Fort Walton Beach Council minutes — 11-21-06 special minutes — reading text

119 MINUTES OF THE SPECIAL COUNCIL MEETING OF THE CITY OF FORT WALTON BEACH, FLORIDA NOVEMBER 21, 2006 INTRODUCTION A special meeting of the City Council was held on Wednesday, November 21, 2006, at 5: 30 p. m. in the Council Chambers of City Hall with the following members present: r- Mayor Mike Anderson Councilmen: Mike Holmes; Bill Patterson; Bob Campbell, Mayor Pro Tem; Jim Tucker; Dr. Wayne Pullen; Jim Hartwell; and Mike Minich Also present: Joyce Shanahan, City Manager; Lisa Absher, Finance Director; Helen Spencer, City Clerk; Toni Craig, City Attorney; and media CALL TO ORDER The Mayor called the meeting to order and welcomed everyone. He requested anyone who wished to address Council to approach the podium after being recognized, and then state his or her name and address for the record. PLEDGE The Mayor led in the Pledge of Allegiance. FAIR ASSOCIATION ABANDONMENT PLAN Consideration of the abandonment plan offered by the Northwest Florida Fair Association. The City Manager reported staff completed the process of analyzing whether or not the property could be declared excess and finds that:the property was purchased, in part, to maintain the recreational use; the purchase was partially financed with tax exempt bonds and there is a safe harbor provision that the financing may only be used for governmental purposes for five years or until the debt is satisfied and if the property were sold to a non- governmental entity, the City would not be permitted to sell at less than Fair Market Value, and it was noted if the property were sold to another governmental agency, the restrictions would not apply; at four different meetings Council directed her to discuss with the County their interest in locating the Judicial Center Annex expansion on a portion of the property, which indicates there is a future need for the property; the City Attorney has given an opinion there is no basis for a determination that the property is unneeded; and the City has solicited bids to develop a master plan to develop the property, which is an underlying assumption there remains a future need for the property. She reported stafffinds it cannot be declared excess at this time. The City Manager went over the options available: to accept the abandonment plan, with or without an extension for removal of the buildings; to direct staff to enter into an Interlocal Agreement for the transfer of a portion of the property to the Fair Association, however, staff does not feel it is in the s overall City' best interest; or to direct staff to negotiate a new lease or license agreement with the Fair Association, and provide staff specific direction on the length of term, compensation, termination clause, and whether I"'" or not there should be oversight. Mr. Hartwell wished to know if research had been done on the fair market value for a lease of the property. The City Manager replied that a fair market analysis for a lease had not been done and mentioned the Fair Association rents to non- profit and commercial activities and staff would need to evaluate the percentage of use between the profit and non- profit activities. Following the question on whether the City collects ad valorem taxes if the Fair Association is not 100%) public service with a combined purpose of commercial and non- profit activities, the City Attorney replied that the City is the property owner and the only taxes collected would be for the permitting and other charges. 1 2 Bpecial Council 11- 21- 06 ABANDONMENT PLAN cont. The Mayor opened the floor for public input. Charles Rigdon, 232 Mattie' s Way, Destin, explained that the activities will fluctuate each percentage for non- profit and commercial year, and given the commercial activities to raise the opportunity they can increase the rental on the revenue to increase the lease three- part proposed payment to the changes to the license agreement: 1) to increase the base City. He mentioned the for $24, 000 rent at $2, 000 per month annually; 2) to increase rental override to 20% from 5% Fair to pay 5% of Fair for $24, 000 +/_ annually; and 3) the gross income ( admission, booth sales, ride income) for an estimated $ 7, annually. 500 i) There was no further public input. Mr. Minich moved to direct the City Manager to negotiate a five year lease with the Association. The lease will be Northwest Florida Fair renegotiable or renewable after three years if all will consist of the following: Base rent $2, 000 per month; 20% of gross parties agree. The rent 50/0 of Fair gross income. Said lease will not include a receipts except for Fair income; 180 day no reason termination include a clause for termination within clause, but should 180 days if the Fair Association the lease. Further, direct the materially breaches the terms of City Manager to examine the permitting process in order process for events at the to facilitate the fairgrounds. Mr. Patterson seconded motion. Mr. Minich stated the Fair Association supported the City person after person come in to purchasing the property and Council has seen say the fairgrounds is a great place for the past year they have gone through a new process, the public use. He commented over collect money from their business, fairgrounds is a business and the City can and what Mr. Rigdon suggested is fair. He further commented the day termination clause should not be included and the 180 process a little faster. parties can work together to facilitate the permitting Mr. Patterson expressed it is a fair agreement for both termination clause because the Fair parties and agreed with taking out the 180 Association would need a day 12good months to vacate the property. Mr. Tucker explained he would not support the motion because he voted to the citizens to be repaid the $4 million with a profit. He mentioned buy the property and he wants would direct the City his intention was to make a motion Manager and the City Attomey to take the that property to be sold to the Northwest Florida Fair necessary action to allow the fairground Association. He voiced his sell that property and not keep the burden of the debt on the thoughts that the City should citizens. Dr. Pullen commented the citizens should not have to subsidize leased to the Fair Association the operation of the fair and should return to the City a fair retum the area should not have their hands in the on the investment. He stated the City Fair Associations pocket on how lease should be set to run their business. He up so the citizens do not have to subsidize believed a to the City on the the operation and there is investment. He also expressed that the sufficient retum care of the entire debt service, but they can take care City cannot expect the Fair Association to take of the area they lease and Officers that can work out the details. there are Charter Mr. Hartwell