06-21-88SpMtg JUNE 21, 1988
A Reconvened Special Meeting of June 17, 1988, 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 7:00
P.M., Tuesday, June 21, 1988.
Roll call showed:
Present - Commissioner Patricia Brainerd
Commissioner Marie Horenburger
Commissioner Mary McCarty
Commissioner Jimmy Weatherspoon
Mayor Doak S. Campbell
Absent - - None
Also present were - City Manager Walter O. Barry and
Assistant City Attorney Jeffrey S. Kurtz
Mayor Campbell called the meeting to order and announced that
this meeting is a continuation of the meeting of June 17, 1988,~ and
discussion of Item (2) Finalization of agreement between the City and
Procacci Development Corporation re Auburn Trace Housing.
2. Assistant City Attorney Kurtz stated they would like discussion
~nd direction on whether or not the Commission will accept or reject the
three major outstanding terms that are left on the formalization of the
agreement with Mr. Procacci. Those involve the repayment of the one
million dollar matching funds, the payments on the purchase money
mortgage and the extent of the City's involvement in off site improve-
ments. He believed Mr. Procacci has accepted the terms as outlined in
the June 17th letter from the City Manager, i.e., the one million dollar
matching funds that would be repaid over a seven year period, the first
payment due a year from the time that Mr. Procacci makes his first draw
on the UDAG funds; payments would be $144,000± per year for those 7
years. On the purchase money mortgage there would be a $10,000 down
payment, $65,000 a month thereafter and then $25,000 per year for five
years payable on the anniversary date of the closing, bringing us to
$200,000 and then a $530,000 payment on the 15th anniversary of the
closing. As far as off site improvements, Mr. Procacci will be respon-
sible for all on site and off site improvements that are determined to
be necessary through site plan review related to this project and the
City will contribute up to $200,000 towards those costs.
Mr. Procacci advised the Commission that he would accept those
terms, referencing the letter of June 17, 1988.
The City Manager stated there is one other unanswered issue and
that has to do with the density; that appropriately will be discussed at
the Public Hearing next Tuesday evening on the Land Use.
Assistant City Attorney Kurtz advised that if the terms are
acceptable to the Cor~mission what they will do is put them into a formal
contract incorporating the UDAG repayment terms that are contained in
the agreement between the City and HUD and present them to the Commis-
sion next week for authorization to enter into the contract. His office
would also have the Commission consider acceptance of the UDAG funds,
would forward an executed contract to HUD and the project would be on
its way. The Assistant City Attorney furnished the Commission a rough
Cash Flow Projection sheet showing that the City would be down about 1
million dollars in 1991, then begin to see positive cash flow to a point
where it would break even sometime in 1997, and the final cash flow to
the City would be in the neighborhood of 7 1/2 million dollars.
Upon question by Ms. McCarty, Mr. Procacci stated the 20
million dollar figure is based upon the value of the project, the cost
plus the developer's profit if they syndicate the project; that's how
the tax credits would be evaluated. As the credits are increased that
will increase the sales proceeds of the project of which the City will
get 40% and the developer will get 60% over the cost of the project.
Mr. Procacci also enumerated the professional fees. Upon question, he
stated the security system is still part of the project.
Upon question by Ms. Brainerd with regard to syndication,
Assistant City Attorney Kurtz advised the City will share in the net
syndication proceeds; there is approximately 3.7 million dollars that
would initially be recovered by Mr. Procacci and then all monies beyond
that, over and above additional expenses, the City would share at the
rate of 40%. This is pursuant to the UDAG agreement. Upon question as
to whether Mr. Procacci plans to have any additional owners throughout
the duration of the project, Mr. Procacci advised that he does not
anticipate any at this time.
Mr. Weatherspoon questioned the management of the completed
project. Mr. Procacci stated he will be responsible for the management
regardless of who is hired to run the project. Ms. McCarty stated it is
of prime importance that the management of this property is done proper-
ly, from a people aspect as well as Mr. Procacci's investment.
Ms. McCarty made reference to the screening of the tenant~ to
make sure they were Delray Beach residents. Lula Butler, Directo~ of
Community Improvement, advised that when Mr. Procacci notifies the ~ity
that he is indeed advertising for applications for the housing project,
at that time they would monitor the application process and ensure to
the City by eligibility that Mr. Procacci is giving priority to Delray
Beach residents. They would have copies of the applications in the
Development Office. Assistant City Attorney Kurtz commented that
language to that effect will be within the agreement. Ms. Brainerd was
in favor of stronger language in this regard, perhaps the City having
secondary approval. She stated she has fears that the City will be
creating an additional population rather than focusing on our existing
population. Discussion followed.
Ken Simback, representing the CRA, advised several studies were
done; one of these was a site specific study which indicated that within
the geographic area which they call Zone I and within the City proper
there was more than an adequate demand for this type of housing and
expected the project to lease up very rapidly. It is not the intent of
the project, nor did the study indicate, that there was any one particu-
lar segment of the population that would be best served by this project;
in fact the study addressed both a racial range, income and age range
and the indication .was there was adequate demand throughout the communi-
ty to support a project of a mixed type. The rents are based on 30% of
the gross income of a family making less than 60% of the median income
of the community; these are stipulated by HUD.
Upon question by Mayor Campbell, the City Manager advised he
feels comfortable with the outlay of money from the City's unencumbered
surplus balance and does not feel it would adversely affect that bal-
ance. He does not anticipate a millage increase this year.
With regard to the density issue, Mr. Procacci stated the
minimum number of units for this project is 368; he could not do a
project for less. Ms. McCarty advised she has a problem with the
density and would not want to go more than seven units per acre; she
also has a problem with it not going to the ownership issue and a
problem with the School Board meeting held a week or so ago by turning
around and doing what the Board told the City not to do. Ms. Brainerd
concurred.
Mr. Weatherspoon stated he shared the concern re the density
and the ownership; however, on the School Board issue the City only has
one housing project at present and he felt certainly that does not
account for the problems we are having with the School Board. He felt
that if Carver Estates was removed from the picture there would still be
the problem of racial imbalance. He would gladly trade density for
quality.
Ms. Horenburger stated there have always been questions about
the 10 units per acre and the amount of units and perhaps it is
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unfortunate it was not addressed more strongly at the time. She be-
lieves there needs to be more discussion.
Mayor Campbell advised that since the developer cannot reduce
the number of units the City could aggregate additional land, taking off
of future land the ability to build units on it. He would suggest that
staff and Mr. Procacci get together and try to accommodate the wishes of
the Commission and bring back a report prior to next Tuesday night. Mr.
Procacci stated he understands that staff if working toward the Mayor's
suggestion; however, he felt there are two situations with regard to
lower density. There is the traffic impact of the area and also the
number of families living there. According to studies, the impact of
traffic in this area due to the project will not change in comparison to
a single family development. With regard to the families living there,
this is a professionally run, secure project and there will probably be
less people living in the 368 unit project than if it were a single
family development. Mr. Procacci stated he felt they would have a lot
more control over a project of this type.
The City Manager advised that the discretion within RM zoning
is based on the site plan review and analysis of traffic, drainage,
access, etc., the physical impact of the unit, not so much t the
socio-economic, demographic impacts. · Staff recommendation wast to
establish a density which guarantees seven units per'acre; the developer
agreed to RM which would give him up to 10 units per acre. It~was
assumed that the site plan itself will allow that density to occur based
on the physical development itself; it is up to Mr. Procacci to show the
Commission a good site plan.
Discussion followed. Mayor Campbell reviewed the background of
the Auburn Trace density issue when it was first proposed several years
ago at 15 units per acre. There were zoning hearings and the community
did not like the density nor did the Commission; However, the Housing
Authority refused to budge. The City ended up giving the Housing
Authority five acres of land to aggregate so that it would bring the
density down to roughly seven units per acre. It has been his prefer-
ence that any new project would carry the same density that the City had
negotiated previously and believes that they need to try and look at it
from every angle possible. The City Manager commented that it has
occurred to them to utilize the land which is presently publicly owned
on which the Catherine Strong Center is located. Mayor Campbell stated
the aggregated land does not necessarily have to be immediately adja-
cent, but in that vicinity, as long as the total amount of acreage fits
the City's density-projections.
Mr. Weatherspoon questioned if it is their intent to tie that
five or six acres to this project for numbers only and the Catherine
Strong Center would still exist and, hopefully, expand. Or, is it their
intent to actually tie it in and use that land. He would have no
problem if it is used for numbers only to bring the density down. Ms.
Brainerd stated she has a real concern with land just sitting there for
the purposes of appearing that it has lower density. She believed the
project should stand or fall on its own density merits. Ms. Horenburger
commented, with regard to the density, she doesn't care as long as it is
a good and workable site plan and the buildings are configured in such a
way that the aggregated land remains open; as long as it is aggregated
land that would have possibly been developed in the future, if it
remains open as part of the project they have still gone a long way to
solving the density.
Mr. Procacci advised that in order for this project to be a
success it needs to have a good site plan, but it also needs to be
economically feasible. There are quite a few differences with this
project and the one referred to by the Mayor.
Mayor Campbell suggested that staff discuss the item with the
Commissioners during the course of the week prior to Tuesday, the 28th.
Assistant City Attorney Kurtz clarified that the Commission has given
direction for staff to prepare a contract encompassing the financial
terms that have been discussed and explore the possibilities relating to
density. Ms. McCarty advised they would also like to see something in
writing on the tenant and screening process.
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68
Mayor Campbell declared the meeting adjourned at 8:00 P.M.
ATTEST:
............. ~"A ~ ~'"'K~-'
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 21, 1988, which minutes were formally
approved and adopted by the City Commission on
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.
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