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06-05-89SpMtg JUNE 5, 1989 A Special Meeting of the City Commission of the City of Delray Beach, Florida, was called to order by Mayor Doak S. Campbell in the Commission Chambers at City Hall at 5:18 P.M., Monday, June 5, 1989. Roll call showed: Present - Commissioner William Andrews Commissioner Patricia Brainerd Commissioner Mary McCarty (Arrived 5:20 P.M.) Commissioner Jimmy Weatherspoon Mayor Doak S. Campbell Absent - None Also present were - City Manager Walter O. Barry and City Attorney Herbert W.A. Thiele. Mayor Campbell called the meeting to order and announced that this meeting has been called for (1) Approval of renewal of site plan for The Landings; (2) Further Discussion on Adult Book Store; and (3) Further Discussion on Lavers. 1. Mayor Campbell stated that due to a time constraint and, in order to avoid a hardship for the transfer, there is a request to extend or modify the site plan for The Landings. Mr. Kovacs, P&Z Director, has recommended removing the original condition of a time period, rather than allowing an extension or waiver. Upon question, Mr. Kovacs stated the same result would not be accomplished if another 18 months were added onto the original date. There is a process required to allow an extension and rules and proce- dures would be waived by doing that. It is not necessary, because the original conditio~ was not necessary. He also stated this is for a modification. The original site plan is already vested and in 1985 a modification was made. There was no need to put a time frame on that modification, but one was placed on it. Mr. Weatherspoon moved to amend the former site plan modifica- tion approval to remove any time limitations, seconded by Ms. Brainerd. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Ms. McCarty - Yes; Mr. Weatherspoon - Yes; Mayor Camp- bell - Yes. Said motion passed with a 5 to 0 vote. Before roll call the following discussion was had: Mr. Weatherspoon questioned if there are any conflicting changes with the current code. Mr. Kovacs stated the existing road and wall do not meet the current standards relative to landscaping and, if time allowed to critique the plan in detail, there are possibly many more small items. Because of this, he feels it is easier to remove the condition thereby eliminating that factor. The City Manager stated that as far as the overall development with regard to life and safety codes, there have been significant changes. Mr. Kovacs advised that items concerning construction standards, life and safety will all be brought up to code. At this point the roll was called to the motion. 2. Mayor Campbell stated the Commissioners received a memo from the City Attorney and he requested a summarization at this time. The City Attorney stated this memo was a reaffirmation and collection of previous memos sent earlier concerning the Book Store property. It sets forth the fact that, provided that the Commission has found the necessary public purposes for the expenditure of the funds for those reasons stated earlier, that there is no problem with the expendi- ture. The Commission had specifically requested that the issue be addressed as to whether or not an adult entertainment establishment of this nature could be relocated elsewhere. To the best of his knowledge, it cannot be renewed at the present location if the grandfathering of the establishment is allowed to expire. It cannot be relocated within the City's jurisdiction under current ordinances and it attaches some cases that go along the lines of the concerns expressed as to whether or not the City could forever prevent that from occurring if a first amendment challenge was lodged against the ordinances. The City Attorney commented further that he confirmed the contract issue today with the owner's representative who stated that the terms and conditions are acceptable to him, including the payment of an amount of money in a lump sum, as opposed to an extended payment. The representative also informed him that, if the Commission approves of the concept tonight, he would be in his office tomorrow with all the neces- sary documents. Upon question, the City Attorney stated that he, personally, had expressed to the representative some concerns over having terms for the contract due to the fact that the Commission was obligating future Commissions to pay on a note without the necessity of other ratifica- tions. Whether or not it needed to be passed with a formality of a bond was a question that concerned him. In order to alleviate that concern, if the Commission appropriates the expenditure from current dollars, he doesn't need to address that. Mayor Campbell suggested a clause could be entered into the contract and, at the time of closing, the Commission could then make that determination. The City Attorney agreed that could be done, but reminded the Commission that the representative would like the closing to be June 13th. Mayor Campbell questioned if there will be an opportunity to do a title update in that period of time. The City Attorney stated that it is conditioned upon the City getting a commit- ment by that time and, if that does not happen, the City will not close and has the ability to cancel the contract. Mayor Campbell questioned, under the County ordinance, if the City has any idea as to where possible relocations may occur. The City Attorney advised that there would be none in that vicinity, but whether or not they could locate west of Military Trail along the unincorporated area, he did not know. Mayor Campbell stated he would like to see a map indicating the areas under the County ordinance in which this could be relocated. The City Attorney stated there are two methodologies, one of which requires that these uses all be concentrated in one area. How- ever, the County requires the second methodology, requiring that those uses be dispersed across the County, so the Book Store could be located anywhere in the County that is appropriately zoned Commercial. The City Manager stated, while he is not 100% literate on the County ordinance, if it follows the same plan of some surrounding areas, it can be located 1000-1500 feet from residential, school or religious institutions in certain types of Commercial zones. Mayor Campbell expressed a serious concern as to exactly where this Book Store can be relocated, as he does not want it to reappear on West Atlantic Avenue or Dixie Highway. Mayor Campbell stated he is willing to make the purchase, even though he feels it could potentially set a bad precedent. He feels, where the investment and the dollars are concerned and as long as the City is investing, the appraised and significant value of the property can be recouped within one and one-half years so the net cost to the City will probably be less than that of the Georgia Town Tavern. However, he first wants to know about the relocation areas. Upon question, the City Attorney confirmed that there is no broker involved. Mr. Andrews stated he does not understand why this cannot be looked at as an area, as opposed to the entire City. He feels by better redevelopment and the fact that it is next door to Gulfstream, it can bring a lot of revenue to the City in the years to come. Upon question by Mayor Campbell if it is possible to expedite this by having a City ordinance, restricting not only coming under the County, but supplementing the County ordinance to allow this use only in Industrial zones, the City Attorney replied that can be done, assuming there is sufficient land available to do that. The City Manager sug- gested that it might be to the City's advantage to remain under the County's aegis because it would be easier to defend ourselves on a more -2- 6/5/89 area-wide, regional basis. Although there are locations in Palm Beach County where such activity can be located within their ordinance, we are not aware of those specific places. If the City should be required to defend itself with any kind of litigation, it would be better to be defended under the County's ordinance. The City Attorney advised that, as the law currently exists on the books, it would require a successful challenge to the City's methodology of zoning and then it would be necessary to introduce regulatory measures. It is the City's use definition that does not allow this. Upon question, the City Attorney advised that under current County Law, he could not confirm there is no place in the City of Delray Beach that would allow this establishment to relocate, and he would be surprised if it were true. Mayor Campbell questioned if it is possible to determine where the Book Store may be able to relocate. The City Attorney stated it will require an effort on the part of the P&Z staff to analyze the prospective sites that are Commercially zoned. Mayor Campbell requested that someone confirm the statement made over a month ago that "this, under the County ordinance, could not locate anywhere in the City". Mr. Kovacs stated that may have been in the context with regard to County properties that are enclaves or surrounded by the City. Mayor Campbell recommended that the contract be approved with the additional changes, but adding the condition that the City shall review the County ordinance regulating the tenants and the establish- ment. If it is satisfactory to the City that such ordinance shall give the protection it seeks, they can continue or revoke the contract. Mr. Weatherspoon stated he feels there remain many unknowns that have not been addressed and wonders where all the concerned citi- zens are. Upon learning that the City Attorney has not yet seen a copy of the lease, he expressed a concern that the City is rushing into this. He also questioned what defense the City would have, should there be potential litigation. He stated he is definitely opposed to this and, until all of the questions have been answered, he feels there are better ways of handling this. Mayor Campbell stated it is his understanding that the owner of the Book Store has had other offers and, with regard to the timing, may be obligated to move on those higher offers. This creates a certain element of risk. He requested that the City Attorney set the closing for June 15th. Ms. Brainerd stated she also wonders where all the citizens are who have no idea of where this owner may pop up tomorrow. She stated while the Book Store may not be the favorite commercial property, she feels the City is trading an unknown for an unknown, and that is not a wise move. She also feels the City is setting a very dangerous prece- dent, with everyone who appeals at the microphone from now forward wanting the City to expend dollars to solve problems in their neighbor- hood or near their business. She stated she would not buy real estate in her personal or professional life from anyone that refused to show her a lease and she certainly will not vote for it as an elected offi- cial. Mayor Campbell requested the proposed contract be drafted, more in the nature of including a City option at this time and bring it back to the Commission for approval. He also stated he will meet with staff, relook at the City maps and asked for assistance in reviewing the City ordinance. Ms. McCarty moved to approve the contract, with the addition of the condition that the City will have an opportunity to review the County ordinance governing the tenants or the establishment along with the current City zoning codes and that they shall be satisfactory to the Commission prior to closing on the contract, seconded by Mr. Andrews. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - No; Ms. McCarty - Yes; Mr. Weatherspoon - No; Mayor Campbell - Yes. Said motion passed with a 3 to 2 vote. Mayor Campbell left the Commission Chambers at this time and Vice-Mayor McCarty took the Chair. -3- 6/5/89 3. The City Attorney stated the bottom line on the discussions is that staff met with the various parties involved, one of them being the representatives from the Canadian Bank operation. There was also a meeting this morning with Mr. Colucci, on behalf of either himself or the Associations. There was another meeting with FSLIC officials who are still a willing seller with the terms and conditions of the acquis- ition essentially the same as they were outlined before. They are willing to make adjustments if there are improvement difficulties but, basically, are being real firm on the purchase price of $2 million dollars. They will be willing to enter into a lease arrangement tomor- row or anytime thereafter, to run two years maximum, the amount of the lease payments being the amount of their taxes, period. It would also include that the City buy an option to purchase at that point, the purchase price of the option being $200,000 and, at some time before the two years, they would give the City good title to the property, includ- ing access that, if they are unable to do so before the end of the two-year period, the City would get the $200,000 back. Additionally, during the two-year period, if the City makes improvements to the site, including investments in the property or expansions of the facilities, etc., they would also reimburse the costs for that if they were unable to give the City title and access. At the time of closing on the property, the City would need to come up with a sufficient amount of money that equals 25 percent of the full purchase price and they will take credits for the option, they would give the City credits for investments in the property and then the cash difference to equal $500,000. The remaining $1.5 million dollars could be paid, over a time period up to 15 years; they would be willing to finance this for the City in the nature of a municipal note that they could float and resell or however the City wished to do it. At that point, title would belong to the City to do as they wished. The map shows that the property includes all the amenities, all 44 tennis courts, the lake areas, the accesses, the parking lots, the current clubhouse, the conference center, the renting offices and the maintenance building. FSLIC gave assurances that the allegations that Lavers is unable to give the City good title are untrue. Ms. McCarty questioned if all allegations have been checked out. The City Attorney stated verbal assurances from the officials of FSLIC have been received. They do not believe it is necessary to close by July 1st, but if the City has an offer being pursued through the system by that time, they feel by the time of the changeover to FDIC on July 1st it would still be processed. Questions of access rights may not be resolved currently, but it is his position they would not be able to sell and give the City good title without those access rights. Ms. McCarty questioned the attitude of the members of the Homeowners Association. The City Attorney stated the City will be unable to buy anything but the entire package. The Homeowners Associa- tion is not able or interested in buying all of the amenities package. If the City acquires title to the entire parcel, it would have an option to auction off a parcel, not open some of the facilities, or bulldoze some facilities and sell the land if there was an unsuccessful ability to sell off the recreational facilities. Upon question by Ms. McCarty, Joe Weldon, Director of Parks and Recreation, stated the City will be looking at expenses of approximately $425,000 per year for operational costs, with revenues projected on the conservative side of $225,000. At this time it is difficult to estimate landscape maintenance costs, because it is not known exactly what landscape areas are involved. This includes all the clubhouse facili- ties and the programming there, also. Being conservative, the projec- tion is an income of $170,000 from the tennis courts and $50,000 from other sources. Ms. McCarty questioned if there is a comfortable feeling that the City has alternatives to either sell off or lease other portions where the $200,000 could easily be made up. The City Manager stated he feels this could be done due to improved facilities and the appeal it will have in the area, by offering stability with the City as landlord. Upon question by Mr. Andrews, the City Manager advised the taxes on this property for one year are $36,000. -4- 6/5/89 Mr. Weatherspoon questioned if there has been any confirmation relative to contractual ties by the condo owners to the facilities. The City Attorney stated that the FSLIC officials assured them that there are two or three buildings on the southern site that have a requirement that they be given access to the social facilities, which they define as not being the tennis courts. They would have a right to be concerned if this parcel should be sold to a third party entity (not those homeown- ers) but, given the City and the desire to keep those open to the public, that satisfies their concern. Mr. Weatherspoon questioned what could happen if FSLIC goes out of business. The City Attorney advised they will be taken over by the Federal Deposit Insurance Corporation, so nothing will happen and will not necessarily affect it in any way. To explain it better, the job of FSLIC is to minimize their losses, dispose of properties and, in the interim, they have a receiver who is supposed to maintain them in order that they do not lose their value. Mr. Weatherspoon stated he feels this is an excellent opportu- nity for the City. Originally, the projection was for a maximum of 20 courts at Lake Ida Park and now perhaps there will be more than 40 courts. The City Attorney advised that this will depend on what the Commissioners' options will be in the future. Ms. Brainerd questioned the projected maintenance costs for the Lake Ida facility, annually. Mr. Weldon stated the current operating costs are around $135,000 and an additional full-time employee has been requested, so it will be near $150,000. Ms. Brainerd commented that there would be roughly a $75,000 higher maintenance cost in looking at this site. The City Manager stated this figure includes the entire amenity package. Upon question, the City Manager stated the figure could be reduced to a figure very close to what has been budgeted. Ms. Brainerd stated she is aware of discussions that have taken place relative to other parties that are interested in buying this. For a variety of reasons, the owner has indicated none of those options are going to happen and if they cannot get their price and it cannot be sold under their terms, it may be more valuable for them to level it. She would like clarification on this. The City Attorney stated that three and one-half weeks from now that will no longer be their decision to make. He feels they have decided that they do not want to be in the process of selling off bits and pieces. Another methodology that would make the other vacant parcel developable, would be to assure the access to the private, already-developed property and dispose of the amenities package in a total all at one time if the City were the purchaser and that is why they are so interested. Ms. Brainerd questioned if it would also be fair to say that when we are speaking of a price of something in the neighborhood of $2 million dollars, that undeveloped land that the amenities package sits upon is approaching that value. The City Attorney stated it certainly is a good asset. Mr. Andrews stated, since he lives in a condominium where there are no recreational assets, he feels there should be a way to make sure the future development, as well as the existing development, is satis- fied with a reasonable amount of amenities. Vice-Mayor McCarty stated that she feels she is hearing that the Commission would like to move forward with this, would like to be sensitive to the residents of the area and look toward a goal of working out a package that would allow the residents to buy, lease or lease- to-purchase a portion of the amenities package. Mr. Andrews moved to authorize staff to make an offer in the amount of $2,000,000, seconded by Ms. Brainerd. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Mr. Weatherspoon - Yes; Vice-Mayor McCarty - Yes. Said motion passed with a 4 to 0 vote. Before roll call the following discussion was had: -5- 6/5/89 The City Attorney stated the specific terms would need to be finalized. The offer would be conditioned upon the ratification of the contract when it gets into final written form. Vice-Mayor McCarty stated she would like to know what the owners are willing to do as far as a purchase or a lease, so the Commission might have some idea of the operating cost being faced. Mr. Weatherspoon stated he feels it could be a part of the overall package. The City could be prepared to make an agreement with the owners at closing and to transfer the title to that portion in the same time frame. The City Manager explained that would create a public asset that must be disposed of properly. At whatever point the offer was accepted, the City would own the amenities package and would then need to sublease back to the Homeowners' Association. The City Attorney stated only one issue has been addressed. It is believed that some financial participation may be negotiated with the other property owners to reduce the City's overall cost. At this point the roll was called to the motion. Vice-Mayor McCarty declared the meeting adjourned at 6:20 P.M. City Clerk ATTEST: M.A Y O R The undersigned is the City Clerk of the City of Delray Beach and that the information provided herein is the minutes of the meeting of said City Commission of June 5, 1989, which minutes were formally approved and adopted by the City Commission on Q~ //./~f~ . ' / Ci{y Clerk NOTE TO READER: If the minutes that you have received are not completed as indicated above, then this means that these are not the official minutes of City Commission. They will become the official minutes only after they have been reviewed and approved which may involve some amendments, additions, or deletions to the minutes as set forth above. -6- 6/5/89