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Description |
Palatka City Commission Regular Meeting |
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Date |
3/22/2007 |
Location |
Palatka City Commission |
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Time |
Speaker/Item |
Note |
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Test |
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Present |
Mayor Karl N. Flagg; Commissioners Mary Lawson Brown, Allegra Kitchens, James Norwood, Jr. and George E. Sanders |
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Also Present |
City Manager Allen R. Bush; City Attorney Donald E. Holmes; City Clerk Betsy Jordan Driggers; Assistant City Clerk Karen Venables; Finance Director Ruby M. Williams; Police Chief Gary Getchell; Fire Chief Mike Lambert; Planning Director Geoff Pappas; General Services Director Kenneth E. Venables |
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Call To Order |
Mayor Flagg at 6:00 p.m. |
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Invocation |
Lester Jenkins, Associate Pastor; Peniel Baptist Church of Palatka |
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Pledge of Allegiance |
As a group |
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Approval of Minutes |
3-8-07 - Commissioner Sanders moved to adopt the minutes as read. Commissioner Brown seconded the motion, which passed unopposed. |
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Public Recognition |
Proclamation - Sexual Assault Awareness Month - April, 2007. Mayor Flagg read a proclamation proclaiming April, 2007 as Sexual Assault Awareness Month. The Proclamation was presented to Detective Danette Evey and Linda Wells. Ms. Wells said Sexual Assault Awareness Day, April 4, will be commemorated through a program at the new Children’s Advocacy Center on Hwy 17 N. |
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Women’s History Month Recognition |
Mayor Flagg noted each member of the City Commission chose a local woman to recognize in honor of Women's History Month. Each honoree was presented with a bouquet of roses and a framed certificate of recognition.
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Commissioner Kitchens recognized Marcia Lane. Vice Mayor Brown recognized Annie Mae Spells. Commissioner Sanders recognized Emma Lou Morris. Commissioner Norwood recognized Mabel Lockhart. Mayor Flagg
recognized Dr. Geraldine McClellan. |
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Student of the Month – March, 2007 |
March, 2007 - Mayor Flagg, assisted by Commissioner Kitchens, recognized the following students for academic excellence, leadership, citizenship and attendance at their respective schools: Charles
Dennis Meridian Jordan Shawn
Carman Na’Myah Jenkins Brian Duncan Brooklyn Green Dylan Wallace Devin Parrish Kelley Smith Elementary School Chance Stokes Mellon Elementary School Artanza McRae Moseley Elementary David Sandlin Palatka High School Hannah Robinson Peniel
Baptist Academy Courtney Henry |
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PUBLIC COMMENTS |
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Sam Deputy, President, Downtown Palatka, Carr Street, invited the Commission to the Community Easter Egg Hunt to be held on March 31st on the Courthouse lawn. On May 4th the Interlachen High Band is scheduled to perform at the Courthouse gazebo. They would like to provide the Band with a Key to the City, which they can present to their hosts when they travel to England this spring. They meet Monday night at the Chamber offices at 6:15; the Commissioners are invited to attend. Mr. Deputy stated he is also present on behalf of the Tree Committee, as its Chairman. He has received complaints from the public regarding the FP&L’s pruning of trees on City right of ways. At the Pink Door on Oak Street they left a 15-foot “stump” which needs to be removed at FP&L expense. He has spoken to the FP&L arborist about this and other butchered trees. Mayor Flagg stated he has spoken to Mr. Womble with FP&L on this matter, and was told they plan to take up the stump. FP&L works with the understanding that Palatka is a Tree City. He has pledged to follow up on these matters. |
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Edison Lambana, Husson Avenue, said a representative from the Federation of cyclists was in Palatka recently, and approved the course for the bicycle races he has planned for this summer. He also met with the Chief of Police on this issue. Commissioner Brown recognized Mr. Lambana for his efforts to bring this sport to Palatka. |
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Mr. Henry Sanders, 2509 Lundy Rd., said he knows the City has undertaken a Comprehensive Plan update, but the average citizen doesn’t know what a Comprehensive Plan is. He would like to see this better advertised in such as way as to educate citizens on its importance. He attended the first workshop and didn’t hear any group address the southwest quadrant of the City. |
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Geoff Pappas, Planner, said two groups addressed the Southwest quadrant, and one covered the Southeast and Southwest quadrants. Mr. Bush noted the information will be compiled and all those who’ve attended the meetings will be able to see the draft product. |
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Mayor Flagg asked Mr. Pappas to address the residents’ concerns through the media concerning baseline definitions so that the public will understand the process. Mr. Pappas stated he did participate in interviews with the newspaper and radio stations. They can also put this on the website. Commissioner Brown stated people don’t realize that the City is already doing many of the things that were mentioned in the comp plan workshop, such as sidewalks. This City is not just sitting here doing nothing. They’ve been looking at ways to square up the City limits. There is only so much they can do with the tax dollars they get. Mr. Henry Sanders stated there were 3 groups that are very interested in what’s going to happen in the southwest section. On March 10th there was a van that took out an FP&L and light pole at the curve. It is a dangerous area and road and utility workers are not safe working in that area because of the narrowness of the road; recently he nearly hit another car head-on that swerved into his lane to avoid a utility worker’s truck that was half in the road. Mayor Flagg thanked him for bringing these things to the City’s attention, and said the City is aware of the issues with this road. |
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Consent Agenda |
a. Authorize expenditure of Police Impact Fee funds in the amount of $3,363.77 for purchase of computer server rack system for upgrade of PPD Network System (Sole Supplier – Dell Systems) b. Authorize expenditure of Law Enforcement Trust Funds in the amount of $1,000 for donation to Family and Behavioral Health Services (formerly Corner Drug Store) c. Authorize expenditure of Law Enforcement Trust Funds in the amount of $3,700 for the purchase of a new Police K-9. d. Authorize execution of FEMA Contract #07HM-6@04-64-02-052, CFDA #97.039, Federally Funded Subgrant Agreement with the State of Florida for FEMA Hazard Mitigation Project #1561-066-R, City of Palatka Police Station Wind Retrofit Project ($22,883.00 Federal Share, $5,720.75 City Share) e. Authorize submission of a grant application to Florida Division of Forestry, for Parks Dept. Development of a Tree Farm at the Wastewater Treatment Plant, per req. of General Services Director f. Accept Report of Tax Increment Fund Revenue and Expenditures Report F/Y ending 9/30/06, filed, as presented at February 22, 2007 City Commission meeting g. Authorize execution of Change Order #1 to Agreement for Consulting Services with Northeast Florida Regional Council in the amount of $50,280.00 for services required by DCA for expedition of Comprehensive Plan/EAR-based amendments per recommendation of Planning Director |
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Commissioner Sanders moved to pass all items on the Consent Agenda as presented. Commissioner Kitchens seconded the motion |
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Roll Call Vote |
A roll call vote was requested, which yielded the following results: Commissioners Brown, Kitchens, Norwood, Sanders, and Mayor Flagg, yes; nays, none. The motion was declared passed. |
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Recess |
Mayor Flagg recessed the March 22, 2007 City Commission meeting and convened the Palatka Community Redevelopment Agency in order to hear Agenda Item 4. |
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Community Redevelopment Agency |
Downtown Palatka, Inc. Request for Transfer of Palatka Main Street
Program to Putnam County Chamber of Commerce: Consideration of Agreement with Putnam County Chamber of
Commerce to Administer Program using Downtown TIF District Tax Increment
Funds. Mayor called to order the 3-22-07 meeting of the Palatka Community
Redevelopment Agency. |
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Present: Mayor Karl N. Flagg, Commissioners Mary Lawson Brown, Allegra Kitchens, James Norwood, Jr. and George Sanders, and Downtown Palatka President Sam Deputy. Absent: Palatka Main Street Manager (this position is vacant) |
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Mr. Bush noted the agenda packet includes a copy of an e-mail from Mr. Steven Zelkowitz, Downtown Redevelopment Counsel, concerning his review of the use of TIF revenues to pay the Chamber of Commerce for the administration of the Main Street Program (filed). Also included are comments from the City Attorney, the Draft Agreement and preliminary budget submitted by the Chamber of Commerce. They are asking this Agency to approve the use of TIF funds for the administration of the Main Street program. Commissioner Kitchens noted the agreement said the City could withhold any reimbursement for any item not found to be consistent with Main Street for expenses incurred in any activity the City didn’t support or approve of. She has no problem with reimbursing the Chamber, just not for things the City doesn’t approve of. She likes the 2nd option in Mr. Holmes memorandum (filed.) |
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Wes Larson, Chamber President, said he likes the first alternative noted in Mr. Holmes’ memorandum the best. He would prefer not to have to out-guess anyone on the Commission or look for some obscure reference in a City plan. He’d like to just be able to use good judgment. |
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Mr. Holmes said these are philosophical issues. If the Chamber does something the Commission doesn’t like, depending upon the degree of dislike, they can terminate the agreement with a 30-day notice. There is a degree of trust and good faith involved in this. They will have to second-guess a little. He’d hope that they would steer away from funding controversial items. If this Commission is reviewing items funded, and asks whether they have to pay for something they don’t agree with, he’d like to be able to give them a concrete answer. If they keep this control, and they ask if they can withhold payment for something they don’t agree with, he’d like to be able to answer yes. They should choose one of the options and include it in the agreement. This is not a question of funding something that is against the law, but something that someone on this Commission doesn’t agree with. Mr. Larson’s view is viable, also. He wants to verify both the Chamber’s and City’s rights. He would like the Committee to choose in advance what they would like to do. If the Chamber makes a habit of spending money for things the Commission doesn’t like, they can terminate the agreement. |
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Commissioner Kitchens said, with that explanation, she is good with the agreement as written by Mr. Larson. Mayor Flagg said his main concern is that the Chamber is not running the Program; the Main Street Board of Directors is. He spoke with Ms. Joan Jefferson with the State Main Street program, and she has no problem with this arrangement as long as they are following the Main Street program directives, and are not creating a “Palatka” version of the program. |
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Mr. Larson stated they are proposing to run the Main Street program within an existing program, which is an acceptable way to do it. The Main Street Program will be run “by the book.” The Chamber ran it successfully in the past. They spun it off to the Downtown Merchants when they asked for it. He intends to spin it off on its own as soon as it can stand on its own. Mayor Flagg stated that is the intent; this is just a transition period. |
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Commissioner Kitchens noted on page 2, Paragraph 3, the Development Director should be CRA, or Community Redevelopment Agency, Director. Also, under Funding on Page 7, Mr. Larson clarified that refers to the Main Street budget, not the Chamber’s budget. Per Commissioner Brown’s question, Mr. Bush said the salary is within the same range as the former Main Street director’s salary. Also, some office equipment and furniture does belong to the Main Street program, such as the computer. |
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Commissioner Norwood asked how the board members will be appointed. Mr. Larson said it will function as any Chamber committee would. They will appoint a committee, who will select a chairman, and the Main Street Manager will report to that person. Mayor Flagg clarified that they will not be answering to the Chamber; they will be autonomous. The Chain of Command should begin with the Board of Directors. Mr. Larson said the chain of command will begin with the Chairman of the Advisory Committee, which is the same as a board of directors. The Committee will report to the Chamber’s vice chairman of economic development. Items will go through several levels of approval before something can be done. They did it this way for five years and it worked fine. Several levels of oversight is a good thing. |
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Mr. Deputy stated the Downtown merchants have worked on this for a long time and have been extremely concerned about the program. They feel this is their best option. He’s been a member of the Chamber for several years and hasn’t been embarrassed by anything they’ve done. They are behind this move. |
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Christy Sanford, 312 Dodge St., said Main Street is devoted to bringing back historic buildings and doing things that will revitalize the City. She spoke with Ms. Jefferson yesterday; she said the transition is fine with her as long as the Board remains autonomous. Her definition of autonomous doesn’t include the Chamber choosing a board. They need Mrs. Jeffers’ definition of autonomous. |
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Edison Lambana, Husson Avenue, stated he is opposed with the Mainstreet Program going to the Chamber. He was a downtown merchant for many years and never had any cooperation from the Chamber; they treated him badly. The downtown merchants do not include him in what they are doing. He has been treated like an outsider. He brings tourism here and fills the hotels. He feels the Commission runs the city. Mayor Flagg stated Mr. Lambana should take his concerns to the Chamber’s Board. He does not need an invitation to attend those meetings. |
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As to the autonomy issue, Mr. Bush stated Mrs. Jefferson stressed the importance of an autonomous Board. He asked Mr. Larson to address the autonomy issue. Mayor Flagg said for the initial start-up, there needs to be an application process and screening process for the initial start-up of the Board. They need to be sure neither the City nor the Chamber is running it. The Board should be running it. They need an oversight mechanism so that if “big brother” needs to step in, they can. |
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Mr. Larson stated he wants a Main Street program that works. He feels a tremendous responsibility to get this program resurrected. You can’t have responsibility without authority. The agreement and protocol is clearly written. The Manager is hired and fired by the Chamber president, and serves as a member of the Chamber staff. Everyone wants this to be successful; he is not going to be tied to a program that does not work. He is going to find people that will commit to do the job. He is not going to micro manage, but needs the authority to put the necessary people in place. Otherwise, he can’t be held responsible for the results. |
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Mr. Bush stated the Chamber’s role is an oversight position. The Manager will answer to the Chairman of the Main Street Board. |
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Per Commissioner Brown’s question, Mr. Deputy said this request comes from the Downtown Merchants. He served on the Main Street Board for several years; it is a big commitment and takes up a lot of personal time. They need to take these appointments seriously. People should be recruited for their talents and abilities. He agrees with Mr. Larson that they need quality people for these positions. |
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Ruby Singleton, 216 St. Johns Ave., stated she was at the meeting when the Downtown Merchants voted to “house” the program at the Chamber. They did not agree that one person would select the Board. The City should select the members. An employee of one 501C3 cannot work for another 501C3; the paperwork would be a mess. This has to be some sort of conflict of interest. The Commission can’t state they allocated the money to Main Street if it goes to hire a Chamber employee. The Downtown Merchants need some of those seats, because the mission is to enhance Downtown. |
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Michelle Jeansonne, 506 Emmett Street, asked how one person can select the Board and the person that reports to the Board, and them not be unbiased? It should be autonomous. She sees Mr. Larson’s point the she wouldn’t want to be responsible for the results if you couldn’t pick the players. The Board should be small and picked through a community effort. Per her question, Mr. Deputy stated the Board may have had up to 20 members at one time, which made it large and difficult to work with. Ms. Jeansonne stated she was on the Downtown Redevelopment Team Mr. Bush put together, which had 17 members, and it was near impossible to meet quorum. A board of 10 – 12 members should be sufficient. The board should be formed and they should hire the person that is going to be working for them. |
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Commissioner Kitchens moved to table this until Mr. Bush talked with Ms. Jefferson to determine the procedure for choosing a board, and get her definition of autonomous, and determine if this Plan is acceptable to her. Commissioner Brown seconded the motion. Per discussion on the agreement, Mayor Flagg noted the composition of the Board is not addressed in the draft. Commissioner Kitchens asked if Mr. Holmes could research the matter. |
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Mayor Flagg asked if the draft was acceptable contingent upon those issues being resolved. Commissioner Kitchens stated she would agree with that. Mr. Holmes said there appears to be some dissatisfaction with the Chamber hiring the Main Street Manager and having him/her answer to the Chamber President. Commissioner Brown asked for Mr. Deputy’s opinion. Mr. Deputy said once you create any board, there are always people who drop off, as it wasn’t what they were expecting. There will have to be some trust that the Chamber can put together a working board willing to roll up their sleeves and get the work done. When he was on this Board, his business was hurt due to the time requirements. As for hiring, they’ve all hired someone that looked good on paper, but didn’t work out. They need to go forward on trust. |
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Elizabeth Hatcher, 619 S. 18th Street, said she’s looked at the Main Street program, and the program contains exact guidelines for choosing the Board. They don’t have to reinvent the wheel. The Chamber will oversee the process until it can stand on its own, but in the meantime it will be run according to the guidelines. |
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Mr. Holmes stated the idea of autonomy is a great concept, but they have to ask how they will square that up with City government. They can’t allow a totally autonomous board to operate under the auspices of government. If you are going to fund a fully autonomous board with taxpayer money, they are not doing their jobs; they are funding a board that is not accountable to anyone. If they are going to form their own corporation that has its own funding, they can do whatever they want, but if taxpayer money is involved, they can’t reconcile total autonomy with public funds. |
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Ruth Burk, 510 Mulholland Park, said there are rules for a 501C3, and Main Street has bylaws. They’ve been misused and controlled by the City. For instance, the City Manager recently called a special meeting. The rules say you can’t sit on the Board if you’ve missed three meetings, and he has, so he’s not even on the Board anymore. Fred Fox has missed nine meetings. Mr. Bush stated he is not on the Board. Mrs. Burk said he then had no authority to call a meeting. |
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Mr. Larson stated this is a contract between the City and the Chamber. This is a different issue than that involving a City committee. They have 30 day right of cancellation. |
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Ruby Singleton stated you do not want to end a program the day after you begin it. They don’t want to end this 30 days after it is begun. There is nothing wrong with the Chamber having an element of control, but it should not be a Hitler mentality where Mr. Larson and the City Manager control everything and do all the appointing. People do accept positions on boards if they don’t want to work. You can't put Mainstreet under the Chamber’s total control. They need to get with the National Mainstreet to see how it should work, because evidently they don’t know. When the Downtown Merchants voted on this their President told them that this was only temporary. If they can’t operate on their own, they will never be able to stand on their own. It hasn’t worked in any other form. |
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Commissioner Norwood stated this is a national program that has procedures in place for setting up a Board. This commission doesn’t need to get involved in that. They need to consider the agreement that is before them tonight. |
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Mr. Deputy stated the Chamber is willing to take over the program. Mr. Larson said he is willing to follow this through. The Downtown Merchants will make certain it is run correctly. Mr. Larson has committed to running the program as it should be run, and the Downtown merchants will be very involved. Program’s like Deland’s are contracted out. It was started in the same fashion, but now it is different. They need to take this first step. |
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Per discussion, Commissioner Kitchens withdrew her original motion to accept the contract pending clarification of procedures with Ms. Jefferson, citing Mr. Holmes’ comments regarding autonomy. Mayor Flagg noted the directive is to follow the program. Commissioner Sanders moved to accept the Agreement as presented and allow the Chamber and Downtown Merchants to work out the details between themselves. Commissioner Norwood seconded the motion. |
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Roll Call Vote |
A roll-call vote was requested, which yielded the following results: Commissioners Brown, Kitchens, Norwood, Sanders and Mayor Flagg, yes; Nays, none. The motion was declared passed. |
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Mayor Flagg adjourned the March 22, 2007 meeting of the Community Redevelopment Agency at 8:08 p.m. |
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Recess |
Mayor Flagg called a recess, having received Commission Concurrency. |
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Reconvene |
Mayor Flagg reconvened the March 22, 2007 regular meeting of the Palatka City Commission at 8:24 and continued with the Orders of the Day. |
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RIVERFRONT REDEVELOP-MENT UPDATE |
Mr. Bush read his memorandum to the Commission regarding the Development Agreement with Elite Hospitality, Inc. (filed). He stated he’d hoped that Mr. Zelkowitz would be here tonight to address the terms sheet, but he was not able to attend. Mr. Bush noted Mr. Zelkowitz recommends the changes in terms submitted by Elite Hospitality should be carefully reviewed. He noted the Commission should either be prepared to accept the proposal, or sever ties with that company and negotiate with the 2nd ranked proposer, or go back out for proposals. If accepted, the City should immediately sit down with the developer and bring this process to a close. |
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Don Holmes, City Attorney, stated he is left to interpret the term sheet, which he stressed is a term sheet and not the development agreement. It outlines the concepts that will be fleshed out in the development agreement. The three issues that are of concern to him are 1) the timing, 2) the exchange between the Housing Authority and the developer; and 3) the City being paid for the 100 Block. Mr. Ashdji has explained they need some flexibility in financing, but as he interprets the Terms sheet as written, there is much potential for placing the City in an embarrassing position. He believes all parties are acting in good faith. Both parties are talking about making a major investment. He is particularly concerned with beginning demolition and construction work before the property is transferred. They could conceivably go through the 90 days inspection and Elite would be able to terminate the agreement at its absolute discretion. If they don’t terminate and get permits, they could start construction on the highrise replacement housing and the next day begin demolition of the 100 Block. The agreement does state he’s not allowed to pledge the 100 block for other financing until he pays for it, but the people doing the demolition have a right to a mechanic’s lien, which is superior to a mortgage. He has to look at the potential issues for the city. In the agreement they do not have to close on the 100 block until 10 days after they finish either the demolition of the 100 block or 30% of the replacement housing, or the latter of the two. There is no requirement for a limit on how much they borrow for the replacement housing. Under the terms, he is concerned that the City may be left owing money on the replacement housing if Elite were to drop out. There are no dates of any kind on when they are going to start construction. He knows this could all be ‘fleshed out’ in the development agreement, but there is no guarantee of that. These terms do not work for him. There is no up front money. Mr. Holmes referenced the Term Sheet Purchase price for city property. He cited concerns in paragraph 1 reference mortgages on the 100 Block that was in conflict with other terms of the agreement. If the “letter of credit” is of a sufficient nature, it could allay many of his fears, and it would cover demolition and mechanics liens, but whether Elite would be willing to do that remains to be seen. There are too many gaps in what they want to do and what the City wants them to do. Mechanic Liens can be attached to both the 100 Block and replacement housing. Time for closing on the City property is an issue; he doesn’t understand the philosophy behind the “trigger points.” Paragraph (b) 4 conflicts with paragraph (a) 11. Paragraph (b) 5 talks about equity. There is nothing that says they can’t finance the replacement property at 150% of value, so there would be no equity in that property. They could default at a point where the City has been prejudiced, with nothing out-of-project. There are 2 default clauses. As to the repurchase clause in case of default, he does not know what their schedule is to know when they would be behind in the completion schedule. As to repurchasing the property for the outstanding debt, if they owe more than it is worth, it is not a good deal for the City. He understands they need to build and sell in phases and are looking for flexibility, but he needs to look for protection for the City. |
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Mr. Fred Ashdji, Elite Hospitality, stated the conference call on Monday morning opened his eyes to many issues on both sides. They did not mean to mislead anyone; the intention was to start the ball rolling on getting this project off the ground. The verbiage about when they will take the 100 Block is to get the process going faster without having to go to outside expense. No bank will give them a mortgage with no equity. His company is not going to enter into an agreement unless they know they are going to get the 100 Block. They have already spent money, time and effort on this project without a guarantee that they will get the 100 Block. When the property is clear and the HUD process is moving along well, they will seek financing on the 100 block, and will then pay the City for the 100 Block. The security-to-loan ratio will be decided by whatever local bank they go with. There is no time line because they do not know when they will start what phase of the project; they intend to start the HUD replacement housing and Phase I of the condominiums first. Phase II will depend upon the process of Phase I. They will develop a timetable for Phase II when Phase I is done. They are not asking to vacate Memorial Parkway, just the ability to close it to Hwy 17 access for safety reasons. As it stands, Memorial Parkway remains a throughway, and they believe it would be better for the development if it were not. It will still be Memorial Parkway. The companies they borrow money from will need security. Phase I is the HUD property, Phase II is the 100 block condos and Phase III is the commercial space & condominiums, and the Hotel is the last thing they will build. |
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Deb Miles, 414 River St, said she recommends using Brefrank as the developer because they have the resources to do this. She has seen their work and knows they will be good for this project. They won’t ask for concessions and are the only developer ranked by name. They are the #2 ranked developer. |
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Mark Miles, 414 River St., said he served on the 5-year planning team which chose Vestcor as the developer, not Elite. If Vestcor is not to be used for the project, they should go to Brefrank. Negotiations are not being done without the benefit of an MIA appraisal, and public lands cannot be the subject of negotiation without one. He does not agree with giving away control of property or roads. If the developer is allowed to begin any work, there must be bonding and deadlines in place to assure completion. Impact fees should be imposed to new residents and businesses to cover their fair share of increased costs for capital and operating expenses, which their move into the City creates. He is offended that the Riverfront park improvements have been removed from the development. The only concession asked for by residents was taken out. This city should be negotiating from a position of strength. Brefrank is still interested. He is offended by the concessions being offered to Elite, as described by the Palatka Daily News. The Commission should consider whom they are dealing with. The developer should be offering concessions, not the City. |
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Doris Satterwhite, PO Box 1707, concurred with Mr. Miles. She asked if they have updated financial statements from Elite; does the City know they have the money to pay for all this? The City should not do anything without having money up front. Developers put up earnest money to show their sincerity. The City needs a current appraisal. The commission should have second thoughts before dealing with this company. |
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Lynda Crabill, 609 S. 14th Street, said she concurs with previous speakers. These terms go against all she knows as a real estate salesperson. Elite is taking advantage of the City. He has changed his plans repeatedly. They are bringing the subject of a marina back again, and they don’t want that. Mr. Ashdji spoke about doing this in phases; with the economy as it is, will he stop after the first phase, or will he wait to begin the other phases until the economy gets better? In the report Elite’s engineer did on these buildings, he states the age of the buildings is unknown. That can be easily determined. They weren’t built in the early 20th century, they were built in 1885. The historic buildings can be reused. They can work with the facades. They are already retail buildings. They shouldn’t demolish the buildings. Once demolished, they can’t be rebuilt. |
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Elizabeth Hatcher 619 S. 18th St, said her family is a pioneer family that founded Peniel. This is her heritage. She worked as a consultant for FDOT in right of way acquisitions. They never purchased anything without three MAI appraisals to establish fair market value, which must be established. There cannot be any negotiations without it. No one is comfortable with Elite. She urged them to begin negotiations with Brefrank. She’d like her children to be able to come back here to live and work. |
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Sam Deputy, 917 Carr St., said he concurs with issues brought by prior speakers. He thought the City was still dealing with Vestcor; to have it announced in the newspaper that they were dealing with Elite was a shock to him. He was concerned at the last meeting when Elite’s representative stated he did not know the highrise was to come down. At a prior meeting he was assured that an appraisal would be done, but that has been crossed out and the purchase price is stated as $1 million. He has trust issues with the attorney representing Palatka. He has obviously had instructions that differ from those stated at these meetings. There are two houses on River Street that are selling for $1 million. Concerning the CDBG grant the City would obtain to do the infrastructure improvements for this development, he is a private enterprise and would like such a grant to improve his building’s sewer lines. They have other needs for grants. The $250,000 for improvements to the park is gone, and replaced by a clause stating the developer will have input on the improvements to the Park, which the City will then have to maintain. It looks like it will become an extension of the Condominiums’ front yard. The Park is for the citizens. |
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Christy Sanford, 212 Dodge St. said she is concerned because things keep changing and disappearing. She wonders if Mr. Ashdji really wants to continue with this since the housing market crashed? The City has allowed Ms. Crabill to do all this legwork on saving the 100 Block, and she is getting the impression this is futile if they intend to give the developer the right to tear them down. Mayor Flagg said they haven’t given anyone the right to tear down anything. The Attorney was only referencing what was proposed on the terms sheet. This commission hasn’t discussed this Terms sheet yet. Per the question, Mr. Bush said the City originally paid $750,000 for the 100 Block. As to the Terms sheet before them, their respective attorneys have discussed the issues and came up with a draft terms sheet. It is yet to be discussed by the Commission, who will make an ultimate decision on what will be included in the Terms and what will not. |
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John Burns, 506 Emmett St., asked where the $1 million figure came from? Mr. Bush stated it was proposed by Elite in the original RFDQ proposal. Per the question, Mr. Bush said a committee sat down and ranked the proposals and Elite/Vestcor was ranked #1. Mr. Holmes said the terms sheet was designed to put the concept of terms in writing for the Commission to consider. This is a package; not a term-by-term analysis. The conference call was designed to put in writing what Mr. Ashdji wants to do, so that the Commission can address the points. Mr. Burns asked if the Attorney that has been hired by the City is representing the citizens of the City and not anyone else, because the City’s attorney has concerns about what is on the terms sheet. Mr. Holmes said this is just a working model, in print, so that the Commission can give him direction on where they want to go. It is not his intent to advocate a position. It is hard to start building on something if you are doing it all in your head. Once it’s on paper, it can be changed. Mr. Burns said if he’s working with the developer, he is developing a list of recommendations to the City, not just a terms sheet. It would have been constructive for that attorney to be here tonight. |
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Michelle Jeansonne, 506 Emmett St., said Mr. Holmes addressed her concerns when Mr. Ashdji stated the attorney rushed these terms. He does not believe these terms address the concerns of the City. Mayor Flagg said the Commission has not had the opportunity to address the terms sheet; this should not be taken as the official position of the City. Ms. Jeansonne said the City’s attorney should have done a better job of putting together these terms, which they are deciding on. Mayor Flagg stated the Commission couldn’t consider these terms before now; that is what they are doing now. With regards to Vestcor, Ms. Jeansonne said they interviewed Vestcor and Rink Design with Elite, and they have none of that now. These terms are extremely far from the mark from what they developed. Vestcor was selected. The City of Palatka should not have to support this project. In regards to the demolition of the 100 block buildings, she believes the appraisal would present an argument for saving them. A University of Florida architect reviewed the historic buildings and believes they can be saved. You cannot recreate these buildings. |
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Crystal Olney, Lundy Road, concurred with what everyone else stated. They don’t need to give Downtown away. She brings people downtown and to festivals. First they needed the marina; then they didn’t. Elite has property on the waterfront and the City can add to the existing dock. They are bringing up the marina again. Do they want the City to get a grant to build one and give it to them? The city already has a nice dock; it needs more slips and improvements. They should support the Boathouse Marina that is already there; the owners are spending money to improve it. Don’t build a marina and give it to the developer. She hasn’t read the terms sheet so she doesn’t know what it is in it. She hopes the commission will pay attention to the people. They should get the money for the 100 Block up front. |
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Elizabeth Hatcher, 619 S. said apparently on Monday they had a phone conversation and the City’s attorney then put together a terms sheet for review. She asked why Mr. Ashdji didn’t have his terms already written out, and asked why the City’s attorney had to write them out, and why did they only have four days to review them. She can’t believe they allowed the developer to set the price of the property. The people are unhappy and afraid of this developer. They all want improvement for the City. |
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Ruth Burk, 510 Mulholland, said it sounds like the City doesn’t have an attorney. She can’t believe they are even considering these terms. The last page of the terms sheet said the developer wants the City to vacate a portion of Madison Street between Mrs. Wilson’s property and the Quality Inn so he can build a boat ramp. If the City closes this street, they won’t be able to get to their houses in Mulholland Park anymore. Mr. Holmes said this property is similar to when they vacated the end of Hotel Street for the Boathouse Marina; it is not part of the existing road and no one drives on it. Mayor Flagg stated no one lives on that portion of Madison Street. It is the property east of the street, and runs down to the River. Mr. Holmes noted the only thing she could drive from this property to her house would be a boat. |
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Edison Lambana, Husson Avenue, said they are sending Mr. Ashdji a signal that they don’t want him, and he thinks that’s wrong. If they could purchase a piece of property at a bargain price and improve it, they would. He is for progress. Downtown is pitiful. They need positive change and growth. If not him, then someone else. He knows what it feels like to be an outsider here. This gentleman can bring positive growth. |
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Mr. Robert Griffith, 510 Mulholland Park, said at a prior meeting he was concerned that the City was going to push this development through without permission to tear down the highrise, and the Commission tabled it based on his concerns. They went through a process to select a developer. When this was going on, he got the feeling Mr. Bush had already spoken to the Elite people about this. He was concerned when the City was using TIF money for all this. He then read an article saying this was an appropriate use of TIF money, so he went to Mr. Bush and apologized. This City has had 20 years to control the CRA for the Downtown redevelopment. He doesn’t know when the plan was changed to use the TIF money not to rebuild downtown, but for the riverfront development. All Cathy Butler’s work was directed on this riverfront redevelopment. They purchased the buildings and just let them sit there. He was told by a person from the League of Cities that two people have bought up all the buildings and are blocking development there. They’ve been here four years and can’t even get a tax abatement program so they can develop their buildings. He is praying they will have the courage to make the right decision for the people. A comment was made at an earlier meeting that all the folks that were for the project are sitting at home. He believes no one knows what is going on. |
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Mr. Ashdji stated that he originally had a list long of things he wanted the City to do, and the City’s attorney took most of those items off the table. This terms sheet is what is left. These are just ideas to consider. This is the first time he has seen it. He knows that there will not be a marina. Much of the misinformation surrounding this project was put out by the public media; they are in the business of making news sensational. If it is not sensational enough, they will make it more so. When they first bid this project, there was a marina involved, but that is gone now, and they are OK with that. They have paid out over $2 million just for designs. Elite Hospitality has the right to change construction companies, which is what Vestcor was. In their original proposal they offered $1 million for the 100 block and $2 million for the HUD property, for a total of $3 million. Then they were told they’d have to build the replacement housing before they could get the HUD property, and it became a $5.2 million project. Before they even take possession of the buildings, they would have $5.2 million in it, plus the cost of schematics. He can’t even begin construction until he is out money for drawings, replacement housing, impact fees, demolition and purchase prices. The impact fees they have asked to be waived aren’t even in effect yet. To close the road, they will be spending a lot of money just to make it look better. Just the base starting price of this project is $5 million, $2 million more than originally proposed, and that is why they are asking for something back. This is just a proposal. As for childhood memories, he grew up in Israel. His house was the largest in the neighborhood, facing the ocean, and you could hear the ocean every night. When he returned to the site several years ago, the house was gone, there were condominiums everywhere and 300,000 people were living in the field his parents owned. You could not see or hear the ocean, or even know which direction it was. He agrees that the property is worth much more than what he is offering. This is one of the best properties he could hope to own. He sent his engineer to look at the 100 block buildings, and although his engineer didn’t know what year they were built, it would have made no difference. He is one of the best and most highly regarded architects in Florida. He can’t please everyone in doing this project. They can’t keep the buildings and make the numbers and required parking space work out. He likes to build beautiful buildings. He feels they have tried to accommodate everyone. The commission has a hard decision to make. The market has changed. His attorney made the offer he was instructed to make. The Commission can consider it or not. This is not a contract. The only reason he asked for the 100 Block prior to closing on it is to help the project move forward. |
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Crystal Olney stated she worked for a developer in Jacksonville. $5 million will only build a few condominiums; it will not pay for all he wants to do. It costs $2 –3 million to build just a hotel. It would take some $10 million to build this project. Mr. Ashdji said the $5 million is just for the land alone. |
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Mayor Flagg closed the public portion and opened commissioner discussion. |
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Commissioner Kitchens said the book that was offered as a response to the RFDQ was offered by Vestcor, who referenced Elite Hospitality as a "partner." Later another book was circulated that showed Elite as the primary developer. Later the question was asked as to whom the developer was, and the answer was Elite, but to begin with it was Vestcor, according to the first book, which is what was voted upon, and that is where that misconception about the developer began. This happened on January 9, before she’d been sworn in as a Commissioner. A few meetings later, Mr. Ashdji said Elite was the developer, and he said he didn’t know how Vestcor’s name got on there. |
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As to the developer terms, she said she received the terms sheet yesterday, and stayed up all night looking at it. They don’t want to look at this piece-by-piece, but as a whole. Some of it does not sit well with her and she has offered her comments in writing (filed). She brought additional copies so the audience could follow along. |
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As to pages 1 & 2, Section A, Sale & Purchase Agreement, the City should not convey any property until the money is in hand. If she were a buyer, she would be very happy with it, but as the seller, she would be very displeased. |
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As to the sales price, she didn't know where the $1 million came from, but understands it came from the builder in the response to the RFDQ. The RFDQ states the minimum price for the HUD property is $2 million, or at no cost in lieu of replacement housing. The Housing Authority block is assessed at $4,217.864.00. The 100 Block has a total assessment of $783,420 for a total of $5,001,011 for both properties. This includes land and buildings. The $1 million price for the 100 Block is unacceptable. |
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The original paragraph 4, which called for an earnest money deposit by the developer, has been dropped, and it now reads "right of way vacation." The City’s attorney drew this up. Mr. Ashdji has already said he is not asking for the right of way, but is asking the City to vacate that portion of Memorial Parkway between St. Johns Avenue and US Hwy 17, such closing to be a condition precedent to closing of the transaction. |
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As to Impact Fees, the developer is asking for an exemption as a condition precedent to the closing on the property. It is her opinion that no way should any developer be exempt from impact fees, as it will have an impact on City services. |
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In addition to conveying the title to the property to the developer prior to payment being made, one of the selling points Mr. Ashdji originally offered was that he had enough money to do his project himself, and was asking for nothing from the City. Now they find he doesn't have unlimited resources. She understands why he needs them, but her job is to look out for the citizens. She knows there’s been a drop in the housing market, but that’s not the point. |
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As to closing costs, he wants the City to pay doc stamps for the conveyance on the 100 block and title searches on the buildings. Doc stamps on $1 million will come to around $7,000, and it costs around $500 for a title search on just one building. |
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As to Section 4, page 8, as to the closing date, it states the closing will occur within 10 days following the completion of demolition of all above-ground structures on city property on the 100 block and when the replacement housing is 30% complete. She doesn't know who is forcing whom to do what, but many citizens want the City to save the 100 Block, and this is insulting to them. If only 30 % of the replacement housing is complete, where will the people living there go? Mr. Holmes said the highrise property would conceivably close when the replacement housing is complete. The 30% completion refers to the closing of the 100 Block, not the highrise property. He said earlier this was troubling to him. Commissioner Kitchens confirmed she stood corrected and understood. |
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As to the three-story parking garage, she asked if the developer intends to go higher than the 3 stories that were approved. As to the design criteria, the conceptual project design was totally unacceptable to her and most citizens. This looks like the developer is going back to that first design. Red tile roofs are totally unacceptable. The next section says the City and developer will develop the design. |
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As to the conveyance of the City property to the developer, it states prior to the conveyance of the property, the City shall permit demolition of the above ground buildings on the 100 Block, provided the developer does not encumber the block with any mortgages or use it as collateral. Again, it seems the demolition of the 100 Block seems to be a condition of sale, with no money changing hands prior to the demolition, which is totally unacceptable. |
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As to remedies for failure to complete, She noted Mr. Holmes covered that very well. |
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As to the Development Agreement, Paragraph 9 states the City will temporarily close St. Johns Ave and Memorial Dr. in connection with festivals and other events. It also needs to contain wording that festivals will be able to use the Riverfront Park as well. The City shouldn’t have to have permission from the developer to close its streets or riverfront park. |
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As to the developer's contribution of $250,000 for the Park, that has been obliterated, and now reads the developer gets to have input on design of improvements to the riverfront park, and the City is responsible for its upkeep. If the Developer is putting no money into it, he should have no say in the matter as all. In addition, it could be construed to mean the developer could construct a marina along the Park. It should spell out no marina if this paragraph is allowed. |
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She said she would like the following added under Additional Matters: She'd like a notarized statement stating which Elite Hospitality corporation they are dealing with. There are many of them. She also wants a legal document showing that Farid Ashdji has legal status to speak for Elite Hospitality. He is not shown as an officer in any Elite corporation; on one document he's shown only as a manager. At an earlier meeting she asked him directly if he as an officer and what position he holds. He replied he acquires properties and does cost estimates for property improvements. |
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In January 2006 the 5-year redevelopment team dropped the requirement for 5 years of financials, and she thinks it should reinstated. |
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Finally, she believes Mr. Ashdji should go someplace where development won't be such a financial burden, and the City should begin negotiations with the 2nd ranked developer. |
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Commissioner Norwood said at their last City Commission meeting, they asked their attorney to put together a terms sheet so they could see how far apart they are with the developer and that is exactly what he did. He believes they are too far apart, judging from the response from the citizens. The City shouldn't bear any of the risk, but should probably make some concessions that won't put the City at risk. He doesn't like turning over properties without assurances they will get them back if the project falls through. He's concerned that the properties won't be bonded, and liens will be able to be levied on the properties. This terms sheet is not an agreement or binding agreement, or a perfect document, but designed to show us where we are. He could not agree to these terms as presented. |
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Commissioner Brown said several folks called her to say they already knew how the Commission would vote, and she doesn't know how they know that, as she has told no one how she would be voting. Four of the members of the Commission were born here; she has four generations of her family here. She wants nothing less than the best for them or anyone else’s children. She is thinking about all their children when making decisions. |
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She sits on the Regional Council, which oversees large-scale development plans. No one is giving anything away. She would not let a piece of property go without being paid for it. They love this town and want nothing but the best for it. She thought these terms would have more of what they would be willing to do for the City. That much development will bring impact to the City, and the developer needs to pay for that impact. She can't go along with these terms as they stand. |
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Commissioner Sanders concurred that they are too far apart on terms; things have changed since the original proposal was made. |
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Mayor Flagg asked if the Commission is saying the term sheet needs to be revised or rejected. |
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Motion |
Commissioner Kitchens moved to sever ties with Elite and begin negotiations with Brefrank, the 2nd ranked proposer, or go back out for other proposals. The motion died for lack of a second. Mr. Holmes said the question is whether they accept, reject or modify the terms sheet. He's not certain they can reject Elite and start negotiating with someone else, regardless of what Mr. Bush's memorandum says. They hired Mr. Zelkowitz to put together this draft “blueprint,” and they can either reject it, or make specific changes to it and send it back to Mr. Zelkowitz, or they can accept it. If they reject it, they can then consider other options. If they come to an impasse, they can talk about what they will do next. |
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Motion |
Commissioner Kitchens moved to reject the terms sheet as proposed. Commissioner Norwood seconded, saying they have a responsibility to use due diligence, and negotiate in good faith. This is the first draft, which the Commission is rejecting. That will give Elite an opportunity to bring another proposal to them for consideration. Maybe the next one will be closer. |
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Roll Call Vote |
Commissioners Kitchens, Brown, Norwood, Sanders and Mayor Flagg, Yes; Nays, none. The Term Sheet proposal was declared rejected. |
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Mr. Bush asked if they need to go through all the public comment on this matter to pick out the points there is a lot of consensus on, and send them to Mr. Zelkowitz to provide him with direction to use for his deliberations. Mr. Holmes said they can. It may result in Mr. Ashdji walking away. He agrees that the City needs to send it back for adjustment before walking away. He's not certain they should go back to the second ranked bidder, as things have changed. They don't even know if he's still interested. If a someone has inside information on whether the #2 developer is still interested, he doesn’t want to hear it, as that would be considered inside information they may not need to know, as it would be advocating for another developer. They can pick out key terms to change, and allow him to negotiate from there. |
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Commissioner Kitchens asked Mr. Holmes to distinguish between his role and Mr. Zelkowitz’ role. Also, she believes Mr. Holmes should be working with Mr. Zelkowitz, as he's had some good input. At the time of the developer interviews and when the developers were ranked, she was told if they couldn't work things out with #1, they would go to #2. She does not know Brefrank and only knows what they presented. Mr. Holmes said he wasn't implying she did; he was reacting to the audience. He was urging them to use caution. |
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Commissioner Norwood said Mr. Zelkowitz should not be bashed for doing exactly what the Commission asked him to do. They wanted to know how far apart they were, and he showed them just that. He was under some time constraints on this. |
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Mayor Flagg said all drafts of term sheets should be dated and adjustment should be made appropriately. |
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Mr. Ashdji said he has worked on this project for the last few months, running the numbers, and he is still paying $5 million for the land, when taking into account the price of the replacement housing, purchase and demolition. He feels that there is a concern that the Commission and this group feels his company and this project is too far away from what is best for the City. It is hard to please everyone, and sometimes people don't understand the terms completely. He has enjoyed working with the Community and City. This is a great location and the best location on the River in Florida. The Commission voted to completely reject this term sheet, which he felt was very close to what they needed to achieve, even though there is a lot of confusion on the terms. This was just a starting point. The only difference in what he is offering today as opposed to a year ago is he is taking away the $250,000. He represents Elite, which is divided into different companies for each property they own. He owns a part of three hotels. They would be establishing a new Elite entity/identity for this project, which is what they do for each project. He is now withdrawing his proposal. He had many hopes for this project, but it seems he cannot do what this community is asking him to do. He felt this was good for Elite, and even took the marina off the table and moved it to his property. There is far too much misunderstanding and commotion from these groups and the media. He has spent enough money on this project. He cannot justify any more legal fees, any more money for drawings they can’t even use, to try to get this project going. He hopes he can be of help to the City in other ways, maybe to find a new developer or give the City his City drawings. He feels much hostility from the citizens and doesn't want to be the 'big bad developer' that comes to Palatka to destroy the riverfront. He will just move on to another project. He thanked the Commission and citizens for their input, and hopes the next developer will be better received. |
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Mayor Flagg thanked Mr. Ashdji for his wisdom, and accepts his position. They will look to Mr. Zelkowitz, Mr. Holmes and Mr. Bush for their next move. Commissioner Kitchens thanked Mr. Ashdji for being gracious and understanding. |
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Proposed Amendments to Municipal Code to update the Building Code |
Debbie Banks, Planner’s assistant, said this is an amendment to the Municipal Code to adopt the current Florida Building Code, which supercedes all local building codes as of March 1, 2002, by order of the Legislature. It is updated every three years. By passing this ordinance, all references to the Sunshine Code, which is no longer in force, will be removed from the City’s Code, and all sections will be updated to reflect what is now in force. |
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Mayor Flagg noted this is just a housekeeping measure. As to advertising, the Clerk noted this was originally advertised for first reading tonight and 2nd reading on April 12, but due to concerns raised, this was changed from a first reading to a proposed change, and will now need to be advertised for April 24 as well, as there will be no first reading tonight. Per the question, Mrs. Banks said the Code referenced in Palatka’s Code Book has been obsolete since 2002. They’ve been operating under the Florida Building Code since 2002. This does not change building permit fees. |
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Tax Relief Measures |
Mr. Bush said various versions of tax relief have been rolling around the legislature, and proposals change daily. Rep. Rubio's proposal was changed this morning from rolling back to 2001 rates to 2003 - 04 rates. In looking at the new proposal, the reduction would have been a 30% reduction overall, but based upon the new figures, it leaves an estimated $770,000 in reductions. He has listed anticipated impacts by departments on his memorandum (filed). He did not include smaller impacts, such as cemeteries, cultural or buildings. If this goes through as proposed, the Police Dept. would take the largest cut with a $878,850 cut from this year’s budget. The next most adversely affected department will be Fire. Better Place money will cover most of the road paving and capital improvements. Administration and Building & Zoning will also suffer large cuts. The proposals change daily. They may be looking at a very tough budget year if these cuts go into affect. This morning, he heard that the Legislature had exempted poor rural counties, but not municipalities. It will still apply to Palatka. |
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Gary Getchell, Police Chief, said Animal Control, Weed & Seed and the Detective Division would be gone. A total of 18 positions would be gone, leaving 26 positions. This will take staffing back to 1960’s levels. They would still have to pay unemployment compensation, which would mean all civilian personnel would be gone, and business hours would be decreased to 20 hours per week, leaving either 4 hours per day or 2-1/2 days per week the PD would be open. |
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Administrative Reports |
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Ken Venables, |
General Services Director, said he deals with risk management and safety for the City. They have a very proactive and active safety committee. Their FLC Liaison dropped off the five-month experience statistics for the City, and he is pleased to say they only had 10 incidents in a five-month period, or a third of last year's incidents. This success is due to the employees of the City; they do a fantastic job in following safety policies. They review incidents every month and they are few. This performance saves money. Commissioner Brown offered thanks to the employees for their safety consciousness. |
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Betsy Driggers |
City Clerk, said the travel packets are ready for Legislative Action Day. |
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Commissioner Comments |
There were none. |
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Adjourn |
At 11:10 p.m. upon a motion by Commissioner Brown. |
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