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HomeMy WebLinkAbout11/6/1998n • November 6, 1998 SPECIAL JOINT MEETING WITH CITY OF VERO BEACH CONCERNING THE LOS ANGELES DODGERS The Board of County Commissioners of Indian River County, Florida, met in Special Session at the County Commission Chambers, 1840 25'h Street, Vero Beach, Florida, on Tuesday, November 6, 1998, at 2:30 P.M., for the purpose of conducting a joint meeting with the City of Vero Beach regarding the Los Angeles Dodgers. Present were John W. Tippin, Chairman; Kenneth R. Macht, Vice Chairman; Fran B. Adams; and Caroline D. Ginn. Commissioner Eggert was absent due to illness. Also present for the County were James E. Chandler, County Administrator; Charles P. Vitunac, County Attorney; and Patricia B. Held, Deputy Clerk. Present from the Vero Beach City Council were Carl Pease, Mayor; Sandra Bowden, Vice Mayor; Jack Grossett; Art Neuberger; and Tom White. Also present for the City were Rex Taylor, City Manager; Robert Sechen, City Attorney; and Tammy Vock, City Clerk. Chairman Tippin called the meeting to order at 2:30 p.m. and welcomed all. He commented on the good turnout and the spillover crowd was directed to the First Floor Conference Room which had the live cable TV broadcast and was equipped with speakers so everyone could hear. Mayor Pease:thanked Chairman Tippin for the welcome and also welcomed everyone. He believed that everyone philosophically agreed on why they were here, but they would have to wait to see what happened. City Manager Taylor thanked the elected officials for agreeing to come together to 4� discuss what he considered to be a very significant policy issue, which also may be even considered to be historic for this community. At question is what actions will be taken to retain the L.A. Dodgers here in Vero Beach, Indian River County. He explained that prior to coming to Vero Beach 3 years ago, he had been the City Manager of Leesburg, Florida. He told of Leesburg's efforts in trying to attract a major league baseball team for spring November 6, 1998 1 BOOK 107 Fb,GE " r � BOOK Ai PAGE CS training for the resultant economic benefits and community pride. They had realized the necessity of bringing in their county and community development tax to make it happen. Unfortunately, Lake County was not interested in using tax dollars in that manner and the effort died. In contrast, he described the close 50 -year relationship he found with the Dodgers' organization and the V B/I R C community. He was surprised at the fact that the Dodgers owned their own facility and had learned from then -Councilman Pease that as long as Peter O'Malley owned the L.A. Dodgers, they would remain in Vero Beach. Unfortunately, the O'Malley family's ownership has ended. A year and a half ago, Mr. O'Malley called a meeting to advise that his family had decided to put the L.A. Dodgers' organization, property, and holdings up for sale. This "signal" to look at their options initiated meetings with Craig Callan, General Manger of Dodgertown, in order to investigate various options which would be legally and practically doable. Manager Taylor stated that the guiding direction of the proposal brought to the meeting today is to be put on a "level playing field" with other cities which also want to attract the Dodgers' spring training to their community. This would be the first step to that proposal. The report before them was released about a week ago to allow review and reaction in preparation for today's meeting. He specified that the "level playing field" concept translates into some type of purchasing of the Dodgertown training facilities and entering into a long-term lease to the Dodgers. Administrator Chandler then presented the financial portion of the plan before them which was set out in a spiral bound booklet. (CLERK'S NOTE: Booklet has been filed with the backup of this meeting.) He was certain everyone recognized that the economics of the matter under consideration were critical, whether that be the $30 million the Dodgers bring to the local economy or our ability to pursue a concept that is economically feasible for the Dodgers, the community, and the taxpayers. He cautioned that the figures presented in the report and being presented today are "benchmarks" or guides. They are the result of a number of weeks and months of generating various economic figures and facts, analyzing them to see if we have an ability to present a proposal that we can support as economically feasible and advisable for our community and taxpayers. Administrator Chandler continued that he and Mr. Taylor had received comments and feedback which prompted him to add some figures not included in the report. The concept of the proposal is to acquire approximately 70.4 acres of the total 468 acres holding. The value on the tax roll for the 468 acres is about $14.8 million. 70 acres would amount to November 6, 1998 2 9 It approximately $4.8 million (assessed value, based on an estimate by Property Appraiser David Nolte). The County's portion is approximately $3.7 million and the City's is a little over $1 million. In terms of taxes, that would mean just under $90,000 per year would be removed from the ad valorem tax rolls. Administrator Chandler pointed out the suggested acquisition areas on a site map projected on the ELMO. He stressed that living facilities are not included in the proposal being made at this time. The proposal calls for the County to acquire Tract 2, which amounts to a little over 39 acres. The City would acquire Tracts 3, 4, 5, 6, 7, and 8, which amounts to approximately 31 acres and lease them back to the County. Of the acquired tracts, about 53 acres would then be incorporated into an overall negotiated long-term lease with the Dodgers. The tracts to the north would not be involved in the lease -back inasmuch as they are not essential to spring training activities and the "level playing field" concept. Administrator Chandler then moved to the financing aspects of the proposed acquisition. The County would anticipate a revenue bond issue as a primary source of funding. An old bond issue would be defeased. The present debt service (about $840,000 annually) is covered by a pledge of the 1/2 cent sales tax. Therefore, if the Board of County Commissioners concurs and the old bond issue is defeased, the County would be able to consider that Y2 cent sales tax for debt service on the new bonds issued to pay for the Dodger purchase. He clarified that he is not recommending using the entire $840,000 at this time, it is just a benchmark. The annual debt service on a $3.7 million revenue bond issue would be about $450,000, based on the prevailing rates as of 2 weeks ago. There are other alternatives such as the 4'h and 5' cents of the tourist tax. The way the law is presently structured, however, the 4' and 5'h cents are not available for "acquiring" stadiums. Bond counsel, therefore, cannot advise use of that funding source at the present time. Administrator Chandler pointed out that another very critical consideration is ad valorem taxes. There would be no taxes under the leasehold agreement as set forth. On September 11, 1998, the Second District Court of Appeals issued an opinion that totally clouded the ability to consider that there would be a property tax exemption. Recent passage of Amendment 10 may provide some relief and the ability to consider this type of leasehold provision an exemption of taxes. If that is not the case, neither the City nor the County would have the ability to waive taxes. There is one provision in State law that is currently applicable to a number of other cities and counties that is not applicable to us, which we would like to have the ability to utilize. Where sports facilities have been November 6, 1998 3 BOOK .1_ _ AU;, z. BOOK 107 PAGE 490 constructed in other areas of the state, they have the ability to use the sales tax generated at that site which can be used for future improvements to the facility. There is no provision in the law which covers the conditions pertinent to this proposal. Changes in both existing state laws might be obtained through the assistance of our legislative delegation. If changed, the County would have greater flexibility in the funding of the property acquisition. Obviously, there are numerous economic issues that need to be examined and addressed. City and County staff feel that they have the combined ability to pursue negotiations with the Dodgers and the Fox group. A long-term lease arrangement would be most definitely be looked at if the City/County are to pursue the concept with them. Manager Taylor proposed that the City use the City's Asset Management Trust, a fund established many years ago. The proceeds of property the City sold were put into that trust, and when the City purchased property, those funds were used. The trust has nearly sufficient funds to cover the proposal for the City's share of the Dodger property purchase. It presently contains about $1.2 million. Administrator Chandler responded to a comment from Mayor Pease concerning a need for a referendum by assuring everyone that the staff plan on behalf of the County would not impact the local taxpayers inasmuch as the V2 cent sales tax is already an existing revenue source. The major debt service it is funding will be defeased and a new issue put into its place. He assured further that staff had looked at this and has definite limits in mind over which they could not comfortably recommend. It seemed to Vice Chairman Macht that only the word "acquire" separated them from doing this without a burden to the taxpayers and a referendum. He pointed out that this word had been omitted from the State's tourist tax law, which he felt was an oversight and is repairable. If that is possible, then the funding mechanism would be intact and would come from the pockets of our visitors. He felt they should vigorously proceed with getting the law modified to include "acquire". Manager Taylor pointed out that Indian River County presently levies 3 cents tourist development tax, as compared to Brevard and St. Lucie Counties which are at 4 cents. He had spoken with Representative Sembler who has a genuine interest in helping Indian River County retain the Dodgers. There will be a legislative delegation meeting locally on November 23, 1998, and Administrator Chandler pointed out that a letter in the backup had been drafted which could be presented to the delegation at that meeting should the proposal be approved today. November 6, 1998 4 Mr. Neuberger questioned the relationship between the benchmark figures being presented today and assessed valuations, and Administrator Chandler specified there is always a difference between assessed and appraised values and since appraisals have not yet been done, the assessed values are the only ones available at this time. Administrator Chandler understood the concern, but there was no other way to present this today without using the assessed values. Mr. Neuberger was concerned that the City's portion of the purchase might be understated and he would have a problem if the amount for the City were doubled for instance. Administrator Chandler again mentioned that these were benchmark figures and that many economic factors and points would have to be negotiated. Aside from the acquisition expense, there is also the question of how to deal with property taxes, repairs and renovations, and how to negotiate a return to the City and County on the revenues generated by the operation of the stadium. Only when all these numbers are known will it be possible to make a final recommendation on an agreement. Both he and Manager Taylor agree that they are now looking at a concept and they both agree that there is the ability to proceed forward. Chairman Tippin understood that staff was looking for a consensus today so the process could be moved forward. He agreed that State law needed to be amended. He had spoken with Representative Sembler who suggested their consensus should include a request to amend State law. Chairman Tippin felt this was a very doable undertaking. Mr. Grossett felt they had put together a skeletal outline of a fine proposal and that today staff was merely looking for acceptance or rejection. He saw no reason to not move forward so everyone would know for certain what it will mean. He understood and wanted it made certain that this would not place a tax burden on the people of the county. Vice Chairman Macht felt the most important thing at this time is to continue to stay in contact with the Dodgers since they are pursuing other alternatives. He felt the plan that staff has outlined is ultimately doable. They also had to consider the estimated $30 million annual economic benefit of having the Dodgers remain. Secondly, the good public relations also has an economic benefit. Third, the financial support the Dodgers have given to various organizations in the community has been extensive. Commissioner Ginn thought it was prudent and important to move ahead with this preliminary plan; that way we will know what the Dodger organization is wanting. There November 6, 1998 BOOK 107 PAGE 4V A has been a good long-standing relationship with the Dodgers, but we must now realize we are not dealing with a family enterprise, but with a huge conglomerate that paid $300 million for the ball club and expects a return on their investment. She suggested it might also be prudent to see if some private investors have an interest. Nevertheless she felt all facts needed to be considered. ON MOTION by Commissioner Ginn, SECONDED BY Commissioner Tippin, the Board unanimously (4-0, Commissioner Eggert absent) approved instructing staff to present the proposed "purchase lease concept" to the Dodgers for formal consideration and authorized submission of the proposal to the local legislative delegation as outlined on page 6 of the staff report. Mrs. Bowden felt it highly desirable to keep the Dodgers in Vero Beach for spring training because they are a tremendous asset to businesses and sporting activities in the community. She believed the City should go forward and approach this proposal with a can - do attitude. MOTION WAS MADE by Mrs. Bowden, SECONDED BY Mr. White, that the City Council move forward to pursue this concept. Under discussion, Mayor Pease wanted to see some other representation from the Fox group, having some authority, involved in the negotiations along with Craig Callan. Mr. Grossett thought all the people in the community should carry this proposal as far as possible to see exactly what can be offered. Mr. White asked if there was any indication whether the Fox group might be receptive to this proposal from the City and County. Manager Taylor felt from his conversations with Mr. Callan that the Fox group would be receptive, and in recognizing the past long-standing relationship will certainly give the proposal due consideration and be receptive to further communication and negotiation. Mr. White felt the Dodgers and Vero Beach go together well and that this should be vigorously pursued. November 6, 1998 Mayor Pease CALLED THE QUESTION for the City and the motion carried unanimously. (5-0) There being no fiuther business, upon motion duly made and seconded, the Chairman adjourned the meeting at 3:25 p.m. ATTEST: Jeffrey K. Barton, Clerk Minutes approved 0, 19 9 8 I' P November 6, 1998 7 F (-) John W. Tippin, Chairman BOOK 10"I PAGE 4 a'