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04-05-04 Minutes SpMtgSPECIAL MEETING APRIL 5, 2004 A Special Meeting of the City Commission of the City of Delray Beach, Florida, was called to order by Mayor Jeff perlman in the City Manager's Conference Room at City Hall at 4:00 P.M., Monday, April 5, 2004. Roll call showed: Present - Commissioner Patricia Archer Commissioner Bob Costin Commissioner Alberta McCarthy Mayor Jeff perlman Absent - Commissioner Jon Levinson Also present were - City Manager David T. Harden City Attorney Susan A. Ruby and City Clerk Barbara Garito Mayor Perlman called the meeting to order and announced that it had been called for the purpose of considering the following item: 1. CONVEYANCE AGREEMENT/MEDIA ENTERTAINMENT PRODUCTIONS (USA), INC.: Provide direction regarding further negotiations on the draft Media Entertainment Productions (USA), Inc. Contract. David Harden, City Manager gave a brief overview of the Conveyance Agreement proposal made by Media Entertainment Productions (USA), Inc. (MEP) which includes the conveyance by the City of a 9,000 square feet parcel located at the S.E. corner of the Tennis Center property. The Project includes parking for the MEP building in exchange for the media exposure and promotion as outlined in Exhibit "B" of the proposed agreement. He indicated there were other contract issues as outlined by the City Attorney in her summary outline. Susan Ruby, City Attorney indicated in addition there is an issue with the parking scenario which would include costs to the City if they were to provide parking for MEP. She found other issues within the contract as outlined in her summary, the value of the exposure for the City over 13 weeks which would need to be identified on certain dates, in addition the repurchase agreement was not favorable to the City. Should we need to repurchase the property at a later date, she suggested perhaps the City should be the first mortgage holder on the property vs. behind or subordinate to all other mortgage holders. Also, there were other concerns of the possibility that MEP would not build in a timely fashion, abandon the project, or fail to get financing. Therefore, she is looking for guidance from the Commission as to whether they wished to proceed with negotiations. Commission Archer expressed concern about recourse regarding; if the 13 week show was never picked-up by the networks, in addition the contract is very vague as the actual television channels the show would be aired on. If the City does not receive the benefits of the exposure she feels we need to have some recourse. She indicated that she felt the parking issues could be worked out with MEP to the satisfaction of both parties but we need some guarantees regarding times of showing and length of time for City credits. She felt the value could be obtained if we have insurances in place. Mr. Harden indicated that since Commissioner Levinson could not attend today he wished to express his concern regarding the fact that current offerings made my MEP are shown at 11:30 pm and 5:00 am, times when many people are not watching television. Consequently the City has no idea when this project series would be aired on television. Commissioner Costin expressed concern that the City is considering conveying a tangible piece of property for non-tangible goods and he feels the values placed in the contract on the media exposure are extremely over inflated. Additionally, he has a problem with the parking issue and cost to the City. Commissioner McCarthy indicated she has not changed her position on this project, she has not found it to be of great value to the City for giving valuable City property away for non-tangible goods. Mayor Perlman indicated that Randy Welker, Executive Director of Business Recruitment and John Sasson, Senior Coordination Producer for MEP were present and he would like to give them the opportunity to speak. Randy Welker, Executive Director of Business Recruitment responded that value of this type of exposure is the most difficult thing to assess as for its worth to the City. However, the exposure can be very valuable to the City. After some research Randy found that to have a Michael Graves building in the City would be of significant value. It could become an attraction to the group of people we are trying to attract to Delray Beach, the office users. It would become an incentive to bring their office businesses to Delray Beach vs. other cities in the area. In addition, having the expertise of MEP and Michael Braves in Delray Beach should be an avenue the City could pursue in negotiations requesting that they become involved in community activities. John Sasson, Senior Coordination Producer for this series reinitiated the project would be the sharing of the beauty of architecture and what goes into the planning of it to the business community. He felt that MEP would address the concerns expressed today regarding the exposure of the show which could be addressed in the contract along with appropriate time slots, marketing with Graves and Target and will make an effort to capitalize in this area. Mayor indicated that the value he visualizes this project to be include; 35 new jobs to Delray Beach, an increase of ad valorem taxes, a value to the City by having a landmark building on a major corridor of the City which is consistent with the Downtown Master Plan and this project could -2- April 5, 2004 begin a renaissance on Atlantic Avenue, in addition the possibility of tapping into Michael Graves expertise, with publicity of the project as an added benefit. The risk you take with a private entity is the jobs would not come to Delray Beach, the company does not do well, the taxes go away and the publicity is not what you expected. The problem as the Mayor sees it is the out-of-pocket expenses for the parking as well as the concerns as outlined by the City Attorney. The City Manager reiterated it is the desire of the Commission to attract office businesses to the City and asked if we would be better off pursuing this offer or putting out a RFP for this property and use the profit in other ways to encourage office space into the City.> After further discussion by the Commission and in conclusion, it was the consensus of the Commission for the City Attorney to proceed with negotiations with MEP with the emphasis on the parking issue being worked out as part of the building expenses and the other issues as outlined in her summary. In addition, Commission wants to be sure that the building designed by Michael Graves would be competed to his specifications. 2. COMMISSION COMMENTS. Commissioner McCarthy commended the City Attorney for her summary memorandum and thoroughness regarding the issues with the MEP proposed contract. Mayor Perlman mentioned that former Police Chief Rick Overman suffered the loss of a family member and the City had sent condolence to his family. He then passed out a card of appreciation from Mr. Overman to those present. The Mayor indicated he had a discussion with Gary Rosen on behalf of the Delray Beach Housing Authority and the conditions at Carver Estates. Mr. Rosen feels that the scope of the problems at Carver Estates are beyond the Housing Authority's board and he would like the City, CRA, County, and our Federal representatives from HUD to be present at a workshop to help find a solution. So far it has been estimated that there are more than 5.7 million dollars of repairs needed at Carver Estates. The Mayor is in agreement with Mr. Rosen and feels we need to have a strategy and rethinking of housing in that area and pursue HOPE 6 Dollars. At this time around the nation public housing is mixed with affordable housing thus creating a better environment for the residents and safety. Commissioner McCarthy added that she was under the impression that HOPE 6 Dollars are still available and they were regionalized as well, and acknowledged the opportunity for the City to make a difference in housing in this area thus making the community more livable and safe for the residents. Mayor Perlman requested that staff proceed and set up a joint workshop including the CRA, County, Federal representatives from HUD, Congressman Hastings, Congressman Shaw and Commissioner Green to get the challenge moving with whatever resources would become available. 3 April 5, 2004 Mayor Perlman declared the Special Meeting adjourned at 5:10 p.m. City Clerk ATTEST: The undersigned is the City Clerk of the City of Delray Beach, Florida, and the information provided herein is the Minutes of the Special Meeting of the City Commission held on April 5, 2004, which Minutes were formally approved and adopted by the City Commission on April 13, 2004. City Clerk NOTE TO READER: If the Minutes you have received are not completed as indicated above, this means they are not the official Minutes of the City Commission. They will become the official Minutes only after review and approval, which may involve amendments, additions or deletions to the Minutes as set forth above. -4- April 5, 2004