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03102010CRACity Council Present: Mayor Richard H. Gillmor Vice -Mayor Jim Hill Council Member Andrea Coy Council Member Eugene Wolff Council Member Don Wright 4. APPROVAL OF MINUTES 2/10/10 5. NEW BUSINESS HOME OF PELICAN ISLAND COMMUNITY REDEVELOPMENT AGENCY (CRA) (CITY COUNCIL) MINUTES WEDNESDAY, MARCH 10, 2010 5:30 PM CITY COUNCIL CHAMBERS 1225 MAIN ST, SEBASTIAN, FL 1. Mayor Gillmor called the CRA Meeting to order at 5:30 p.m. 2. The Pledge of Allegiance was recited. 3. ROLL CALL Staff Present: City Manager, Al Minner City Attorney, Robert Ginsburg City Clerk. Sally Maio Deputy City Clerk, Jeanette Williams Growth Management Director, Rebecca Grohall Police Chief, Michelle Morris MOTION by Mr. Hill and SECOND by Ms. Coy to approve the February 10 2010 minutes passed with a voice vote of 5 -0. A. Stan Mayfield Working Waterfront Dabrowski Purchase (City Manager Transmittal) The City Manager said staff is very close to the end of the grant procurement portion of the process and noted the packet recapped the grant application, the City's efforts in obtaining the property to create the working waterfront. He said the Florida Communities Trust (FCT) has negotiated a price over appraised price and he was seeking authority to move forward as the price is over the assessed value. Community Redevelopment Agency Meeting March 10, 2010 Page Two John Conway, Chair, Working Waterfront Committee, read from a report of the Committee. (see attached) He said the project was to stimulate the commercial fishing industry, provide waterfront destination for water enthusiasts, educate the public about fishing, and promote the historic fishing industry which will increase area hotel, food, and beverage services. He said the Committee recommendation is to move forward and close on the property. The City Manager said going forward the Dabrowski parcel has become critical because of the need of the working waterfront which was going to be the heartbeat of the project. He recommended putting together the two parcels and lease out for both uses, noting the Fishing Co -op are the best people to do that. He offered three options to the CRA Board as set out in the agenda packet: 1) Give him authorization to purchase the Dabrowski parcel at $750,000 2) Give a counteroffer to the trustee 3) Deny the offer He said the project has merit and is a classic example of the use of redevelopment dollars. He also said there are some budget ramifications if they spill over and he can explain where to get the money from. 6. PUBLIC INPUT Damien Gilliams, 1623 US Highway 1, disagreed with the project, citing the current economy, inappropriate use of CRA funds, new regulations being imposed on the fishing industry, and taking prime property off the market. Sal Neglia, Member of the Working Waterfront Committee, said he thought earlier it would be a good thing for City but he was under the assumption it would be a museum, and education center, didn't think there would be enough money for the CAVCORP property and cited the Archie Carr property purchased by the County. He urged the Board to give it a lot of thought. Barbara Salmon, Member of the Working Waterfront Committee, spoke in favor of the project, said there are a lot of interested people waiting to see if the City purchases the Dabrowski property, and CAVCORP can wait. Louise Kautenburg said if you do nothing, nothing will happen but continual degradation of the area, said this week three people told her they purchased Sebastian property because of the Main Street boat ramp improvements. Chris Pinson said this town has done nothing for the commercial fisherman, it is worth the investment, otherwise it will be bought for condos and docks, and there are a number of business opportunities to go in there, and if the City is going to make an offer, there should be a letter of intent to sell at a specific price. 2 Community Redevelopment Agency Meeting March 10, 2010 Page Three Ed Herlihy, Sebastian, said this Council voted to start the working waterfront project, he strongly urged Council to approve option number two, allowing the City Manager to see if he can get a lower price. Mayor Gillmor asked everyone to recall the amount of time spent on the Main Street project which has been a wonderful, but said it is hard to pay more money than what it appraises for. MOTION by Mayor Gillmor and SECOND by Ms. Coy to approve chart number two, bringing this back to the City Manager to negotiate at $571,000 which will still brings the City in under budget. Mr. Wolff said when the City Manager started off he mentioned the collaboration with Fisherman's Landing, to which Council had sent a letter of support to FCT for their grant application but we were not privy to the application. He asked the City Manager for details on the collaboration between the City and Fisherman's Landing. The City Manager explained at the time that Council submitted a supporting resolution, Fisherman's Landing was not prepared /willing to share and after the grants closed up, we received a copy of the grant. He said their grant estimated a $2 M purchase for Dabrowski and their goals matched the "A" purpose of the grant which was to invest and rebuild a working waterfront with piers, docks, kiosks, fishing house. He explained Fisherman's Landing pays expenses to the Dabrowski trust now, they want to purchase that ground and invest back what they pay now. He said the "B" portion was to be the ancillary items to include restaurants, museums and as the City got more into it, the City found some things couldn't be as business enterprising as we wanted, so the Committee decided to buy the property. Mr. Wolff asked what investments or securities Fisherman's Landing might have. The City Manager said he knows of the investments they put into the dock and the expenses they pay now. Mr. Wolff asked if Fisherman's Landing, Inc. would be the sole recipient of the lease or will it be an RFP process that is open to others. The City Manager explained that the City should lease it with Fisherman's Landing because as the Committee was working on Hurricane Harbor and Sebastian Entertainment's business plan, the Committee decided to obtain a RFP for a fish market, an ice depot, and eco tours. The City only received one proposal but the feedback was that the fisherman weren't interested in filling out paperwork that doesn't have working waterfront next to it. He said the use of the property without the Dabrowski purchase is in limbo but without the security of knowing there will be an actual waterfront, the City lost the fishermen's interest. 3 Community Redevelopment Agency Meeting March 10, 2010 Page Four 6:15 pm Mr. Wolff said he wanted to understand the statement that they had said they were not interested in it if the Dabrowski property was not included so he contacted the City Clerk to find it in minutes of the public meetings that it came from but they could not find any. Mr. Wolff asked the City Manager if he buys into the concept of single property leased to Fisherman's Landing. The City Manager said he didn't foresee a unity of title but a lease over two parcels that depict what Fisherman's Landing is to do at the Dabrowski parcel and they will take charge of the Hurricane Harbor building, in exchange for the price of a lease. The City Manager said he sees a lease over the two parcels and in exchange for what we want them to do. The City needs to be extremely reasonable with the lease price to make sure the fishermen are investing back into the property. Mr. Wolff asked how that reconciles with other business owners in the district that have similar businesses. The City Manager said the FCT rules benefit the businesses that support commercial fisherman such as packing houses, retail fish market, museums so we will try not to compete with the businesses on Indian River Drive. Mr. Wolff said the trustee has an appraisal for $1.5 M and he asked if the City Manager saw the appraisal. The City Manager said that is what the trustee represented to us, and the FCT did an appraisal of $500,465. Mr. Wolff said it has been his experience that if you can't see the appraisal, there is a good chance it is non existent, and asked why we would purchase above the appraised amount in the worst real estate market in history. The City Manager said this is a classic example of why government can't get good deal when they purchase property because of the sunshine law, Dabrowski had in his mind that his property was worth $2 M which carried over to Fisherman's Landing opinion and they agreed even though the market was declining, and as the City moved forward, we leaned on appraised value numbers where there was $1M gap and at every turn they used our documentation to keep the offer high. He continued to say that the perceived values, and our planning for it brings us to where we are at today and this is where we ask is the intrinsic value worth the extra $250,000 and he didn't want to give his opinion because it compromises what he goes back to the state with. Mr. Wolff said we have been working on word of mouth, we have nothing in writing and it makes the decision difficult. He said he did some research and cited an article dated Sept. 2008 regarding the Archie Smith House and comments from County Environmental Chief Roland DeBois who was interested in using Stan Mayfield Grant Program to teach others about Florida's commercial fishing heritage. He said he put that out there because this began in 2006 and he hoped Council could draw some conclusions from this. 4 Community Redevelopment Agency Meeting March 10, 2010 Page Five 6:28 pm Mr. Hill said we are not going to be able to finish this and it would be in the best interest of all if we table this until we can put an entire meeting together, this is a critically important issue for the City of Sebastian, there are a lot of numbers being thrown around and we need to dissect those numbers to see if they are fair. He said the City of Sebastian has no intention of offering $750,000 for anything, rather we are considering a much smaller amount to help the state purchase it. Mr. Hill said again he thought we should table this and have a CRA meeting in the future that is completely devoted to this subject. Ms. Coy said she agreed but she didn't want to end the meeting with a negative taste in people's mouth. She pointed out that as a member of the County's Land Acquisition Committee, she did encourage the County to buy the Archie Smith parcel along with an attached parcel, but Archie Smith doesn't have a channel to get the boats in and out of. She said it could replicate a working waterfront but could never be a working waterfront. Mr. Wright said he thought it would be a wonderful project; the City has spent 10 years coming up with visions for the waterfront. He also said the Archie Smith project was never managed by the City or fishermen so it's quite different, and suggested another hour to dedicate time and effort to it, or could go along with the counter offer, which in his opinion would be rejected. Mayor Gillmor thanked everyone for their comments, said he wanted to bring this to some resolution tonight because it is difficult to negotiate in the sunshine, but the motion is to negotiate and if it fails, we may get another number from the Trust. He said he appreciated Mr. Hill's idea to table but we do have a motion and second on the floor and called the question. Ms. Coy said she was not done even though she seconded and wanted to discuss further. Mr. Wolff asked if there was a sounding made for the water's depth. The City Manager said it is functional now so he thought it was deep enough for boats to get in and out. Ms. Coy said she would like to discuss this matter further before voting. She asked the City Attorney if they could pick up exactly where they left off if they continued the meeting. Mayor Gillmor asked the City Attorney if they could pick up this meeting where we left it off and the motion would still be on the table. The City Attorney said they could but so far there was no second to the motion to table. The City Clerk noted there had not been a motion to table and Mr. Hill said he made that motion. Ms. Coy seconded the motion to table. The City Attorney advised that a motion to table takes precedence over the Mayor's motion. 5 Community Redevelopment Agency Meeting March 10, 2010 Page Six Approved at the March 24, 2010 CRA meeting. *as amended to include language underlined on page 5. Rich ATTEST: Result of the roll call on the motion to table: AYES: Gillmor, Hill, Coy, Wolff, Wright NAYS: None Motion carried. 7. Being no further business, Mayor Gillmor adjourned the CRA meeting at 6:38 p.m. H. Gillmor, Mayor ,)/n Sally A. Maio, MC City Clerk 6 Submitted by John Conway, Chairman Working Waterfront Committee to CRA at 3 -10 -2010 meeting Stan Mayfield Working Waterfront Grant The decision before the CRA Council this evening To determine if the intrinsic value of Sebastian's Working Waterfront Project warrants the purchase of the Dabrowski property for an amount that may exceed the current appraised value. Background: The Stan Mayfield Working Waterfront Grant was established to: Assist coastal communities in the preservation of their traditional working waterfronts with the acquisition of properties to be used for the commercial harvest of marine organisms, by state licensed commercial fisherman to promote and educate the public about the cultural and historic heritage of Florida's traditional working waterfronts The City of Sebastian and Fisherman's Landing Sebastian, Inc initially pursued the grant as a collaborative effort to purchase three properties on Indian River Drive, Sebastian Entertainment Center, Hurricane Harbor Dabrowski Ocean Marine The City of Sebastian was awarded $3,163,500 from the SMWW Grant on April 14, 2009. Hurricane Harbor is under contract 1) Fisherman's Landing did not receive grant funding due to a not for profit technicality 2) Sebastian Entertainment Center rejected the State of Florida's offer As the Working Waterfront Committee researched the project, the committee realized the importance of the Dabrowski property to the overall success of the waterfront operation and due to the two events stated above, recommended moving the boundaries of the grant that was awarded to the City to include the Dabrowski property. On Oct 8, 2009 City Council agreed. The anticipated new cost to the City as outlined by staff at the time was $600,000 for the Dabrowski property. Appraised Value At the time of the initial grant application by Fisherman's Landing in Nov 2008, the Dabrowski property had an "estimated" value of $2M, then by mid 2009 to have a value of $1.5M. The state recently (2010) requested and received two appraisals for the Dabrowski property, and set the state funded purchase price at $500,000. Committee Findings Meeting throughout the year the committee has visited a commercial fishing operation, discussed the needs of the industry, the transient nature of commercial fisherman to go where the fish are, the seasonal nature of the business and the basic infrastructure requirements. The Sebastian Working Waterfront will fill the recognized need to conveniently unload their catch of the day, have the availability of ice for packing, the wholesale operation onsite and the storage of equipment. This infrastructure has costs associated with it and the fishermen are willing to pay for it. Many ideas have been discussed and researched for the Hurricane Harbor property as the location for educational and civic events. The space requirement for the adjacent commercial fishing operation have also been considered, two examples would be the need for a cold storage facility and a possible retail fish market with some prepared foods. We eventually recognized that the properties could not be viewed as separate entities, with separate leases with the city. The city should lease the combined property to a single business management company. This company would then adhere to the requirements of the grant. We have also found that Department of Agriculture is very supportive of the project, along with many of the local fisherman, wholesale distribution companies and tour operators. There has however been hesitation by potential investors /business's to commit due to the uncertainty of the Dabrowski property. Without a commercial fishing dock there is no working waterfront. Proiect Summary as defined in the City of Sebastian Grant Application to rejuvenate the commercial fishing industry in Sebastian provide a destination for waterfront and fishing enthusiasts to educate the public about the commercial fishing heritage of Sebastian exhibitions demonstrations educational venues civic events create a destination for promoting Florida's primary and historic industry fishing matching funds CRA generate new tax bases bolster the local economy increase retail, food, beverage, hotel sales create job's Today's economic conditions have caused the value of these properties to decline, the SMWW may never be funded again and the momentum is there today to make the project successful Committee Recommendation Proceed with the working waterfront project and negotiate the best deal possible to close on the Dabrowski property Thank you in advance for considering our recommendation The City of Sebastian Working Waterfront Committee