On the agenda

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

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   Subordination of Hacienda Hotel Agreement

   approved

   The CRA approved subordinating its mortgage on the Hacienda Hotel property to an institutional first mortgage not to exceed $500,000, allowing Hacienda Hotel Florida Corporation (Mr. Gunderson) to secure bank financing to continue restoration. Title would transfer to HHFC and the CRA's $800,000 purchase agreement would convert to a subordinated mortgage. The motion passed unanimously after public comment cautioning against city real estate ventures.

   • motion:Approve subordination of the CRA's mortgage on the Hacienda Hotel to an institutional first mortgage not to exceed $500,000 for continued restoration of 5621 Main Street. (passed)

   📍5614 Red Snapper Court📍5621 Main Street🏢Hacienda Hotel Florida Corporation🏢Kaiser University🏢Lakeside Inn🏢Main Street Landing👤Dan Holback👤Dr. McGurn👤Mr. Davis👤Mr. Gunderson👤Mr. Murphy👤Mr. Rudd👤Mr. Ullman👤Ms. Manns#COVID-19 economic impact#CRA subordination agreement#Option to Purchase Agreement (June 19, 2018)#Three Gorges Dam (historical reference)

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   [00:00:22] Thank you. First item on the agenda is the subordination of the Hacienda Hotel Agreement. [00:00:26] Yes, I'm going to ask Mr. Rudd, [00:00:28] our Economic Development Director, to present this to you. [00:00:34] And it relates to the fact that Mr. Gunderson of the Hacienda Hotel Florida Corporation [00:00:42] is in need of some financing to implement some improvements at the hotel. Mr. Rudd? [00:00:49] Thank you. As you recall, on June 19, 2018, the CRA entered into an option to purchase agreement [00:00:57] with Hacienda Hotel Florida Corporation for the property located at 5621 Main Street, [00:01:02] commonly known as the Hacienda Hotel. In that agreement, the CRA granted HHFC the exclusive right [00:01:09] and option to purchase the property for $800,000 to be paid in annual installments. [00:01:15] The purchase price will be paid in installments commencing one year from the date of a certificate [00:01:20] of occupancy is issued and continuing on the anniversary each year. [00:01:25] The parties agreed that there would be some flexibility in the installment schedule set forth [00:01:30] based on the annual cash flow in connection with operation of the property. [00:01:33] However, by the 10th anniversary of the issuance of the CO, [00:01:38] the buyer shall have paid the full purchase price in the amount of $800,000 to the city. [00:01:43] Title, as of this date, title and ownership of the hotel have not been transferred from the CRA to HHFC [00:01:50] and a certificate of occupancy has not been issued as the renovations [00:01:54] and the restoration are still in progress. [00:01:57] In light of the recent pandemic impacting commerce and the national, regional and local economies, [00:02:02] HHFC is seeking assistance in securing a bank loan to continue the renovation and restoration of the Hacienda Hotel. [00:02:09] In order to receive a bank loan, the obligation to the city must be subordinated to the bank loan. [00:02:15] A letter to that effect is included in your packet. [00:02:18] In order to receive the bank loan, ownership of the property would have to be transferred to HHFC. [00:02:23] Upon transfer of title, the CRA's agreement would be converted to a mortgage [00:02:28] that would be subordinated to the bank loan. [00:02:30] Staff's recommendation is to approve the subordination of the CRA's mortgage [00:02:34] to the Hacienda Hotel Florida Corporation to an institutional mortgage not to exceed $500,000 [00:02:41] for the purpose of continuing the restoration and renovation of the property located at 5621 Main Street. [00:02:48] If you'd allow me some additional explanation, Mr. Mayor. [00:02:52] Mr. Gunderson made a commitment to the city in addition to the $800,000 that he was willing to pay for the property [00:03:02] to a level of investment that needed to be implemented in order to completely restore the hotel. [00:03:11] It was his plan originally to fund that with cash, in large part relying on the operational revenue [00:03:23] that he received through his hotel in Mount Dora, the Lakeside Inn. [00:03:30] As a result of the fact, though, that people just aren't visiting the hotel with as much regularity [00:03:40] as he is accustomed to, he has determined that he needs a $500,000 loan in order to go forward. [00:03:47] Mr. Rudd has indicated the procedure by which we can allow the loan to go forward [00:03:57] and provide the bank with the necessary form of security so that they're comfortable to make a loan [00:04:05] on a building that he doesn't truly own at this time. [00:04:11] Open it up for public comment. [00:04:16] Come on down and give us your name and address for the record, please. [00:04:29] I guess I'm the only one talking tonight. [00:04:30] I apologize. [00:04:32] My name is Dan Holback. [00:04:34] I live at 5614 Red Snapper Court here in New Port Richey. [00:04:40] I'll be brief. [00:04:41] I know you guys weren't on the council back then, or at least a good majority of you. [00:04:49] I hope you guys consider and future councils consider not getting into the real estate business at all. [00:04:58] This is, I'm sure you're in a pickle. [00:05:01] I'm sure that you guys have to get this thing finished now, but the city now is going to be in number two, [00:05:09] and if this gentleman gets foreclosed on, the city's investment in the hacienda is going to evaporate. [00:05:16] I'm sure you guys know that. [00:05:17] I'm not going to explain it. [00:05:19] I just want to recommend that these have been super costly to the taxpayers. [00:05:26] I think you guys know that, and I would really appreciate that you guys don't venture into these real estate deals any longer. [00:05:36] That's all I have to say tonight. [00:05:37] Thank you. [00:05:38] And if it'll make you feel any better, absolutely none of us were on the council when that was done. [00:05:47] I would disagree with that. [00:05:48] Thank you. [00:05:51] Were you on at the time? [00:05:52] No, I just disagree with disavowing it. [00:05:56] I accept the decisions made by previous councils, and I support them. [00:06:00] I think it's a great asset. [00:06:02] We've talked about it, so anyhow. [00:06:06] Okay, go ahead. [00:06:07] Anybody else? [00:06:10] Seeing none, we'll close the public comment and bring it back to the CRA. [00:06:18] That's fine. [00:06:20] My recommendation is for approval. [00:06:22] Move for approval. [00:06:23] I'll second. [00:06:24] To the maker? [00:06:26] Yeah, I mean, we talked about COVID earlier, just the trickle effect it has. [00:06:29] I've never even crossed my mind about the loss of income over at the lakeside and at Mount Dora affecting, you know, his ability to do renovations here at the Hacienda. [00:06:38] He's pretty much, thus far, said everything he's done, everything he said he was going to do. [00:06:44] I trust Mr. Gunderson, and I'm more than happy to help him out with this. [00:06:48] Mr. Ullman? [00:06:48] Yeah, I'd just like maybe some, maybe we can get our attorney to give us some response to this concern that we're going to be stuck with a bad investment. [00:06:59] A lot of money has been invested in it now. [00:07:02] What we're asking to do is allow for borrowing. [00:07:06] That borrowing will be specific to fixing up that facility. [00:07:10] Is that correct? [00:07:12] Yes, the agreement that we would enter into with Mr. Gunderson's company would provide that we will not subordinate unless we are satisfied that the terms and conditions of the first mortgage are satisfactory to the city. [00:07:28] So we're going to be looking at that mortgage, making sure that we're not going to be overextended by agreeing to be subordinate to that mortgage. [00:07:36] And so, in essence, you're going to be second in line, but we feel that with those funds being invested in the property, the value is going to be there to cover both mortgages. [00:07:49] And can you speak to the value of this mortgage? [00:07:53] The first mortgage will be $500,000, and then the city's mortgage will be $800,000. [00:07:58] Okay. [00:07:59] So you're talking 1.3 total. [00:08:03] Well, if the city gets it back, it doesn't lose its money. [00:08:06] It gets the facility back. [00:08:07] Correct, correct. [00:08:09] Plus the $3 million that has already been invested there. [00:08:11] And the money we got from the state of Florida for historic preservation and the benefit of putting our city on the map and the ability for us to find another person. [00:08:21] I'm confident that he's got a plan. [00:08:23] He wouldn't be asking to borrow money if he didn't think he could proceed with it. [00:08:29] It's been recommended. [00:08:30] It's really a small loan in comparison to the amount of investment that he's making there. [00:08:35] My point, I just wanted to get that on the record. [00:08:37] Mr. Davis? [00:08:38] Nothing, I just want to comment. [00:08:40] I make stops there every month or two, and they found a lot of things underneath that he never expected. [00:08:48] And I'm not surprised, not only the loss of revenue from the Lakeside Inn, but the problems he found when he started digging into it. [00:08:59] So I'm not at all surprised. [00:09:01] Mr. Murphy? [00:09:04] No, I appreciate the comments from Mr. Dan. [00:09:08] You know, he definitely has some good points, and this is a project that I think we're really going to get our investment out of. [00:09:16] But we're in it now, and we need to see this thing through, or we're going to be in worse shape than not seeing it through. [00:09:26] In speaking up for the folks that were on council before us, I'm sure it seemed like a good idea at the time when they went out and bought the properties. [00:09:36] The one that I would say was absolutely a good idea was the Hacienda, because it is absolutely a keystone for the entire downtown. [00:09:49] Some of the other properties, not so sure about, and for the life of me, I still don't understand why they bought the church on the South River. [00:09:57] But we do have a precedent for this. [00:10:03] Back before I came on to council, originally in 2007, the CRA and city council were approached by the developer of Main Street Landing. [00:10:19] Because the economic situation had changed rather dramatically. [00:10:25] For those of you who may recall, back in the mid-2000s, China was building the Three Gorges Dam, [00:10:34] and basically was sucking up all of the concrete worldwide in the process, and prices escalated on them. [00:10:43] The council, on a 3-2 vote, turned down a request by Dr. McGurn, the developer, and at that point, that project ground to a halt, [00:10:58] and it stayed there looking like a bombed out section of Beirut for a decade. [00:11:06] Certainly, I don't want to see us make that sort of mistake. [00:11:12] COVID has done some really nasty things to everybody. [00:11:19] I'm surprised he's getting any revenue whatsoever out of the Lakeside Inn right now, [00:11:24] because tourism and travel have just basically shut down. [00:11:31] So, to the extent that by agreeing to let him take a first mortgage from a bank so that he can finish this, [00:11:38] and get it open as the economy reopens, I think is very prudent on our part. [00:11:45] It's a good idea on his part. [00:11:46] It will get this thing to the finish line. [00:11:51] And, Ms. Manns, we're looking at probably June for an opening at this point? [00:11:57] That's correct, Mr. Mayor. [00:11:58] We're thinking about June, based on the current projections of the construction schedule. [00:12:05] So, I'm in favor of this. [00:12:08] I think it's what we need to do to make this project happen. [00:12:12] That hotel opening up in downtown New Port Richey next summer is going to be a massive boost for that entire part of the city. [00:12:21] Destination hotel. [00:12:22] It will be. [00:12:23] Councilman Davis, you still have the first reservation, correct? [00:12:25] I have the only reservation. [00:12:28] We have a motion on the floor, do we? [00:12:29] We do have a motion. [00:12:30] I'd like to speak to it again if I may. [00:12:32] I'm sorry, I'd like to speak to the motion again. [00:12:35] Yes, Mr. Alderman. [00:12:36] Just to reiterate, this is the CRA. [00:12:45] When individuals come up and speak to the CRA, you're talking to the redevelopment agency. [00:12:50] The agency is charged with improving our tax base and improving our city. [00:12:56] In order to do that, we have to put on the hat of a developer. [00:13:00] Developers make and lose money all the time. [00:13:03] There was a tremendous amount of angst about us buying the church around the lake. [00:13:10] Now it's become a feature and part of what we hope is a solution to keep our businesses going. [00:13:16] The comment about buying the church on River Road, I agree with you, Mr. [00:13:23] Chairman, that it didn't have any investment plan backed up to it. [00:13:30] If anything, it was just to eliminate property that wasn't paying taxes and open it up for property that would pay taxes, [00:13:37] which is not an acceptable reason to buy something. [00:13:41] As it will hopefully work out, though, it's a beautiful property. [00:13:45] And if you go out there when it's not a boating day, and believe me, it's being used by all the boat trailers. [00:13:51] There have been times when it was full, particularly during the summer. [00:13:56] There's a beautiful stand of trees out there. [00:13:58] I think you all ought to go out and just walk behind that and see what a beautiful property it is. [00:14:04] A huge property and a particular good asset, hopefully, to whatever happens out there from Kaiser University. [00:14:11] So I, for one, reject the idea that the CRA is not charged with being a partner in a public-private venture where private money comes and our basis of our town goes up. [00:14:28] That's the purpose of what we're here for. [00:14:29] So I take exception, and I just want to make sure it's clear. [00:14:34] Sometimes we hear things and let them go. [00:14:37] I've been hearing this for a long time. [00:14:39] This body asked the city manager, or in this capacity, our director of our separate entity here to help go out and buy some land on the river [00:14:49] because we need boat docks and we need more activity along the river, which we're trying to foster. [00:14:56] That's property acquisition. [00:14:57] So I just... [00:15:00] we can't take a swat against property purchase, I will agree we shouldn't buy things we don't [00:15:06] know somebody else is going to come in and work with us to develop. And I think that's [00:15:10] been my plea to my colleagues here to say, you know, if we have a good plan, then we [00:15:16] have sort of, it's part of our charge to participate, help build infrastructure, do whatever we [00:15:21] can to make it happen. [00:15:22] The Kaiser University project is another example of exactly what you're talking about, where [00:15:26] the city got involved and was able to assemble the parcel necessary to make that project [00:15:33] happen. And that is, you're correct, that is what the CRA is for. [00:15:38] Any further discussion? Hearing none, all those in favor, please signify by saying aye. [00:15:43] Aye. [00:15:44] Opposed, like-mind. Motion passes. Next, discussion regarding targeted businesses.

   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

   Discussion Regarding Targeted Businesses

   discussed

   The CRA Board discussed targeted businesses for the downtown CRA district, reviewing a Gibbs Planning Group retail market analysis and Arnett Muldrow branding recommendations. Members expressed interest in specialty retail, restaurants (including a restaurant district), an arts district, clothing stores, sporting goods, and quick-service food near the new Keiser University campus, and discussed creating a tiered incentive program for targeted businesses. The board directed staff to develop additional incentives and pursue recruitment of these business types.

   • direction:Board directed staff/Mr. Rudd to develop a tiered incentive program offering additional incentives for targeted business types and report back. (none)

   📍Rowan Road📍Southgate📍corner of Main and 19🏢Arnett, Muldrow and Associates🏢Dick's Sporting Goods🏢Gibbs Planning Group🏢Keiser University🏢Main Street🏢Pete's🏢Springback Cafe Grand🏢Zen Forest👤Altman👤Camille👤Charles Rudd👤Chip Waller👤Jacob👤Jeff👤Larry Chalice👤Mr. Gibbs👤Starkey#Arts district#CRA incentive program#Restaurant district#Retail Market Analysis#Retail leakage#Targeted businesses list

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   [00:15:51] Yes, at your meeting on August 4th, Director Altman requested that I pass along to you [00:16:01] some information in respect to a retail market analysis that was conducted by Gibbs Planning [00:16:09] Group, as well as some recommendations that were presented by Arnett, Muldrow, and Associates [00:16:17] in respect to some marketing and branding work that they did for us. I pass those pieces [00:16:24] on to you so that we can conduct amongst ourselves a conversation then about targeted businesses. [00:16:33] And I'm ready to engage you in that discussion in any respect you'd like. [00:16:43] Let me start this off by asking if there's any member of the public that has strong feelings [00:16:48] about what sort of targeted businesses we ought to be looking at. Seeing none, I'll [00:16:57] bring it back to the CRA. I'll kick it off. I would love to see us have more specialty [00:17:10] retail stuff. I am, like Mr. Starkey, very disappointed to learn that Pete's is leaving [00:17:23] because that struck me as a neat type place. It was just, if you had ever told me that [00:17:30] an antique shop and bar could be part of the same business, I'd have never believed it. [00:17:37] It was a really cool idea. And the sort of thing that would draw people downtown, other [00:17:45] sort of specialty retail that would be something you're just not going to go on Amazon and [00:17:55] buy or you're not going to go to the mall or a big box store. Those are the sort of [00:18:00] businesses that will attract people to come downtown, walk up and down the streets. I'd [00:18:07] love to see more of that. I think it would be great. [00:18:11] Mr. Gibbs did a very nice job of identifying some of the existing demand that we aren't [00:18:19] currently meeting in our market. One of the things that Mr. Rudd is currently working [00:18:26] on is not just providing incentives to any business that wants to either relocate or [00:18:36] expand within our CRA district, but to offer some additional or different types of incentives [00:18:43] for those businesses where we are interested in expanding their presence in the cities [00:18:52] downtown and in the city as well. [00:18:55] And to go along with that, I think that's a combination between Charles and Jacob, [00:19:01] to get the word out there that we can help them. [00:19:04] Certainly. [00:19:05] Those businesses. I mean, Jacob's what, eight, nine months or something like that on the job [00:19:10] now, and he's probably being pulled in a hundred different directions. But economic development [00:19:14] is real important to continue what we've been doing for the six years, seven years that Jeff [00:19:19] and I've been on. One other thing I want to say that if you're asking what kind of businesses, [00:19:26] I've toured Dade City and Dade City's toured here. And Camille and I wish that we could [00:19:32] exchange, you know, she wants the restaurant nightlife and I want the retail. So, you know, [00:19:38] in that concept, in that idea, you know, we're just too far apart to put the two together. [00:19:43] It's probably a mix. And as I was sitting here, I was thinking with Kaiser University going in [00:19:51] at the corner of Main and 19, there are probably some opportunities. I don't want to call them [00:19:58] fast food, but at least quick food type establishments where students and faculty can [00:20:07] take a break and go down and get a bite to eat. It's something that's affordable and good. [00:20:13] Maybe an opportunity for a bookstore or something down in that area too. [00:20:18] This is by no means a shot at any of our current restaurants or previous restaurants, [00:20:23] but the number one thing I hear from people in Trinity and people are trying to [00:20:27] get to come here is just lack of variety of restaurants and food. [00:20:33] Charles, reach out to Zen Forest. They're very, very interested in downtown. I don't know if [00:20:36] you've spoken to them yet. They're out on 54, or excuse me, on Rowan Road. You have? [00:20:43] Springback Cafe Grand, if we could. That would be just restaurants like that. Nothing against [00:20:49] corporate owned restaurants out on the 19 area and smaller areas around Kaiser and places like that, [00:20:54] but if you get good food, people will come. It's as simple as that. [00:21:00] And Zen Forest is very nice, Charles, so if you can get them to come into town, that'd be super. [00:21:07] Mr. Altman, any thoughts? [00:21:09] Yeah, I think I'm looking at the retail demand slide that was done most recently, [00:21:14] so it's more current. I couldn't believe the date of the Gibbs report. It's been years already. [00:21:23] So a couple of things just to reiterate. The top five that they had was clothing and accessory [00:21:31] stores, restaurants, full service limited coffee shops, specialty food. I think this goes [00:21:40] hand in hand with our agriculture sort of vibe that's going on with folks growing [00:21:51] plants in their yards and selling them and food to table type theory. [00:21:58] Sporting goods is always a hard one. That's not something that's easy to run. We may not get a [00:22:03] larger store like that in the downtown, but we do have a full citywide, so if a sporting goods [00:22:07] store wanted to come into Southgate or open up somewhere, I think we should identify. [00:22:12] Dix is closed. There's a lot of athletes. If we could snag a sporting goods store to fill up some [00:22:19] of our shopping space, I think we ought to identify it and say, you know, that's one that [00:22:24] we're looking for. And specialty retail goes into your books, gifts, hobbies. So it's really [00:22:33] listed out there, and just for the public who's listening, this is the result of looking at what [00:22:40] has gone through credit cards, I'm assuming, that was spent in our city, in our zip codes, [00:22:46] and in our shopping area, whatever they determined that to be a few miles around, [00:22:51] and then how much of what they spent and actually are buying now is leaking out of our area. So [00:22:58] this is existing demand that we were told is here, and if we provide for it, that can compete. [00:23:06] As you say, folks in Trinity are looking for, you know, a level of service that we don't have [00:23:17] enough variety of. And last week, I watched a video produced on the devastation of the [00:23:27] hurricane up in the Panhandle, and they copied what happened to all the stores, and one restaurant [00:23:35] owner was talking about the small community that they all banded together and helped each other. [00:23:43] If somebody's out of something, and you know this from your business, if you're out of something, [00:23:47] you call one of the other businessmen. That's the kind of community we have right now with our [00:23:51] existing shop owners and restaurants. And he referenced that and said, hey, people don't want [00:23:58] to come and eat in my restaurant every day. We need for them to know they can come down and eat [00:24:04] and go to something else, or tables are full. And so I think a restaurant district, but also I would [00:24:11] add an arts district. We've got now two places where artists are bringing their work and trying [00:24:19] to sell it. I think they're having a bit of a hard time, and we have to draw customers to them. [00:24:25] And that's what works in Mount Dora. That's what works in Dade City. That's what works in other [00:24:30] places. You have to have enough. They're not going to drive an hour to go to one shop, but they'll [00:24:36] drive an hour to walk around, get something to eat, go to. Dade City was more, what, antiques at [00:24:43] one point. I don't know how much that is now. But if we find those things that will drive customers [00:24:52] into our town and get people walking on the street, I think this is the list here. I don't think that [00:24:58] should mean that someone that's in another business can't access, but I'd like to see maybe [00:25:04] a tiered system or something that you all could work on that could provide additional incentives [00:25:10] for the targeted type businesses and maybe bring that back to us. And that also sets the table for [00:25:19] the Main Street group. I see some members are here, and that's one of their charges is to go [00:25:23] out and help us recruit. And one other thing that's mentioned frequently is the professionals [00:25:30] who are on the ground floor. If there was an incentive for the professionals to be [00:25:36] second floor, shops first floor, you know, as we get creative and need space. [00:25:44] Larry Chalice, Chip Waller, there's not a whole lot of people that are coming in [00:25:52] anxious to go shopping at the tax store or the lawyer's office, but they're needed and we don't [00:26:00] want them out of town. And so designs that put professional above, housing above, is also, I [00:26:07] think, has been a recommendation. So I'd be curious to get the professional, you know, suggestions [00:26:13] back to us. And we've been working on the same incentive program for a few years, maybe dust it [00:26:19] off, call it a new one. So thank you for having the discussion. I think it's all in front of us. [00:26:27] I would agree in that, you know, I looked down that list, and I'm thinking, yeah, there's a [00:26:31] bunch of these that I'd be interested in going to. Arts, I think, should be added to it personally, [00:26:37] because we have that started already. I would agree with you, but they had closing stores [00:26:43] right up at the top. And I don't know about the rest of you, but this whole COVID isolation thing [00:26:51] has been doing horrible things to my clothes. A lot of them are getting a lot tighter. Yeah, [00:26:59] they are, and it's a direct result of COVID-19, I'm sure. Let me just read these numbers real [00:27:05] quick. Women's clothing, $18 million in demand and sales. Family clothing, $21 million in demand. [00:27:15] Shoe stores, $18 million. Jewelry, $8 million. Restaurants, $22 million. Limited service, [00:27:21] 48. Coffee shops, specialty sporting goods, $12 million. Specialty food, $24 million. So [00:27:29] that's just, that's not people coming here on tourist trips, that's our residents leaving [00:27:35] to go buy stuff somewhere else. I'm looking at the retail leakage rate, and on clothing stores [00:27:42] alone, it's over $21 million. I mean, that's money that we're basically leaving on the table. [00:27:47] That's what we have room for, too. I mean, it makes perfect sense that we target the businesses that [00:27:52] we would like to bring in with some extra incentives, but you can look at the market analysis, [00:27:58] executive summary, and it lists out all the types, and you can look at it, and you can see what we do [00:28:02] and don't have, and we've got quite a few empty spots in there. So, I mean, it just makes perfect [00:28:07] sense to go after those, and that's what we should be doing. I would commend this list to Mr. Rudd, [00:28:13] the CRA's executive director, to see if we can't fill in some of these holes.

   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. 4Communications▶ 28:21
5. 5Adjournment