Fort Walton Beach Council agenda — 09-11-12 regular — reading text

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Beedie, City Manager From: Michael Beedie, Engineering & Utility Services Director Date: September 11, 2012 Subject: Revised Interlocal Agreement for Sound Side 1. BACKGROUND: 1. 1. In June 2010, the Community Redevelopment Agency Board of Commissioners and City Council executed an Interlocal Agreement with the Fort Walton Beach Housing Authority ( FWBHA) and Sound Side Apartments, LLC for infrastructure improvements at Sound Side Apartments. 1. 2. The City agreed to contribute up to $ 2, 500, 000 in CRA revenues for site demolition, infrastructure improvements, restoration, and other qualifying costs towards the Sound Side development. 1. 3. Sound Side Apartments, LLC agreed to repay the $ 2, 500, 000 at 1. 5% interest with a maximum annual payment of $119, 000. 1. 4. The development application is currently in the final review stage with the U.S. Department of Housing and Urban Development (HUD). 2. DISCUSSION: 2. 1. During HUD' s review of the development application, HUD approached the development manager and the general contractor requesting the transfer of the infrastructure improvements from the City of Fort Walton Beach to the general contractor. This request was made for the following reasons: 2. 1. 1. HUD determined during their review that the secured loan amount could be increased to accommodate the general contractor performing the infrastructure improvements. 2. 1. 2. By allowing the general contractor to complete construction of the entire project, the management of the development will be simplified. 2. 2. To accommodate this request, the original Interlocal Agreement would need to be amended. The FWBHA' s attorney amended the Interlocal Agreement to include the following: 2. 2. 1. Adding the following statement to Section 1( f) of the Interlocal Agreement - FWBHA wishes to only borrow up to $700,000 in Community Redevelopment Revenue Special Trust Funds for the Sound Side Apartments Planned Unit Development ". 2. 2. 2. Revising Section 3( d) of the Interlocal Agreement to " The CRA shall contribute  City Council of Fort Walton Beach ENGINEERING & UTILITY SERVICES MEMORANDUM To: Michael D. Beedie, City Manager From: Michael Beedie, Engineering & Utility Services Director Date: September 11, 2012 Subject: Revised Interlocal Agreement for Sound Side up to $ 2, 500, 000 $ 700, 000 in Community Redevelopment Revenue Special Trust Funds..." 2. 2. 3. Deleting Sections 4( b)( iii) & 5 of the Interlocal Agreement in their entirety. 2. 2. 4. Revising the third and fourth sentences of Section 6( a) of the Interlocal Agreement as follows - " The parties acknowledge that the total estimated qualifying costs and cost of the infrastructure improvements and other project related costs will not exceed $ 700, 000. The total amount shall be repaid by the Property owner to the City at no more than $ 52, 142. 41 per year at one and one - half percent ( 1. 5 %) interest, and shall be payable no sooner than three years after the Closing (the " Trigger Date ") ". 2. 3. The revised payback amount is based on a 15 -year payback period at the 1. 5% interest rate. 2. 4. The FWBHA Board of Commissioners unanimously approved the amended Interlocal Agreement at their August 21, 2012 meeting. 3. FINANCIAL INFORMATION: 3. 1. The amended Sound Side Interlocal Agreement is beneficial to the City as it reduces the financial contribution from the CRA Fund from $ 2, 500,000 to $ 700, 000. This will allow the City to reallocate the remaining $ 1, 800, 000 to other programs and projects within the CRA. The funding currently resides in the CRA Fund Balance. 4. RECOMMENDATION: 4. 1. Staff respectfully requests City Council authorization for the Mayor to execute the amended Interlocal Agreement with the FWBHA and Sound Side Apartments, LLC for the Sound Side Apartments development and any accompanying documents associated with the Interlocal Agreement. ATTACHMENTS: Sound Side Interlocal Executed 06 -25 -2010 ( PDF) Sound Side Interlocal Amendment 08 -20 -2012 ( DOC) SIGNATURE BLOCK: Finance Completed 08/ 29/ 2012 2: 29 PM City Attorney Completed 08/ 30/ 2012 4: 40 PM  City Council of Fort Walton Beach ENGINEERING & UTILITY SERVICES MEMORANDUM To: Michael D. Beedie, City Manager From: Michael Beedie, Engineering & Utility Services Director Date: September 11, 2012 Subject: Revised Interlocal Agreement for Sound Side Carole Jones Completed 08/ 30/ 2012 4: 43 PM City