Friday, November 26, 2021

Holes in the Ocean Breeze Case, CRA Takeover in Delray?

Koski tries to make his case

ocean breezeHey, Boca Raton City Council. Spot us $24 million. Just don’t ask about the details.

That, in essence, was the message Monday from Art Koski, director of the Greater Boca Raton Beach & Parks District. The district wants to buy the closed Ocean Breeze golf course at Boca Teeca for $24 million and reopen it as a “world-class” public golf facility. The district doesn’t have the cash on hand and can’t issue bonds. So the district wants the city to issue the bonds, with the district reimbursing the city for the debt payments.

After weeks of buildup, you would have expected a presentation crammed with numbers and research. Instead, Koski spent almost the first 30 minutes promoting the “vision” of buying Ocean Breeze. He compared the potential of Ocean Breeze to an asset like Boca Raton Airport, and used a pilot metaphor about staying on course. Koski basically dismissed any questions about cost. “Would we be having this conversation if the price was $5 million?” he asked. Perhaps not. But the price isn’t $5 million. It’s $24 million.

Koski acknowledged that he had no appraisal showing the 214 acres of Ocean Breeze to be worth that amount. I inferred from the presentation that Wells Fargo —a subsidiary of which owns the property—and Lennar—which has a contract to buy it—want $18 million and $6 million, respectively, out of the deal. Koski described the $24 million as a “take it or leave it offer.”

Koski claimed that the district, which would operate the course, could make nearly $2 million in profit, based on 75,000 rounds at $50 each. But he arrived at that number mostly by comparing a reopened Ocean Breeze to the county-owned Osprey Point out west. Would everyone pay $50 each time? Members likely would not. “I grant you,” Koski said, “that these are estimates.”

Koski claimed that companies are “standing in line” to build a hotel on the Ocean Breeze land zoned for that purpose. He claimed that the district could receive $300,000 a year in lease payments. But he didn’t identify any of those companies, and he admitted that the $300,000 figure is “somewhat speculative.”

Then there’s the money to fix up the course. Koski estimated that cost at between $9 million and $12 million. A new pro shop/clubhouse would cost between $2 million and $2.5 million. Would the city also have to help pay for the improvements? Koski said he “could not promise” that he wouldn’t be back to ask for more. He said a financial consultant had concluded that the district could take on Ocean Breeze without having to cut services or raise taxes, but he provided no spreadsheet to confirm that.

City council members didn’t receive any information from Koski until the 4:30 meeting Monday. City staff members have not reviewed the proposal, such as it is. “Not a lot of specifics,” Mayor Susan Haynie told me. Koski couldn’t even answer Councilman Scott Singer’s question about how much the annual debt payment would be. Koski just called the purchase a “once-in-a-lifetime opportunity” that would bring “immeasurable” benefits. He spoke of all the boys and girls who would learn integrity as they learned the game of golf.

Koski might have presented a study of property values in Boca Teeca, and how a new course might raise them, thus bringing revenue to the city. He might have proposed that Boca Teeca residents pay a small assessment. The new course would offer a bailout to the community, whose residents’ refusal to join Ocean Breeze created this problem. But the community just wants the bailout. Residents booed a speaker who suggested that the council ignore the offer and seek to take the course by eminent domain. That would be a bad idea, but their rudeness made the residents look bad.

Haynie asked Koski for some added information. The council will discuss the presentation at tonight’s regular meeting but take no action. Council Jeremy Rodgers wasn’t even at Monday’s presentation. During their goal-setting meeting last week, council members seemed to agree that they still want to sell the western course and keep golf in the city. But Rodgers, who offered the resolution about preserving a public course, added, “At what price?” And in what time period?

Maybe buying Ocean Breeze makes sense. Maybe a new Ocean Breeze could be the asset Koski envisions. But after all the buildup, he underwhelmed. If it’s really a “take it or leave it offer,” Koski didn’t give the council enough evidence to take it.

Delray iPic update

Ipic and the Delray Beach Community Redevelopment Agency did not close as hoped on April 28. The new tentative closing date is this Friday.

Since I last reported on this, iPic has satisfied one of two outstanding issues. The company has obtained a performance bond for construction of the project, which would include an iPic theater, a restaurant and office space, part of which iPic’s corporate office would occupy.

The remaining issue is the company’s plan for managing parking during the 18 months of construction, which will displace public parking spots and delivery service to nearby businesses. After discussions among Planning and Zoning Director Tim Stillings, City Attorney Max Lohman and lawyers for iPic, a revised document emerged. IPic principals are reviewing it. If the two sides agree on the plan, the city will issue the permits necessary for iPic and the CRA to close on the purchase of the site. The CRA assembled the properties.

Stillings said the parking plan came down to “a matter of expectations. My concern was that the plan laid out how (iPic) would try and fix the problems. It comes down to the legal phrase ‘best efforts.’ We want there to be minimal disruption. If there are problems, people won’t be screaming at iPic. They’ll be screaming at us.”

IPic wouldn’t be the only project in the area. Ground has been cleared for the nearby Aloft Hotel. Stillings said developers of the Metropolitan condo, also in the SOFA – South of Atlantic Avenue – district are applying for permits. The Metropolitan’s website touts the iPic projects. Settlement of the Atlantic Crossing lawsuit could lead to work on that project just one block west of iPic.

I will update on whether this closing date sticks.

The CRA issue

IPic is one reason the Delray Beach City Commission will discuss taking over the CRA.

For the three-plus years I’ve written this blog, the CRA has united commissioners who disagree strongly on other issues. Commissioners have been frustrated by the amount of money flowing to the CRA from higher property values that can’t go to areas outside the CRA. They have been angered by what they consider actions of an unelected CRA board, even if elected commissioners appointed them.

For Mayor Cary Glickstein, the latest flashpoint came over street naming. Last month, the commission voted to rename a portion of Southwest Sixth Avenue after James Lamar Shuler, the late funeral director and former CRA chairman. In doing so, however, the commission suspended its ordinance against street renaming, then reinstated the ordinance, then asked Interim City Manager Neal de Jesus for suggestions about amending the policy.

It was a one-time exception, and the commission cautioned about the potential for “buying” such renamings. Barely a week later, the CRA approved its own “naming and recognition policy.” At last week’s commission meeting, Glickstein said, “I look at that vote as a personal ‘f-you’ “from the CRA to the commission. Call it selfish, arrogant. Pick an adjective.”

CRA board member Paul Zacks called the street naming controversy “way overblown. It was never our intent to supplant the city’s authority on the issue.” The CRA, he said, acted only to support one application to the city. He predicts that the anger “will be short-lived.”

Nevertheless, City Attorney Max Lohman will prepare for next Tuesday’s meeting a resolution under which the city commission would replace the seven-member CRA board. The Boca Raton City Council long has functioned as the CRA board, but Delray has maintained an independent board. The legislation that created the CRA allows the commission to take this action, if the commission chooses.

My read of last week’s discussion is that commissioners Mitch Katz and Shelly Petrolia are most supportive of the takeover, Glickstein and Commissioner Shirley Ervin Johnson are more hesitant—“I’m not there yet,” Glickstein said in an email—and Commissioner Jim Chard is in the middle. Chard agreed. “My mind is not made up,” Chard told me Monday, “but I think there has been a cooling-off period” in the last few days.

Katz saw more unity in the discussion. “We’ve talked about this for two years,” said Katz, who was elected in 2015. While he agrees that the street naming vote was the latest attempt by the CRA to “one-up the commission,” Katz also questions the CRA’s decision to give Atlantic Crossing and iPic incentive money and criticizes the failure of Uptown Atlantic. The CRA board chose the company to develop the three blocks east of the Fairfield Inn, but Uptown was unable to close on the land. Katz said city staff “spent thousands of hours” on the failed project.

According to a trade group, Katz said, fewer than 10 of the 218 CRAs in Florida have independent boards. As simple as the takeover would be, however, the ramifications could be complicated. I will have more on this before Tuesday’s meeting.

Delray art scene

A year ago, I wrote for the magazine’s print edition about changes to Delray Beach’s arts scene. Two Boca Raton lawyers had bought the three former auto body shop warehouses that made up Artists Alley. The transaction brought higher rents, displacing some artists who had rented space. The CRA had declined to match the lawyers’ offer for the property. They paid $4.5 million, $1 million above the appraised value.

I checked out things on Friday, at the monthly Art Walk, and found a fairly high level of pessimism. After the sale of Artists Alley, the CRA had touted its building just to the south as a replacement. Known as the Arts Warehouse or Arts Incubator or just The Cube, it had been envisioned as a complement to Artists Alley. Suddenly, it loomed as the essential piece.

Now, as then, the artists complain about the CRA’s slow pace. The agency is seeking a director for the facility. CRA Director Jeff Costello said the agency has “quite a few candidates” and hopes to hire one soon. The minimum salary is about $58,000, but could be higher. The CRA’s budget for the first year contains $120,000 for the director, an administrative assistant and a part-timer. Roughly half of the revenue would come from the CRA with most of the rest from studio rentals.

Joseph White, one of the lawyers who bought Artists Alley, said he intended to develop the property. The city, however, has received no development application.

Sober homes bill DOA?

With little time left in the legislative session, it appeared that the major sober homes bill was dead.

HB 807 had passed the House 115-0. It would allow tougher enforcement of rules against patient brokering— kickbacks for referrals to sober houses. But the Senate version remained hung up, for reasons that made no sense outside of the Senate chamber.

Fortunately, Senate President Joe Negron, R-Stuart, got the bill to the floor. It passed 38-0. Credit Sen. Jeff Clemens, D-Lake Worth, who sponsored the bill. Rep. Bill Hager, R-Boca Raton, was the House sponsor.

That bill was one of four the Legislature passed in response to the opioid crisis. It was the most productive session yet, an indication that while the problem may be more prevalent in cities like Delray Beach and counties like Palm Beach, it is a statewide issue. For Delray Beach, the next step will be added sober home regulations.

Missed the last City Watch? Visit our Community/City Watch page, and subscribe to the magazine for more monthly City Watch columns in the magazine.

Randy Schultz
Randy Schultz, a native of Hartford, Connecticut, has been a South Florida journalist since 1974. He worked for The Miami Herald until 1976 and for The Palm Beach Post from 1976 until 2014, where he served as managing editor and editorial page editor. Since 2014, he has written a politics blog, commentaries and other articles for Boca magazine. His writing has earned first-place awards from the Florida Magazine Association and the Florida Society of Newspaper Editors. Randy has lived in Boca Raton with his wife, Shelley Huff-Schultz, since 1985. His son, daughter-in-law and their three children also live in Boca Raton.

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