Board of Commissioners Workshop Meeting

MINUTES BOARD OF COMMISSIONERS REGULAR WORKSHOP MEETING JU NE 30, 2021 6 :00 p.m. The City o f Madeira Beach Board of Commissioners he ld a regular workshop meeting at 6:00 p.m. on June 30, 202 1, in the Patricia Shontz Commission Chambers at City Hall, located at 300 Municipal Drive, Madeira Beach, Florida. MEMBERS PRESENT: John 8. Hendricks, Mayor Helen " Happy" Price, Vi ce Mayor/Commissioner District I Nancy Hodges, Commissioner District 2 Doug Andrews, Commi ssioner Di strict 3 Dave Hutson, Commi ssioner Di strict 4 MEMBERS ABSENT: CITY STAFF PRESENT: Robert Daniels, City Manager Clara YanBlargan, City Clerk Thomas Trask, City Attorney 1. CALL TO ORDER Mayor Hend ricks ca lled the meeting to order at 6:07 p.m. 2. ROLL CALL City Clerk C lara YanBlargan ca lled the ro ll. 3. PUBLIC COMMENT Mayor Hendricks opened to public comment. There were no public comments. 4. TOPICS FOR DISCUSSION A. High and Dry Storage Facility - Robert Daniels, City Manager; Andrew Laflin, Financial Consultant Financial Consultant Andrew Laflin introduced the representative with Cardno, Brian Zarli na. June 30, 202 1, BOC Regular Workshop Meeting Page 1 of 5 Mr. Zarlina said the City hired them to conduct the feasibility report for the redevelopment of the City's existing Marina into a high and dry boat storage facility, featuring offices and operations for the Public Works Department. The purpose of redeveloping is to provide an improved boating experience for boaters that use the Marina facilities and upgrade the Public Works Department operations currently taking place within the Marina. There is a need for additional boat storage space and vehicle parking spaces to accommodate the heavy influx of boaters regularly looking to use the Marina facilities. The feasibility study will aid the City in deciding what it wants to do at the Marina. Mr. Zarlina reviewed the feasibility report and explained the scope of work; recent inflationary pressures; sovereign submerged land constraints; description of improvements for Option I, redevelopment with no restaurant and Option 2, redevelopment with a restaurant; existing operational and maintenance costs; increased labor needs and costs; planned maintenance; loan options; possible grant opportunities; rate structure used for the analysis; and how they come up with the revenue stream. Mr. Zarlina explained that the discounted cash-flow analyses assume construction begins in 2022 and ends in 2025, with the Marina open for business in 2026. The analysis period is projected over 20 years. The breakeven year would be 2045. • For Option I, the estimated cost of redevelopment without a restaurant is $26,250,000. With a 15-year loan at 2% interest, it would be $30,405,786.10 when paid off. The benefit-cost ratio is 1.16, and the internal rate of return is 9 .8%. r--\. • For Option 2, the estimated cost of redevelopment with a restaurant is $26,480,000. With a 15-year loan at 2% interest, it would be $30,672,198.70 when paid off. The benefit-cost ratio is 1.17, and the internal rate of return is I 0.0%. Vice Mayor Price said it looks like adding the high and dry at the $25 per linear foot would about double the income of the Marina. Mr. Zarlina said the $2.4 million is what the Marina is generating, and the high and dry would generate $2.2 million in the future. Mayor Hendricks said Fort Myers is about $22 a linear foot up to a 25-foot boat, and over 25 feet it goes to $30. It depends on the size boat getting in there. Mr. Zarlina said the best comparison right now is the one in Fort Myers, and that contract did help them with a lot of the pricing and the input for the Marina facility. Mayor Hendricks asked if they had spoken to the adjacent property owner. Mr. Zarlina said they met with him, and he is willing to work with them. The City Manager said he had spoken to the adjacent landowner, and he is willing to cooperate with the venture. His only request is that he be given a copy of the study when completed. After he gives him that tomorrow, he will get his thoughts about it. They will need some form of document in writing if they should go ahead with the investment. He will work with the City Attorney on drafting a document permitting them to use the canal to enter the facility. The Mayor said a project like that would increase the value of his property. The Vice Mayor said they are using the canal now. June 30, 2021, BOC Regular Workshop Meeting Page 2 of5 Mayor Hendricks asked if they had looked at the easements of the cell tower on site. Mr. Zarlina said yes, they had built $3 million into their cost analysis and cost estimate for the site cost, including relocating their database to the cell tower and creating new easements to get them straight out. Mayor Hendricks asked Mr. Zarlina if he knew that the ship store was built structurally to hold a second floor for a restaurant. The building and foundation were built to have a second floor and eventually have a restaurant up there. Mr. Zarlina said he had seen the plans but was not 100% sure about it, so they included building a second floor with a foundation in the plan. The Mayor said the ship store stands as is, and some restaurateurs are already interested in footing the entire bill for a restaurant above the ship store. That is something they can scratch off as an investment for the City. Mayor Hendricks said his question about the price per foot had been answered. He was wondering how they had come up with their figures. He did not see that. They need to get their public works building at the Marina. He understood from a previous Commissioner that there was a way for the garbage trucks to be in the bay and sanitized so there would be no odor. Mayor Hendricks said he has a hard time putting the City in almost $30 million in debt. His thoughts to the Board are to look at a joint public-private venture if they pursue it. Vice Mayor Price said it appears they have moved all their fueling over to the canal side and asked if they were taking the fuel pumps out from in front of the Marina on the waterside. There will be a lot of activity going on there. Director Rau explained it was to provide a bigger staging area. They need enough room to pull boats out and get them in the water for people. A new fuel dock would be built there for the customers. The tanks will stay where they are. They will be losing nine wet slips to do that. The Mayor asked if that was taking off, and Director Rau said no, and that if they take away the dry storage and the additional wet storage, they will lose about $150,000 in current income. Mayor Hendricks said if they are losing $150,000 a year, the figures are not accurate. Vice Mayor Price said they are accurate to what they represent. They made an allowance for additional employees and things, but what they missed was losing eight boat slips. Commissioner Hutson asked if stagging boats inside the current fuel dock would be enough room for people to bring in a boat and spin it around. Director Rau said yes, they would be removing five slips there to make room for people to come in on both sides of the fuel dock, and they can use both sides of the staging area. Commissioner Hutson asked that in the canal where they are talking about the submerged land rights if it goes all the way up to the seawall onto the opposite side. Director Rau said no, the landowner has about 20 feet of land across from the seawall side. The canal is about 120 feet wide. Commissioner Hutson asked how many boats in a high and dry get used on a holiday or weekend. It says one parking spot per four boats. They would run out of parking. Director Rau said that would be hard to guess. It will be about how many boats per hour they take reservations for. Mr. Zarlina said they projected for 200 boats but could get 265 small boats in the facility. June 30, 2021, BOC Regular Workshop Meeting Page 3 of5 That works to Brian's advantage on how he wants to manage the facility. The more boats, the more linear footage you have, the more revenue stream you will get. Mayor Hendricks asked Public Works Director Megan Wepfer if she had any questions because it was not what they had envisioned there. Director Wepfer said it would be challenging for Public Works because they have a lot of equipment and vehicles. Without physically putting her eyes on the site plan, it isn't easy to figure out how to manage the space. She does not have a lot of questions but concerns on how they would manage it. Vice Mayor Price asked Director Wepfer if the square footage allowed on the plan was larger or smaller than what they are working with now. Director Wepfer said it looks much smaller, and they currently have a lot more outdoor storage than what shows on there. They might be losing space but will be gaining indoor storage. There would be no room to store four garbage trucks on the property, so they will not be getting away from the rental property they have now. Commissioner Andrews said he loves the enthusiasm and believes in the idea, but the numbers are astronomical. Ten years ago, they had no debt. They took out a $10 million loan to build the facility and a $15 million loan to do the road project. They are proposing to more than double the debt for something that will not pay off until 2045. That is not including losing $150,000 a year in boat slip rentals and calculating that over 30 years, it is $3.8 million, which adds another 18 months minimum to their payout schedule. It is a great idea, but they must sell it to the people. He asked about Safe Harbor's involvement in it. Mr. Zarlina said they are the contractor who built the Fort Myers facility and assisted them in cost estimating. Commissioner Andrews said ~ they are the same people courting St. Pete. At the Mayor's debate the other night, he heard that everybody but the current mayor is entirely against privatizing their Marina. The numbers are crazy, not that he is against a third party or a public/private partnership. That is not what they do. They come in and put $30 million into the project and get a five-year lease on it. The buyout in year one is like $38 million. The design looks similar to the one they had years ago. Although it is cool, he is worried about the stormwater damage in robotics. He is stunned they spent money without knowing and having an agreement in place for the submerged land leases. He is glad there was a positive conversation, but they need something in writing. That should have been cleared up prior to them doing a survey. It is concerning that they are adding seven to eight employees, and right now, they do not have anybody that has ever run a high and dry or has any experience in it. They are about to throw $30 million into a project like that. He asked if they had the definitions of the parcels given to the City by the Internal Trust Fund of Florida, where their floating docks are. They were given that land, and he does not know if they have the right to move it, convey it or sell it. He saw nothing in the plan about it. It is a significant number, and it will not make any money for the City for about 20 some odd years. The City Centre is not producing revenue, and that is a $10 million loan. The road projects they are doing for $15 million are not producing revenue. The Marina project will not produce the revenues to pay off a loan that will not extinguish itself until 2046 or 2047 based on the loss of revenue. He does not know if they can get $20 a square foot. The Mayor said he believed they could get that, but it is too much debt to put on City. June 30, 2021, BOC Regular Workshop Meeting Page 4 of5 Mayor Hendricks sa id the numbers are a lot different than what he had gotten. He and the City Manager had spoken to an F3 company a couple of days ago, and their numbers are not like it. His opinion is to put it out for an RFP to do a j oint public/private venture and see what they get back for the high and dry at the Marina. They might get a company to flip the bill on a lot of it. He cannot support the City taki ng on that much debt. The Vice Mayor said it is the wrong time to be bui ld ing anything. Commiss ioner Andrews said he was kind of surpri sed that it was with a restaurant or without a restaurant. He thought it would have been with robotics or without robotics. He would like to know what that number looks like. The Vice Mayor said she does not think it is worth building if it is without robotics. Commissioner Andrews said the biggest issue with robotics is who they will call if it breaks down. It is not a common thing in the area. The Vice Mayor said they would get a contract with the company that installs it. Vice Mayor Price said she liked the looks of Option 2. If they are going to do something, the restaurant should be a patt of it. Following discussion, The Board consented to put it out for an RFP. The Mayor said they could do that for the restaurant and the high and dry storage. He will get with the City Manager and try getting it on the next meeting agenda. Mayor Hendricks opened to publi c comment. Jeff Brooks, 425 150th Avenue, said he is next door to it. He is fine with putti ng a high and dry there. But, when looking at the proposal regarding parking. it shows 40 spots for 200 boats. That is way off base. If you add the restaurant, the 20 spots fl oating for whoever disappears, and those 20 spots are not I00% fo r the restaurant. That many spots for a restaurant will not work. That needs to be thought about. They can either do the high and dry or the restaurant. If considering doing the restaurant, they need to stipulate how it will work from their side. At I 0:00 p.m., there needs to be an end to outdoor music or any live music inside. He wou ld hope that wou ld be considered going fo rward. 5. ADJOURNMENT Mayor Hendricks adj ourned the meeting at 7: 14 p.m. ST: , City Clerk June 30, 202 1. BOC Regular Workshop Meeti ng Page 5 of 5