City Commission Work Session All Day tomorrow (6/8)

Click title for complete back-up.  The meeting begins at 8:30 a.m. and the morning consists of reviewing the scope of the Request for Proposal (RFP) for future power supply.  This topic carries an estimated time of three hours.  After lunch, around 12:30, there's the Beach Casino financing plan and after that review of the scope of work for architectural firm REG's contract.  I just had time to review those two items today and I have some observations.

For the Casino financing plan, staff mentions in the transmittal memo that they looked at the "market value of the commercial property" in the Casino.  Rates of $25 to $40 square foot for restaurant space and $20 per square foot for retail space are being used after the rehabilitation of the building.  A second story restaurant at $40 a square foot is included in the analysis. These square footage lease rates were "researched...with a commercial real estate expert...based on compatible properties in the region."  We are not offered a copy of the marketing analysis - one presumes the one talked about during various meetings and at the architect interviews.  This was to be performed by a firm out of Broward County and done under the $15,000 limit that the City Manager can approve on her own.

Also important would be whether or not a percentage based rent or hybrid should be used for restaurant tenants.  The market analysis should have addressed that, as well.

Needless to say, the integrity of this analysis depends largely on the assumptions and procedures used in that market analysis.  Not to have that report as part of the basic back-up information and easily available to the general public leads one to be suspect.  Just knowing what "compatible" properties were used is an important consideration.  It is a public document, anyway, why not include it?

One of the points I made in previous posts about the pluses and minuses of rehabilitating the old structure versus building a new building was the impact to the tenants during the construction period. In fact, throughout the RFQ process in selecting an architect, the Commission repeatedly asked questions of the architects related to whether or not tenants could continue operating while rehab is underway.  I always maintained that it really wasn't practical in this case and, therefore, was one of the reasons to build new.  Tenants could stay in the old building, paying rent along the way, and then move into the new building once it was completed.

Well, it seems that the staff has come around on this issue and the analysis specifically assumes that the tenants will vacate the building during the June 2011 through September 2012 construction period.  Huh, if only we knew this beforehand...So, the tenants will be out of business during this time frame and the city will not be earning rental income.

In reviewing REG's contract, the two documents don't share the same construction timeline.  The financial analysis has the construction period beginning in June 2011 - the REG contract has it beginning in August 2011.  The same group of people pretty much worked on the same documents so the discrepancy is not easily explainable.  That two months (or three depending) might make a difference in the bottom line - if not the city's, then certainly with the tenants' bottom line.

The revenue from parking at the beach will be one of the main sources of support for a $6 to 6.5 million loan - with upper parking at $1.75 an hour and $1.50 for lower level parking.  Meters are still the devices, according to this analysis, that will be used to collect money from parking.  Based on our past experience with reliability and enforcement of the meter system, I think we need to look at gated parking with an attendant.  I know this adds a level of administrative costs, but it might be worth the revenue lost from the other methods.  It would also give the city another set of "eyes" on the parking area for both crowd control and vehicle security.

The other odd thing about the REG draft scope of work is that REG is marked out of most of the copy included in the back-up and Living Designs Group is in its place.  Wonder what the story is about that.  Rick Gonzalez doesn't seem concerned.

Tune-in or attend tomorrow.  Public comment, of course, is not accepted during workshops.  Why would the Commission want to hear from the residents anyway?