Woodwater Investments also plans commercial development to serve residents and neighbors in the area
Commissioner Nancy Detert this week posed numerous questions about the intentions and the expertise of a developer who has proposed an affordable housing community — with commercial and retail space — on a 114-acre parcel the county owns at 2501 Dr. Martin Luther King Jr. Way in Sarasota.
As a result of her concerns, she cast a “No” vote on Oct. 6 as her colleagues approved a “term sheet” that staff had negotiated with the developer, Woodwater Investments of Miami.
“I think we can do better,” Detert told her colleagues. “This guy — we don’t know him,” she said of the principal of Woodwater. “He’s from Miami. There’s very sketchy details.”
Woodwater’s website says Barron Channer is the CEO and founder of the company. The website notes that he earned his Master of Business Administration from The Wharton School at the University of Pennsylvania, and he holds a Bachelor of Science in computer engineering from Rensselaer Polytechnic Institute in Troy, N.Y. The website adds of Barron, “His personal passions include equitable economic development for marginalized communities and widespread exposure to emerging technologies for youth.”
In late May, the commissioners authorized staff to work on the details of a potential sale of the North Sarasota property to Woodwater Investments. The parcel is located at the intersection of Dr. Martin Luther King Jr. Drive and North Tuttle Avenue.
“I want to know about what they’ve done in the past,” Detert said of Woodwater. In her research, she added, she had found little about the firm, even through a check of Florida Division of Corporations records.
When Commissioner Christian Ziegler asked how staff ended up working with Woodwater, Assistant County Administrator Brad Johnson explained that the firm approached staff in 2018. Johnson understood, he said, that representatives of the firm had talked with the commissioners one-on-one, as allowed under the provisions of the Florida Statute regarding economic development.
Staff has been working on the Woodwater proposal under the aegis of that statute, 125.045, Deputy County Attorney Joshua Moye pointed out.
Moye also told the commissioners on Oct. 6 that he hoped to have the draft contract ready by the end of the week for Woodwater representatives to consider it. “There’s no reason why this [process] should drag on for 30 or 45 days,” Moye added.
After staff receives a response from the firm, the document will be presented to the board members for final approval.
Assistant County Administrator Johnson told the commissioners that Woodwater had offered $2.5 million for the parcel, which the county purchased for $2.2 million in 2013. The plans in 2013 called for the site to be transformed into a regional park with athletic fields.
The first question Detert asked during the discussion was about the purchase price. “We have a $2.5-million offer for pretty much downtown Sarasota property, huh?
“We’re considering the land to be an investment into the affordable housing component,” Johnson replied.
When she asked whether staff had sought an independent appraisal of the land, Johnson responded that a person on staff who handles appraisals determined the fair market value of the parcel is $4.5 million.
Based on the negotiations with Woodwater, he continued, no fewer than 150 affordable housing units would be constructed on the site.
Half of them, Johnson continued, would be rented to tenants making 60% or less of the Annual Median Income (AMI) of the North Port-Sarasota-Bradenton Metropolitan Statistical Area (MSA). The rest would be rented to tenants with AMI of 80% or less, he added.
This year, the AMI for the North Port-Sarasota-Bradenton MSA is $76,700. That figure is set by the U.S. Department of Housing and Urban Development.
Furthermore, Johnson explained, the term sheet calls for those rent levels to remain the same, through deed restrictions, for 10 years. The county’s 2050 Plan, which governs residential growth east of Interstate 75, provides for affordable housing units built in new developments to retain their classification for only five years, he added.
When Detert asked Johnson what the rent would be at the AMI levels he had mentioned, he said the figure for tenants making 80% of AMI would be $1,500 a month; for those at the 60% level, it would be $1,100 a month.
“Certainly, I think, we’re able to leverage the property that we own to achieve some pretty substantial affordable housing commitments from the developer,” Johnson told the commissioners.
A secondary goal, Johnson noted, would be to ensure that “no less than 6 acres” of the site would be set aside for specific commercial services needed in the neighborhood, including a grocery store, a pharmacy and dining establishments.
As Johnson pointed out, the area around the parcel has been considered “a food desert” because of the lack of such commercial entities.
Commissioner Ziegler concurred with the “food desert” description. “It’s kind of right between Fruitville [Road] and University [Parkway], and there’s just nothing right there in the middle,” he said. “I think [the project] will do very, very well.”
“This is an amazing example of a public-private partnership to help carry out a county priority,” Chair Michael Moran added. “It took the private sector to come about to us.”
Moran reminded Detert that “a lot of detail” will be provided in the application for the rezoning of the site, which will be necessary for the mixed-use development to be built.
Nonetheless, Detert told her colleagues, “I don’t know why we want to negotiate with an unknown, unproven, out-of-town developer before we offer this [property] to everyone locally, or even in the area, that has a proven track record.”
“We’ve put properties out there for sale before, [with] commercial real estate brokers,” Commissioner Charles Hines pointed out. “We don’t seem to do very well. … This parcel has been no secret to anybody.”
Hines also reminded his colleagues that all staff was asking them to do that day was to approve the proposed term sheet, so staff could draft the contract. Before the commission commits itself to the Woodwater proposal, he said, representatives of the firm will have ample opportunity to meet with the board members to expand on the plans for the development.
Deposits to ensure progress
Johnson also explained details about the deposits Woodwater would have to make, as it goes through the formal purchase and development process with the county.
The company would pay an initial deposit of $125,000, he said, which would become non-refundable at the end of the company’s due diligence period regarding the site. Staff has agreed to allow Woodwater six months for due diligence, he said, with the potential of two, three-month extensions. However, Johnson stressed, the second of those extensions could be granted only at the county’s discretion.
“Due diligence” refers to the efforts of a potential purchaser to ascertain, through research and analysis of a site, whether any issues would prevent the developer from proceeding with its plans for the property.
If Woodwater wishes to proceed with the purchase and planning following due diligence, Johnson continued, then it would have to put down another $75,000 deposit, which would become non-refundable at the end of what Johnson called the “entitlement phase.” The latter is a reference to the effort to rezone the property for the affordable housing units and commercial uses.
That entitlement phase, Johnson said, would encompass the traditional county process: drawing up a site plan, submitting an application to staff with all the project details, holding one or more meetings with residents and the owners of property in the surrounding area to discuss the plans and answering questions, and then appearing during formal hearings before the Planning Commission and the County Commission.
In regard to the commercial development of the site, Johnson also pointed out that the term sheet says that, upon Woodwater’s closing on the purchase of the property, the firm would have to pay an additional $175,000 deposit, which would be held by the county in escrow. That stipulation, he said, is to ensure construction of the commercial/retail elements of the plan get underway within two years. If Woodwater complied with that requirement, he added, then it would get the money back.
Looking to the past in offering caution for the future
Commissioner Alan Maio pointed to the potential that the entitlement phase could end with the board members voting against the rezoning petition Woodwater is expected to submit to the county. “Make sure they’re clear about that,” he told Johnson, referring to Woodwater representatives. “I would just be real careful with that.”
However, Commissioner Hines voiced concern about the board members allowing the firm to go all the way through the entitlement phase and then turning down the rezoning petition. “People aren’t going to do business with us [in the future],” he said, if that happens. He cited two earlier situations in which developers took months — and spent a lot of money, Hines said — going through rezoning processes only to be turned down. “People are nervous.”
One of those projects Hines referenced was TST Ventures’ proposal for a yard waste and construction recycling center on county property near the Celery Fields. The commission ended up voting 3-2 in August 2017 to deny that rezoning petition, and then TST Ventures withdrew its offer on the land.
“Affordable housing has been one of our goals for many, many years,” Hines stressed. “We’ve tried everything, and it doesn’t seem to work.”
Commissioner Maio said he did not believe the board members “need to accept this [proposal] because we’re trying to worry about our reputation.” Nonetheless, Maio agreed with Hines that if the commission continues to have what Maio characterized as “misfires,” then “you’re going to have less and less people put in bids on our property.”
In this situation, Hines continued, the commission would be giving Woodwater a significant discount on the purchase price in exchange for the firm’s creating affordable housing units in the community.
If the board sold the property at market value, Hines indicated it would be impossible to arrive at terms with the buyer to ensure the development offered what he and his colleagues have called “workforce housing,” which would be affordable to teachers, nurses and firefighters, for example.
Moreover, Hines emphasized, “The commercial aspect in this is huge for that area, and you’ve got to keep that in mind. … I think [Woodwater will] be incredibly successful.”
Hines predicted that Woodwater would be able to find tenants for all the affordable apartments by the time it started construction.
He also pointed out that he was on the commission when the land was bought for park purposes. His belief, he continued, is that the creation of the affordable units and commercial development in that area would be far more beneficial than new soccer fields and softball fields.
Commissioner Detert nonetheless expressed frustration with the fact that “we have one unsolicited offer” for the land. “I’m 100% for using our land for affordable housing,” she continued, but “what bothers me is we’re real light on the details [from Woodwater]. “We really haven’t put [the property] out for everyone else to look at,” Detert said.
Commissioner Maio ended up making the motion on Oct. 6, which formally called for the board to consider the term sheet “identifying the material terms and conditions” for the potential purchase of the property located at 2501 Dr. Martin Luther King Jr. Way, for the purposes of economic development. Commissioner Ziegler seconded it.