As you already know, the CRA authorized their Executive Director to enter into an agreement with Keenan Development Group, Inc. in January of 2020. The purpose of the agreement related to the sale of three CRA properties which in its final form would be used to support the establishment of a 40,000 sq. ft. building that would serve as a satellite location of Keiser University. In that same respect, the CRA also authorized the Executive Director to enter into an Option Agreement that provided an opportunity to construct a parking garage in lieu of certain specified surface parking spaces on property that would be deeded to the CRA by Keenan Development Group, Inc.
The redevelopment of these properties which by the way are located in the Rivergate Redevelopment Project area is a critical step in revitalizing the city’s economy . The reason that this holds true relates to the prominence of the location as well as the fact that a critical mass of commercial activities will serve as a major stimulator for economic growth and potentially a key revenue generator for the CRA and the city. Therefore the choice to build structured parking is a necessary prerequisite to free up land for redevelopment thus enabling future growth.
That being said, the Option Agreement, which is attached for your reference along with a site plan of the parcel, specifically calls out the following terms and conditions:
- The CRA will construct a multi-level parking garage, inclusive of site improvements required for a parking garage at its sole expense, to be located on the Parking Parcel. Construction of the Parking Garage shall include all required drainage improvements.
- Chinook Construction will be provided the opportunity to bid on the construction contract for the Parking Garage, but the CRA shall not be obligated to accept such bid and shall at all times exercise its lawful purchasing authority in accordance with applicable law.
- The CRA will agree to cause the Parking Garage construction to commence by September 1, 2020 and be completed by April 30, 2021.
- The Parking Agreement will give the Developer the right to use of 140 parking spaces for use by Keiser University, plus up to 60 additional spaces for the benefit of the Development Parcel sufficient to meet City of New Port Richey codes in connection with a hotel or other development. The Parking Agreement will also include easement rights for ingress and egress to the Parking Garage, and to the use of the aforesaid spaces, to the extent authorized and allowed by any bond issued for construction of the Parking Garage. To the extent sufficient surface parking is available to meet the city code parking requirements for the Development Parcel, the spaces allowed within the Parking Garage shall be reduced or eliminated.
- Upon commencement of use of the Parking Garage, the Developer shall be responsible for its pro rata share of the Parking Garage Operating expense pursuant to a budget to be attached to the Parking Agreement. The pro rata share shall be a fraction, the numerator of which will be 140 and the denominator or which will be the total number of parking spaces in the Parking Garage. The Parking Agreement shall grant the Development Parcel the exclusive right to parking spaces in the Parking garage and the Development Parcel shall be responsible for its pro rata share of the maintenance expenses calculated in the same manner as provided above, where the numerator is the total spaces dedicated to the Development Parcel.
Based on an analysis of comparable data including recent construction costs for structured parking and the current economic climate the city staff is confident that the project can be accomplished with a construction budget of $6,500,000 and additionally that the parking provided would be in the range of 350 spaces.
If you determine that it is appropriate to exercise the Option Agreement the plan to finance the project would be through the sale of a revenue note relying on the full faith and credit of the City. The required payments on the bond would be made through the use of CRA funds. In that regard, attached is a letter from Ford and Associates who serve as the City’s financial consultant which amortizes the financial consequences of both a 10-year and a 15-year repayment plan. Mr. Will Reed of Ford and Associates will be in attendance at your meeting to fully introduce the schedules and respond to your specific questions. Additionally attached is a letter from Duane Draper of Bryant, Miller and Olive which outlines the issues related to whether or not the city will be eligible to utilize their tax-exempt status on the full financing associated with this proposed project.
Lastly, in respect to the income source necessary to repay the revenue note also attached you will find the financial projections of the CRA for a 10-year and a 15-year period of time. This matter will also be fully introduced to you at your meeting next week.
RECOMMENDATION:
The recommendation is to authorize the Executive Director to exercise the Option Agreement to construct a parking structure on the property located east of U.S. Highway 19 and south of Main Street as submitted.
BUDGET / FISCAL IMPACT:
The financial impact will vary based on the number of years that the repayment schedule is based on and in accordance with a ten-year schedule the amount would be $7,530,516 and in accordance with a fifteen-year schedule the amount would be $8,094,109. In either eventuality the CRA budget would be the funding source relied on to pay the costs associated with the revenue note.