in the Tampa Bay [01:07:39] area, and I've certainly have marketed quite extensively a lot of the other [01:07:44] individuals about investing, you know, and so we might shake some other [01:07:48] people out of it also. Before we adjourn the workshop, I would be remiss if I [01:07:51] didn't recognize we have representative the Friends of the Hacienda sitting back [01:07:55] in the back soaking all this in. Bob, do you have any comments you want to come [01:07:59] up and share with us? [01:08:09] I really like the ideas that I hear passed about tonight, especially the last [01:08:29] couple ideas, and I really like hearing how you folks feel about it, but it's not [01:08:38] a surprise, and I'm glad it's not a surprise. I know it's a great project, [01:08:43] and I know the people are very excited about getting it going, especially after [01:08:50] that gala, and we're going to have another thing coming up on the 28th that [01:08:58] we'll be having there, and then we have another plan that we're trying to work [01:09:03] through for later on in the year, and it's been great. The response has just [01:09:11] been so overwhelmingly great, so y'all are reading your constituents well, and I [01:09:17] appreciate Mr. Phillips' input on this, too, because I really didn't realize [01:09:26] about the tax assessor and all that. I think that's great considerations that [01:09:31] you have somebody like that that comes up with plans to help move this along. I [01:09:37] love the way you all are taking care of it. [01:09:40] How many tickets did you sell at $100 a piece for the gala? I think it was [01:09:45] 180. And then from what I was told the whole last week, you had the phones [01:09:52] ringing off the hook of people trying to get tickets, correct? We could have sold, we [01:09:56] turned away more than that. We turned away more than that. When people talk [01:10:01] about, you know, income, a New Port Richey, no one has the money to do that. I mean, [01:10:05] look at just a small example like that. You have a portable AC. I mean, y'all did a [01:10:08] phenomenal job getting that AC unit up and running and decorating. Well, thanks. That's [01:10:13] the credit to a lot of volunteer people. Just my point being that there's that [01:10:19] much interest in this piece of property that people would pay $100 [01:10:22] just to go get some finger food and be able to dress up and go back in the [01:10:26] ballroom for the first time in how many years? It's been a long time. It's been a [01:10:31] real long time, and it was good, too, to see all the people dressed the way they [01:10:37] were. I was surprised that that many people turned out dressed in period. I [01:10:42] mean, for them to even get me to do that, you can't imagine what that was like. [01:10:47] Y'all did a great job. Well, thank you. Thank you, Bud. [01:10:56] Well, it wasn't a prom, but it was that my 10th high school reunion was there, which was scary to think about, but it was. [01:11:06] Mr. Langford, thank you very, very much. Thank you for the opportunity to talk. If there's nothing else, let's [01:11:11] take a adjourn, and we'll reconvene at City Council meeting at 7.

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3. 3Adjournment