06-19-89 Special
[ITV DF DElAAV BEA[H
00 N.W. 1st AVENUE
DELRAY BEACH, F_ORID..\ 33..+44
-+07:?43-7000
Please be advised that if a person or persons decides to appeal any
decision made by the City Commission with respect to any matter con-
sidered at this meeting or hearing, such persons will need a record of
these proceedings, and for this purpose such persons may need to ensure
that a verbatim record of the proceedings is made, which record includes
the testimony and evidence upon which the appeal is to be based. The
City does not provide or prepare such record.
SPECIAL MEETING
OF
DELRAY BEACH CITY COMMISSION
Pursuant to Section 3.07 of the City Charter of the City of Delray
Beach, Florida, Mayor Doak S. Campbell has instructed me to advise you
of a Special Meeting of the Commission to be held in the Commission
Chambers at 5:15 P.M., Monday, June 19, 1989.
This meeting has been called for the purpose of considering:
(1) Purchase of Adult Bookstore Property.
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City' lerk
City of Delray Beach
T,.- E;;-'jPT ALWAY'; MATTERS
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[IT' DF DELRAY BEA[H
100 N.W. 1st AVENUE
DE LRA Y BEACH, F LOR I DA 33444
407/243-7000
MEMORANDUM
TO: Mayor and City Commission
FROM: City Manager
SUBJECT: ADULT BOOKSTORE PROPERTY PURCHASE
DATE: June 16, 1989
Attached
options
Highway.
loan of an
property.
is correspondence from the City Attorney regarding funding
for purchase of the bookstore property on North Federal
We have contacted MidLantic Bank and they have agreed to a
additional $240,000 for purposes of acquiring the bookstore
With this commitment from MidLantic Bank, staff's recommendation is
that option ~2 be selected and either the CRA offices or the City
Attorney's office be located in that property. I spoke with Ri~
Miller of Mudge Rose regarding the property's use for governmental
purposes. Mudge Rose's position is that the City must intend to use
the acquisition for governmental purposes (such as the CRA or the City
Attorney's office) and intend to locate those offices in place for an
indeterminate amount of time. On the other hand if circumstances were
to change, there is no covenant which would preclude sale of the
property itself. For example if the CRA were to occupy the facility
and, as a result of CRA efforts, that parcel became part of a
redevelopment effort along North Federal Highway, then the property
could be sold and not be in violation of the intent to use the facility
for governmental purposes. Similarly if the City Attorney's office
were located there and the property became part of a redevelopment
effort, the use could legally change. What would be precluded is for
the City to put up a "for sale" sign immediately in front of the store
without regard to it's otherwise legal governmental uses.
At this point it is unlikely that the City Attorney's offices will move
back into City Hall any time in the near future. Similarly the Chamber
of Commerce has need for the space presently leased by the CRA and, as
North Federal Highway is part of the redevelopment plan for the CRA,
location there would be appropriate as well.
I recommend purchase of the bookstore be facilitated through additional
funding through a new bank note to be placed with MidLantic Bank in the
amount of $240,000.
WOB:nr
Encl
THE EFFORT ALWAYS MATTERS
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[ITY DF DElRAY BEA[H
CITY ATTORNEY'S OFFICE
310 S.E. 1st STREET, SUITE 4 DELRAY BEACH, FLORIDA 33483
407/243.7090 TELECOPJER 407/2784755
MEMORANDUM
Date: June l4, 1989
To: City Commission
From: Herbert W.A. Thiele, City Attorney
SUbject: Fundinq the Adult Bookstore Property Purchase
This memorandum is
sources of funding
property.
to provide you additional information on
for the closing on the adult bookstore
The closing on our bond .notes, in the amount of 4.3 million
dollars was held on Wednesday, June 14, 1989. In anticipation
of future changes, we have provided languag.e in the document
and notes that additional projects may be added, sUbject to
approval of bond counsel and approval by the City Commission.
Therefore, in addition to ordinary budget procedures for use of
contingency funds, which informa.tion can be obtained from the
City Administration, there are three options for the funding of
the bookstore property acquisition which are presented below
for your consideration:
1. The City Commission may, by adopting a resolution on
Monday, ,Tune 19, 1989 at the Special Meeting of the
City Commission, add the bookstore property acquisi-
tion to the list of projects covered by the 4.3
million dollar bond note, subject to bond counsel's
approval. Bond counsel has indicated that the City
must then use the property for a governmental use,
such as governmental offices, for a non-determinative
length of time. The bond note contingency of
$190,000.00 and interest earnings of $60,000.00 would
be used to fund this purchase (or some combination
thereof). We will have this resolution prepared and
ready for your use in anticipation of your considera-
tion of this option.
2 . The funding f or the bookstore property acquisition
can also be accomplished by providing for a new note,
which includes this property for the purchase amount;
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which, if approved by MidLantic Bank, could be
accomplished without going out for RFP's, on the same
terms, or perhaps, depending on market conditions, at
a lesser rate. This option also requires the decla-
ration of the City Commission's intent to use the
property for a governmental use for a non-determina-
tive length of time, and requires we go through a new
bond note procedure and closing with MidLantic.
3. The least restrictive method as to the use of the
property, would entail using the General Fund as a
source of funding. This option does not restrain the
City Commission from selling the property whenever we
desire and to recoup the funds. The interest earn-
ings from the bond note are unencumbered, and, thus,
once earned flow to the General Fund. This would,
while not specifically tied to this individual
project, replenish the General Fund. The only caveat
which applies is that only 10% of the entire bond
note proceeds plus interest earnings may be used for
non-governmental (private activity) items within the
meaning of the Internal Revenue Code. For example,
let us assume the bookstore property was re-sold for
say $200,000.00, for a $50,000.00 loss. This loss,
along with other private activity uses, should not
exceed the lQ,!S limitation. Moreover, the interest
earnings flowing into the General Fund should cover
the $50,000.00 loss.
The attached letter from Mudge, Rose, Guthrie, Alexander and
Ferdon, indicates that options one and two can only occur if
t.he City declares an intent to use the property for governmen-
tal offices or other governmental use. Option three does not
restrict the City's use and would permit the City to sell the
property at any time, such as when the non-conforming use has
lapsed. All three of the options must meet the lO% test.
Please do not hesitate to call me should you desire further
information on these suggestions.
HT: lc gt:'
cc: Walter O. Barry, City Manager
David M. Huddleston, Finance Director
Richard Miller, Esq., Mudge, Rose, Guthrie, Alexander and
Ferdon
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RICH"'~O J, MILLeA'
"M\TNC"
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BUITe. .tO~O
:In SOUTH ORAND ""V'
1.0. ANOI:I.Ca,CAI..I'.1
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'JELECO,.I(;RI 0407- 83.]-1722
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June 15, 1989
Herbert W.A. Thiele, Esq.
City Attorney
City Attorney's Office
310 S.E. 1st Street, Suite 4
Delray Beach, Florida 33483
Re: Bookstore Purchase
Dear Herb:
Pursuant to our conversations with you and YOUr staff,
attached hereto please find a copy of a resolution authorizing
the acq\.q.si tion of the""e above-referenced parcel of real property
(the "ProJ",ct" ) i.n lieu of the contingencies provided for the
projects (the "Note Projects") authorized in City Resolution No.
32-89 (the "Note Resolution"). In this regard, we believe that
if the Project is acqUired to be used, on an indefinite basis, as
governmental office space or for other governmental purposes,
that the acqUisition of the Proje"ct as a Note Project is
permitted. Furthermore, if the City intends to pursue this
course of action, We are prepared to deliver the opinion of Bond
Counsel required by Section 1.2.A. of the Note Resolution.
If the City wishes to use general funds or other moneys
on hand at this time for the acquisition of the PrOject for the
aforesaid governmental purposes, and finance the acquisition at a
later time by means of tax-exempt obligations (such as an
addi tional note to MidLantic in a transaction substantially the
same as that accomplished yesterday), then an indication of such
intent must be made by the City Commission prior to the purchase.
However, if the City intends to acquire the Project for
resale or for some other "non-governmetnal" purpose under the
Internal Revenue Code, then the City may want to consider funding
the acquisition of the Project directly from available moneys in
the Oi ty' S General Fund. " . _ .
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TEL NO:4e7-S33-1722
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If we may be of any further assistance in this regard,
please do not hesitate to contact this office.
Best regards,
RJM:rg
SA YOU~
R1chard ~llel'
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::eSOLUTION NO. _-89
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'tA RESOLF'l'ION OF Tl; CI'l'Y COMMISSION or '1'HE CITY OF DEU A'i
~:BEACH, FLORIDA AU'l iORIZING THE ACQUISITION OF CERTAIN It"AI,
PROl?EHTY 'l'O BE UTI IZEO AS MUNICIPAL OFFICE SPACE AND <m E:R
GOVERNM!::NTAL PURJ)SES; AU'l'HORIZING 11. SUBSTI'rUTI<N cJF
'PROJECTS rINANCED ;Y THE CITY'S $4,300,000 AGGREGATE .JRN-
CIPAL A}'iClUN'r 01" U'l:LITIES 'rAX REVENUE NOTES, SUBORDrn,rE
SERIES 1969 TO ACC :fi'J-tl:SH SUCH ACQUISITION; AUTHoIUZING 'j HE
PROPER ('l'l'ICERS 01' TIlE CITY '1'0 DO ALL O'lHER THDIGS Olilll, W
NECESSAJ1'l OR ADVISBLE IN CONNECTION WJTH SUCH ACQUISI'1') )N
AND SUBDIVISION; 1\ 0 PHOVUIING FOR AN Eli'FECTIVE OAT;;.
1'IHEnnAS, the~ity Commission of the City of oeln\, Beach,
Florida (t.ho" "City C( mission") has det""'mined that tLJlity of
Delray 13"'<-1011, nod,da ( 'Ie "City") is in naG'., of acquiring ,ld, itional
I:'
office EJpc,ce t " accoP\O, Ite the growing d8m',nd fOr gO'/Qrnn: ..n' ~l ser-
vices; elncl
In:IERrAS, the ity CommIssion has been adviced tii,H a cer-
tain parcel of real pre )e'rty, as more fully clescrib.;;d in f: ,libit A
attached hernto (the III 'ojeot") haG becomn iwailable for a:'.J isition
by the City Clnd the cit, han agreed to purr:hase the same, . nd
WU1~!\EAS, the 'Hy has prey iously issued, pursuar.I;:.o City
Resolution Nw. 32-89 ac )?ted by the city Commission on Jun( 11 I 1989
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(the "NotE: R':i>:101ution''), its $4,300,000 aggregate pr l'ncipal .:,n, !unt of
City of Delr.1Y Beach Florida, utilit.ies Ta)( Rayen,16 Notes
Subordin.'lte flel:ies 1989 (tho "Notes") to fJ,nanoe cer cain p.)jeots
(the "Note P.1'oj ects") d, ';cribed in such !lote Resol ut Lon; ell 1
1'i1IEfU':.l\S, the N te Resolution provides that Ci ':y mal . ubsti-
tute a Not,.'! FJ:oject, pre ;ided that Bond Co\tnsel (as defin.ct in the
Note Resol:lt;i nn) shall. 'rst deliver to the City an opini, n ;0 the
effect tha:: "\)ch SUbstib:ion will not adYf.',rsOly affect the. :'f'. lusion
of interes:~ I);) the Note" from gross inc01l18 for Federal il1 x :e tax
purposes i <'In')
HHE"Ei\S, the C 'I:Y Commission has determined that '1, is in
the best i I)tn lie 'It of the ;J ty to acgl~ire th';l proj ect as oxpec:, .ouely
as possiblo; ~nd
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Res. Nt, _-89
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',l;.j!;"f~."..il~.'. WIl1m,:~AS, the city Commission b~lieves' it is in the best
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;;l;(j,~erest oj' the City to, acquire the projoct with ,;joneys now
J~,~i",Jt1N ',}':~
iq' deBign~ter.:1 Jar contingenci~s provided fo~' '~he Note Proj.:lcts autho-
_1:iJF :\r'~!, .t'
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.' ,,-1- rized in thf, Note Resolution,
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1'1.""' HOl': 'i1mREFORE, be it resolved by the City Commis.;ion of the
11,;W:':!;',:
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. ji1' city of D'~h-",y Beach, Florida I as follows:
"l~~l''?"'!'''"'', ,i'~',
I "I~l"'~~'~~, SE~;nON 1. Authority for this Ilnilolution. 'l'his
Itl'~eaolutJ.Oll JO adopted jJurSllant to the pro\' isions of the Charter of
:"jif}" {:I"I( .":
I ':'{li~.f~e'~City of D<nray' Beac;h, Florida, as amo!1Jed and llUpp1euented, the
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I;,. '. !'i~;~~~ttqtlda Cons:;j tution, Chapter 166, Florid", statutes, I.\r.l (mended and
I ~1:"\~'~,\:f;
i "'t'r ";"',:B:.emcnl-,Cti" and other applicable provisions of la".
I '!!it.., S~C'rION 2. Fi.ndlnga. It is heroby aSO:rbin"d, deter-
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i tt:~j'!> .n!d;'and de<::lared:
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That the CLty is in need of acrJulring additional munlc-
"'the groldng .:lelnand for <.IoV('rnmental serv 1C')5.
..,ipal office ,1pace for ii:s l:,Se and that of ita agenCief; to ,tCcomOdate
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B. That the city Commission has agreed to pUr~hase the
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;real property comprisin0 the Project.
C. 'l'bat it is in the best intere~;ts of the ctty l.o acquire
the project nn expediti,uo1y as possible,
J), 'I'l1at is in thE best interest r~f the Cit,y t,) add the
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Note Resolut,.; on in lieu oj' (,xi,sting continr)encles providh:{ for the
acquisitio:l cf the Project, ,:0 tJJS Note Projects authorized under the
Note project"" ''numarateci in the Note Resol\!tion.
The acqub;i t ion of the Pro j ect as a Note lJroj ect undel: che Note
SECTION 3. Aut;l\r)I:'Lzation of Proj'~ct as Note PJ:\iject.
Resolution i,:. hereby autJ1.Jriled subject to th., receipt by the City of
'an opinion DC Dond Couns21 to the effect that such action will not
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adversely i1ff'"ct the excLusion of interest on the Notes fLom gross
income for FedHral income tax purposes.
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ReG. No. _-89
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SEC' ,ON 4. Use of Note Proceedo. Upon receipt of the
opinion 01' Dr" i Counsel as described in Sect,tun 3 above, a portion of
'the pro~ccds from the Notes may be used to acquire the Projeot.
,;EC'l'JON 5. Additional AuthorizaL'on. The Mayor, the
ci ty Marw( 1', the 1"1 n.~lnCC Director and any '\ther proper official of
the Cit:, )"'-' tnd e('lch of them is hereby ar'\llorized and directed to
execute .~ncJ :.lcoliver any ancl all documents ""d instruments and to do
and cart> ,', ~:,., b,~ done ,~ny nnd all acts and til' ngs necessary or proper
for carl ',',: 11"1 e,ut the transactions contemplCl.:ed by this Resolution.
one or t""iO ,)f the P~'()visj,ons of this ResoII;:. J on should be held con-
n,CnON 6. Sev€ll:ubility of Invali 1 Provisions. I f any
tr<\l:'y to {'n',' expref's provision of law or e'J:,trary to the pOlicy of
express l~w, through not expressly prohlb~~lng or against PUblio
policy, 'r :'::'<:\]1 for anyrC(H'On whatsoever b' [laId invalid, then such
provisirn,: ':hall be null IJnn void and shull "e deemed separate from
the rem,,: J: :.1<1 provisions, Cdld shall in no wui' l\ffect the validity of
any of Uw ();;b'~r pt'ov.i.sions'of this ResoluU'Jn.
pArts tl1-1'.,'),;" in conn ict herewith are/ to .: he extent of auch con-
flict, br'l'Jby c"epea1e.cl, anr~ 't.his Resolution ,;ball take effect upon
,'ik",'I')N 7. H"'pEl~lnr. All resol:,l'::ions and orders, or
,
its pass ,',JO j L the manner I?l;oV ided by law.
!iEC'l':C?N 8. Effecti.ve date. This ,esolution shall be
effectiv0 imrn~lintelY upon its adoption.
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Res. No. _-89
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1'<'15: '.1<1 and adopted in special asslOion on this 19th day of '
June, 198:'.
Mayor
..... Attest:
City C1erL
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Res. No.
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EXHIBIT A
.he East 80 feet, De1ray Elea':h Estates, acoording to
:of r.ecorded in Plat Book 21. page 13, of the PUblio"
.rn Beach County, I1orida. ;. r
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_b [? ~. ~',.l Al~l ;\'; I clo ~let ~by c;~
, l, ,) of : ii,. City )f Delra}
,ify that I am the duly
>,aach, Palm Beach Co\mty,.
~1?1: G( ,-t: i l' th('t l.ho abov,) md foregoing constitutes',
....'ct c( py cf th" mjnute!; or. , Special Meeting of the:,
n of sr 10 Ci',y l:e1d on Jl:ne 1 , 1989/ and Of a resOlu~,;:,;"
t: sa Ld 51=(<(;1, l. Hoet '.n'] , <1S1/', d minutes andresolutiol),oj
(f re.cor:l i', my p'. S!,'~sl;ic.l. I.'.
Tl E~:::; l'1lf. :Ill;('" h,ve hnr,,'" 0 subscribed my official
.~ .np:-e'1G€d }1' ,:e1In ;.he oEf;" :\1 seal of the City at
:\J S 19t.h dt,y of Junl, H 89.
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Jay Slavin:
I'm Jay Slavin and I live in Rainberry Bay. I would like
to speak to the Commission before you vote. Commission
McCarty, you have taken the lead in convincing the
Commission to purchase the book store. And also the
owner of the Volvo Dealership has taken a leadership role
in convincing the Commission and some of the public to
purchase this book store. We have learned recently that
you, Commissioner and your husband, Mr. McCarty, have
purchased a volvo at an exceptionally good deal. A deal
which no one else could possibly buy. Is this true?
Mayor Campbell: I don't think that you can ask a Commissioner - just
make a statement.
Jay Slavin:
Your Honor, would you ask if that is true. Because if
its true, I think, I know that Commissioner McCarty
should step down from the vote on the book store. It
will be perceived by the taxpayers, and it is, and it has
been when she very courageously brought it up about other
people on the Commission when it was perceived that it
might be improper or a conflict of interest that that
person step down and not vote. And I do think that
Commissioner McCarty should not vote on the money for
this bookstore. Thank you.
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