Latest estimates show money being raised from tax-increment financing district climbing well above anticipated total over 30 years
Before they voted 4-1 on April 23 to approve the county’s next allocation to The Bay Park Trust Fund, produced by a tax-increment financing mechanism, the Sarasota County commissioners heard an update on the 53-acre project underway on the city of Sarasota’s bayfront.
AG Lafley, the volunteer CEO of the Bay Park Conservancy, which manages the park and raises private funding for it, pointed out that the creation of Phase 2 of the initiative is on track. “We’re in the design and construction and planning stage,” he said during his April 23 presentation to the commissioners.
“We are refining scope, as we always do,” he continued, in an effort to ensure cost effectiveness.
Phase 2 consists of four initiatives, Lafley noted: creation of the Resilient Shoreline, including the section along Hog Creek, which is north of the Van Wezel Performing Arts Hall; work on the Cultural District, which borders North Tamiami Trail in downtown Sarasota; replacement of a seawall and installation of new day docks at the Centennial Park Boat Ramp; and construction of the Sunset Pier.
The permitting process remains underway for the pier, which is one of the signature elements of the park, as Lafley and other representatives of the Conservancy have pointed out. The nonprofit has to win approval from even the U.S. Army Corps of Engineers for that feature, Lafley told the commissioners.
In June or July, he pointed out, construction is to begin in the Cultural District.
The budget for Phase 2 is $65 million, Lafley reminded the commissioners. Of that, $48 million is being funded by the City of Sarasota’s issuance of bonds, which will be paid back by the tax increment financing mechanism (TIF).
In 2020, both the County and City commissioners seated at that time agreed to create a TIF district that encompasses not just the area of The Bay Park but also surrounding property. Each year that the value of the land in that district rises from the figure for the base year, which is 2019, the two local governments apply the lower of their current millage rates to that value. The resulting revenue is set aside for the park.
However, as the county commissioners did last week and the City Commission did on April 15, both local government bodies have to vote formally to contribute the funding to the trust fund for the park.
Lafley told the county commissioners on April 23 that the Conservancy had spent $8.7 million to date, out of the $48 million in bond revenue. Altogether, he said, the Conservancy expects to have spent another $11 million by the end of this year.
He noted that the Conservancy does have an extra $17 million-plus from a series of government grants that it has won.
Further, “We’ve raised more than $50 million from private sources to date, and 90% of the Conservancy’s annual operating expenses are covered by funding from private sources,” Lafley pointed out.
During 2020 discussions, city and county commissioners talked of the prospect that the total cost of the park would be in the range of $100 million.
Lafley emphasized the environmental initiatives within the park, noting that a key feature of Phase 1, the southernmost section of the park, which opened in October 2022 — is the treatment of 70 million gallons of stormwater that flows through its approximately 10 acres. That effort removes nitrogen and phosphorus, he added. Those are the primary foods for the red tide algae, Karenia brevis.
Commissioner Ron Cutsinger told Lafley that he hopes the Conservancy can complete its stormwater initiatives as part of Phase 2, as the goal is to treat the approximate total of 200 million gallons of stormwater that flows through the entirety of the park, before it reaches Sarasota Bay.
The success of the park, Cutsinger added, is “dependent on good, clean, clear water.”
A variety of modern technology will be used in the stormwater initiative, Lafley told the commissioners.
Commissioner Neil Rainford noted that members of the public “don’t see what the effect is on the Bay” from the stormwater work. Rainford added that David Tomasko, executive director of the nonprofit Sarasota Bay Estuary Program, has reported since last spring that the health of the bay has continued to improve. The state no longer classifies any segments of the water body as impaired.
“We know the [Mangrove] Bayou [in Phase 1] is in the best shape it’s ever been in,” Lafley responded, concurring with Rainford that the public generally is not aware of the environmental aspects of The Bay Park.
A transition from ‘surface parking and rooftops’
Early on during his presentation, Lafley showed the board members an aerial view of property where The Bay Park is being created, prior to the start of the work, noting that the photo was in color, even though it appears gray. “The site was principally surface parking and rooftops,” he explained.
It is expected to take eight to 10 years to complete all of the park’s amenities, he added.
Already, Lafley pointed out, as indicated by the tracking system the Conservancy uses, “Over 400,000 visitors have been recorded in less than the first 18 months [since the opening of Phase 1].”
Moreover, he said, Conservancy staff has counted 50-plus people participating in each of the free activities at the park.
“Our yoga program keeps growing,” Lafley added, as an example of attractions at the park. “We’re going to run out of lawns to accommodate everyone that wants to come.”
Additionally, he told the commissioners that the shade structure — a primary feature of Phase 1 — has been honored with architectural awards.
The park also hosts free movies every Thursday night, he continued, and family movies are shown each Friday. People come from as far away as North Port and Manatee County for the movies, he said, emphasizing, “Everything’s free,” including the popcorn — and sometimes ice cream.
Commissioner Mark Smith told Lafley that he and his wife, Esther, “have enjoyed the movie nights …”
The emphasis from the outset of planning for the park, Lafley stressed, is that it serve all people.
The 2025 fiscal year TIF contribution
After Lafley completed his presentation, Deputy County Administrator and Chief Financial Management Officer Steve Botelho addressed the latest TIF contribution from the county.
Showing the board members a series of slides, he pointed out that when the TIF district was created, county staff estimated that the county’s payments over the next 30 years would be slightly above $92 million. However, he noted, the latest projection is for the total to reach $175,867,021 — a figure $83,736,704 higher than the original estimate. The city would be expected to generate $175 million, as well, the slide showed.
(Originally, the city was anticipated to generate $97,288,084 from the TIF district over 30 years.)
Then Botelho explained that the city’s debt service payment on the $48-million bond issuance for this fiscal year is $2,062,050. Because the county’s revenue from the TIF district is estimated to be $2,624,483 in the 2025 fiscal year, he added, staff recommends that the county turn over to the city only its half of the debt service payment, which would be $1,031,025. The remainder would be kept in the county’s General Fund, he said.
The General Fund is the most flexible account for the county to draw from, especially if unexpected situations arise. It is the “pot” into which the annual property revenue is placed.
A county staff memo included in the April 23 agenda packet pointed out, “Since The Bay TIF was created in 2020, the County has approved $4,566,243.00 in contributions to The Bay TIF through [Fiscal Year 2024] (the city of Sarasota has also contributed the same amount). In 2022, both commissions approved funding Phase 2 of The Bay which included a $48 million bond issued by the City of Sarasota, to be paid from TIF revenues. After accounting for the revenue contributions from both
local governments, and the expenditures for the Phase 2 debt service, the City’s financial statements show an ending fund balance in FY23 of $4.1 million, which is estimated to exceed $6 million by FY24 year-end.”
In 2020, when the county commissioners debated whether to join the city in creating the TIF district, Commissioner Michael Moran, especially, voiced concern that the county most likely would need the property tax revenue for a variety of initiatives over the coming decades. As a result, he consistently has voted against any motion regarding the TIF district and its revenue for The Bay Park. (He did so again on April 23.)
Then-Commissioner Nancy Detert also pointed out during a November 2020 discussion, “What we’re doing is forgoing future collection of … property tax [revenue] that may or may not rise. We’re all taking a chance and betting that appreciation will happen on those properties [in the district], and there will be a surplus of revenue to fund this [park].”
Because of those concerns, then-Commissioner Alan Maio brought up the prospect that the TIF district could be dissolved in fewer than 30 years, if it raised the necessary projected revenue ahead of time.
Maio had been a long-time colleague of Bill Waddill, then the Conservancy’s chief implementation officer; both were principals of the Kimley-Horn consulting firm in Sarasota before they left the company to pursue other endeavors.
Language reflecting Maio’s proposal was included in the 2020 TIF agreement that city and county leaders signed.
In the array of slides Botelho had for the commissioners on April 23, he referenced two other sections of the agreement. One said, “Notwithstanding any other term in this Agreement that may be read to the contrary, the County will make a maximum of twenty-nine deposits of Tax Increment Revenue to the City and will only make deposits that correspond to an Approved Budget of Tax Increment Revenue and only when there is sufficient increase in valuation of the Subject Property to produce a Tax Increment Revenue in accordance with Article XV, Chapter 38 of the Sarasota County Code. Furthermore, should any Annual Approved Budget provide for the deposit of less than the full amount of Tax Increment Revenue in a particular year, the deposit shall nonetheless count as one of the maximum twenty nine deposits of Tax Increment Revenue under this Agreement.”
The second slide included this part of the agreement: “Upon a finding of the Board of County Commissioners that the Tax Increment Revenue is not needed for [the Park in a given year], the County may transfer moneys to the general fund of the County to be used for any lawful public purpose.”
Commissioner Cutsinger ended up making the April 23 motion to approve the county’s payment for the city’s debt service, as Botelho had recommended, and Commissioner Rainford seconded it.
Even though Moran cast his “No” vote for consistency, he told Lafley, “I wish you much success.”