City Council

CITY OF SARATOGA SPRINGS CITY COUNCIL WORKSHOP MEETING CITY COUNCIL ROOM TUESDAY, JUNE 12, 2007 5:00 P.M. PRESENT: Valerie Keehn, Mayor Commissioner John Franck, Accounts Commissioner Ron Kim, DPS Commissioner Matthew McCabe, Finance Commissioner Thomas McTygue, DPW OTHER PRESENT: Sonny Bonacio, Bonacio Construction Peter Cornell, BBL Development Bill Loewenstein, CIDC Michael Englert, City Attorney WOODLAWN PARKING LOT DEVELOPMENT DISCUSSION Matt McCabe opened the workshop discussion at 5:07 p.m. He said the Department of Accounts did an RFP for parking on Woodlawn Avenue and one official response was received. The bid was announcedat the last Council meeting and the Mayor said that she desired a workshop/discussion to explore the proposal further. Sonny Bonacio said there were three key pieces to the proposal, a public safety building, a 500 parking space structure and a future mixed-use building. He introduced Peter Cornell from BBL Development and Bill Loewenstein from CIDC. Peter Cornell briefly reviewed the history of BBL Development, which has been in business for 25 years. He said that this particular project has a unique funding mechanism with CIDC and turned the presentation over to Bill Loewenstein. Mayor Valerie Keehn joined the meeting at 5:10 p.m. Bill Loewenstein said CIDC does economic development financing. They have assisted 315 units of affordable housing in the United States and most of this work was done with Boscov as a partnership. CIDC also works with assisted living and has done projects related to public facilities such as garages and firehouses. They were just contracted to work with a New York City developer for 893 parking spaces at Yankee stadium. CIDC is well versed in financing public facilities and they work with 501(c)3 loans. They currently have four bidders with 501(c)3 bonds. Ron Kim asked that Bill Loewenstein clarify who would own the public safety building. He said Bonacio Construction would not be the owner but it would be owned by CIDC, a non-profit corporation. The advantage to this is the City would avoid Wicke’s and it would keep the financing off the City balance sheet so it wouldn’t hurt the future bondedness. The pricing mechanism provides more flexibility because of the not-for-profit status of CIDC and CIDC is limited by the IRS in the amount of profits that can be earned. They are governed by a Board of Directors and file an annual report with the IRS. The building itself would be governed by a three member board with two members selected by the City of Saratoga Springs and one member selected from CIDC. When the bonds are paid off in 30 years the building will become available. The three member subsidiary board would decide what to do with the building at that point. City of Saratoga Springs City Council Meeting/Workshop Tuesday, June 12, 2007 Peter Cornell presented a power point Project Overview. A aerial photo with building footprint overlay was shown with a public safety building, a 500 parking structure, a proposed mixed use facility and a smaller footprint at the corner of Woodlawn and Church, behind, the ATC bank, noted as “future expansion”. The ATC has a row through this section of property and are amenable to possible variations of development. ATC is willing to forward a letter to the City stating support of the proposed Public Safety building location. CIDC would subdivide the property into three separate parcels. Parcel one is the section noted for “mixed use facility” and would be owned by Bonacio Construction. It is located at the southern end of the City owned lot on Woodlawn Ave. Development would begin approximately three years from now on that lot. The second parcel would be the 500 parking space garage, which would be transferred to the City plus $200,000 for maintenance. Parcel three is the public safety building. This building would be owned by CIDC Saratoga through the duration of the bond then the subsidiary board would decide from that point the future of the building. The presentation included a rough draft rendition of the street elevation of the proposal. BBL Development would work with the Design Review Commission. The garage would be built with precast pieces. It would be a five-story garage. Each of the three parcels or buildings would be physically separated and would meet code requirements. A comparative analysis chart was presented that showed the differences in interest if the project were funded by three different methods, one being funded by CIDC. A graph showing the scope of reduction on the annual payment was presented and a list of possible revenue sources were presented. Included in possible revenue sources were Bonacio project taxes, State OCA support, City Hall rent for the vacated locations, advertising and permit parking. Other one-time revenue includes the ATC easement purchase, possible sale of the expansion piece, money in existing parking fund accounts and the sale of the Lillian’s parking lot. Ownership of the public safety building does not automatically revert to the City but would take a vote of the subsidiary board, two-thirds of who would be appointed by the City. If the subsidiary board decided for the City to assume ownership of the building then the deed could be transferred for as low as $1.00. One problem with contracting with a public sector institution for funding the Public Safety building or a lease buy back, the law would prevent the City from buying the building back for $1.00 but would require it be purchased at fair market value. The non-profit aspect of CIDC allows the City to buy the building for less then market value. BBL Development is a Union Contractor and will automatically pay prevailing wage rates. For the Bonacio mixed-use facility Sonny Bonacio uses 50/50 union employees for construction at this time. Financing of the garage and public safety building would be arranged by CIDC and they see no problem with financing this project. CIDC can go to the IDA for the garage and will look at all financing opportunities. The not-for-profit status with the IRS makes the financing process transparent. Mayor Valerie Keehn said she would provide to CIDC the City of Saratoga Springs standard IDA reform resolution recently passed by the City. The cost to the City for the lease of the building would be stable year to year but the lease amount hasn’t yet been determined because the size of the project is unknown. Once the project is established, CIDC will lock in an interest rate on the 30-year loan. Bill Loewenstein said interest rates are inching up and long-term debt is a stable environment but things could change. If a CIDC Saratoga was created their financial report would be separate from the parent company and separate financial statements would be issued. One consolidated report would be prepared with separate statements, including CIDC Saratoga. Reports are available to the public. The mixed-use facility is proposed to be either 80,000 or 85,000 square feet, which still allows room for the 500 space parking garage. Peter Cornell said the garage is set and laid out, they centered their attention on the parking structure but worked to make the public safety building feasible as well as the Page 2 of 5 City of Saratoga Springs City Council Meeting/Workshop Tuesday, June 12, 2007 mixed-use facility. Sonny Bonacio has talked with Rod Sutton, an adjacent property owner and they are aware of this proposal. Bonacio Construction deals with parking requirements on site and parking is handled internally. They use projections of 1.5 parking spaces for every residence. Sonny Bonacio said he is committed to creating his own parking on the mixed-use facility site. He does not anticipate using parking in the proposed 500 space parking garage for the mixed use facility. Ron Kim said Public Safety also does not anticipate using parking in the proposed structure but have allocated for parking requirements on the public safety building site. They have projected 4,000 square feet for impound vehicles. Police and judge vehicles were also included in their projections. The parking structure proposed actually provide 50 more spaces then what was requested in the RFP. Currently the Woodlawn Ave lot provides 138 parking spaces. John Franck talked with Bill Loewenstein about selling the bonds. Bill Loewenstein said that if CIDC goes with FHL bonds then they would be tax free but that decision hasn’t been made yet. He said either way, tax free bonds or not, would depend on what the subsidiary boards decide for the future. CIDC, as a not for profit, would be tax exempt and receive tax exempt benefits such as the property would be tax exempt, except for the Bonacio piece, which will be sold to Bonacio immediately. The CIDC plan would lease the public safety building to the City at $1.46 million per year for 30 years. Sonny Bonacio distributed a worksheet to the Council that was titled, “Explanation of Potential Revenue Offsets”. Monthly permit parking, for 250 spaces at $40 per month were used for the estimates as well as City Hall rental, advertising, tax revenue from “sold” parcels and NYS OCA funding. A column for metered parking was included but no value was included in the calculations. The net lease rate on the table is at first significant at $20.69 but drops over the 30 years to $10.04. The NYS OCA funding was discussed. Ron Kim said he has had meetings with Christine Gillibrand and it doesn’t look like they will benefit from funding until 2009. OCA money, if received, could be used for safety equipment such as metal detectors. Matt McCabe said this proposal does not answer his department’s RFP and feels there is a better economic way to go. He said he felt this proposal was more in the interest of the Public Safety building issue, which the City Council has not made a decision on yet in regards to the space needs of Public Safety. Matt McCabe added that he felt the City has a good bond rating. He said it was his sincere belief that Woodlawn needs to be all parking. This Council needs to act for the future of the City and conversations on paid parking needs to be advanced, studied and eventually find it’s way into the budget. He said he appreciates the creativity of the project, Sonny Bonacio is a fine resident but said he felt we do not need to lease a building that would have such a significant impact on the taxpayers. Tom McTygue said he has talked with Matt McCabe, in light of the opening of the Spring St/Phila St lot and DPW would like to initiate a pilot program of a parking permit fee of $8.00 per day. It could even be done on a weekly basis. This revenue could be used to offset other costs. He said it is the residents who are footing the bill and paying for the maintenance for parking at the different facilities. He does not want five-tier parking on Woodlawn Ave and the existing one tier is attractive. Discussions need to take place regarding the Public Safety problem, the amount of space that is needed and the potential to move Engineering elsewhere. Ron Kim said a report would be distributed at the first July meeting from well-versed experts who have reviewed the current Public Safety conditions. He said 28,000 square feet is needed and the information will be finalized in a report. Tom McTygue said the City needs an opportunity to provide input on Public Safety space requirements. Matt McCabe said he has worked some figures on the Spring St deck, although he needs further specifications, but it could generate between $150,000 and $225,000 in revenue on that lot alone. The new proposed lot could generate 1.4 million per year for the 500 spaces. The “Hub Lot” can not charge for parking because it received funding from the County and there was a stipulation to the agreement. Page 3 of 5 City of Saratoga Springs City Council Meeting/Workshop Tuesday, June 12, 2007 Charges could be applied for special events and the revenue can go toward the maintenance. He is not proposing meters on Broadway. He said it is his proposal still that the City is in good financial standing and can absorb funding projects on their own. Ron Kim said he predecessor presented a 27,000 square foot building that would have cost 6.3 million, it is now five years into the future and with a 28,000 square foot building costs are projected at 21 million. He said City Hall is an ADA mess, and serious asbestos concerns will bring up costs substantially if rehabilitation were considered. Costs will continue to accelerate and this proposal is one way to move a proposed new building along. He said Council has been discussing how to solve the parking solutions for 12 to 18 months and now we are saying to wait and do further studies. The problem is not going to go away. He encouraged Council members to tour the police station. He also noted that if rehabilitation was considered the police station runs 24 hours a day, 7 days a week, is a facility that has prisoners, and a rehab would not be an easy solution. Tom McTygue said this was the first time Council has sat at the same table to discuss a Public Safety building. He said Ron Kim’s predecessor never brought forward a proposal to Council. He said this Council is a “problem and solve” Council and there are ways to solve police facility problems with a renovation. He encouraged further discussions. Matt McCabe said the City needs to find a better financial mechanism, the City bond rating is good and is in a good position when they do bond. Valerie Keehn said this was a healthy discussion that needs to continue. She said she felt this proposal was interesting and solved multiple problems. She would like to see a comparative analysis with a 30 year span between the costs of the CIDC proposal and the costs to the city for funding the public safety facility and parking on their own. Sonny Bonacio said, in regards to the RFP, that this proposal did not follow the RFP issued but Bonacio Construction did receive an addendum that brought in the Public Safety element. John Franck said that three RFPs have been done in regards to parking within the City and not one has been acted on yet. He said past RFPs need to be brought up for a vote because they can’t just lie around and a decision needs to be made. Ron Kim said the past RFPs and the Public Safety building problem are all connected. DPW started 1.5 years ago with High Rock as the logical candidate for location. A City Committee at that time was not interested in developing a Public Safety building at that location so Public Safety started looking elsewhere. He said nothing has been done yet with the High Rock lot. Construction costs increase year after year and it is irresponsible of this Council to postpone a decision. Tom McTygue said Council needs to come to agreement on square footage for Public Safety needs. Peter Cornell said he felt they could deliver the proposed buildings for less then what the City could do. Through this proposal the City will not have to go through the Wicke’s process, an architect will not need to be hired, they have that already and they have the benefit of going straight to the construction material providers. He said CIDC can not dip into profits because of their not for profit status. He said they will show all proposed numbers as separate projects or combined, and said further that however the City would like to proceed, BBL Development will spend the time to make the City comfortable. He also said that if the City were to do the projects on their own they could potentially have to pay two bond council fees and two origination fees. Matt McCabe asked and was informed that the first lease payment would not be due until the project was complete. Bill Loewenstein said this proposal brings the best of private and best of public together for the benefit of the City residents. Page 4 of 5 City of Saratoga Springs City Council Meeting/Workshop Tuesday, June 12, 2007 Valerie Keehn said the police station should be the priority of Council and it needs to be promoted by the Council. Matt McCabe said that whether the building is leased or bonded Council still needs to discuss the details of space needs. He suggested the numbers for parking and public safety should be all done together and determine what Council wants to do. He said that parking could generate up to a million per year and Council needs to make a decision to address parking as a potential revenue source. Valerie Keehn thanked all present for their participation and the meeting was adjourned at 6:35 p.m. Page 5 of 5