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

   ↳You arrived here from a search for “Joe DeLuca” — transcript expanded below

   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

   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

   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)

   ▶ Jump to 12:35 in the video

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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