October 10, 2011
To: Mayor and City Council
From: Leif J. Ahnell, C.P.A., C.G.F.O.
Subject: Wildflower Property
Request for Letters of Interest
Special Workshop Meeting
Tuesday, October 18, 2011 – 6:30 p.m.
6500 North Congress Avenue - Auditorium
During the May 2011 Goal Setting Sessions, City Council established deciding a direction for the City’s Wildflower Property as a top priority for the City. Staff subsequently issued a Request for Letters of Interest and established a Wildflower Webpage on the City’s website in order to receive public comments and Letters of Interest on the future improvement and/or development of the Property. The City received sixty-one e-mail comments and five Letters of Interest. The public comments and Letters of Interest are included in this notebook. A summary of the comments and Letters of Interest is also provided.
The purpose of the Request for Letters of Interest and Public Comment process is to solicit ideas for the future of the property and to help determine what options may be available for improvement and/or development of the property, whether by the City itself, in a public-private partnership, or in some other manner.
The Request for Letters of Interest indicated that the City preferred to receive all Letters of Interest by August 31, 2011, but this was not a firm deadline, and the City has continued to receive Letters of Interest and public comments. Any additional input received after preparation of this report will be provided to City Council at the Special Workshop Meeting on October 18, 2011. The meeting will be held in the auditorium at 6500 North Congress Avenue at 6:30 p.m. Parties that submitted Letters of Interest have been invited to make a 15-minute presentation and discuss their proposal with City Council. The agenda will also provide time for public comment during the meeting.
The Request for Letters of Interest is an essentially informal procedure, as opposed to the more formal Request for Proposals process. The fact that one submittal does or does not respond to a requested piece of information does not make the submittal non-responsive. The purpose of requesting Letters of Interest was to hear ideas and explore concepts. As was noted in the published documents, the City may, based upon direction from City Council: elect to negotiate with a party based upon a Letter of Interest; solicit and re-advertise for other Letters of Interest; issue Requests for Proposals or other invitations for specific type(s) of improvements and/or development on the property; to take any other action available to it in its discretion; or to take no action.
Public Comment Received:
As of October 5, 2011, the City had received sixty-one e-mail public comments via the Wildflower Webpage. The individual e-mails are provided in the notebook along with a summary of the comments in each.
Eleven of the e-mails suggested the Property be developed essentially for passive recreation uses, such as park, picnic areas, parking, fishing, and docking facilities.
Forty-five of the e-mails suggested more active recreation and destination uses such as restaurants, concessions, amphitheater or open stage areas, rental facilities, art shows and events, food trucks, boat and trailer parking, roller rink, shops, bike rentals.
Three e-mails offered general comments on the purchase of the property. The Fifth Avenue Place Homeowners Association expressed concern about impacts on adjacent residential property from development of the Wildflower Property.
Two e-mails suggested the City sell the property for residential development.
Letters of Interest Received:
The City received five Letters of Interest. Some of the Letters of Interest provide more detail than others. There are also differences in the overall development, scope of work, term of lease, rental stream, and City and developer responsibilities. Because these are letters of interest and not formal proposals or proffered lease documents, some of the terms and conditions would need to be clarified if the City were to enter into negotiations with any of the submitting parties. The actual terms and conditions of any lease agreement would not be final until approved by the City Council through the Sale of City Property process.
Although it is not mentioned in all the Letters of Interest, it should be noted that a portion of the Wildflower Property is zoned R-1-B (single family residential), and a rezoning of this portion of the property would be required to allow use of this property for parking related to the commercial (B-1) portion of the site.
The Letters of Interest are included in the notebook along with a capsule summary of the proposal. The following provides information on key elements in each of the five Letters of Interest.
Boca Outdoor Center
Proposed Use: Approximately 450 sq. ft. of land area for chickee hut; 250 sq. ft. floating dock; use of 3 parking spaces; water tours employing kayaks and paddle boards; bicycle and Segway land tours; instruction and classes on water; team building adventures; paddle parties; youth camping and activities; rentals; concession trailer; bicycle rack; small use proposed as compatible with other development of the Property; site location indicated
Term: 5 years; 4 @ 5-year extensions (i.e. 25 years total term)
Rent: $24,000 per year (450 sq. ft. x $53.33) or 10% of sales revenue, whichever is greater; Annual CPI adjustment capped at 5% per option period
The Boca Outdoor Center Letter of Interest is presented by the owner of the Jupiter Outdoor Center, which operates in conjunction with Guanabanas Restaurant. Note that Guanabanas Restaurant also submitted a Letter of Interest (see below). The Letter of Interest does not provide details on financial capability.
Hillstone Restaurant Group
Proposed Use: 7,500 sq. ft. full-service restaurant with 1,000 sq. ft. exterior patio; restaurant designed to connect to waterway; pedestrian access; public parking; integrated with and connected to Silver Palm Park via walking trail; Hillstone responsible for all construction costs, including parking; shared parking desired; (proposal appears to assume all of Property to be included in Lease); also provides conceptual ideas for Silver Palm Park improvements; conceptual site plan provided
Term: 35 years, with options to cancel at year 20, 25, and 30 (i.e. minimum 20 year term)
Rent: $500,000 per year with “annual increase of 5% every three years thereafter during the Term” plus 5% of gross annual sales, with property tax offset against percentage rent
The Hillstone Restaurant Group owns and operates the Houston’s Restaurant in Boca Raton. The Letter of Interest discusses Hillstone’s financial and performance capability and indicates Hillstone’s intention to develop the property to compliment the City’s objectives for downtown and the adjacent area, including Silver Palm Park.
Boca Dockside Marketplace
Proposed Use: Four-story multi-use structure: First floor: public market with local produce and products; performance space; seating space; second floor restaurant with deck; third floor boutiques; fourth floor upscale restaurant with deck; water taxis and landing; no conceptual site plan provided
Term: None proposed
Rent: None proposed
The Boca Dockside Marketplace Letter of Interest indicates that funding is believed to be secured and need not be an impediment to the realization of the project. The Letter of Interest proposes uses as outlined above but does not provide detailed information regarding performance commitments, financial capability, or general terms and conditions
Guanabanas Restaurant, Inc.
Proposed Use: Outdoor restaurant concept; tropical atmosphere and landscaping; Key West style structures, chickee huts; retail paddleboards and surf clothing; +/- 4,700 sq. ft. dining area; +/- 5,600 sq. ft. kitchen operations; +/- 1,700 sq. ft. retail; +/- 800 sq. ft. special event chickee hut; +/- 1,200 sq. ft. open air bar; sublet space to local small businesses; reference to Jupiter Outdoor Center (see Boca Outdoor Center Letter of Interest); a conceptual site plan, including parking, is provided; City to repair seawall and build floating dock and boat access to Property as allowable
Term: 25 years, with 5 year extensions thereafter
Rent:7% of gross sales with minimum rent of $450,000 (for 25 years).
Guanabana’s Letter of Interest discusses the financial and operational capability of the proposing team. The operational concept discussed includes a variety of community events and public outdoor activities at the site, including fundraisers, fishing tournaments, movie premiers, and high school reunions.
Bricktop’s (West End Restaurants)
Proposed Use: Restaurant; +/- 7,500 sq. ft. with exterior patio of +/- 1,500 sq. ft.; lease is for a portion of the Property (+/- 14,000 sq. ft. lease area within the “building limit line” as depicted on the 05/02/2011 sketch); Bricktop's to construct restaurant building; Bricktop's will provide rent guarantee via Letter of Credit at $1.2 million to be reduced by $400,000 per year assuming all rent payments timely made; restaurant to be “afforded…the parking required by City Code” subject to shared parking study; conceptual site plans provided, including connection to Silver Palm Park; City to complete site work and landscaping other than work within “building limit line”
Term: 15 years with 5 @ 5-year renewal terms (i.e. 40 years total term)
Rent: $400,000 minimum annual rent with annual increase of 1.5%; in addition 5% of gross sales in excess of natural breakpoint; percentage rent resets every five years at higher of minimum annual rent than in effect or 75% of average total rent paid during five prior years.
Bricktop’s originally made its proposal in June, prior to the City starting the Request for Letters of Interest process. The Letter of Interest describes Bricktop’s as a community gathering place.
The parties who have submitted Letters of Interest have been invited to make 15-minute presentations at the Special Workshop Meeting on October 18, 2011. Noting that this is an informal process, any of the parties may make additions and/or modifications to the proposals outlined in their Letter of Interest, and the City may receive additional presentations of Letters of Interest or public comment prior to or during the Workshop.
As noted above, the City Council may elect to negotiate with a party based upon a Letter of Interest; solicit and re-advertise for other Letters of Interest; issue Requests for Proposals or other invitations for specific type(s) of improvements and/or development on the property; to take any other action available to it in its discretion; or to take no action.
The purpose of the Special Workshop Meeting is to hear the presentations on the Letters of Interest and public comments so that City Council may, in its discretion, establish consensus on the future of the Wildflower property and the direction to be taken. Because it is a Workshop meeting, no decisions requiring formal action by City Council will be made, but staff will be prepared to follow up as indicated.
Document originated by: George S. Brown, Deputy City Manager