Agenda Special 10-07-02CITY OF DELRAY BEACH, FLORIDA
CITY COMMISSION SPECIAL MEETING
MONDAY, OCTOBER 7, 2002 - 8:00 A.M
CITY COMMISSION CHAMBERS
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opportunity to participate in and enjoy the benefits of a service, program or activity conducted by
the City. Contact Doug Randolph at 243-7127, 24 hours prior to the event in order for the City
to accommodate your request. Adaptive listening devices are available for meetings in the
Commission Chambers.
SPECIAL MEETING AGENDA
Pursuant to Section 3.12 of the Charter of the City of Delray Beach, Mayor David W. Schmidt
has instructed me to announce a Special Meeting of the City Commission to be held for the
following purposes:
1. GRANT REQUEST/ATLANTIC GROVE REDEVELOPMENT PROJECT:
Consider a request for waiver of building permit fees in the amount of $150,000.00 from
the Delray Community Development Corporation (CDC) and the Center for Technology,
Enterprise and Development, Inc. (TED Center) regarding the Atlantic Grove
Redevelopment Project.
2. COMMISSION COMMENTS
Barbara Garito
City Clerk
POSTED ON: OCTOBER 3, 2002
Please be advised that if a person decides to appeal any decision made by the City Commission
with respect to any matter considered at this meeting, such person will need to ensure that a
verbatim record includes the testimony and evidence upon which the appeal is based. The City
neither provides nor prepares such record.
Merrlo
To.'
Re:
David Harden. City Manager .,/~
Lula Butler, Director, Community Improvement
October 4, 2002
Grant Request/Atlantic Grove Redevelopment Project
ITEM BEFORE THE COMMISSION:
Consideration of the request for a grant in the amount of $150,000 from the Delray
Community Development Corporation (Delray CDC) and the Center for Technology,
Enterprise and Development, Inc. (TED Center), non-profit partners in the Atlantic Grove
Project. The grant will be used to fund the balance required to maintain a 50% equity
partnership position, as well as provide them with the balance of the cash the non-profit
partners need for the property acquisition closing scheduled for October 8.
BACKGROUND:
The initial request for a grant contribution was considered by the Commission at the regular
meeting of October 1. Staff recommended a waiver of 75% of the assessed building permit
fees, not to exceed $150,000, in lieu of a cash grant, since we could not identify a source of
funds at this time. The City Manager, however, recommended denial of the request. The
Commission had a number of questions that were not adequately resolved at Tuesday's
meeting. Most of their questions centered on whether the City should waive building permit
fees, clarification of the non-profits equity position and benefits to the City; clarification of the
County Commission's requirement on City participation pursuant to their $600,000 grant
award. Additionally, staff stated that there may be conditions in the Partnership Agreement
that may impact grant awards or permit fee waivers and consideration should be given to a
formal agreement that will govern any conditions the City may wish to propose if dollars are
granted.
The City Commission agreed to hold a special meeting on Monday, October 7, 8:00am to
continue their discussion and consideration of th~s request. Since then we have learned the
following:
The non-profit partners must provide a total of $835,127 to maintain a 50% equity position in
the Atlantic Grove Partnership, (Atlantic Grove Sources & Uses of Cash, "Schedule A").
Predevelopment costs incurred to date are credited towards the equity investment. Attached
for your reference is a copy of the summary of expenditures the partnership has incurred
through September, documenting a total $336,352.44. Fifty percent of this total is credited to
the non-profit partners. According to the information I received, most of the pre-development
expenses paid by the non-profits were made from a loan obtained from LISC, Inc.
The non-profits anticipate a gross profit of $750,000 to $1.5 million dollars with a 50% equity
position. These dollars could benefit the municipality through reinvestments in other projects.
LISC, Inc. will be providing the additional cash needed for the October 8 closing by increasing
the loan amount. All of the monies loaned from this agency (inclusive of the predevelopment
loan) are required to be repaid by TED Center and Delray CDC. Included as one of the
attachments to this transmittal memorandum is a letter from Remar Harvin, Director of
Housing and Community Development for Palm Beach County, clarifying the County
Commission's $600,000 grant award to the non-profits with respect to participation from the
City. Based on his letter, the City has flexibility in determining the amount of assistance it
wishes to give. Any amount of dollars contributed by the City will affect the net profit and
funds the non-profits will have in the future to reinvest into the community.
Staff believes there are a few options the City Commission could consider to assist the non-
profits in maintaining a 50% equity partnership position in the Atlantic Grove project. They
are:
(1) Waive 75% of the assessed building permit fees not to exceed $150,000 with no
repayment requirement.
(2) Provide a repayable grant in the amount of $150,000 of general revenue dollars to the
non-profit partners triggering repayment from equity earnings, or
(3)
Direct staff to repriodtize CDBG activities to allow a $50,000 economic development
grant to the non-profits. We will need to enter into the appropriate agreement that meet
the requirements of Section 570.503 of Title 24 of the Code of Federal Regulations.
Additionally, both non-profits should be required to make a $25,000 investment in
support of the Southwest Neighborhood Plan. The time allowed for the investment
should be consistent with the time allowed for job creations under their agreement with
Palm Beach County.
The City Attorney will comment separately on her review and interpretation of the partnership
agreement.
RECOMMENDATION:
Staff is recommending C~ty Commission approval of "option #3, providing for a $50,000
CDBG grant under the eligible activity of Special Economic Activities, and direct the staff to
develop the required agreement for approval prior to disbursements of the grant.
· Page 2
10/02/2002 14:53 561-233-3651 HOUS & CONN DEV PAC.~ 02/02
Development
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Perm Beach Couftty
Board of County
Warren H Newell, Chairman
Carol A Roberts, Vice Chmr
l~ren T. M~cus
Mary McCarty
Bur~ A~ron$on
Tony MasflottJ
Addle L Greene
County Adminis~Cor
Robert W~mman
Oc ober 2, 2002
Lula Butler, C. I. Director
of Dclray Beach
fi~t Avenue
Beach, Florida 33444
Atlantic Grove Project
Ms. Butler:
be advised that Palm Beach County Board of Commssioners (BCC) on
October 1, 2002, approved a Community Development Block Grant
economic development grant in the amount of $600,000 for the Atlantic
project. These funds are to be utilized in the acquisition of that portion of
project site which contains the commercial buildings.
Beach County Housing and Community Development's (HCD) Economic
gram's criteria normally calls for a match from the local
jurisdiction where the County's CDBG funds are to be utilized.
criteria calls for a "one-to-one" match of local final assistance. Because our
to this project is $600,000, the match from the City of Dekay Beach
normally be at least $600,000.
:ause of the delays associated with the City's CDBO Section 108 Loan
for this project, Palm Beach County is sympathetic to your current
to immediately provide the normally required match. It is for this reason,
County's BCC waived our program's match requirement in awarding our CDBG
tins project. Palm Beach County, however, is requesting that the City of
continue its efforts to assist in the development of the "Atlantic Grove"
eot with any and all contributions that are deemed appropriate by your city
These contributions may be in-cash, in-kind or both. It is hoped,
that the total value of such contributions will be in an amount that reflects
spirit and vision of HCD's Economic Development Program's criteria.
contact me directly at (561) 233-3602, if I can provide additional
of these matters.
Director
,using and Community Development
Verdenia C, Baker, Deputy County Administrator
Tammy K. Fields, Assistant County Attorney
Am.in Houry, Housing & Rehab Manager, HCD
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