Staff recommends approval of a contract with D.A. Davidson & Company for financial management services relating to Kristen Court Subdivision Redevelopment.
During the process of acquiring Kristen Court Apartments which consist of 59 units, 17 triplex buildings, one duplex, one sixplex and 5.88 acres (256,000 sq.ft.), the need for a short and long term strategy that would layout the steps necessary for this project to be successful was evident. The City Commission has expressed a desire to not be in the housing business long term. In addition, the City Commission expressed they do not wish to undertake long term debt which would be necessary if the City cannot raise the revenue to pay off the short term Bond Anticipation Note (BAN) by the time it falls due in three (3) years. The BAN is a $4,000,000 note, with a taxable fixed rate of 6.01%. The initial transfer to the City was $3,527,631.50 which represents the total cost of acquisition ($3,492,631.50) and closing cost ($35,000). The payments on the BAN will be interest only starting May 1, 2007.
Therefore, the City Commission will need the best information available to assist them in choosing the best alternatives for the future development of Kristen Court. There are several development alternatives for Kristen Court that needs a thorough financial assessment such as:
· Renovate existing units and sell as fee simple townhomes;
· Reduce the number of units to a total of 48, with 8 units consisting of 1,275 square feet of livable space and the remaining 40 to be sold as 850 square feet of remodeled townhomes;
· Issue an RFQ and seek a housing developer to form a joint venture for development;
· Demolish structures and sell vacant land;
· Place the complex on the market and sell “As Is”;
· Renovate existing units and pursue 100% occupancy rate (keep as rentals);
The proposed financial feasibility report will help to identify gaps in future development cost, evaluate possible options, create pro forma income statements, and draw conclusions including a ranking of the options. The intent of the City is to not lose money in the process, but to maintain affordable housing units, create homeownership and eliminate a blighted condition from the community. Staff is pursuing several housing grant initiatives to assist with this project, and the financial feasibility report will help in all grant applications Staff pursues.
1. Approve contract with D.A. Davidson & Co. or;
2. Such alternative action as the Commission may deem appropriate
An additional alternative exists, the Lake County School Superintendent has indicated a desire to expand Rimes. Past Principals of Rimes have indicated that it was difficult to convince parents that Rimes was a safe location when parents had to drive past Kristen Court to visit the school or to bring their children to the facility. The Lake County School Board has indicated a willingness to expand the Rimes campus and make it a full elementary school. We have approached the School Board asking to lease Dabney. Perhaps the School Board would be willing to trade Dabney to the City in return for Kristen Court. However, we have never asked the question.
The total cost of the feasibility report will not exceed $10,000. If the Commission should decide to proceed, funding will be allocated from the Bond Anticipation Note (BAN) provided by Sun Trust Bank.
Prepared by: ______________________
Attachments: Yes____ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ___________________
City Manager ______RS_____________
Account No. __554-5540-554-34-10
Project No. ___________________
WF No. ______________________
A resolution of the City Commission of Leesburg, Florida authorizing the Mayor and City Clerk to execute a contract with D.A. Davidson & Company for financial management services for the Kristen Court Subdivision; and providing an effective date.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT the Mayor and City Clerk are hereby authorized to execute an agreement with D. A. Davidson & Company whose address is 3504 Lake Lynda Drive, Suite 155, Orlando, Florida 32817 for Financial Management Services relating to Kristen Court.
THAT this resolution shall become effective immediately.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the 9th day of April 2007