Commissioner Hines voices hope city leaders will act quickly on document establishing tax-increment financing district and oversight board
On Sept. 22, it took about 12 minutes for the Sarasota County commissioners to unanimously authorize staff to deliver to the City of Sarasota a proposed interlocal agreement governing the planned funding mechanism for The Bay Park on 53 city-owned waterfront acres.
Additionally, they voted 4-0 — with Commission Chair Mike Moran absent — to authorize a public hearing on the ordinance that would create a tax-increment financing (TIF) district to bring in revenue for construction of projects planned at The Bay Park.
After the board members offered a variety of comments and suggestions to staff on Sept. 9, Commissioner Charles Hines called for the draft copies of the interlocal agreement and ordinance to be brought back to the commission for review on Sept. 22.
A defined district encompassing the 53 city bayfront acres, plus some surrounding parcels, would have as its base year Jan. 1, 2019. Then, each year, staff would determine whether the value of the property within the TIF district had increased, compared to that base value. Whenever the value rises, the property tax revenue resulting from application of both the city and county millage rates would be diverted to a trust fund for The Bay Park.
Altogether, Deputy County Administrator and Chief Financial Management Officer Steve Botelho reported on Sept. 9, staff expects the TIF district to produce $92,130,317 in county TIF funds over 30 years. The City of Sarasota’s tax revenue from the district has been estimated at $97,288,084, he added. The figures assume no millage rate increases over the life of the TIF district and annual growth in the taxable value of the property ranging from 6% to 8% in the first 10 years and then approximately 4% in each of the remaining years.
Commissioner Charles Hines made the motion on Sept. 22 to send staff to the City of Sarasota with the latest draft interlocal agreement, and Commissioner Nancy Detert seconded it.
During a presentation that day, Deputy County Attorney Karl Senkow told the commissioners that, since Sept. 9, he and Botelho “have been engaged in discussions” with representatives of the Bay Park Conservancy (BPC) and the city. The nonprofit BPC has an agreement in place with the city to manage The Bay Park and to raise funds for the park’s phases. BPC leaders have said it potentially could take 10 to 15 years to complete all the amenities, at an expense estimated between $100 million and $150 million, excluding a modern facility to replace the Van Wezel Performing Arts Hall.
“We’ve only received some conceptual feedback” from the city and the BPC, Senkow noted.
“I’m glad you’re working with the stakeholders, and probably need to involve them a little bit more,” Hines told Senkow.
“I think you’ve done a good job on this,” Detert said in addressing Senkow, “It’s just a starting point,” she noted. Still, she said, “I hope the City of Sarasota likes it.”
Any tweaks at this time?
His goal that day, he continued, was to ask the commissioners if they wanted any further tweaks in the draft documents.
“Great work,” Hines replied, adding that he had seen in the drafts the points board members raised on Sept. 9.
Among those, Hines continued, was language Vice Chair Alan Maio had suggested, calling for an assessment of the collaboration at the 15-year mark, to determine whether the interlocal agreement should continue for the full 30 years.
The draft interlocal says, “Beginning in the fifteenth year of this Agreement and every five years thereafter, the City and the County agree to work in good faith to jointly evaluate the performance of this Agreement.” Among the factors to be considered, the document explains, will be the total amount of TIF revenue contributed to the trust fund at the time of each assessment, as well as the amount of private investment in The Bay Park and the operation of the facilities.
The draft also says that any TIF revenue the city and county receive that is not included in the annual budget for The Bay Park will be held by the city and county until such time as the money is included in a park budget. “There shall not be any requirement for the City and County to contribute any interest earnings on Tax Increment Revenue held in such circumstances,” the document adds.
Further, the city has been charged with establishing the interest-bearing trust fund into which the TIF revenue will be deposited by both local governments.
Moreover, the agreement calls for the city to ensure that an annual audit of the trust fund is undertaken by “an independent certified public accountant in accordance with rules for audits of local governments adopted by the Florida Auditor General,” with the county to receive a copy of each report.
29 years, not 30
During the Sept. 22 discussion, Hines added that he also read language reflecting Commissioner Detert’s desire for the interlocal agreement to be clear in pointing out that only 29 payments would be made by the county into the TIF fund, if the agreement remained in place for 30 years.
On Sept. 9 — as she has on other occasions — Detert noted that the county made 29 payments to the Downtown Sarasota Community Redevelopment Area (CRA) Trust Fund, in which it participated with the city. However, after that 29th payment, city leaders insisted the CRA agreement called for 30 payments. City and county leaders took about three years to settle that dispute.
Deputy County Administrator Botelho has explained during County Commission meetings that the first year a TIF is in place, no revenue results. Thus, over the 30-year life of a TIF agreement, only 29 payments are due.
A ‘TBD’ acknowledgement, but no ‘gotchas’
Then Commissioner Christian Ziegler referenced concerns he had raised on Sept. 9. “I’m still kind of [to be decided] on the final agreement, when it comes back.”
He has been very open with the leadership of the BPC, he pointed out. “It really is an outstanding potential project here,” he added of the park and its amenities. “My only concerns [are] just the optics at the current time, when we have a lot of unknowns.”
On Sept. 9, Ziegler noted that numerous businesses are struggling to stay open and many individuals are dealing with difficulties in buying food and paying rent and mortgages because of the negative impact the novel coronavirus has had on the economy.
“Six months from now,” Ziegler indicated on Sept. 22, the economic situation could be a “different story.”
Chair Moran has opposed the TIF district because of his concerns, he has said, that the commission will need the property tax revenue to continue to provide services to a growing county population. He was not present Sept. 22 because of what Maio indicated was a family emergency.
Moreover, Ziegler said on Sept. 22, his goal is to ensure the use of the park remains free to the public and that the facilities can be easily accessed.
Although the Van Wezel Foundation is raising money for a new performing arts hall, Ziegler continued, not everyone will be able to afford tickets to performances in that facility. That is why, he added, that he believes what he called a “destination playground” on Sept. 9 and planned open space are critical features of The Bay Park.
He also has been focused on the configuration of the waterfront dining establishments planned for what BPC leaders call the “Canal District,” as well as better boater access to Sarasota Bay, he noted. Just the previous day, Ziegler said, he had further discussions with BPC representatives. “I look forward to that [conversation] continuing.”
BPC leaders have said they will put a certain percentage of revenue from the restaurants’ operations into a fund to pay for the park’s upkeep. Earlier this year, Ziegler talked of his desire to see at least a couple of the restaurants facing the bay, instead of facing each other over the boat basin in the Canal District.
Taking his turn at comments on Sept. 22, Commissioner Maio said, “This has been fraught with a great deal of stress for me because of the magnitude of the money … and the personalities and the friendships with many of the players.”
Maio and Bill Waddill, chief implementation officer of the BPC, were colleagues for many years, Maio has pointed out, when both worked for the Kimley-Horn consulting firm in Sarasota.
Further, Maio told Deputy County Attorney Senkow that he hoped Senkow would convey to city leaders “the manner in which we have spoken here” and the county commissioners’ hope that city leaders will “expeditiously approve [the interlocal].”
Maio also pointed out that, if city leaders planned to comb through the draft documents for “gotchas,” they should not waste their time, because such language does not exist.
After the board members voted unanimously to approve Commissioner Hines’ motion, applause broke out in the Chambers at the County Administration Center in downtown Sarasota.