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Item 9 - Oakland Park Square Sept 20 PresentationOAKLAND PARK SQUARE PSA September 20, 2018 1 Quality Design Strong Partners + ROI and Value City Goals CREATING VALUE IN THE COMMUNITY 2 3 4 5 Mixed -use development Centralize municipal operations Hardened municipal facilities Generation of new taxable value Increase property values Add additional public parking in the downtown Enable the development of residential to support businesses Remediation of the environmental issues Open other opportunities for potential development Conversion of CRA loans to grants 6 The Realization of 13 Years of Planning 7 Community Meetings and Presentations •November 2017-community meeting at Jaco Pastorius Park •February 2018 –City Commission -Award of the Request •for Qualifications •March 7, 2018 –Presentation at Kiwanis •March 14, 2018 -community meeting at Collins Community Center •All residents in the City received a notice in the mail •Open house with presentation and tables with detailed information. •March 17, 18, 24 and 25 –City facility tours with staff at each facility to provide information and respond to questions/comments.8 •April 10, 2018 –Presentation before the Downtown Business Partners and North Andrews Neighborhood Association •April 18, 2018 –Presentation before the City Commission on all Facilities •April 24, 2018 –Presentation before COPNA Neighborhood Association •May 15, 2018 –Presentation before the Rotary Club •May 22, 2018 –Oakland Park/Wilton Manor/Uptown Council –update on proposed project •May 23, 2018 –Presentation before the Oakland Park Business Group •June 12, 2018 -Presentation before the Downtown Business Partners •June 20, 2018 –Presentation at City Commission. •July 10, 2018 -Status update presentation for Downtown Business Partners •July 30, 2018 –Status update presentation for the Community Community Meetings and Presentations “The City has Hosted 15 separate discussions and or meetings to inform and educate the community on the Oakland Park Square Project”9 THE ELEMENTS OF THE DEVELOPMENT Residential Apartments 87 units Live/Work Rentals 11 units Ground Floor Retail/Commercial 34,600 sf City Hall Office and Public Space 29,000 sf Parking 343 spaces Height 68 feet 10 THE ELEMENTS OF THE LEASE AGREEMENT CITY HALL LEASE: •29,000 square feet of office space on the ground floor and 6th floor of the South Block •Includes 133 public parking spaces of which 116 will be designated to City Hall in the South Block LEASE TERM: •Initial: 15 years •Option to Extended: Two (2) options to renew for 5-years LEASE RATE: Lease Years 1-5: $26.07 per sq.ft. Lease Years 6-8: $35.83 per sq.ft. Lease Years 9-10: $38.57per sq.ft. Lease Years 11-15: Mark to Market for Lease Year 11 Lease Years 12 & 13 at a fixed rate Lease Years 14 & 15 at a fixed rate Will come before Commission for approval prior to closing on the property.11 High Return Low Cost Investment 12 Public Investment Waiver of City Impact Fees $ 260,000 Roadway Improvements $ 500,000 In Lieu RE Taxes Payment $ 340,000 CRA Retail Tenant Incentives $ 260,000 Broward County Funding Program (35% share)$ 385,000 Total $ 1,745,000 The City is NOT donating land for this project. Lots will be sold to the developer for $2.55 million Return On Investment 13 For every $1 the City spends the developer spends $55 when compared to the City Cash Only Investment. Public -Private Investment Oakland Park Square Estimated Total Project Cost Private Investment Public Investment Leverage Ratio Total 1 $ 45,000,000 $ 43,255,000 $ 1,745,000 25 City Only 2 $ 45,000,000 $ 43,940,000 $ 1,060,000 41 City Cash Only 3 $ 45,000,000 $ 44,200,000 $ 800,000 55 1. Includes all Public Investment (Broward County Funding Program and City Initiatives) 2. Excludes Broward County Funding 3. City Initiatives (Cash Outlays Only) 14 *Assumes current millage and 4% annual increase in property values ** Sale value of West Side Lots can be applied to lease payments to offset costs on an annual basis. **Interior build-out of Dixie Lots City Hall to be financed through new external debt, approximately $2.5 million in principal. Lease Year Estimated Fiscal Year WDL Property Tax Revenues* WDL Sale Value Offset to Rent**Total Annual Lease Costs Interior Build Out Debt Service *** Net Annual Financial Impact Year 1 2021 -$ 631,236$ -$ 631,236$ 756,030$ 280,000$ 404,795$ Year 2 2022 241,013$ 270,530$ -$ 511,542$ 756,030$ 280,000$ 524,488$ Year 3 2023 250,653$ 180,353$ -$ 431,006$ 756,030$ 280,000$ 605,024$ Year 4 2024 260,679$ 180,353$ -$ 441,032$ 756,030$ 280,000$ 594,998$ Year 5 2025 271,107$ 180,353$ -$ 451,460$ 756,030$ 280,000$ 584,570$ Year 6 2026 281,951$ 270,353$ -$ 552,304$ 1,039,070$ 280,000$ 766,766$ Year 7 2027 293,229$ 270,353$ -$ 563,582$ 1,039,070$ 280,000$ 755,488$ Year 8 2028 304,958$ 220,353$ -$ 525,311$ 1,039,070$ 280,000$ 793,759$ Year 9 2029 317,156$ 140,353$ 301,500$ 759,009$ 1,118,530$ 280,000$ 639,521$ Year 10 2030 329,843$ 140,353$ 301,500$ 771,696$ 1,118,530$ 280,000$ 626,834$ Year 11 2031 343,036$ 140,353$ 301,500$ 784,889$ 1,152,086$ 280,000$ 647,197$ Year 12 2032 356,758$ 80,353$ 1,073,500$ 1,510,611$ 1,186,648$ 280,000$ (43,962)$ Year 13 2033 371,028$ -$ 1,073,500$ 1,444,528$ 1,222,248$ -$ (222,280)$ Year 14 2034 385,869$ -$ 1,073,500$ 1,459,369$ 1,258,915$ -$ (200,454)$ Year 15 2035 401,304$ -$ 1,073,500$ 1,474,804$ 1,296,683$ -$ (178,121)$ TOTAL 4,408,583$ 2,705,295$ 5,198,500$ 12,312,378$ 15,251,001$ 3,360,000$ $6,298,622 Total Net Annual Costs $6,298,622 WDL Cost of City Provided Incentive (Less Anticipated CDBG)$800,000 Estimated Civic Campus Sales Value ($7,000,000) 2007 Capital One Loan Final Maturity ($301,500)Estimated Civic Campus Tax Revenues, FY 25 to FY 35 ($7,813,419) 2000 FMLC Loan Final Maturity ($772,000)Redevelopment Capital Loan Conversion ($1,600,000) Mark-to-market occurs; estimated at 3% rent increase GRAND TOTAL COST ($9,314,797) Longterm Financial Forecast TIMELINE CITY REVENUE AND OTHER RESOURCES CITY EXPENSE Other Resources PURCHASE AND SALES AGREEMENT SUMMARY •Purchase Price: •Sets purchase price at $2,550,000 with earnest money deposit provisions: oPrice is appraised value. oNot discounted for potential environmental issues. •Inspection Period: •180 days or longer to conclude environmental testing and plan 15 PURCHASE AND SALES AGREEMENT SUMMARY •Timelines and Development Approvals: •Sets timelines for required approvals •Defines and restricts the ability for material changes to the development program and design. •Option to Repurchase: •Establishes the City’s sole right to repurchase the property if the Developer does not perform in a timely fashion;cost will not exceed original sale price. 16 PURCHASE AND SALES AGREEMENT SUMMARY CONDITIONS PRECEDENT TO CLOSING: This provision seeks to protect the City’s assets,requiring thefollowingbeforethetransferoftheproperty: 1.Development Agreement 2.Environmental Approved Plan and permits. 3.All necessary Development Approvals and associatedrequirements 4.Lease Agreement with the City 5.Closing 17 PURCHASE AND SALES AGREEMENT SUMMARY 18 ENVIRONMENTAL ISSUES AND REMEDIATION PROVISIONS The costs and strategy to address the environmental issues will be determined using mutually agreed upon process for testing,assessment,and permitting. •Sets process for Purchaser and Seller to: o Review permitting requirements and assess the costs.Parties either commit to the costs necessary to fulfill permitting requirements or terminate the agreement under certain conditions. •If after the Environmental Approval Plan and Permit have been issued and the closing of the property has taken place and additional environmental conditions be discovered: o The City has committed to placing $1M of the $2.55 M purchase price in an interest bearing escrow account controlled by the City to front load unforeseen environmental conditions until BSRA reimbursement is received. PURCHASE AND SALES AGREEMENT SUMMARY NEXT STEPS •If the PSA is approved,the second reading of this Ordinance will be scheduled. •At the second reading of the PSA,staff will present for Commission consideration the Development Agreement. •The Development Agreement will establish the provisions and requirements for the Development of the Oakland Park Square Project. 19 TIMELINE 20 Development Agreement Due Diligence Pre-Development Approvals Environmental Permit & Plans Approved Lease Agreement Closing and Escrow Environmental Testing Assessment Application for Pre- Development Approvals Flex Unit Building Height to be reviewed by DRC, Planning and Zoning, and City Commission To be presented to the City Commission for approval within the Due Diligence Period All conditions precedent to closing are met, sale and transfer of property is complete 21