development of a new project consisting of a 92-unit hotel, 96 residential (condominium) dwelling units, and a marina. It is important to note that the residential component of the project requires the owner/developer to acquire development credits from the City through the Coastal Transfer of Development (TDR) Program.

Given the magnitude of the Redevelopment Project and its potential to positively impact the City and to effectuate the Community Redevelopment Plan, the Executive Director has led our administrative team in coordinating with Royal Five in the hopes of facilitating a successful project. Additionally, at the CRA Board meeting of July 18, 2023, the Executive Director presented a preliminary “TIF Analysis for the Magnuson Hotel and Marina Property” and stated that a proposed incentive package would be brought back before the Board at some point in the future.

This memorandum serves to propose terms for such an incentive package; and further, staff proposes that such terms be set forth in the form of a Redevelopment Agreement by and between Royal Five, the City of New Port Richey and the CRA. The proposed framework for the Redevelopment Agreement is as follows:

·       Parties: Royal Five, City, CRA.

·       Redevelopment Project: Aqua Harbor, consisting of 96 residential (condominium) dwelling units to be constructed in two buildings/phases; a 92-room full-service hotel; and marina.

·       Obligations:

o   Royal Five:

§  Completion of the Redevelopment Project in accordance with the Timeline.

§  The hotel brand shall be Hilton or another premier brand approved by the Parties.

o   City:

§  Act in good faith to expedite permitting reviews.

§  Provide 96 TDR credits (to be paid for by CRA).

o   CRA

§  Fund Incentives.

§  Provide concierge services to facilitate shared success.

·       Timeline:

Aqua Harbor Redevelopment Project Timeline

·       Incentives:

In formulating the proposed terms for your consideration, staff considered many factors including:

·       Magnitude of the private investment and the Redevelopment Project’s meaning to the community.

·       Consistency of the project and proposed incentives with the Community Redevelopment Plan.

·       Ensuring that the hotel brand reflects the desired quality of development and is aligned with our vision for the future.

·       Reasonably anticipated tax increment revenue that would be generated by the Redevelopment Project. (Please see updated projections.)

·       Right-sizing the incentives to provide meaningful assistance to the developer without “overpaying” or putting taxpayer dollars unnecessarily at risk.

·       Industry best practices, including the avoidance of cash incentives; the investment in public infrastructure which would serve the proposed redevelopment, any successors, and the broader public at-large; and investments which could simultaneously achieve multiple goals.

Additionally, with regard to the formulation of the proposed incentives, staff considered that:

·       TDR credits impose a unique cost to affected projects in New Port Richey. Our administrative team does not want to see those costs disincentivize desirable redevelopment. At the same time, we want to recognize and honor the merits of the TDR Program.

·       “The cost of doing business” could be addressed through impact and building permit fees, a common economic development incentive and a past practice of the City, and that having the CRA pay the City on the owner/developer’s behalf provides the City with funding to meet the demands of the development.

·       The proposed reconstruction of Floramar Terrace would benefit the owner/developer and the public on many levels by:

o   Providing the Redevelopment Project with required parking.

o   Improving a public roadway, which is currently in poor condition, with repaving, stormwater, enhanced landscaping, street lighting, sidewalks, a trail section, and the City’s preferred proposal for the Pedestrian Overpass.

o   Better connecting us to the regional trail system.

o   Clarifying our vision for the long-discussed Pedestrian Overpass.

o   Helping showcase this Redevelopment Project and the community’s efforts to redevelop the US Highway 19 Corridor, welcoming our residents and visitors with a roadway, trail, and view which are consistent with our vision and the future we are building.

·       None of the proposed incentives are paid to the owner/developer.

·       The big-ticket item is the cost of the TDR credits; and, it is anticipated that the City and CRA can agree to payment terms which allow the CRA to pay as the tax increment revenue from the project ramps up. As a result, the CRA will never be too far out in front of revenues or at significant financial risk if the project does not come to fruition.

·       The proposed reconstruction of Floramar Terrace would benefit the public independent of the proposed Redevelopment Project.

·       The only proposed incentive subject to “loss” if the Redevelopment Project does not go according to plan is the building permit fee review.

Agency staff finds this request consistent with the Plan and is recommending approval because:

·       Aqua Harbor is a transformative redevelopment project that is turning a dilapidated hotel into a landmark waterfront mixed use project that will anchor the City’s southern gateway, expand our City’s renaissance out of downtown, advance a decades-in-the-making revitalization of the US Highway 19 Corridor, and bring us closer to realizing our vision for the future (best walkable, waterfront, historic hometown in Florida).

·       Aqua Harbor will have a significant economic impact on the community, which includes:

o   Construction and long-term direct, indirect, and induced jobs.

o   Increased consumer base with above average buying power.

o   Tens of millions of dollars in private investment.

o   Aggregate assessed value in excess of $40 million, which can reasonably be expected to produce more than $650,000 per year in tax increment revenue and approximately $15 million over the remaining life of the Agency.

Increased tourism.