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HomeMy WebLinkAbout7/24/20000 MINUTES ATTACHED A G E N D A SPECIAL MEETING MONDAY, JULY 24, 2000 -12:00 Noon County Commission Chamber County Administration Building 1840 25th Street, Vero Beach, Florida 32960 VERO BEACH CITY COUNCIL Sandra Bowden, Mayor Tom White, Vice Mayor John Capra Craig Fletcher Art Neuberger COUNTY COMMISSIONERS Fran B. Adams, Chairman District 1 Caroline D. Ginn, Vice Chairman District 5 Kenneth R. Macht District 3 Ruth M. Stanbridge District 2 John W. Tippin District 4 Rex Taylor, City Manager Julie Schutta, City Attorney Tammy Vock, City Clerk James E. Chandler, County Administrator Paul G. Bangel, County Attorney Kimberly Massung, Executive Aide to BCC Jeffrey K. Barton, Clerk to the Board Joint Special Meeting to Consider the Proposed Memorandum of Understanding with the Dodgers Anyone who may wish to appeal any decision which may be made at this meeting will need to ensure that a verbatim record of the proceedings is made which includes the testimony and evidence upon which the appeal will be based. Anyone who needs a special accommodation for this meeting may contact the County's Americans with Disabilities Act (ADA) Coordinator at 567-8000 x1223 at least 48 hours in advance of meeting. Indian River County WebSite: http://bccl.co.indian-river.R.us BK 1 14 PG 306 C. I July 24, 2000 SPECIAL JOINT MEETING OF THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY AND THE CITY COUNCIL OF THE CITY OF VERO BEACH The Board of County Commissioners of Indian River County, Florida, and the City Council of the City of Vero Beach, Florida, met in Special Session at the County Commission Chambers, 1840 25'b Street, Vero Beach, Florida, on Monday, July 24, 2000 at 12:00 p.m. Present were Indian River County Board of County Commissioners' Chairman Fran B. Adams, Vice Chairman Caroline D. Ginn; Commissioner Kenneth R. Macht; Commissioner Ruth Stanbridge; and Commissioner John W. Tippin. Also present were City of Vero BeachMayor Sandra L. Bowden; Vice Mayor Thomas P. White; Councilman Arthur R. Neuberger; and Councilman Craig Fletcher. Councilman John Capra was absent. Also present were City of Vero Beach Manager Rex Taylor; City Attorney Julie Schutta; City Clerk Tammy Vock; County Administrator James E. Chandler; County Attorney Paul G. Bangel; Executive Aide to the Board Kimberly Massung; and Deputy Clerk Patricia "PT' Jones. Chairman Adams called the meeting to order. All present reviewed a Memorandum of July 17, 2000 with a Proposed Memorandum of Understanding (hereinafter referred to as `MOU") relating to "Dodgertown" of July 17, 2000 (CLERK'S NOTE: PROPOSED MOU IS ON FILE IN THE OFFICE OF THE CLERK TO THE BOARD): BK 114 PG 307 JULY 249 2000 -1- I TO: Board of County Commissioners DATE: July 17, 2000 SUBJECT:Pro osed Memorandum of Understanding - Dodgers FROM: Ae—sE. Chan e'r, County Administrator The proposed Memorandum of Understanding (MOU) with the Dodgers has been completed and distributed. Therefore, as suggested at last weeks Board meeting, staff recommends a joint meeting of the Board and City Council to consider the MOU. Monday afternoon, July 24 is proposed. A potential conflict with a Code Enforcement Board meeting that afternoon in the Commission Chambers has been resolved. County Administrator Chandler noted that the County's bond counsel from Tallahassee, Bob Reid, should be here by 12:30. He then introduced the following individuals: Craig Callan, Dodgertown Managing Director; Gary Ehrlich, Executive Vice President of Sports Enterprises (FOX); Bob Graziano, Chief Operating Officer of the Los Angeles Dodgers; Sam Fernandez, Legal Counsel for the Los Angeles Dodgers; and George deGuardiola, President of deGuardiola Corporation, the developer. Rex Taylor, City of Vero Beach City Manager, commented that he has been involved in working on this transaction for 3 years. There was a need to change the state law to allow utilization of a portion of the Tourist Tax for this purpose and it was only this year that the Legislature approved funding for spring training facilities. BK 18 4 P6 308 JULY 249 2000 -2- 0 Administrator Chandler then stated that a draft ofthe Memorandum ofUnderstanding has now been prepared and all the major issues have been addressed. Some of the issues would involve obtaining 64 acres for $10,000,000 funded through a revenue bond issue and leasing the property back to the Dodgers over a 20 -year period, with options for renewal. The County would then become responsible for all property taxes which were $124,000 for this past year. The proposed improvements and development would increase the value of the land so that the ad valorem taxes would be approximately $400,000. Staffhas recommended $7,000,000 to fund the Dodgertown facilities improvements. Staff has also recommended a $2,000,000 reserve for capital improvements. The Dodgers would have the opportunity to draw down on the reserve; however, once the reserve has been depleted, the Dodgers are totally responsible for any improvements for the remaining 20 years of the lease as well as being totally responsible for any daily operating expenses. Should the Dodgers vacate the property for any reason during the 20 year term, they would be responsible for paying off any outstanding bond debt and would then have the option to reacquire the property at the then market value. Craig Callan commented that he had visited several other facilities during the last few years and the Dodgers' accommodations in Vero Beach are smaller than the usual facilities. They also have fewer fields than other facilities. They have put together a "wish" list including adding some fields and some new outdoor batting cages. They also plan to modify and upgrade the existing facilities. They would keep the stadium "as is" because they feel it is a real gem as well as being an historic, traditional structure. They plan to upgrade the maintenance building, the clubhouse, the executive offices and the training rooms. JULY 249 2000 -3- 8K 1 14 PG 309 George deGuardiola, President of deGuardiola Corporation, gave a brief synopsis of his background and emphasized that his specialty is creating new "main street" projects. He has several of these projects; one in Jupiter and one in West Palm Beach. Many civic organizations use these facilities which are comprised of tourist, recreation and residential areas. He used a PowerPoint presentation, a copy of which is on file with the backup for today's meeting. These projects incorporate a 24-hour main street area containing entertainment, retail shops, restaurants and game rooms. These are not static projects, but evolutionary and dynamic areas. Mr. Callan stated that the Dodgers are proud of their relationship with Indian River County and the City of Vero Beach. He has spent a lot of time with George deGuardiola and his group and has been impressed with his work in other places. The goal is to add more activities than baseball; however, if the MOU is approved the Dodgers will definitely stay in Vero Beach and make Vero Beach their hub of operations. They plan to move their instructional league here as well as other teams. Administrator Chandler noted that the whole transaction is contingent on the receipt of state funds. The application for these funds is due October 1'. If state funding is not received, then all agreements would be void but we must have all agreements ready by that time. If the MOU is approved, there are a number of contracts which must be negotiated and completed by October 1'. He believed the transaction to be in the best interest of the County and the City. Bob Graziano, President of the Los Angeles Dodgers, stated that success of the transactions depends on creating partnerships. He believed this to be a win-win situation with benefits to the Dodgers, the County and the City. BK 114 PG 3 { 0 • JULY 249 2000 .q 9 - Councilman Neuberger wanted to let the public know the City's contribution of $1,400,000 would come from cash accumulated from selling properties in the amount of $1,200,000 with the balance from cash reserves in the general fund. These are all unencumbered funds. Vice Mayor White questioned what would happen should the Dodgers leave, and Administrator Chandler responded that they would be responsible for paying off any balance on the bonds at that time. Mr. White then questioned some penalty to protect the County and the City, and Administrator Chandler responded that title to the properties would then be held free and clear. Councilman Fletcher stated that this is an information gathering meeting for him and he has quite a few problems with the MOU. He questioned who would draw up the additional required contracts, and Administrator Chandler stated that Bond Counsel Reid would work with staff and the City and County attorneys. Attorney Reid has a lot of experience in drawing these types of agreements and would be the primary drafter. Commissioner Ginn stated that she loves the Dodgers and wants them to stay. They have been extremely generous to this community. However, this is a difficult time and there are many vacant commercial buildings. She felt that the concept is a worthwhile one but believed that the Dodgers could stay in Vero Beach without taxpayer assistance. She continued that the MOU grants the Dodgers $7,000,000 for capital improvements with a capital reserve of $2,000,000 which they could use at any time for any purpose. There are no prohibitions at all on the use of the capital reserve funds. She would like stronger language regarding the use of the capital reserve funds and the responsibilities of the Dodgers JULY 249 2000 -5- & Ii4PG3ii once that fund is gone. She also had concerns about the liabilities of the County and the City as lessors. Attorney Reid stated that, as the owner, the County could not escape some liability but the Dodgers will have to provide insurance indemnifying the City and the County. The goal will be to protect the County and the City to the fullest extent possible. Commissioner Ginn was concerned about hidden costs. The County will not be receiving the $125,000 in taxes which we now receive. She was also concerned about the loss of the 1/2¢ sales tax from the receipts. Administrator Chandler responded that we receive about 6.3 million dollars per year from sales taxes and we currently use those funds for either the general fund or an MSTU. Commissioner Ginn questioned whether those funds can be used for rollback, and Administrator Chandler responded that they could be used in that fashion. Commissioner Ginn stated that studies have been done that agree that benefits from publicly funded sports stadiums make a minor contribution to the economics of a community. She would like the Dodgers to consider some other options. Commissioner Macht wanted to make clear that we are considering a transaction where staff has to find funding sources without involving the ad valorem taxpayer. Along with the business detail is the symbioses between the deGuardiola project and the Dodgers' plan. The risk is more on the Dodgers' side than on ours and this isa continuation of a great relationship with a financial benefit to the County. JULY 249 2000 U 0 Bit 1 1 4 PG 3 1 2 IJ Commissioner Stanbridge agreed that this is basically a real estate transaction. We will be acquiring properties which will be very beneficial to our community. She would not like to look back and say we should have done it and didn't. Administrator Chandler did an excellent job in bringing this forward and it will not be a burden on the taxpayers. Commissioner Tippin stated that he was the only one in the room who had been present at the first Dodgers game in Vero. He was in the high school band in the 8h grade and Lorraine Day autographed his drum head. He complimented staff and advised that he had seen the deGuardiola project in Palm Beach County and felt it is fantastic. Mayor Bowden questioned how title to the property will be held, and Administrator Chandler advised that title would be addressed in the Interlocal Agreement between the County and the City. Chairman Adams opened the floor for questions and comments. Sid Turner, 8775 20' Street, loved the Dodgers but had concerns about the MOU and felt the $1 per year lease payment would not be fair. John Clinton, 3606 Mockingbird Drive, was opposed to the transaction and felt that free enterprise works and government should not be involved in the process. Bobbie Greenlees, President of Taxpayers' Association, read the following letter of July 24, 2000: JULY 24, 2000 -7- BX 114 PG 313 _I RECEIVED AT IRC -SEC 7--D y-" TAXPAYERS' Mite ASSOCIATION Item a ESL 1A57IAJ2 By Clerk INDIAN RIVER COUNTY, INC. P.O. Box 1751- Vero Beach, FL 32961-1751 561-564-2898 Board of 011mo t Bows Gfw does PreWau July 24, 2000 aooen scr"n I, Ylee Prealdsm Ka►1bl6aen e via Ant1"M Board of County Commissioners Indian River County xarnevi Met City Council, Vero Beach Treasurer ROW veory ° j0""f0" seasLadies and Gentlemen: Thant euctmnan While the Taxpayers' Association finds the proposed Memorandum of Baa Gadrw . Understanding relating to "Dodgertown" very interesting, before you proceed we urge Jim GIDon TwgGoN you to consider what we believe are serious questions. damst Grants 1. We urge you to retain an attorney who has had considerable experience in r�da MrWsen Breen formulating transactions such as these to assure that the legal and financial alamrd - — "Vk Mi" ramifications in the Agreement are in the best interest of the County and the City. We Eftwd Trac cannot over -emphasize how important is this first point. 2. We believe there should be a more severe penalty if the Dodgers renege on any part of this Agreement, i.e., the Dodgers should be required to pay all costs incurred by the County and City. In the event the Dodgers repurchase the Facility, the amount of liquidated damages paid by the Dodgers should not be deducted from the fair market value. 3. We believe this Agreement should be contingent on obtaining an "A" or better bond rating. 4. It would seem that the funds generated by the tourist tax and the sales tax BK 114 PG 314 . JULY 24, 2000 -8- go are limitless. We say this because all too frequently this or that proposal is purported to be funded by these two taxes. What projects are presently or about to be funded by these taxes? S. The Collateral Development is plagued by an inordinate number of "if' s and "when"s and separate dealings between the Dodgers and The Developer. The County/City transaction with the Dodgers should not be contingent on the Collateral Development. We have an uneasy feeling that neither the City nor the County is in control. 6. The County and City should have a guarantee that the minor league team remain in Vero Beach. Our Board of Directors asks that you please have further expert review of these documents before you proceed. Respectfiilly, Bobbie Greenlees, President Frank Zorc, 2044 deLeon Avenue, commented that baseball provides a wonderful clean entertainment for all ages. However, he noted that 99% of cities do not have a baseball business to coddle and they do just fine economically. He felt the MOU would be a "Monument of Uncertainty" and that there had not been sufficient public discussion. He complained that the commissioners had never appointed a board or committee and had allowed staff to carry on negotiations with no notice to the public. He believed the process should be put to a taxpayer vote and that it was time for the baseball business to pay its own way. 8K 14PG315 JULY 249 2000 -9- Frank Coffey, 1335 River Ridge, approved the continuation of the relationship with the Dodgers and felt it has been a good relationship for both the Dodgers and Vero Beach. Anthony Donadio supported the MOU and felt it would be a good business deal. He also noted that the Dodgers have generously supported local charities. Joseph Guffanti, 441 Holly Road, was opposed to the transaction and felt it was discriminatory to support one business and not all the businesses in the City and the County. He believed that this was the first opportunity that the public had been given to voice an opinion on this matter. John Kurtz, 4332 2nd Square, looked forward to many more years of having the Dodgers in Vero Beach and felt the MOU would be a very good economical decision for all citizens. Susan Harris, Director of DoubleTree Suites, noted that every year there are lines of tourists to register for rooms during baseball season and felt the whole community could take pride in the transaction. Brian Heady read from several newspaper articles and letters (CLERK'S NOTE: THESE ITEMS WERE NOT PRESENTED TO THE BOARD OR TO THE CLERK FOR BACKUP.) He noted that Mrs. Ginn had pointed out the difficulty we are having to keep the current commercial space filled. He asked why the taxpayers are being asked to subsidize entertainment centers when other businesses in the area are not being subsidized. He felt this transaction would be "corporate welfare". He believed the taxpayers should not foot the bill for this transaction. JULY 249 2000 -lo- BK 1 1 4 PG 3 16 0 -I B. J. McClure, 395 Nieuport Drive, was opposed to the transaction and noted that should the Dodgers have to repay the bonds if they leave prior to the expiration of the lease, they would get full credit against the repurchase price of the land should they opt to repurchase it. He believed there would be many hidden costs and he asked the Board to deny the MOU. Bill Johnson, 1155 Winding Oaks Circle, had serious misgivings about the transaction although he had been a baseball fan for many years. He felt there should be more public input before the transaction could be approved. Robin Lloyd, Ocean Drive, loves the Dodgers and appreciates their contributions to local charities. He believed they have shown their commitment to Vero Beach and this will be a good partnership which will work well for the community. Catherine Self, 2125 10' Lane, of the Citrus Motel and Vero's Hotel, noted that many tourists make reservations to come to Vero Beach during spring training time. She compared the loss of the Dodgers for Vero Beach to a hurricane hitting the community every March of every year. She asked that the Board do everything possible to keep the Dodgers here. John Clinton, 3606 Mockingbird Drive, noted that if the City and County did nothing, the Dodgers would still own their property, would still pay their taxes and could still sell the property to a developer. He did not feel that the community should buy their property back from them. BK i 1 4 PG 3 6 7 JULY 249 2000 -11- FF - Commissioner Gunn felt that the Dodgers have a long and wonderful history in Vero but support for these types of projects is waning and she makes her decisions based on fiscally conservative principles. City Attorney Julie Schutta advised that the City Council is not prepared to take a vote today. She had serious concerns to be addressed and asked that the Board approve only the conceptual idea with the understanding that the MOU must meet the approval of the City and the County attorneys before adoption. Administrator Chandler again noted that the MOU contains only the basic concept of the transaction and there are many specific agreements which will have to be approved both by the City Council and the Board prior to consummation of the transaction. MOTION WAS MADE by Commissioner Macht, SECONDED by Commissioner Tippin, that the Board approve the Memorandum of Understanding as is. Commissioner Tippin noted that the County can depend on its bond counsel to initiate a concept we can live with that will implement the transaction. Chairman Adams commented that everyone agrees the County's interests must be well -protected. Administrator Chandler commented that the MOU is more than a concept, there will be specific agreements to cover the major issues. 8K 114 PG 318 61V 2492000 -12- . After general discussion, Attorney Reid noted that the major concerns as he understands them are: a guarantee that the minor league team will stay in Vero and more protection from liability. His understanding of the MOU is that basically the County and the City will be held harmless from liability. Commissioner Ginn wanted stronger language about the disbursement of the capital reserve fund, and Attorney Reid noted that even if the Dodgers chose to spend all of the capital reserve today, they would still have the same obligations for the balance of the lease term and those obligations would be enforceable. Chairman Adams questioned whether the County would recoup its costs if the Dodgers paid off the bonds and repurchased the property in 10 years, and Attorney Reid replied that the costs are a part of the bond issue. Any costs are paid when the bonds are issued and the bonds would be paid in full should the Dodgers leave. Commissioner Macht noted that the discussion only involves the MOU and that the Board would have final approval of the subsequent agreements. Attorney Schutta asked for approval of the MOU "subject to approval by the 2 attorneys" and noted that the entire deal is contingent upon the ancillary development by deGuardiola. If he does not develop the project, all parties would be relieved of all obligations. Chairman Adams called for a brief recess at 3:35 p.m. and the meeting reconvened at 3:55 p.m. with the same parties present. Attorney Reid commented that the MOU is a statement of the understanding of the big picture or a foundation of what is being envisioned. There are a lot of negotiations still to come with the final agreements. Administrator Chandler stated that if substantive changes are to be made in the MOU, we would need to go back to negotiations. However, if there are only clarifications in wording to be made, the MOU could be approved today. 311IMMOMMO JULY 249 2000 -13- Sam Fernandez, Legal Counsel for the Los Angeles Dodgers, stated that the motion was to vote on the MOU "as is". He continued that the legislation that enabled this transaction was not enacted until May of this year which gave the County access to the $7,500,000 to be applied to the transaction. Unfortunately, there is an October 1' deadline for the application for those funds. We have tried to put together a document including the material terms of this transaction and how to proceed toward negotiations on the more detailed agreements. There is no reference in the MOU to the Dodgers remaining in Vero Beach because their current corporate desire and intent is for each of the remaining agreements to come together in order for the transaction to work. Their intent is to turn Vero Beach into a hub for their activities but they cannot commit to it because they are being asked to commit to something which has yet to be developed. He noted that Page 4, Section 3(b) of the MOU states: "Dodgers fully responsible" and Page 3, Section 2(c) states "lessee shall assume all obligations". He believed that both of those clearly state the intention of the parties. There are only "x" number of dollars available and, once those are spent, there are no more dollars available. There have been a lot of references to the 20 -year lease with 4 5 -year options for $1 annually and maintenance obligations. The Dodgers must now consider that they must have the same revenues and maintain them over the next 20 and possibly 40 years to come out ahead. With reference to the penalty in the event the Dodgers terminate the agreement, he clarified that when the bonds are issued, the associated costs are paid from the bonds, so that when the bonds are defeased, that will make the County whole. The MOU contemplates a significant counter incentive for the Dodgers because, if they defease the bonds and move on, they would have to purchase the property. If the City Attorney wants to add conditions which would materially affect the MOU, then we would have to go back to more negotiations. The MOU reflects agreements which have taken months to negotiate. The MOU clearly states that any expenditures that exceed the capital reserve fund are obligations of the Dodgers. JULY 249 2000 -14- BK 1 1 4 PG 320 Commissioner Macht asked for a vote on the motion, and Chairman Adams wanted to be certain that everyone is on the same page. Commissioner Macht then withdrew his motion and suggested the matter be tabled until Thursday, 7/27/00. Commissioner Tippin also withdrew his second to the motion. MOTION WAS MADE by Commissioner Macht, SECONDED by Commissioner Stanbridge to continue the meeting until Thursday, July 27, 2000 at 9:00 a.m. ,y There being no further business, on Motion duly made, seconded and carried, the Meeting recessed at 4:28 p.m. until Thursday, July 27, 2000 at 9:00 a.m. ATTEST: J. K. I anon, Clerk ��R18 Fran B. Adams, Chairman Minutes Approved: JULY 249 2000 -15- BK 1 1 4 PG 32 1