On the agenda

1. 1Call to Order - Roll Call▶ 0:00
2. 2

   Approval of the October 18, 2016 CRA Minutes

   approved

   The CRA Board approved the minutes from the October 18, 2016 CRA meeting.

   • motion:Motion to approve the October 18, 2016 CRA minutes. (passed)

   #October 18, 2016 CRA Minutes

   ▶ Jump to 0:11 in the video

   ▸Show transcriptHide transcript

   Auto-transcript · machine-generated, may contain errors

   [00:00:11] Next item on the agenda is the approval of the October 18 CRA minutes. Move for approval. Second. Motion second. Any discussion? Hearing none, all those in favor please signify by saying aye. Aye. Opposed, like sign.

   This text was generated automatically from the meeting video. It is not a verbatim or official record. For exact wording, consult the video or the city clerk.

3. 3

   FY 2016 Annual Report and Public Notice

   discussed

   Staff presented the FY 2016 CRA Annual Report required by Florida Statute 163.356(3)(c), to be published as public notice on March 25th. The Deputy Mayor raised multiple corrections regarding titles, project phasing for Residences at Orange Lake, dating of new commercial business openings, language about 'economically depressed areas,' and clarity on the $8.8 million debt advance versus the $3.2 million property valuation. Staff agreed to make changes before March 31st.

   • direction:Council directed staff to make corrections to the FY 2016 CRA Annual Report before submission, including titles, Orange Lake phasing, business opening dates, language on 'economically depressed areas,' and clarification of the $8.8 million debt advance. (none)

   📍Residences of Orange Lake🏢Dulcet's👤Deputy Mayor👤Mrs. Feast👤Ms. Manz#CRA debt service fund (2012 restructuring)#Chapter 163.356(3)(c) Florida Statutes#FY 2016 CRA Annual Report

   ▶ Jump to 0:24 in the video

   ▸Show transcriptHide transcript

   Auto-transcript · machine-generated, may contain errors

   [00:00:24] Motion passes. Next is the fiscal year 2016 annual report and public notice. Ms. Manz? [00:00:31] Mrs. Fierce, I'm sorry, Mrs. Feast will be representing this agenda item to you members of the Community Redevelopment Agency. [00:00:41] Good evening. Pursuant to Chapter 163.356.3C of Florida Statutes, the CRA is required to file an annual report of the activities of the CRA along with financial statements to the state. [00:00:56] In addition, the CRA is required to notify the public of the availability of this report. The public notice is scheduled to be published on March 25th and it will also be made available on the city's website. [00:01:12] Attached to this memorandum that was provided to you is a final draft of the report that will be submitted for your review and approval. [00:01:23] Thank you. Any further information, Ms. Manz? No, Mr. Mayor. Public comment? Seeing none, bring it back to the CRA Board. [00:01:33] Mr. Chairman, I have a couple of corrections and since this is the final draft, I'd like to make sure that the corrections are made before the 25th. [00:01:45] First of all, on page 1 of the report, page 7 of our packet, our titles need to be correct. Chairman, Director, I don't know if there's an opportunity that you need to put the city attorney into the report as part of the process. [00:02:06] I know we're so used to having other titles, it's awful hard to figure out who we really are these days, but the report needs to be in tandem with what we had in our minutes. [00:02:23] Over and above that, I know we have a mission statement. I just hope that when we redo our CRA, which I understand we were out there, that's on page 2, that we better define the CRA moving forward as we do our due diligence on that. [00:02:42] There are some highlights on page 5 of the report, page 11 of our package. I believe that when it talks about the residents on Orange Lake, I don't believe it properly reflects the phasing of that project. [00:03:06] I think it makes it out that this is going to happen all at one time. Some understanding can be given, because I understand it's going to be phase 1, it's going to be on the smaller parcel, and then phase 2, and if that's not correct, then somebody needs to update me. [00:03:23] Also, when I looked at the report initially, I sent an email to the city manager, or to the executive director, asking questions with regards to, in this report, in the area when it talks about new commercial businesses, I asked for some definition about when some of these were open, because I understand we need to take credit for these as many times as possible. [00:03:52] There's a number of them that don't fall in this calendar or fiscal year, so I don't want somebody calling us on the table as a council person or as a director and saying, how many times are you going to take credit for Dulcet's? Dulcet's actually soft opened in 15, not 16. [00:04:10] They hard opened, but we were there on the 31st, so for the sake of being correct, I just wanted to make sure that that part's there. [00:04:20] There's many parts in the report, especially on page 7, page 13. [00:04:28] I guess the wording just makes me cringe, but I know the CRA is over the entire city, but when it says economically depressed areas of the city, I don't recognize that my downtown has been an overly economically depressed environment. [00:04:50] I just don't like the connotation there. [00:04:53] I'm getting my say in, so I can do that. [00:04:59] We show that the properties are valued now at $3.2 million as of September 30. [00:05:09] There seems to be some confusion, or at least there needs to be some clarity in the next bullet point that when we created the CRA as a debt service model, we in essence rolled over the $8.8 million, and I believe that's what we paid for those properties. [00:05:36] Somebody looked at this, and I don't think the 8.8 has anything to do with the rec center, but we turned it into a debt service fund. [00:05:47] I just need some clarity there, because we say it's valued at 3.2. [00:05:51] We got 8.8 as the debt that we're on, because we paid part of the debt off. [00:06:02] Those are my points with the report, and if some due diligence can be given before the 25th, I'm sure that we have to vote on it. [00:06:14] Like I said, those are my questions and concerns. [00:06:18] If my name's on it, as much as the hour's late, it's got to be right. [00:06:26] I apologize for keeping people late, but I'm not putting my name on something that I don't feel comfortable with, because I got a lot of time in this city, and I don't want somebody coming back, and it's strictly me. [00:06:40] I apologize for my personal views on this, but I want the report correct so that there isn't any misinterpretations of the document and the information in it. [00:06:53] I don't know if anybody else has any questions on it. [00:06:57] I don't have any thoughts for those catches. [00:06:59] Anyone else have any comments or questions? [00:07:02] Just one minor – it's probably a typo. [00:07:04] In Residences of Orange Lake, this upscale housing project is now on track. [00:07:10] I think it should be a K at the end instead of track. [00:07:13] I believe you're correct. [00:07:15] Thank you. [00:07:16] Is that right? [00:07:18] Yes. [00:07:19] I just want to tell the Deputy Mayor he shouldn't apologize for being diligent. [00:07:22] If I may, between the Economic Development Director and myself, we would be able to make these changes before March 31st. [00:07:32] The March 25th deadline is just the notice that's going to be submitted in the newspaper giving the date that the report will be available, so we'll have time to make those changes. [00:07:44] Just for clarification, the two bullet points under the balance sheet, so page 7 of the report, they're two separate bullet points. [00:07:55] The $8.8 million that's referenced in the second bullet point just refers to the advance that was given to the CRA to pay off debt recently, [00:08:08] so it's not related to the land available for sale. [00:08:13] But because it was a misunderstanding or misinterpretation, I'll change the language so that it's more clear. [00:08:20] Yes, because I know in bullet point 1 we say the value is there, but I think on our statement, I believe we've written down the – [00:08:27] I think from a value perspective, we've written down the value of those properties to very little for whatever that is. [00:08:34] And then where it talks about that the CRA begins to pay back the advance at five years, just for the sake of clarity, [00:08:43] I date there in parentheses so that it puts the onus back on us to correct what's happening in the CRA, [00:08:52] which the Development Department and the Economic Development Director are getting ready. [00:08:57] We're going through that process to undo some of the things we did in 2012 to turn this into a debt structure element at the time.

   This text was generated automatically from the meeting video. It is not a verbatim or official record. For exact wording, consult the video or the city clerk.

4. 4

   ↳You arrived here from a search for “Director Davis” — transcript expanded below

   Request for Waiver of Penalty Fees from Pasco County

   approved

   The CRA Board considered a request from Pasco County to waive a $40,864.81 penalty fee assessed under Florida statute for the county's late transmittal of FY2017 CRA funds. Staff recommended waiving the fee since it was the county's first such error, and the Board approved the waiver to maintain a good working relationship with the county.

   • motion:Accept the annual report as modified. (passed)
   • motion:Waive the $40,864.81 penalty fee assessed against Pasco County for late transmittal of FY2017 CRA funds. (passed)

   🏢Pasco County👤Director Davis👤Mr. Phillips👤Ms. Baker👤Ms. DeBell-Thomas👤Ms. Manns#Annual Report#FY2017 CRA funds#Green Key Beach#Leisure Lane#Van Doren

   ▶ Jump to 9:04 in the video

   ▸Show transcriptHide transcript

   Auto-transcript · machine-generated, may contain errors

   [00:09:07] But those dates being specific will drive us to make it a priority, especially if we're looking two years out, [00:09:15] that that fund's going to have to start paying back and doing some things. [00:09:21] So those are just key elements. [00:09:23] Thank you. [00:09:24] Director Davis, anything? [00:09:26] Okay. [00:09:27] Entertain a motion to accept the annual report as it's going to be modified. [00:09:32] Move for approval. [00:09:33] Second. [00:09:34] Motion is second to the maker. [00:09:36] No, I'm satisfied. [00:09:37] Thank you. [00:09:38] Any further discussion? [00:09:39] All those in favor, please signify by saying aye. [00:09:41] Aye. [00:09:42] Opposed, like sign. [00:09:43] Motion passes. [00:09:44] Next is a request for waiver of penalty fees from Pasco County. [00:09:48] Ms. Manns. [00:09:49] Yes, sir. [00:09:51] A letter was received from Pasco County requesting that the Board of Directors waive penalty fees, [00:09:58] which are assessed in accordance with Florida statutes as a result of their delayed payment to us of fiscal year 2017 CRA funds. [00:10:08] The statute specifically states that a 5% penalty fee is required with an additional 1% interest fee for every month that the payment is late. [00:10:19] The total penalty fee, based on the day that they transmitted the funds to us and outlined it in a letter attached to the packet communication to you, [00:10:31] is in the amount of $40,864.81. [00:10:37] This is the first time that Pasco County has made an error in transmitting the funds to us, [00:10:46] and the staff's recommendation to you is that you consider allowing for the waiver of the penalty fee. [00:10:56] Open this up for public comment. [00:10:58] Seeing no one come forward, bring it back to the CRA. [00:11:01] Move for approval. [00:11:02] We have a motion. [00:11:04] And I'll second it with a comment. [00:11:06] Very good. [00:11:07] To the maker. [00:11:08] I just want the public to understand that we are waiving, as a city, a $40,864.81 fee, [00:11:15] and we are entitled to because we'd like to work well with our county. [00:11:22] I second. [00:11:23] And I'd just like that we remind the county that when it's due next year in this, [00:11:30] you know, I guess, waiving the penalty when they're due next year. [00:11:37] Mr. Phillips. [00:11:38] Yeah, because obviously they'll have a new county administrator, and I don't want that. [00:11:44] I mean, I had my conversation with Ms. Manns. [00:11:47] Obviously, there's a number of things to work with the county on, [00:11:51] and I think it shows great discretion in trying to work with them that we understand the oversight. [00:12:01] But still, it's in the state statute, so we actually could have asked to be paid that amount. [00:12:10] And as a side note, I'd like council to consider some kind of a resolution when Ms. Baker is retiring, [00:12:19] that we do something on her behalf to thank her for her many years of service, [00:12:23] as well as working well with us on a council perspective and with the city of Newport. [00:12:29] Very good. [00:12:30] Ms. DeBell-Thomas. [00:12:31] Yes, thank you. [00:12:32] I think we are being gracious and absolutely in the interest of working well with them. [00:12:39] I would concur. [00:12:40] We've got too many irons in the fire involving Pasco County right now, [00:12:43] including the discussion about Leisure Lane, Van Doren, and the Green Key Beach. [00:12:52] I would prefer not to burn any bridges while we're trying to negotiate some things [00:12:57] that are going to be very important for the city going forward. [00:13:01] So with that being said, if there's no further discussion, all those in favor, please signify by saying aye. [00:13:06] Aye. [00:13:07] Opposed, like sign. [00:13:08] Next is Commercial Real Estate Grant Program.

   This text was generated automatically from the meeting video. It is not a verbatim or official record. For exact wording, consult the video or the city clerk.

5. 5

   Commercial Real Estate Grant Program

   discussed

   CRA Director Iazzoni presented a proposed Commercial Real Estate Grant Program designed to incentivize taxable redevelopment projects of $500,000 or greater in the downtown CRA district, offering a 20% match (one CRA dollar to four private dollars) with $100,000 currently budgeted. The board discussed eligibility (existing owners and purchasers), funding mechanics, comparison to programs in other Florida cities, and the goal of attracting larger private-sector investment to underutilized downtown properties. The item was a presentation/discussion with board questions; no formal vote is reflected in the available transcript.

   • direction:CRA Board received and discussed the proposed Commercial Real Estate Grant Program presentation. (none)

   🏢Big Storm🏢Bulk Nation🏢Main Street Landing🏢Quicken Loans🏢Streets and Lanes🏢Vincenzo's👤Director Davis👤Director Phillips👤McGurns👤Mr. Iazzoni👤Ms. Manns👤Ms. Starkey#Allendale Beach grant program#CRA Plan page 46#Commercial Real Estate Grant Program#Davie, Florida grant program#Downtown Jacksonville grant program#Highway 19#IRS Section 179 bonus depreciation#Marine District#Melbourne, Florida grant program#Minter, Ohio grant program#Orange Lakes

   ▶ Jump to 13:10 in the video

   ▸Show transcriptHide transcript

   Auto-transcript · machine-generated, may contain errors

   [00:13:10] Ms. Mams. [00:13:11] Yes. [00:13:12] Sir, Mr. Iazzoni has drafted a redevelopment grant program to support some of the private sector projects [00:13:25] that need to occur in the city's downtown area, [00:13:28] and he's prepared a PowerPoint presentation to outline that program to you. [00:13:33] Thank you very much, city manager, and thank you, CRA board and CRA director. [00:13:40] Let me go back to this next slide. [00:13:42] This concept really goes back several months when the development director said, [00:13:46] can we enter into a development agreement with much larger properties? [00:13:52] And, you know, over the several months we've been trying to come up with a way of kind of doing that. [00:13:58] And last year we attended an event in Winter Haven. [00:14:02] If you go to a lot of these redeveloped downtowns, [00:14:05] what you'll see is significant capital investment in the urban core of these cities, [00:14:09] and there's a lot of money that is available and flowing through the communities. [00:14:13] And so this grant program is designed to try to make the market [00:14:17] or provide an incentive for big dollar projects that can come to the city. [00:14:23] For example, and, again, I work really closely with this building owner. [00:14:26] He's a very nice guy. [00:14:28] We work with him constantly. [00:14:30] And the second floor of this building is a classic example where if we're coming to the market [00:14:35] or we want to get that second floor space utilized, [00:14:39] obviously it would take a significant amount of capital investment to do that. [00:14:43] And the grant program is designed for basically half million dollar projects or better, [00:14:48] and large pieces of property that have a significant amount of square foot [00:14:53] that would be of value to the city in a creative manner. [00:14:59] Thanks, everyone. [00:15:00] The program goal is basically to support taxable redevelopment projects that are half a million [00:15:05] dollars or greater. The goal here is to, is a form of reverse obsolescence. In other words, [00:15:11] what we're trying to do is basically try to bring investment capital to the private portion [00:15:17] of the city infrastructure. Again, the whole purpose of this program is really designed [00:15:23] to basically put a big enough carrot out there so that when the bigger walls come to town or if [00:15:30] somebody's looking to make significant investments in town, that we have a tool in place within the [00:15:35] CRA that we're able to evolve pretty much based on what the investment capital is looking for. [00:15:42] A big part of that is really, what we see an awful lot is that when we re-rent these buildings, [00:15:50] there's a significant number of challenges with the codes and the upgrades of the codes, [00:15:54] and there's just a lot of back and forth in regard to that. We want to eliminate that process. And so [00:16:03] again, that's going to be a big focus of this program. Again, it's to attract private sector [00:16:07] investment. One of the things that we're finding with the much smaller grant program is the realtors [00:16:13] are starting to promote the city. They have people that are looking to form and grow and establish [00:16:18] businesses. And say New Port Richey has this grant program, and it's kind of brought a lot of people [00:16:23] to the table and it's been really beneficial. And with this bigger program out there, we're hoping [00:16:28] to be able to put a much bigger piece of, for lack of a better term, a bait on the hook. And I think [00:16:37] that it's a really great thing for a realtor out there, and they're looking to do something downtown [00:16:41] in New Port Richey, that way this program at least gets them into our office to begin the discussions [00:16:46] of how we can evolve their concept to deal with these really important properties in our town. [00:16:52] But perhaps the most important thing is the last component here. It's really the improvement of [00:16:57] quality of life for city residents. The key point here, and this is a really important point, is that [00:17:02] you know, obviously this program has to be funded through the budget process. And more importantly, [00:17:09] that none of these programs get approved without going before the CRA board. And so therefore, [00:17:15] whoever is looking to come to town has to do a pretty good job in convincing the board that [00:17:21] the city will benefit significantly from the investment capital that will come to town. [00:17:25] The framework essentially is a 20% match is what we're talking about here. Right now we get about [00:17:33] $2.75 in addition to the dollar we spend in our current grant program. The reason that ratio is [00:17:42] low is because we have a three-quarter match for vacant properties and leasal improvements. And what [00:17:48] we want to do is kind of bring that ratio up much higher. So for every CRA dollar spent, we're [00:17:54] expecting four additional dollars in capital investments of the project. This project must be [00:18:00] accretive to the property values of the surrounding CRA district. So if somebody comes with this, [00:18:05] let's say, this is a significant project. A classic example, people ask me to bring [00:18:12] Bulk Nation downtown. Okay, they're a franchisor, people like that, you know, obviously related to [00:18:20] a health food store. And several months ago we had, I think, the county in here basically saying [00:18:28] that, you know, our property tax values are based on vacancies and the amount of vacancies in town. [00:18:33] And so what's really important with any significant projects that come to town would be that it must [00:18:38] be accretive. In other words, not only do we get a bump in avalorum for that specific property, [00:18:44] but the adjoining properties would have to benefit as a result of that in the form of [00:18:49] more customer traffic, in the form of maybe higher rents as a result of having a bigger project come [00:18:55] to town. The third component here is it's designed to secure long-term tenant agreements. By having a [00:19:01] long-term tenant, you produce cash flow for the property owner and that cash flow [00:19:07] certainly goes out to support the long-term debt service that would occur there. What I'm [00:19:13] trying to do is make a market for the properties that we have all throughout the city [00:19:22] in a way that should somebody come and acquire those, it helps facilitate that transaction. [00:19:29] A lot of properties are very inactive, they don't move an awful lot, [00:19:33] and I generally believe that this program is designed to try to do that. The last component [00:19:42] is job creation and retention, which is an essential component of any CRA project. [00:19:48] There's basically going to be four focus areas that we'll look at in any form of grant application. [00:19:54] One is basically private sector purchase or significant upgrades to commercial properties, [00:19:59] as you saw in that first slide where the second floor has been vacant for many years [00:20:04] and would need significant upgrades. Improved leasehold space in a comprehensive manner. [00:20:12] One of the things that we found out in some of the market analysis we've done is that there is [00:20:16] a market demand in there, and actually when we interviewed quite a number of the CRA candidates, [00:20:21] they kind of expressed that same thing, is that we're the downtown for 168,000 people, [00:20:26] and most of the current property owners prefer office space as opposed to retail space. And [00:20:33] we've had several inquirers where we're simply not able to provide them that prime opportunity. So [00:20:40] again, if there's significant upgrades to be able to provide more retail, we would consider that. [00:20:46] The third component here is redesigning the building facade interior grounds. [00:20:50] Obviously, there's a specific city image that is needed, and anything that would occur would, [00:20:56] I think, certainly have to be approved by development in terms of what their sense of [00:21:00] perspective is in terms of how the city should look. So again, we're simply trying to support [00:21:04] an overall appearance of the downtown. And the last component, which is common in the backup work, [00:21:11] you'll see that there are several cities do these job creation and business growth loan programs. [00:21:17] The reason we have that in there is that the specific business owner that might sign a long-term [00:21:24] lease may have a variety of uses of the fund as opposed to where the fixed improvements going to [00:21:29] go. One other component here is in the second component there, and again, I kind of get into [00:21:35] a task code here, but the IRS statutes have changed such that you can very aggressively [00:21:41] write off leasehold improvements. You can use what's called Section 179 of bonus depreciation, [00:21:47] where years ago you can only write those improvements off over 40 years. You can [00:21:51] write them off literally at the time that you make it, and specifically within the retail sector and [00:21:56] restaurant sector. I know it doesn't mean much to the layperson, but from a CPA's perspective, [00:22:05] this is a huge incentive when people have profitability in their businesses and looking [00:22:09] to mitigate those profitabilities that they can make these significant investments. And if you [00:22:16] go back years ago, you see all the Hummers showed up on the road. It's related to that tax law that [00:22:20] allows for progressive write-offs. These are just four examples here. 19,000 square foot [00:22:27] downtown retail building with the second floor that's in need of significant structural upgrades. [00:22:33] A 16,000 square foot warehouse within the vicinity of the city, [00:22:39] on the market for many years, can easily house a small manufacturing engineering firm. [00:22:44] Another one is an 18,000 two-story building, significant upgrades [00:22:50] with safety, because there's often safety and code complaints. And so what we're looking to do [00:22:55] here is, as you can see, they're fairly significant in terms of square footage. [00:23:00] The last one actually is down in the Marine District, where we have a medical office complex, [00:23:05] 15,000 square feet. And one of the buildings was actually recently purchased, and even at $6 a [00:23:11] square foot, they really simply can't get a tenant in there. So the goal of this program basically [00:23:18] is to fill that gap in the marketplace where an investor comes into town, expects a certain [00:23:24] rate of return on investment, has a solid idea for the board to approve, and the CRA can find [00:23:31] itself in a position of supporting the project. The last point here is that this is further [00:23:38] supported by the Florida statute. Specifically in the Florida statute, this is carrying out plans [00:23:43] for a program of voluntary and compulsory repair and rehabilitation of buildings or improvements [00:23:48] in accordance with the community redevelopment plan. So it's supported at the Florida statute [00:23:52] level, and it's also written into our CRA plan on page 46. And one of the subcomponents is, [00:23:59] cities should consider incentive programs to entice private redevelopment and revitalization [00:24:04] of centrally located commercial properties that have been underutilized or poorly maintained. So [00:24:11] again, that last sentence is pretty much the essence of the program. What we're trying to do [00:24:16] basically is, with the economy getting better, the market getting much better, [00:24:20] and a real emphasis in revitalization of these communities that we've seen all over, [00:24:25] actually all over the country, we're simply trying to position the CRA plan where, [00:24:32] so if somebody kind of show up and want to open up the wallet for the town, that we have [00:24:37] the capacity to do that. Thank you very much. Thank you. Anything else, Ms. Manns? No, the only [00:24:45] other point I wanted to ask Mr. Eisen to make was to reference some of the other cities that [00:24:50] have similar programs. It's not, you included it as an attachment, but it's not noted as an [00:24:57] attachment. Allendale Beach, Davie, Melbourne. Yes. Minter, Ohio, downtown Jacksonville. [00:25:09] I was quite surprised at the number of programs, and what I specifically looked at here [00:25:15] I'll have a list here. It's Allendale Beach. There's a $200,000 loan on 80% of the project [00:25:24] with 0 to 3% interest rate. What we're specifically looking at here was, if we do a job creation, [00:25:30] can we possibly forgive a principal portion of the loan? And we found several examples here [00:25:38] where the interest rates has either been removed. Here's one in South Allendale Beach for a $50,000 [00:25:44] loan forgiveness for job creation over a five-year term. In fact, that's what we're [00:25:50] specifically looking at here is that in the presentation, what we talk about is that the [00:25:56] minimum is a half a million dollars. And so if you were to sign a tenant in there, and the tenant [00:26:04] that was going in there was of benefit to the downtown or the community, and it created, [00:26:10] basically it comes to about $2,000 for each job created or retained from a relocation. [00:26:19] That over the lease of the term, based on a set of performance metrics, and actually what I would [00:26:27] say is a development agreement in a lot of respects, is that these are the goals that you [00:26:31] have to achieve if you're looking for this money. Davie, Florida is an interesting one where it's [00:26:39] a $100,000 grant for a $300,000 expenditure, a one-to-three ratio. And some other cities like [00:26:46] Melbourne have a seven-to-one ratio or a 10-to-one ratio for very significant projects up to $5 [00:26:52] million. So what we're trying to do here is put into place, and prior to the review of the CRA [00:27:00] plan also said it can be looked at considerably in terms of how we can use this tool to further [00:27:04] benefit the CRA. Melbourne, Florida, you know, in addition to their property tax rebates there, [00:27:14] they require a minimum of a $300,000 investment. So we looked at several programs here [00:27:20] that make sure that we're well within the framework, and the city manager has gone over [00:27:25] this very thoroughly, and it took me a while to kind of get this through her, but we really believe [00:27:30] that this is a really great program for those individuals that are looking to bring their [00:27:35] pocketbook to New Port Richey and be an investor partner with the city as it continues to grow. [00:27:43] Thank you. Any open up for public comment? Bring it back to the CRA. Questions? Councilman? [00:27:49] Thank you. I have a question. So are you anticipating that this would be one grant per year at the $100,000? [00:27:56] Well, it'd be based on how much money is in the grant program. This year we set aside $100,000, [00:28:06] but it would be based on, you know, for example, if we have a million dollar project, then [00:28:13] conceivably it would be a $200,000 grant. However, that grant would be restricted [00:28:20] by the amount of money that's in that specific account for that grant program, and that money [00:28:27] would be doled out over a period of years. So one of the dangers of this program is the fact that [00:28:34] if it doesn't get funded the next year, that's a particular challenge in that regard, specifically [00:28:40] if, you know, we're in a multi-year project. And some of these can go as long as five years if [00:28:45] they're significant. And so where are you funding it at? Where would we be funding it from? It would [00:28:51] be from the CRA. It would be in this business incentive grant program, and there's $100,000 [00:28:56] sitting in that program right now. It was something that we did when we went through the budget [00:29:00] process. And it just said you had brought up those particular projects. Can we pursue those [00:29:09] individuals, or are we putting it out for them to respond to us? No, actually I've talked to [00:29:17] in that one specific project, you know, I think what happens to a lot of these investors is that [00:29:25] they're different in different stages of their lives, and they have different investment properties [00:29:28] and different financial goals. And a lot of them kind of hung on these properties for years, and [00:29:35] they're of significant value in terms of square footage to certain portions of the city. [00:29:42] And so, you know, it offers an opportunity to engage in a conversation. Are you interested in [00:29:48] selling your property a year from now? Oh yes, I might be. I'm considering retiring. I'm considering [00:29:52] relocating somewhere else. I'd be very interested. And what you have kind of out there in the [00:29:57] realtor market is saying, you know, New Port Richey has this. [00:30:00] interesting grant program is, you know, if you're a [00:30:04] significant developer, it creates this conversation. [00:30:08] And that's typically how these projects go. [00:30:12] I mean, Streets and Lanes is a classic example. [00:30:14] It was an 18-month conversation that occurred to [00:30:16] kind of get that project going. [00:30:21] But it really kind of helps me get these people in the room [00:30:26] and get them really interested in the city, get them to see [00:30:28] that, get them to turn off Highway 19, get them to [00:30:32] understand the capacity of the Sierra Board and the Council, [00:30:36] that they're very interested and very [00:30:37] serious about the city. [00:30:39] And that's what's really happened, is that given the [00:30:43] structure and the management of the city, we've been able [00:30:46] to gain the confidence of quite a number of individuals. [00:30:49] And I think Main Street Landing is just a classic [00:30:51] example, where the McGurns had a tremendous amount of faith [00:30:54] in the city's capacity to deliver, and we did do that. [00:30:58] And the same thing with the residents of Orange Lakes, [00:31:00] that there's a strong interest in the [00:31:03] redevelopment of downtowns. [00:31:05] And as I travel throughout the country, I'm always amazed [00:31:09] at what we're looking for as we kind of evolve. [00:31:15] We want to live in walkable communities. [00:31:16] And internet, like accounting firms, are classic. [00:31:19] Most people who worked in CPA firms telecommute. [00:31:22] And so this is certainly a beautiful town, where if we [00:31:26] have, Quicken Loans is a classic example, when they [00:31:29] came into downtown Detroit, bought a building, I think it [00:31:32] was for $500 million, and was responsible for the [00:31:36] renaissance of downtown Detroit. [00:31:38] He said the buildings were cheap. [00:31:40] And if you look what's happened south of here, and if [00:31:44] you look at the growth of Tampa, I simply want to make [00:31:48] a market and put the word out there that if you're [00:31:52] interested in New Port Richey, our CRA has the capacity to [00:31:54] provide you some capacity to make the market for the [00:31:59] required rate of return that you want on your investment. [00:32:04] Mr. Starkey. [00:32:04] So the program would just be eligible to people purchasing? [00:32:08] It wouldn't be for existing owners? [00:32:10] It would be for existing owners, yeah. [00:32:11] So someone who's been sitting on a property for years and [00:32:13] years and years, letting it deteriorate, say, oh, now it's [00:32:16] a free money, maybe I'll start doing something. [00:32:18] Absolutely. [00:32:20] And a lot of times, those people have been in [00:32:23] discussions with tenants. [00:32:25] We often look at microbreweries. [00:32:30] And in that package, in our current incentive program, we [00:32:33] have some funding for kitchen equipment that gets fixed to [00:32:39] real property. [00:32:40] This time, I tweaked it a little bit, because I really [00:32:42] think that microbreweries have a real place in downtowns. [00:32:45] And we've talked to several people that, from Big Storm to [00:32:49] quite a number of people, have looked at properties all the [00:32:51] time, but the challenge in one particular property is [00:32:55] that it needs firewalls in between them. [00:32:57] And that's just simply the requirement to make the [00:32:59] property habitable. [00:33:01] And so another one is, let's take [00:33:04] Vincenzo's, for example. [00:33:06] It's been on the market for a long time. [00:33:08] And there's a certain dynamic there. [00:33:09] And there's people very interested in [00:33:11] looking at property. [00:33:12] And they've had several offers on the property. [00:33:15] For me, it's encouraging, because I think it may, like [00:33:18] you said, brings people to the table. [00:33:19] But it motivates somebody that's been sitting on a [00:33:24] property, let's either do something or [00:33:26] sell and get out. [00:33:27] Because it's just going to continue. [00:33:30] The prime example that you had a photo of, I mean, there's [00:33:32] so much potential for that building. [00:33:34] And I know it's going to take a lot to renovate it. [00:33:36] But if you're not going to do it, sell it. [00:33:38] So let's incentivize you if you want to do it. [00:33:40] And if not, bring more people to the table, where it would [00:33:43] generate more interest. [00:33:44] Because to just have these property owners just sit on it [00:33:47] and these buildings continue to deteriorate as you didn't [00:33:51] label them, and as you're going through each square [00:33:52] footage and talking about them, I know exactly what [00:33:54] building you're talking about. [00:33:55] So I think that's what's encouraging for me. [00:33:57] It motivates people to either, let's get going on this, or [00:34:01] let's sell it and get someone who is motivated to do [00:34:04] something with it. [00:34:05] One of my observations early on is that the supply chain, [00:34:09] the challenge is that we compete with the county. [00:34:11] We compete with the county with lower tax rates. [00:34:14] We compete with the county. [00:34:16] One of the challenges we have in the Marine District is the [00:34:18] fact that though our downtown's unique and urban [00:34:21] core's unique and there's a demand and a real interest in [00:34:24] our urban core, how do we compete out there with all [00:34:27] those medical space? [00:34:28] And on Highway 19, we provide a far greater degree of [00:34:35] services, but when the investor's looking at the [00:34:39] alveolarum tax on tangible tax and on real estate, how do [00:34:45] you compete? [00:34:46] And by putting this in the back pocket of a realtor, it [00:34:51] begins that conversation in the individuals that are in [00:34:54] constant contact with the investment capital. [00:34:58] And a lot of times, they come up empty in terms of where [00:35:01] they can go somewhere else. [00:35:02] And I've seen this with businesses that want to come [00:35:04] to downtown. [00:35:07] These realtors will start recommending New Port Richey. [00:35:09] You need to take a look at New Port Richey again. [00:35:11] You need to revisit what they're doing again. [00:35:13] And that supply chain of realtors is really important [00:35:18] to the city. [00:35:18] And this is one I'd really like to put on the table, let [00:35:21] them chew on, because it begins a conversation within [00:35:24] that arena that I think has been shut down for quite a [00:35:26] number of years. [00:35:29] Director Davis, any questions? [00:35:32] Director Phillips? [00:35:36] Mr. Izzone, my first statement is I don't mind giving you [00:35:41] another tool in your toolbox, but I obviously have some [00:35:47] additional thoughts about what's in your toolbox and how [00:35:53] expensive the tools are. [00:35:58] And let me just jump right in, but some of the things you've [00:36:03] looked at, I know that it's a grant program. [00:36:09] It's 20%. [00:36:10] Basically, it's $100,000 on a $500,000 minimum capital [00:36:18] improvement program. [00:36:20] I think we kind of missed the intangible a little bit of [00:36:26] your four basic points. [00:36:28] I think you need a fifth one. [00:36:30] I think there needs to be a little bit of cost in there to [00:36:33] recoup dollars for either the economic development time or [00:36:39] the ombudsman or whoever's going to help drive this [00:36:42] program, not only through our economic development [00:36:45] structure, but also through our development structure, [00:36:48] through our fire department structure. [00:36:50] I think we need to be much more of a hand-holder and a [00:36:53] conduit than someone who says, we're going to give you some [00:36:56] money, good luck. [00:36:59] I want somebody that's going to walk them through the [00:37:00] process, and while that's being happened, I want to make [00:37:03] sure that this grant helps to take on, or part of the grant [00:37:11] absorbs some of that time. [00:37:14] And if you want something to tie that to, the money that [00:37:17] comes back in is allocated in a way to improve our fire [00:37:24] department and our police department. [00:37:26] Because if we do these new developments that you're [00:37:28] talking about, we're going to generate another level of [00:37:32] traffic, another level of dynamic, that we don't even [00:37:35] know of today. [00:37:37] When you do that, I think if you tell them as part of this [00:37:40] grant program, the money that we put out and that part of [00:37:45] it's going to be allocated for some of your time or however [00:37:48] you want to classify it, that those dollars are being put [00:37:51] back in so that they know that there's going to be site [00:37:55] specific improvements, much like the chief had to do for [00:38:02] applicant insight. [00:38:03] When Mr. Starkey and the PDEC went to them, they were very [00:38:07] concerned about what was happening in their [00:38:09] neighborhood down in the Marine District, because it [00:38:11] had become that way. [00:38:13] So I want to answer that question before it comes to me. [00:38:16] I want to have it in the program. [00:38:19] Or that's my suggestion. [00:38:22] Over and above that, obviously, you've got some [00:38:25] qualifying points. [00:38:26] Everything else I saw, and obviously it's a grant, it's [00:38:29] not a loan. [00:38:31] But I would like to possibly see adjusting that minimum [00:38:34] down just a little bit in year one to kind of, doesn't mean [00:38:41] you can't come and ask us. [00:38:43] I'm just saying, it looks like Davey, which is obviously a [00:38:46] bigger economic engine in South Florida adjacent to Fort [00:38:50] Lauderdale and that, that $300,000 seemed to be a little [00:38:54] more palatable to me. [00:38:56] And I think you're going to get overflow, and I think [00:38:58] you're going to get benefit anywhere you're going to do it. [00:39:02] I don't think it just has to be in your, you know, I think [00:39:04] the old Kmart would be a prime example, [00:39:08] whatever had happened. [00:39:09] So if somebody comes in and wants to spend a million [00:39:11] dollars, or half a million dollars on a piece of property [00:39:13] on Highway 19 in the city, sign me up. [00:39:18] I'm not going to exclude them, because it didn't fall within [00:39:21] certain parameters. [00:39:22] So I just want to make sure. [00:39:24] And the question, the one is, and maybe you can explain the [00:39:30] scenario to me, but on page 21, it talks about balance of [00:39:35] the grant will be forfeited if the owner sells [00:39:38] without city approval. [00:39:41] So I'm just trying to understand. [00:39:45] I'm encouraging them to do it. [00:39:48] If they haven't spent all the money or they sell it, I'm [00:39:51] just trying to, so maybe you can define for me [00:39:55] that scenario. [00:39:56] Because in the sentence before, in the paragraph, [00:39:59] anything and projects that are going to be taken on and done [00:40:03] are all going to meet state building codes and minimum [00:40:06] requirements in the city of New Port Richey. [00:40:08] And sometimes we make that endeavor as [00:40:13] interesting as possible. [00:40:15] So explain to me the scenario on which, without city [00:40:20] approval, because. [00:40:22] We come across this issue in the larger development [00:40:26] agreements that we have. [00:40:28] And this type of agreement is essentially that, a two-, [00:40:35] three-, four-, five-year goal. [00:40:38] And to flip a property, to make these capital [00:40:43] improvements, and all of a sudden it not be accretive, or [00:40:46] the city walks, or the individual walks away with a [00:40:51] significant benefit, the danger there is that we [00:40:58] certainly would like to have some degree and say, if you [00:41:01] should try to liquidate the property, or try to back out [00:41:04] of the program, or try to evolve it. [00:41:07] And that's something I've kind of added in after looking at, [00:41:10] specifically, some of the development agreements we were [00:41:14] engaged in, is that we need some degree of say in regard [00:41:17] to the, because the grant funding can occur over a [00:41:21] period of five years. [00:41:23] Because if you're going to come in and make some major [00:41:25] structural improvements with these larger projects, I don't [00:41:28] think that they're just going to occur over a year. [00:41:31] Or if you have a possibility to have somebody sign a [00:41:36] five-year lease. [00:41:37] I've talked to people about that already, where we want to [00:41:39] come in, we want to grow a business, we [00:41:41] expand our business. [00:41:42] The business concept is really great for the city. [00:41:44] And we want to sign a five-year lease. [00:41:46] And that five-year lease serves as debt [00:41:49] service on that loan. [00:41:50] What I'm trying to basically say there is that if you are [00:41:54] going to take our city's money and be a participant in our [00:41:59] growth and development, all I'm simply trying to do is [00:42:02] have a check and balance on that, to say, well, wait a [00:42:05] second, if you kind of walk away from this project, and we [00:42:10] have maybe one or two other rounds of funding that's going [00:42:12] to occur here, we want to be able to have a say in that. [00:42:16] So they get more than one bite at the apple, is what you're [00:42:19] telling me? [00:42:20] Not entirely. [00:42:21] They can come back year after year and ask me if they do a [00:42:24] I'm just trying to make sure that what the scenario is. [00:42:29] Like for example, let's say you have a $1 million project [00:42:33] here, and what I did was I left this intentionally [00:42:42] flexible, because it goes before the board. [00:42:45] This individual or individuals or the investment [00:42:47] capitalists coming to the board is going to have to [00:42:50] convince the board that it's a significant benefit to the [00:42:52] city and the residents of the city. [00:42:55] And so it wouldn't be unusual to be several phases to this [00:43:04] project and several benchmarks and several [00:43:06] objectives to this project. [00:43:07] If you come back two years from now and you've lost two or [00:43:09] three employees. [00:43:11] I just have two more points. [00:43:12] One is, underneath on page 22, when you say why is the grant [00:43:16] program necessary, and you bring out the objective being [00:43:21] that when renovated, the targeted property will compel [00:43:24] nearby property owners to make improvements as a result of [00:43:28] recovered economic conditions surrounding the improved area. [00:43:31] It's very subjective. [00:43:33] And to me, it's in some ways discriminatory on smaller [00:43:36] property sizes. [00:43:37] So that does it there. [00:43:41] And anybody that does their due diligence and looks back and [00:43:47] sees what we did and what the city's done long term on the [00:43:53] Main Street Landings project, and you can use the McGurns if [00:43:57] you like, we negotiated that deal. [00:44:01] And in essence, in my mind, when we renegotiated it a year [00:44:06] ago, we actually threw another $250,000 into it, including [00:44:10] development rights with no recapture. [00:44:14] And my whole goal was, I was hoping they'd sell it and give [00:44:17] it to somebody else to finish it. [00:44:19] Thank God, a year later, they have turned dirt and they're [00:44:22] working away now. [00:44:24] But my goal with redoing that deal back then was exactly [00:44:28] that, is they hadn't done anything in eight or nine [00:44:31] years, if somebody's going to spend $1 million or $2 [00:44:34] million, and like I said, I don't mind having the tool in [00:44:37] the toolbox, it's going to have to come here and then back in [00:44:40] council, and what we're doing is we're setting up, trying to [00:44:44] fund it annually. [00:44:46] Then it falls back in our budget conversations, whether [00:44:50] you fund it through Penny for PASCO and you offset it with [00:44:53] CRA, my biggest thing is, we still get back to some other [00:44:58] elements on our budget that are not. [00:45:00] funded, like an emergency rainy day fund that we talked about. [00:45:05] And so I want to make sure that that's on the table, [00:45:09] if we're going to do our due diligence [00:45:11] and talk about what we are going to put into each silo [00:45:15] so we can anticipate the Clint Eastwood movie, [00:45:20] the good, the bad, and the ugly. [00:45:21] I'm really sorry, but like I said, so with it, [00:45:24] I don't mind the tool. [00:45:26] I just know that sometimes we've given tools [00:45:29] without instructions on how they're going to be used. [00:45:32] And the implementation gets to be a little more [00:45:35] onerous than we anticipate. [00:45:37] Thank you. [00:45:39] I think it's one more tool in the toolbox. [00:45:41] I'm not really concerned about a whole lot of minutia, [00:45:45] primarily because any potential grantee [00:45:50] is going to wind up coming back in front of us. [00:45:52] So I would entertain a motion to accept the recommendation. [00:45:59] Move approval. [00:46:00] I second that. [00:46:00] Second to the maker. [00:46:02] Second. [00:46:03] Yeah, the thing I want to say is my recollection of the years [00:46:08] that I've spent as a Main Streeter, [00:46:10] there are so many Main Street cities that [00:46:12] have used this type of thing. [00:46:15] I can think of Bartow, well, Melbourne, you said. [00:46:20] There's one up in the panhandle. [00:46:22] And they found that when they put this out, [00:46:25] one particular, I think it was Winter Springs, [00:46:30] enticed an entrepreneur to come in that almost single-handedly [00:46:34] redeveloped the downtown, because he [00:46:36] had this type of not just the incentive, [00:46:39] but the mentality of knowing that he [00:46:43] was working with people who were interested in doing this. [00:46:46] And those Main Street cities utilized [00:46:49] their economic restructuring committee as the conduit. [00:46:53] And I know probably 15 or 16 years ago, [00:46:57] that was a very viable partnership between the CRA [00:47:00] director, the economic redevelopment, [00:47:03] and when there were folks on there that were bankers [00:47:05] and realtors and entrepreneurs themselves. [00:47:07] So I applaud you for moving this forward. [00:47:11] And I'm excited to see what can come of it, [00:47:13] because I know that we have prime locations in our downtown, [00:47:16] as well as people that are, this might just [00:47:20] be the push that they need to get it going. [00:47:23] So thank you for that. [00:47:24] Mr. Starkey. [00:47:26] Could this be used for the Hacienda? [00:47:30] Yeah. [00:47:31] Yeah, yeah. [00:47:32] In thinking this through, again, because it [00:47:35] comes before the CRA board. [00:47:38] Hacienda is a CRA asset. [00:47:43] In thinking this through, some of these programs [00:47:45] have targeted, like enterprise zones [00:47:48] have specific requirements. [00:47:50] I didn't want to make it that narrow, [00:47:51] because I believe that, one, is that business models can [00:47:56] be so varied, so different, in terms of how people come up [00:47:58] with different ideas. [00:48:00] But to answer your question, yes, it can be. [00:48:01] It's much grander scale. [00:48:02] I mean, it's a drop in the bucket, [00:48:03] as far as renovating the Hacienda properly. [00:48:05] But like Mr. Bell-Thomas said, I just [00:48:08] think it's going to generate, like you said, [00:48:10] generate, the sky could be the limit. [00:48:12] This could grab the attention of one investor that hasn't ever [00:48:15] looked at new poetry, and have that person come in and say, [00:48:18] whoa, I had no idea this was going on here. [00:48:20] What a cool city. [00:48:20] What a cool, you know, what awesome things [00:48:24] are already doing. [00:48:24] So I just think, like I said, when [00:48:26] we're told in the toolbox, we don't [00:48:27] have to approve everybody that applies for it. [00:48:29] If someone were to apply, it comes before us. [00:48:31] We can look at every applicant individually. [00:48:33] And I don't think it's giving us too much reliability [00:48:36] by having it there. [00:48:38] Is it a tool that the developer, that [00:48:40] would be looking for the VA, in and outside of what [00:48:43] we already approved for them? [00:48:45] It can be that tool. [00:48:48] However, I think that when we look at substantial projects [00:48:52] like that, we're probably in a totally different arena. [00:49:01] I mean, there's other language in the CRA statute [00:49:04] that provide us the capacity. [00:49:07] Again, but to be able to, I mean, you can do that there. [00:49:10] However, I think that if you're looking at a project [00:49:14] that size, and that scale, and that significance, [00:49:16] and there might be a totally different dynamic [00:49:18] that we're looking at there, that we [00:49:19] would have to go before the CRA board to work with. [00:49:24] Further questions or comments? [00:49:26] All those in favor, please signify by saying aye. [00:49:28] Aye. [00:49:29] Opposed, like sign.

   This text was generated automatically from the meeting video. It is not a verbatim or official record. For exact wording, consult the video or the city clerk.

6. 6Adjournment▶ 49:31