Anna Maria Mayor Mike Selby presented the bad news to city commissioners at their June 9 work session.
Tax increment financing is “a wonderful thing for the city,” but it won’t generate enough income to “help us acquire the six lots” across from the city pier’s north parking lot, he said.
The asking price for the lots is $3 million, and calculations by Selby and others of the amount of money a TIF district on Pine Avenue would produce annually “didn’t show enough revenue with TIF to buy the property,” the mayor said. “TIF would work great for other city projects, but not this one.”
But that doesn’t mean the city shouldn’t pursue alternative financing methods to buy the lots, he added.
Selby said he’s spoken to the bank that owns the property, and it offered to sell the city the lots for $3 million at 3.75 percent interest for 10 years with no payments in the first two years.
“That would give us time to find private funding, alternative funding or grants. That’s the option on the table,” he said.
While commissioners were disappointed that a TIF program wouldn’t generate enough revenue, all were in favor to varying degrees of pursuing a purchase of the lots.
Commission Chair Chuck Webb said he believed the city should not pay more than fair market value, as done in an eminent domain case, and believed the value of the property is less than the amount owed.
He suggested the city get a new appraisal and offer the bank that amount, but other commissioners and the mayor said it’s a foregone conclusion that the appraisal would be less than the sale price.
Selby said the bank was “up front,” about the value, which dropped below appraised value from several years ago when the bank loaned investors $3.2 million to buy the properties. The bank would lose about $200,000 on this deal, he said. The loan appraisal for the mortgage was likely $4 million, as the bank loaned 80 percent of the value to the investors.
Forget the fair market value, said Selby. This is an opportunity that “should not be wasted just because the value might be low right now.”
“The city has missed too many opportunities in the past” to buy property for the public good, Selby said. He reminded commissioners of the lost opportunity on Pine Avenue, which eventually saw three “mega-mansions” built on what had been a marina, and the Villa Rosa property on South Bay Boulevard, which remains vacant.
In both instances, the city commission declined to pursue a purchase, citing lack of funds, even with the Trust for Public Lands in St. Petersburg offering nearly $2 million in 2004 to help the city buy the marina. That deal was lost when city commissioners declined to pay for the property appraisal.
“I think we ought to have a vision for our citizens of what we want the city to look like in 10 to 15 years. I support the city controlling this property,” the mayor said.
Commissioner Dale Woodland agreed with Selby. He’s not heard anyone say not to buy the property, but it’s not going to be easy. He wants the commission to be positive and “take this bull by the horns.”
Commissioner Gene Aubry said if the city doesn’t buy the property, then “what happened on Pine will happen again right before our eyes.”
Planning and zoning board member Margaret Jenkins suggested the city could take the deal currently offered, sell one of the lots and look for grants or other funding to complete the purchase in two years.
And it was suggested the private sector might be able to help with a purchase plan.
Mike Coleman of Pine Avenue Restoration LLC said he and partner Ed Chiles made a $2.5 million offer on the property that was rejected.
If the city sticks to current fair market value, it could never buy the property, he contended.
“If that’s the price you want to pay, just walk away from the project now,” because the lender is not going to sell at the appraised value, he said.
But the lender’s terms are “very favorable,” he said, and the business community supports purchasing the property for the public.
“I believe we could raise a half-million dollars in the business community toward purchase of this property. Once it’s gone to someone else, someone not familiar with our town, they will come in and, overnight, build six houses there,” Coleman predicted.
Woodland suggested the purchase become a community project, not just a city hall effort.
Selby said he would get a new appraisal, but the city should not turn its back on the deal if the appraisal is lower than the sale price.
Commissioners were in general agreement with the mayor, but wanted to begin by determining the value.
In other business, city auditor Ed Leonard gave the city a clean audit report, noting that reserves might drop to 20 percent for the first quarter in the upcoming 2011-12 budget, but grow after that period. In two years, the reserve account should be more than 40 percent, he said.
Commissioners also agreed to a professional review of the city’s cellular communications ordinance after Selby said the estimate from wireless expert Rusty Monroe for a review of the ordinance and master wireless-services plan would be between $500 and $1,000.
Webb said the mayor is authorized to approve contracts below $2,500 without commission approval.
Business developer Lizzie Vann Thrasher asked commissioners what they would like to see develop at the Historic Green Village, now that the Angler’s Lodge has been added to the complex.
She’s had a suggestion for a bed-and-breakfast inn for the lodge. The structure presently has eight bedrooms upstairs, and these could be converted to three bedroom suites and office-retail businesses could occupy the downstairs.
However, city planner Alan Garrett said city code prohibits a bed-and-breakfast inn and it would have to be amended for such an operation.
Webb thought a special exception with restrictions on the inn might work, but city attorney Jim Dye said Vann Thrasher should start with a site-plan and work with Garrett to locate any problems.
Woodland brought on a round of laughter when he said Vann Thrasher should seek guidance from somewhere other than the commission, although “other than a whorehouse, a bed-and-breakfast is a perfect use” for the lodge.
Dye observed dryly Woodland’s suggested use would require an ordinance amendment.
Commissioners agreed there was nothing to discuss or vote on until Vann Thrasher presents a plan. She said she would return to the June 23 meeting with the appropriate information.
Vann Thrasher also inquired about a beer and wine license for the Village Cafe at Rosedale, and holding a flea market on the cafe patio.
Webb, however, said Vann Thrasher was “putting the cart before the horse. Just make an application and go through the procedures and process and see what happens,” he said.
Vann Thrasher also suggested the city could become a “green city,” possibly the smallest city in the United States to obtain such status.
Commissioners suggested she first bring the idea to the environmental education and enhancement committee to generate input and a game plan, and then return to the commission with that information.