Financing mechanism for The Bay Park project wins County Commission approval on 4-1 vote, with details to be ironed out in agreement with City of Sarasota

Chair Moran opposes plan, citing worries over how county would pay for expanded services as population grows

This is the most recent rendering of the master plan for The Bay, shown to the County Commission on Jan. 15. Image courtesy Sarasota County

With Chair Michael Moran in the minority, the Sarasota County Commission voted 4-1 on Jan. 15 to direct staff to “begin engagement” with the City of Sarasota for a 30-year financing mechanism to help pay for The Bay Park on the city’s 53 waterfront acres.

Altogether, based on city estimates, the plan could yield about $202 million for the bayfront project, city staff has reported.

The tax-increment financing (TIF) plan the Sarasota City Commission requested that the County Commission participate in would establish the value of property in a defined district as of Jan. 1, 2019, according to the motion County Commissioner Alan Maio made this week. That district would include the area of the park and surrounding property, including portions of the city east of U.S. 41.

Then, each year, as the value of the property in that district grows, the extra amount of revenue received by the city and county from property owners in that district, based on that year’s millage rates, would be put into a trust fund to cover the expense of amenities in the park.

Further, Maio called for a five-member board to oversee the budget based on the money in the TIF trust fund; the City Commission had asked for a seven-member board. Maio’s motion said two of the board members would represent the City Commission, two would represent the County Commission and the fifth one would represent the Bay Park Conservancy.

County commissioners did indicate a willingness to allow a couple of ex officio members on the board with technical expertise that would be of value.

This is a close-up of the plans for Phase 1. Image courtesy Sarasota County

The Bay Park Conservancy is the nonprofit working with the city to plan the park, manage the facilities and raise funding for the project.

Maio further agreed to use of the TIF proceeds to help pay for a new performing arts center to replace the Van Wezel, and he said a certain small percentage of the revenue could go toward bicycle and pedestrian pathways within the TIF district’s boundaries.

None of the TIF money could be allocated to what Maio called “raw infrastructure,” including pedestrian bridges that have been proposed over U.S. 41 to connect the rest of the city to The Bay, or roundabouts.

If The Bay is completed before the end of the 30-year period, Maio said, then the remainder of the county’s TIF revenue would be returned to the county. City staff has estimated that amount at $46 million.

All of the details will have to be worked out with the city in an interlocal agreement, Deputy County Administrator and Chief Financial Management Officer Steve Botelho explained to the commissioners on Jan. 15.

“I’d love to see this agreement signed [before] the end of this spring,” Commissioner Charles Hines said.

Based on city staff estimates — which Botelho showed the County Commission — the total amount of county revenue diverted to the TIF over 30 years could be $98,424,996. For the city, the figure was put at $103,968,807, based on the millage rates for the current fiscal year.

This chart shows the estimated revenue for the TIF for The Bay. Image courtesy Sarasota County

Botelho did point out that the loss of those funds would hamper county administration’s plans to build back up the Economic Uncertainty Fund from which commissions were able to draw money to maintain county services during the Great Recession and succeeding years, as the economy rebounded. Commissioners established that fund during the “boom years” before the recession.

During the discussion with Botelho and Bill Waddill, the chief implementation officer for the Bay Park Conservancy, County Commission Chair Moran referred to “the 800-pound gorilla in the room”: diverting property tax revenue to the TIF for 30 years, he said, would deprive the county of funds to handle the demands associated with expected population growth in the community.

“This is a significant, a massive amount of money,” Moran stressed, even if the county’s figure were cut in half. Yet, “We’ve got growth coming our way.”

Seeking assurances about fiscal responsibility

Commissioner Christian Ziegler acknowledged that, as the newest member of the board — having been elected in November 2018 — he was not familiar with TIF proposals. As a result, he apologized at the outset of the Jan. 15 discussion for having a multitude of questions. Ultimately, though, he joined the other four board members in approving Maio’s motion.

Among responses to Ziegler’s concerns, Waddill of the Bay Park Conservancy (BPC) explained that the nonprofit would not plan any phase of The Bay until it had secured the necessary funds for that part of the project.

The latest estimate for completing the entire initiative, Waddill told Ziegler, is $100 million to $150 million, depending on the amenities included in each phase. About 85% of the estimated $23-million to $33-million expense for Phase 1, on the southern part of the city acreage, will come from the private sector, Waddill pointed out.

These financial projections for Phase 1 were part of the partnership agreement with the Bay Park Conservancy that the City Commission approved last year. Image courtesy Sarasota County

In December 2019, he noted, the nonprofit filed its site plan with city staff for Phase 1. The BPC, he continued, hopes to secure the City Commission’s approval for that plan in June. If the nonprofit is successful, Waddill said, then it would break ground on Phase 1 “by the end of the year.”

With the rest of the project, Waddill continued, the BPC figures on “probably 50%” from the private sector and the rest from public sources, with the hope that the TIF would be part of the latter.

Altogether, he added, the BPC expects 10 to 15 sources of revenue to cover all the costs.

Additionally, Waddill said, the Van Wezel Foundation has estimated the expense of the new city performing arts hall at “around $200 million or so.” However, he noted, an earlier estimate indicated that figure could go as high as $240 million.

The goal, Waddill indicated, is to complete The Bay “in four to six phases over the next 10 years or so. … If we hit a recession, or if costs are beyond what we can afford, we can push the other phases out. … We have been committed to fiscal responsibility from the beginning.”

This is a rendering of an area of Phase 1, showing arcing shade structures designed by the Sweet Sparkman firm. Bay Park Conservancy Chief Implementation Officer Bill Waddill said the concept was planned to reflect elements of the original Selby Library — later the G.WIZ museum — which used to stand near the water on the Phase 1 site. Image courtesy Sarasota County

He also stressed that the nonprofit already has begun putting privately donated funds into an endowment, which will ensure care of the park’s amenities in perpetuity.

“If it takes us 20 years to build out a 50-acre park … in phases,” Waddill said, “then it takes 20 years.”

Cathy Layton, chair of the BPC board, also pointed out to Ziegler that the construction of The Bay — except for the new performing arts center — would be what is characterized as “horizontal,” instead of “vertical.” Referring to the latter — such as the building of a structure like the new performing arts hall — she said, “That’s where costs tend to get out of control.”

The BPC board members, she added, “feel very secure” that The Bay can be completed within its proposed budget.

This is the board and staff of the Bay Park Conservancy. Image from the nonprofit’s website

The park and the TIF

Opening the Jan. 15 presentation, Waddill showed the county commissioners a series of slides depicting the master plan for The Bay, along with renderings produced by the Sweet Sparkman architecture firm in Sarasota, which is working with the BPC.

The dominant feature of Phase 1, he pointed out, will be the Sunset Boardwalk over Sarasota Bay, which has been modified to eliminate negative impacts on seagrass. It will be for pedestrians only, he said of that structure.

Restrooms and concessions will be on the eastern end of the site, he continued, along with a “flexible lawn area” where events could be staged. An “adventure playground” has been planned, as well, plus a half-mile walk around the mangrove bayou that exists on the property and a canoe/kayak launch.

As Deputy County Administrator Botelho explained the proposal for the TIF, he ran through the 10 terms the City of Sarasota had proposed. For example, with the TIF governing board, the City Commission agreed to two members from the county, two from the city, one from the BPC, one representing the new performing arts center and the final one chosen by the other six members.

This graphic explains facets of a TIF. Image courtesy Sarasota County

He also explained that both the City Commission and the County Commission would have to approve the budget for use of TIF revenue each year. Botelho indicated that if the County Commission did not find the TIF governing board’s proposal appropriate in a given year, then the County Commission could stop the transfer of its share of the revenue for that year.

Chair Moran sought clarification “that the TIF board has no authority whatsoever other than presenting an annual budget.”

“They wouldn’t be the entity issuing the debt” for The Bay, Botelho replied.

The city would be responsible for issuing bonds, which would be paid back by the TIF money, Botelho explained. City staff anticipates two borrows of $50 million each, he said — in the fourth and 10th years of the TIF.

With the current millage rate, Botelho noted, the county gets about $2.5 million in property taxes from the owners of parcels in the proposed TIF district.

If the taxable value of the district climbs 8% in Year 2, as city staff projects, then the county would be giving up $199,412, he added. By the 30thyear, Botelho noted, the county’s TIF payment would be $7,142,748, based on the city figures.

City staff expects the property value growth to level off at an annual rate of 4% by Year 11, Botelho said.

This graphic shows how the property tax revenue from the TIF district would be diverted to the TIF trust fund. Image courtesy Sarasota County

“My concern,” Commissioner Nancy Detert told Botelho, “is, frankly, that looks very familiar to the last TIF we had with the City of Sarasota.”

She was referring to the Downtown Sarasota Community Redevelopment Area (CRA), whose sunset led to a dispute between the city and county over when the final county payment into the CRA’s trust fund was due. The controversy began in the spring of 2016 and was not settled until early 2019.

In drawing up the interlocal agreement for the new TIF, Botelho told her, “We would ensure that there’s full clarity” about the date of the last payment.

She wanted to be certain that the two local governments would be partners in the new project, Detert stressed, “and that we’re not just the wallet. … We’re taking a parking lot and putting up paradise,” she pointed out, noting that she was alluding to an old Joni Mitchell song.

Waddill had explained that most of the 53 bayfront acres are used for parking spaces in the current configuration of the land.

In regard to the baseline for the TIF, Commissioner Maio said he initially voiced reservations with Waddill about setting it as Jan. 1, 2019. Detert noted the same concern on Jan. 15.

“Admittedly,” Waddill explained, “there is a fair amount of construction that’s going on around this site. We’re creating value around us.”

This is a close-up of the proposed TIF district. Image courtesy Sarasota County

The new BLVD condominium complex and the Ritz-Carlton’s new residential tower both are getting close to receiving Certificates of Occupancy, he added, which means they would be added to the tax roll. (The website for the former says it “is located downtown in the heart of the Rosemary District, beside the famed Boulevard of the Arts, and overlooking the stunning Sarasota Bay. The Ritz-Carlton Residences are located at 1111 Ritz-Carlton Drive, that project’s website notes.)

“It’s real simple,” Maio acknowledged to Waddill. “You want Jan. 1, 2019 because you want to grab the TIF [revenue] on everything” that has received a Certificate of Occupancy since then.

1 thought on “Financing mechanism for The Bay Park project wins County Commission approval on 4-1 vote, with details to be ironed out in agreement with City of Sarasota”

  1. It’s a beautiful idea. It could take 25 years; it’s a ‘want’.. not ‘need’.
    Four areas of concern: have we over committed funding, extended financial obligations (MOTE, e.g.) to nonprofit entities who do not create direct revenue back to the County; what about upcoming school tax increase being requested ;
    upcoming property tax increase for 20 years to cover water infrastructure.
    City presently receives a benefit of County Fire & EMS services without reimbursing the County at the Performing Arts- Bay Park area. The liability for maintenance, insurance and security will increase without generating any TDT for the County.
    Will the City be responsible to pay for those services in the acreage of the new Bay Park? Sounds like they should as it’s in the City limits .
    Are we overextending County funds, work time and talents of our Staff?
    Our county has a strong history of setting aside for ‘lean times’ and unexpected events .
    The savings disappear if our high TDT producing areas are not well maintained. Take good care of your ‘bread and butter’ areas.

Comments are closed.