Next step will be County Commission consideration, which likely will not happen until 2020
With only Commissioner Willie Shaw voting “No,” the Sarasota City Commission this week approved the elements staff recommended for inclusion in an agreement with Sarasota County for a tax-increment financing (TIF) district for The Bay park project on about 53 city waterfront acres.
Vice Mayor Shelli Freeland Eddie’s motion also emphasized city staff’s proposal for setting aside a small percentage of the district revenue for improving connectivity from nearby neighborhoods to The Bay, including more visible bicycle lanes and wider sidewalks for pedestrians.
The percentage of overall TIF revenue allocated to those efforts most likely would be 5%, based on a Dec. 2 presentation to the City Commission.
“I think that’s important,” Commissioner Hagen Brody said. “Our bicycle grid is terrible in the city of Sarasota. It just is. … But we can’t put the complete burden of that on this TIF district …”
The priority of the TIF district, Brody added, “is to get the amenities done.”
(Among those is a new performing arts hall. See the related story in this issue.)
Further, at the recommendation of a Rosemary District resident, the motion incorporated extra details regarding one of the seven members on the board that would govern the TIF district.
City staff will continue to work with county staff on the language in the interlocal agreement for the TIF district.
Neither Assistant City Manager John Lege nor the two representatives of the Bay Park Conservancy — Chief Implementation Officer William Waddill and Founding CEO A.G. Lafley — offered details about when they expected to be back before the City Commission with the proposed document.
However, a staff memo provided to the city commissioners in advance of their Dec. 2 meeting said that the County Commission had indicated that a joint meeting of the two boards “would be most beneficial to finalize any details.”
The last regular County Commission meeting before the end of this year has been set for Dec. 11. The Dec. 2 City Commission meeting was its last formal session of the year.
County Media Relations Officer Drew Winchester told The Sarasota News Leader in a Dec. 3 email that he had seen nothing about the proposed TIF district agreement on the County Commission’s draft agendas for Dec. 10 and Dec. 11. Therefore, he wrote, he anticipated it would be after the start of 2020 before the board would consider the issue.
Among the details in his Dec. 2 presentation to the City Commission, Lege said city staff anticipates the TIF district could generate $202,286,189 over 30 years for The Bay project. That would enable city staff to issue $100 million in bonds, Lege added. Even with anticipated debt service of $56 million on top of the $100 million, he pointed out, about $46 million should be left over.
The baseline proposed for the TIF is Jan. 1, 2019, Lege said. The revenue generated by calculating city and county taxes on the property each succeeding year would be set aside for use in the district, he explained. The total value of district property as of Jan. 1 was $850,422,231, he pointed out.
That represents about 8% of the total taxable value of city property, which is approximately $10.5 billion, he said.
If Jan. 1, 2018 had been the base date for the district, he noted, then the increase in property value in 2019 would have generated $535,829.
By the end of the 30-year period, Lege estimated, the value of property in the district will be close to $3.3 billion.
In explaining why he would not support Vice Mayor Freeland Eddie’s motion to approve the elements of the district agreement, Commissioner Shaw reiterated concerns he has voiced in past discussions. He has been adamant that the boundaries of the district encompass Newtown, so its residents would be able to benefit, as well, from the revenue expected to be generated. Funds could be set aside for workforce training and affordable housing, he has told his colleagues.
Residents of Newtown, Shaw has pointed out, very likely will be hired to help construct parts of The Bay and then become employees at the new amenities. They should benefit in other ways from the project, he has stressed.
Yet, county commissioners have been equally adamant that the district should have tight boundaries, with the revenue primarily dedicated to the park, city staff members have emphasized.
“One of the things that we have to remember with this TIF district,” Commissioner Liz Alpert said on Dec. 2, is the necessity of “a narrow focus …” Otherwise, she continued, “we don’t get county approval and none of this happens. … So I think it’s extremely important that we support this [district] as is.”
During his presentation, Lege also had emphasized work with county staff members in the design of the district boundaries.
The proposed district does incorporate what Lege called the “gateways” of 10th Street and Boulevard of the Arts. Altogether, the boundaries determined in discussions with county staff encompass 1,734 parcels, Lege said.
One potential modification of the district that had been discussed with county staff, he continued, was the inclusion of city rights of way going north on Cocoanut Avenue to the Central Cocoanut District.
Waddill of the Bay Park Conservancy added that the focus had been on “the importance of connecting the neighborhoods” with close proximity to The Bay. The potential for improved bicycle lanes, wider sidewalks, better lighting and more signage — “making it safe,” as he put it — along the northern part of Cocoanut Avenue would be beneficial for Newtown residents, he indicated. Perhaps the improvements could go as far north as 14th Street, Waddill said.
The district details
During his presentation, Lege explained that 30 years would be the optimal amount of time for the establishment of the TIF district. With a 20-year timeline, he said, “You wouldn’t be able to borrow as much [money] early on …”
In terms of governing the district, he continued, the proposal calls for the board to comprise two members appointed by the County Commission; two appointed by the City Commission; one representing the Bay Park Conservancy; one representing the new Sarasota performing arts center, which will replace the Van Wezel; and one chosen by the members of the Governing Board.
During public comments on the TIF district, David Lough, a Rosemary District resident, proposed that that last member be someone who resides in the TIF district, owns property in the district or owns a business in the district. That was the extra distinction Vice Mayor Freeland Eddie incorporated in her motion.
Lege further explained the process staff used for estimating the revenue from the district. One scenario, he said, called for a flat 5% increase a year over 30 years. However, he continued, given the construction underway at the Quay Sarasota site west of the U.S. 41/Fruitville Road intersection and the upcoming building of the Auteurluxury condominiums on North Palm Avenue, staff felt a number of new projects would be underway in the coming years. That scenario led to an estimated tax value increase of 7.9% in the first increment year of the TIF, Lege noted, which would be expected to fall to 6.33% by the 10thyear and then level out to about 3% a year.
Staff also has figured on issuing $50 million in bonds in the fourth year of the TIF agreement, he continued, with the second $50 million in the 10th year.
In response to questions from Freeland Eddie, Lege explained that any shortfall in revenue needed to pay back the bonds “would fall on the city.”
Later replying to questions from Commissioner Hagen Brody, Lege stood fast in his belief that, even if the United States experiences another significant economic downturn, the TIF district values should climb sufficiently to ensure enough revenue for repayment of the bonds. Lege said he based that assertion on the fact that the 30-year Downtown Sarasota Community Redevelopment Area (CRA) was in effect during two recessions, and property values in that area did not suffer significantly.