On the agenda

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

   Approval of September 23, 2021 CRA Meeting Minutes

   approved

   The CRA Board approved the minutes from the September 23, 2021 meeting.

   • motion:Motion to approve the September 23, 2021 CRA meeting minutes. (passed)

   ▶ Jump to 0:15 in the video

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   [00:00:15] Quorum, next is the approval of the September 23rd meeting minutes. [00:00:20] Move for approval. [00:00:22] Second. [00:00:23] Any discussion? [00:00:25] Hearing none, all those in favor, please signify by saying aye. [00:00:28] Aye. [00:00:29] Opposed, like sign. [00:00:31] Motion passes.

   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.a

   Purchases/Payments for CRA Board Approval

   approvedon consent

   The CRA Board approved the consent agenda containing purchases/payments for CRA Board approval without discussion.

   • motion:Motion to approve the consent agenda (Purchases/Payments for CRA Board Approval). (passed)

   ▶ Jump to 0:32 in the video

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   [00:00:32] Next, consent agenda. [00:00:35] Move for approval. [00:00:37] Second. [00:00:39] Any discussion? [00:00:40] Hearing none, all those in favor, please signify by saying aye. [00:00:43] Aye. [00:00:44] Opposed, like sign. [00:00:46] Motion passes.

   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

   Discussion Regarding Proposed Economic Incentives for Zen Kitchen & Bar

   discussed

   City staff (Ms. Manns) presented a report on proposed CRA economic incentives for Zen Kitchen & Bar, which is relocating from Rowan Road/SR 54 to the former Gatsby's Bar location at 6229 Grand Boulevard. Proposed incentives include a two-year rent subsidy totaling $80,400 (50% of $6,700/month rent) and a $200,000 redevelopment reimbursement in four $50,000 increments tied to investment milestones on an estimated $800,000–$1,000,000 buildout. No vote was taken; a formal agreement will be brought back at the next meeting.

   • direction:Staff will bring back a formal agreement and recommendation for Zen Kitchen & Bar incentives (two-year rent subsidy of $80,400 and $200,000 redevelopment reimbursement) at the next meeting for a formal vote. (none)

   📍6229 Grand Boulevard📍Rowan Road and State Route 54🏢Convergent Capital Investments🏢Gatsby's Bar🏢Widow Fletcher's🏢Zen Forest🏢Zen Kitchen & Bar👤Joe DeLuca👤Ms. Manns👤Peter#CRA redevelopment program#CRA rent subsidy program

   ▶ Jump to 0:47 in the video

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   [00:00:47] Next, discussion regarding proposed economic incentives [00:00:50] for the Zen Kitchen and Bar. [00:00:53] Ms. Manns. [00:00:53] Yes, thank you, Mr. Mayor. [00:00:55] As all of you are aware, the Zen Forest, which is currently [00:01:01] situated at Rowan Road and State Route 54, [00:01:07] has decided to relocate themselves into the city. [00:01:14] And they have secured a location at 6229 Grand Boulevard, which [00:01:20] is the former location of the Gatsby's Bar, [00:01:30] I guess you'd call it. [00:01:34] And for some time, they were involved in discussions [00:01:38] with the property owner, Mr. Joe DeLuca, [00:01:42] about potentially purchasing the property. [00:01:46] Those discussions, though, ended [00:01:50] when they decided that a lease agreement was the best [00:01:57] method for them to go forward. [00:02:02] And the building, though, is in considerable disrepair [00:02:09] and in need of considerable reinvestment [00:02:13] to bring it up to a state that is appropriate for what [00:02:19] the investors have in mind for their new venture, which [00:02:24] will be called Zen Kitchen and Bar, at which time [00:02:28] they'll offer their traditional menu, [00:02:32] as well as some embellishments to that menu [00:02:38] to include sushi and some other items. [00:02:43] And a full bar. [00:02:47] The improvements are estimated to cost between $800,000 [00:02:58] and $1 million, probably closer to $1 million [00:03:03] after all is said and done. [00:03:06] They do have a 10-year lease agreement for the property [00:03:14] with some options. [00:03:16] They are eligible to participate in two [00:03:21] of our existing CRA programs. [00:03:25] One is our rent subsidy program. [00:03:33] The rent subsidy program is a program [00:03:37] whereby we provide a subsidy up to 50% of the rent [00:03:44] for a one-year period of time. [00:03:47] And in the case of this establishment, [00:03:54] for a couple of different reasons, [00:03:56] what I plan to advance to you for your consideration [00:04:02] is a rent subsidy for a two-year period of time. [00:04:06] And the reason that I'm recommending [00:04:08] a two-year period of time is to spread the payments out [00:04:15] over a longer period of time to minimize [00:04:18] the impact on the CRA. [00:04:20] It's also because they have a higher rent payment than what's [00:04:25] typically the experience for some of our restauranteurs. [00:04:30] Their rent payment is the amount of $6,700 per month. [00:04:37] So the aggregate payment that I'm asking you to commit to [00:04:42] is $80,000, $80,400. [00:04:46] What does that back into the month? [00:04:47] Is it the full, is it 50-50, or is it? [00:04:50] 50-50. [00:04:50] OK. [00:04:54] And the other program is the redevelopment program [00:04:58] where we invest a percentage of what [00:05:02] they invest in commercial redevelopment costs, [00:05:09] so in the reconstruction costs. [00:05:12] And typically, it's a range of percentages based on, [00:05:23] is it catalytic? [00:05:24] Is it not? [00:05:25] And we try to keep them in about the same range [00:05:34] as some others in the industry, I should say. [00:05:40] And we're presuming at this point [00:05:45] that the recipient is going to invest in excess of $750,000. [00:05:52] And so what I am asking, or will ask of you [00:05:58] at a formal meeting, and so I'm asking [00:06:00] you to consider it at this point. [00:06:04] And it'll be brought to you with a formal agreement, [00:06:08] at which time I'll ask for a formal vote, [00:06:11] is that the CRA will back the $750,000 investment [00:06:25] with $200,000 made in four equal payments. [00:06:31] And so every increment of $187,500 [00:06:39] will result in a $50,000 reimbursement [00:06:43] of those expenses. [00:06:45] If they don't spend that amount, they [00:06:48] don't get a $50,000 reimbursement. [00:06:56] I think that that is consistent with the amount [00:07:01] that we provided to Widow Fletcher's when [00:07:09] they renovated that property, which was also [00:07:13] in very poor condition. [00:07:15] It was a larger facility, and they spent more, [00:07:20] but we gave them more. [00:07:23] So on a percentage basis, it's the same. [00:07:27] Are you looking for just guidance? [00:07:29] I'm just updating you. [00:07:30] This is a report only tonight. [00:07:34] I'm not asking for any vote, no action. [00:07:36] I'm just telling you where I am in the discussions. [00:07:40] And I will bring back to you a formal recommendation [00:07:49] with more detail and an agreement for you [00:07:53] to look at at your next meeting. [00:07:55] The next item I wanted to bring you up to date on [00:07:58] is the redevelopment of the Walden Pond property. [00:08:02] And I've provided an aerial at your places [00:08:05] in case you're not familiar with the location of the property. [00:08:09] And it is located on the west side of US Highway 19, [00:08:21] just south of Oldsner. [00:08:24] And Convergent Capital Investments [00:08:28] is the owner of the property. [00:08:31] The land is 8.43 acres in size. [00:08:37] And the city played an active role [00:08:44] in getting some mobile homes removed from the property [00:08:50] several years ago. [00:08:52] It has remained in an undeveloped state [00:08:56] then since that time. [00:08:58] And I don't recall the year. [00:08:59] I'll look that up, that that occurred. [00:09:02] But I know it was prior to me joining the staff. [00:09:07] Peter may remember. [00:09:09] No. [00:09:09] 2012 or 13, I'm thinking. [00:09:12] OK. [00:09:14] There have been some offers along the way [00:09:18] to bring in density that was beyond what [00:09:24] the zoning of the property would support. [00:09:28] And it was of housing types that really [00:09:31] wouldn't have been a complement to the neighborhood. [00:09:35] The current owner of the property [00:09:38] is interested in constructing 96 condominiums on the property, [00:09:43] 48 of which would be two bedroom units, [00:09:47] 48 of which would be three bedroom units. [00:09:51] There would be a full build out of the project [00:09:54] within a three year period of time. [00:09:58] The price points for the units would be $220,000 [00:10:05] for a 1,130 square foot unit and $260,000 [00:10:13] for a 1,319 square foot building. [00:10:20] They are prepared to initiate construction in March of 2022. [00:10:26] Their construction costs would be $18 million. [00:10:33] The projected 10 year cumulative revenue, [00:10:37] I've run an estimate, and so I don't have a final figure. [00:10:42] I'll have a final figure for you by the time [00:10:45] I bring this back. [00:10:48] I've come up with an estimate with a very conservative [00:10:53] valuation growth rate of just two. [00:10:56] And it's $2.5 million on a 10 year schedule. [00:11:04] And it's $5.8 million on a 20 year schedule. [00:11:10] Their ask is a $1 million CRA contribution to the project. [00:11:24] And at this point, I've indicated to them [00:11:31] that that's a big ask. [00:11:35] I've also indicated to them that the CRA isn't in March of 2022 [00:11:43] or in any year close to that in a position [00:11:49] to outlay that kind of cash. [00:11:51] What I propose to them instead of that [00:11:54] is that at year three, which is probably about the time [00:11:59] that their final certificate of occupancy [00:12:03] would be issued, that the city would [00:12:06] initiate a payment of $100,000 per year [00:12:11] for a 10 year period of time. [00:12:15] And those terms would be of interest to them. [00:12:22] I do want to discuss further with them, though, the amount [00:12:27] and perhaps get them to agree to a lesser amount [00:12:34] other than the $1 million before I bring it back

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5. 5

   ↳You arrived here from a search for “Hacienda project” — transcript expanded below

   Discussion Regarding the Proposed Redevelopment of the Walden Pond Property

   discussed

   CRA Director Davis updated the board on negotiations regarding the proposed redevelopment of the Walden Pond property, a roughly 96-unit, three-story residential project (with first-floor garages) facing a retained waterway used for retention. Council discussed the proposed CRA incentive (potentially up to ~$1 million / ~15-26% range) and asked for context on prior comparable projects and a formula-based approach for future incentive decisions.

   • direction:Council directed staff to provide a spreadsheet of comparable past CRA-funded projects (Hacienda, Frank Starkey's Main Street building, etc.) and to develop a formula-based approach for evaluating future incentives. (none)
   • direction:Council directed the CRA director to continue negotiations on the Walden Pond redevelopment and bring a final proposal back for approval. (none)

   📍Main Street property (Frank Starkey building housing Knight Rights Nutrition and Cody River)📍Walden Pond property📍corner of Main and 19, behind Kaiser University📍old HCA hospital site🏢Cody River🏢FRA🏢Hacienda🏢Kaiser University🏢Knight Rights Nutrition👤Chopper👤Councilman Altman👤Councilman Phillips👤Director Davis👤Frank Starkey👤Mr. Peters#FRA conference#Hacienda project#Marine Parkway#Muldrow vision#Riverwalk master plan#Walden Pond redevelopment#Zen Forest project#boat ramps property purchase#gateway project#tax increment projection software (purchased 2015)

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   [00:12:37] to you for a final approval. [00:12:42] And I just wanted to update you on where [00:12:44] I am on the discussions. [00:12:45] Appreciate it. [00:12:46] I just have a couple of questions. [00:12:47] Sure. [00:12:48] We're getting questions here? [00:12:49] Yeah. [00:12:50] Are they going to be three stories where [00:12:52] the first stories are going to be the garage? [00:12:53] Yes. [00:12:54] So they don't have to build the property up? [00:12:56] They do. [00:12:56] We'll still need to build the property up. [00:12:58] It's very low. [00:12:59] OK, but some degree, not, OK. [00:13:02] It's about four feet that they'll have to build it up. [00:13:04] And still do the garage. [00:13:05] And still. [00:13:06] And now, isn't there a water on the one side of it? [00:13:13] There is water. [00:13:14] And they will retain a waterway on the property. [00:13:17] OK, now will that be their retention pond? [00:13:20] It will be used for retention purposes. [00:13:24] And all of the units will face the water. [00:13:27] OK, so that's, I'm just saying, OK, so I'm just. [00:13:30] So they're going to use it as an amenity. [00:13:33] I like the approach you're going to spread the money out. [00:13:36] I like that approach. [00:13:36] Now, back to Zen Forest. [00:13:41] I have different numbers in my head [00:13:43] than I just plugged in the numbers [00:13:45] you had as far as the funding of it based on what they have. [00:13:51] So could we get a copy of the other places like Whittle [00:13:58] Fletcher's, like Frank Starkey's building, probably. [00:14:02] Which of Frank Starkey's buildings? [00:14:04] The one where Knight Rights Nutrition is. [00:14:07] And that one where he got CRA money after he did the project. [00:14:10] Main Street property? [00:14:12] Yeah, Main Street property, where Knight Rights Nutrition [00:14:16] is, and Cody River, and that whole building there. [00:14:21] Certainly. [00:14:23] I think there's some money in there, too, with the Hacienda. [00:14:28] That's another big project, isn't it? [00:14:30] A similar. [00:14:31] Well, yeah, there's certainly money in the Hacienda. [00:14:34] I just would like the layout of. [00:14:37] Just tell me what projects you wanted. [00:14:38] I want the big projects. [00:14:39] This is a big project. [00:14:41] This is a million dollar project, or close to it. [00:14:43] Could be up to a million. [00:14:45] The ones that are a million or more, [00:14:46] and I don't really care about. [00:14:48] You're looking to try to see the balance. [00:14:49] Yeah, exactly. [00:14:51] See the percentages run closer. [00:14:53] Because I have a, excuse me just a second. [00:14:56] I have, in my mind, a 15% to 20%. [00:15:00] what you just get numbers you just gave us if it's it it's 750,000 then it's [00:15:04] closer to 25 26 percent so I just want to make sure that we're being fair to [00:15:08] those guys as we are the others. Yeah I think you know when it comes to our [00:15:14] minds we're a collective mind of five and so I think what we really need is a [00:15:18] discussion among all of us feeding us information for us to arrive at [00:15:23] percentages is fine but these are not big projects and the city is well [00:15:28] positioned for some very big projects coming forward what we've talked about [00:15:34] behind Kaiser the hotel the expansion of that the Riverwalk around the the [00:15:41] purchase of the additional property by the boat ramps the potential for the [00:15:45] gateway the Muldrow vision that was set up to us is a big vision we've got [00:15:52] Highway 19 we've got commercial properties that could cost multiple [00:15:56] millions so I'm with the director Davis in the sense of trying to make sure [00:16:04] we're fair to everybody I think it really requires economic analysis that's [00:16:09] more than what we can do at the kitchen table and so I believe that the the [00:16:17] reactivation of our tax increment projection software that we bought back [00:16:22] in 2015 that interfaced the effect of growth that's going to have on the [00:16:27] general fund the length of time we have left the we are really going to have to [00:16:33] do more than take these as one offs as they come out and decide what we can [00:16:38] afford to pay three years down the road I think I think it's all good planning [00:16:43] and good idea I appreciate you sharing that and I think you're on the you're on [00:16:46] the right track but I envision you know as as Councilman Phillips was talking [00:16:53] about the Marine Parkway the the residential that can go in the old HCA [00:16:58] hospital site you know we have so much of our city to be sort of built into the [00:17:05] future that you know I think we and I think it's time for us to really have a [00:17:13] real global look at what we're doing so that we can have not have to you look at [00:17:19] each one of these projects individually and try to compare them as much as saying [00:17:23] you know as you've done here's the increment we think we're going to create [00:17:27] here's the process that we have so that we can entice development in and say [00:17:33] this is what we have to offer we may be going out for RFPs and other things so [00:17:39] this is really an important formula that you're coming up with and and I [00:17:44] think looking back to what we have done is good but I think looking forward as [00:17:48] well to see what's going to be sustainable as our tax growth occurs is [00:17:53] important to one thing that development can do and what's been done in the [00:17:59] heights in Tampa which is the which is going to be one of the topics at the [00:18:04] FRA conference which I hope that some of you or all of you will attend which [00:18:09] is how to pay for your most ambitious projects is looking at alternative ways [00:18:15] in which we can fund and support this development some we can do with [00:18:19] infrastructure that they would have to otherwise pay for this is not just what [00:18:24] the CRA can do this is what the city needs to do and and that's kind of my [00:18:28] message our our general fund is frozen and it's not going to succeed unless we [00:18:33] meet certain certain goals and one of those goals is going to be increased [00:18:39] population and that's what the folks in the other side of the of the river on [00:18:44] Main Street are looking for which is more customers more business more [00:18:48] vibrant city so this I think that putting a path out there for not just [00:18:56] someone who owns some property that that we've already given them some breaks on [00:19:02] I think they got a break on the utility lien that was on that property of [00:19:06] several hundred thousand dollars or a good a good fee that was due that we [00:19:13] relieve them from so I'm glad you're moving forward I would love to see us [00:19:20] have a discussion at the CRA again and I don't know that the financial advisor we [00:19:25] had before is the right person for it but I think it's time for us to really [00:19:31] say we've got a very ambitious master plan that Riverwalk is going to cost an [00:19:38] awful lot of money it's more than remodeling an old building and the the [00:19:43] corner of Maine and 19 behind Kaiser University and the hotel is set there [00:19:48] for another couple hundred units potentially that we can have in the [00:19:52] high-hazard area so thank you I'm excited for that to come I think this [00:19:59] enforcing and be a great thing and so yes keep on negotiating but at the same [00:20:08] time could you start talking to us about a formula approach that that will as [00:20:16] chopper wants to look at it and come up with 15% but something that will [00:20:20] identify how we how we can track and keep ourselves safe as we go forward but [00:20:26] still not have given everything away so we don't have anything for the next big [00:20:31] project that's why I bring it to you tonight so that we can stage [00:20:36] discussions about it and so that you're not surprised it's certainly in [00:20:42] alignment with things that have been done in the past through the CRA and I [00:20:48] will have all the projections through a financial consultant for you but I did [00:20:55] provide the estimate information to you tonight that's great thank you [00:21:01] yeah I agree with the Councilman Altman and Davis on spreading out that money over time [00:21:07] just gives us opportunity to to take on more projects to move them for quicker [00:21:11] with the money available I'm so that helps everybody and correct me if I'm [00:21:16] wrong this man's the money the numbers you're talking about now the money may [00:21:20] start here but it may end up being a lot more investment or even less so the [00:21:25] incentives will be based on what they actually spend the capital investment so [00:21:28] those numbers can't change right so this is just kind of a guesstimate right now [00:21:34] very good guesstimate right and very conservative numbers that I've provided [00:21:41] I'm not sure I'm with any particular percentage but I do agree with my [00:21:48] colleagues it would be nice to have some context what we've done before and what [00:21:54] we anticipate so if we could get that sort of as a spreadsheet I think that [00:22:00] would help all of us certainly Mr. Peters anything just that you know the [00:22:06] Walden product Walden pond project is really intriguing to me because there we [00:22:10] bring was it 90 96 units you know and if my numbers are right those units are [00:22:17] being constructed at a cost of our person our cost of $200 a square foot so [00:22:22] that's gonna be pretty nice units it's a lot of people that's an area that [00:22:29] needs development I've been back there on my bike before I want to know what [00:22:32] worlds are we going to be here right and so not only you know property values and [00:22:37] property future property taxes but also that's 96 family units that are going to [00:22:42] be you know participating in our downtown areas and our merchants and our [00:22:47] businesses so I think that's a double win there so I'm really interested in [00:22:53] in seeing you know that that area over there west side to get a really boost in [00:23:00] development maybe that'll catch fire and other areas will move on that way as [00:23:04] well what one of the question in the Walden property on the sides of the [00:23:10] property two of the roads the roads in the city or in the county it's it's a [00:23:18] mixture all I can tell you is our roads are paved no I mean that it has to do

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6. 7Adjournment▶ 23:19
7. 6Communications