OFFICE OF
THE CITY COUNCIL
CHERYL L. BROWN 117 WEST
DUVAL STREET,
DIRECTOR 4TH FLOOR, CITY
HALL
OFFICE (904) 630-1452
FAX (904) 630-2906
E-MAIL: CLBROWN@coj.net
JOINT FINANCE/RCD
COMMITTEE ON 2013-757
MEETING MINUTES
December 9, 2013
3:00 p.m.
City Council Chamber
1st
floor, City Hall
117 West Duval Street
Attendance: Finance Committee – Council Members Greg Anderson (Chair),
Stephen Joost, Richard Clark, John Crescimbeni, Robin Lumb, Matt Schellenberg,
Clay Yarborough
RCD Committee -
Council
Members John Crescimbeni (Chair – arr. 3:08), Don Redman (arr. 3:35), Warren
Jones, Denise Lee (arr. 3:42), Jim Love, Clay Yarborough, Matt Schellenberg
(temporary appointment)
Excused: Council Member Ray Holt (RCD)
Also: Marilyn Allen – Legislative Services
Division; Jeff Clements – Council Research Division; Kirk Sherman and Janice
Billy – Council Auditor’s Office; Cindy Laquidara and Peggy Sidman – Office of
General Counsel
Council
Member Anderson called the meeting to order at 3:03 p.m. Council Member Jones gave introductory
remarks, stating that the City and the developer of the 220 Riverside mixed use
residential and commercial building had reached an apparent impasse on
interpretations of the obligations of the parties with regard to certain
financial terms and construction responsibilities.
Steve
Diebenow representing Hallmark Partners explained the history of the company’s
relationship with the City on this project and the delays the company believes
have been unreasonable. He stated that
three major changes to the original 2007 Hallmark project deal were made in
2012: 1) the addition of a Recapture Enhanced Value (REV) grant with a City clawback provision; 2) a requirement for proof of a $30
million capital investment by the developer and assurance of a park maintenance
mechanism for Unity Plaza; and 3) transfer of the responsibility for
reconstruction of Magnolia Street from Hallmark Partners to the City. Mr.
Diebenow stated that it took 7 months from the date the revised agreement was
approved by City Council in 2012 until the City began the design of Unity
Plaza, which subsequently took another 10 months, for a total of 17 months to
complete the design process from City Council’s original approval. He also
stated that the City’s road contractor rebuilding Magnolia Street dug up a
significant portion of the apartment building’s foundation because of a lack of
coordination with Hallmark that could have been prevented if the company had
done all the work itself. That matter will be the subject of a lawsuit with the
contractor. Ultimately, 2 issues remain to be resolved – production of proof
sufficient to the City of the required $30 million private capital investment
and sufficient proof of a maintenance mechanism for Unity Plaza. Hallmark
Partners is petitioning the City Council to break the current logjam and to
enable construction of the plaza to get underway so that it can be completed at
least close to the time the building is complete in the summer of 2014.
General
Counsel Cindy Laquidara stated that what is at issue is the sufficiency of the
documentation of the $30 million private investment. The development agreement requires a loan
commitment letter, but because Hallmark is building the project with its own
cash resources, there is no loan commitment letter. She does not have the authority to approve an
alternate form of proof that is not contemplated in the written agreement; that
is a policy decision for the City Council to make. She stated that the various
documents provided by Hallmark appear to her to provide reasonably sufficient
proof of the required investment if that is the Council’s judgment.
Bill
Joyce of the Public Works Department discussed the timeline for the Unity Plaza
design project. Public Works Director Jim Robinson stated that the City took
over construction of the Magnolia Street project so that it could coordinate
that project with the needs of the developer of the adjacent Pope and Land
project on Riverside Avenue.
The
committees felt that there were more questions to be answered about the
proposal and the scheduling of another joint committee meeting at 4:00 p.m. in
the Council Chamber did not provide sufficient time to explore all the issues.
There
being no further business, the agenda meeting was adjourned at 3:55 p.m.
Jeff
Clements, Council Research Division (904) 630-1405
Posted
12.11.13
4:00
p.m.