Bay Park Conservancy planning on restaurant revenue, chief implementation officer says
How will The Bay park on 53 acres of City of Sarasota waterfront property generate enough revenue to sustain itself in perpetuity?
That was a question Sarasota County commissioners asked earlier this month in considering whether to participate with the city in a proposed 30-year funding mechanism for The Bay.
They eventually voted 4-1 to direct county administrative staff to work with city staff on drawing up the interlocal agreement necessary for the process. (Chair Michael Moran cast the “No” vote.)
“I would feel much more comfortable if there was something specific that you could grab onto with Excel that was going to show revenue that could offset these massive debt obligations,” County Commission Moran told Bill Waddill, chief implementation officer for the Bay Park Conservancy (BPC), on Jan. 15.
(Excel is a spreadsheet software program developed by Microsoft.)
Waddill was standing before the County Commission on Jan. 15 to discuss the proposal for the county to join the City of Sarasota in a tax-increment financing (TIF) plan that has been projected to cover about $202 million of the expense of constructing the downtown Sarasota project. Under the terms of a partnership agreement with the city, BPC is overseeing development of the public park and raising funds for it. The nonprofit also will manage most of the amenities on the property.
Overall, Waddill told the commissioners, the park is expected to cost from $100 million to $150 million to build, with another $200 million or so needed for a new performing arts hall to replace the Van Wezel.
During the discussion, Chair Moran referenced a slide Waddill had shown the County Commission, which offered details about revenue and expenditures for Phase 1 of The Bay, on approximately 10 acres of the southernmost part of the city site.
That slide said the BPC would like to win as much as $20 million from philanthropists to cover the approximately $23-million to $33-million expense of Phase 1, on which the BPC board hopes to break ground this fall.
“We will generate revenue to handle enhanced maintenance and operations in perpetuity,” Waddill explained. “I have built over 30 parks,” mostly in Florida, he added, referring to his long tenure as a principal with the Kimley-Horn and Associates consulting firm in Sarasota.
Most of his clients, he continued, did not put aside any money for ongoing operations, which he characterized as a mistake in planning.
However, in regard to The Bay, Waddill said, “A really good consultant … has helped us think this through,” offering advice that he called “a realistic approach.”
One early proposal for generating revenue, Waddill noted, was construction of a convention center. However, such facilities across the country typically lose money, Waddill said. “So that’s not the answer.”
“In most places,” he continued, “retail is having a really challenging time, as they look out in the future.” Therefore, that also was not an option, he said.
Construction of office space on The Bay property also would not be appropriate, he indicated.
Further, a hotel probably would not be a good idea, either, as construction of such a facility would entail “a very complicated deal,” including, potentially, donation of land to the developer, Waddill said.
“By far,” he told the commissioners, “the best way” to generate revenue is to allow restaurants to be constructed on part of the site “and take a percentage off their gross and plow that back into the operational revenue.”
As a result of the BPC’s discussions, he continued, the proposal his board has focused on calls for three or four restaurants in what the master plan denotes as the “Canal District,” on the northernmost part of the property.
“We do not have waterfront dining,” Commissioner Christian Ziegler pointed out. Yet, when he has clients come into town, he added, they want to dine on the waterfront. “It’s a struggle,” Ziegler continued, noting that most options — such as Marina Jack — look out over marinas. “We have an opportunity here with this property … to really have some amazing, downtown, accessible waterfront dining,”
Ziegler then told Waddill, “No offense,” but the master plan indicates the restaurants would be facing each other across a boating basin. Diners in those establishments, Ziegler emphasized, would be looking across the water at other structures, with boats potentially heading in and out of that basin.
“It kind of hit me,” Ziegler said of the current concept: Diners would not be facing Sarasota Bay.
If the BPC and its design team could tweak the master plan to ensure the restaurants look out over the water, Ziegler said, that would be preferable.
“You’re right,” Waddill responded, referring to Ziegler’s assessment of the existing plan. However, Waddill explained, substantial changes had been made to the Phase 1 design after it initially was created. “The current master plan is a concept,” he stressed, so the Canal District reflects the configuration of the existing boat basin that probably was constructed about 100 years ago. “It needs to be something much more attractive,” Waddill said of the final design.
Referring again to the lack of restaurants overlooking Sarasota Bay, Ziegler added, “I do hear that complaint from a lot of people in town.”
“I do, too,” Waddill acknowledged.
“Whatever we can do to get the public facing our bay is a winner,” Ziegler told him.
A detailed process
Then Ziegler asked what the county commissioners could do to protect their constituents from potentially negative changes to the master plan, if the board agreed to the proposed TIF financing mechanism.
The financial plan would entail a county commitment of close to $100 million over 30 years. It would set Jan. 1, 2019 as the baseline for the value of property in a defined district that would include The Bay site. Then, every succeeding year, as the property value increased, the city and county would apply their millage rates to those values. Each local government would set aside in a trust fund the revenue resulting from the difference between the amount of ad valorem tax revenue the baseline value would have generated and the revenue resulting from the increased value, which is known as the increment.
Waddill explained that the design of each phase of The Bay will have to undergo an extensive process before winning final City Commission approval for construction, as provided for in the BPC’s operating agreement with the city. “There are multiple levels of refinement every step of the way,” Waddill said.
If the County Commission approves the TIF agreement with the city, Waddill continued, then the partnership document also calls for a county representative to serve on the BPC’s board. “That would provide month-to-month feedback [on design changes] from the county’s perspective.”