Will a deal finally be approved for the Downtown catalyst site?

A three-block area dubbed the “catalyst site” is intended to jump start new construction in downtown Sanford, but to date there’s been no activity on the 5-acre site.

That may soon change as city leaders and the developer chosen for the project, Sanford Waterfront Partners LLC (SWP), appear to have an agreement to move forward with the $50 million redevelopment.

Under the terms of the deal, the city would provide up to $13 million in incentives in the form of rebates, fee waivers and infrastructure improvements. In return, SWP would begin construction in about 27 months to build 235 residential units, 37,750 square feet of retail/restaurant space, and 8,550 square feet of offices that would generate more tax revenue, new jobs and increased property values in downtown. Here’s a video showing how the project would look.

The city’s consultant S&ME Inc. (formerly Littlejohn Engineering) projects the project, also known as Heritage Park, will generate $2.35 million in property taxes in the first five years, add 254 permeant jobs and create $19.2 million in direct sales from businesses located in the development.

The proposal is working its way through various city boards for recommendations, and will presented for public hearings at the April 10 and 24 City Commission meetings. If there are no major changes, the agreement would go into effect by the end of April.

If the agreement is approved some site and infrastructure work could begin this summer and actual construction of the buildings would begin no later than July 2019.

It seems like this is taking forever, why the delay?

Sanford and SWP inked a Memorandum of Understanding in February 2016 and the timeline called for the parties to sign a development agreement in September 2016. That deadline came and went, and the city commission extended the deadline three times. So too did the hopes of starting construction by the end of 2017

Three main issues dogged the negotiations:

• First, the site “has some hair on it” and will require extensive work to make it ready for development said John Jones of S&ME Inc. Power lines and underground utilities must be moved. In addition much of the soil was pulled from Lake Monroe when the city constructed a seawall in the 1920s and will need to be stabilized to build multi-story structures.

• Second, the deal is complex because it involves city land and tax incentives.
City leaders were willing to provide incentives, but wanted them tied to specific performance benchmarks.

For example, SWP originally proposed taking possession of the city’s land to start construction, but deferring payment for 5 years. That proposal did not guarantee construction would actually happen and did not prevent SWP from flipping the property to another developer. The new proposal requires SWP to purchase the property at the start of each phase of the three-phase development, with the city refunding the purchase price after each phase is completed with a certificate of occupancy.

“As it was originally written, the city had no guarantees anything would be built, and we had no control of the land,” said Sanford Mayor Jeff Triplett. “Now if they don’t perform, it’s costing them money.”

• Third, Sanford City Commissioners are leery about real estate deals involving city land because of past deals made by city fathers. Specifically, commissioners cite Marina Island (which abuts the Heritage Park property to the north) as a deal gone bad. The city built Marina Island in the 1960s and signed a 99-year lease with a company to build a Holiday Inn. The lease provided no guidance on how the city and the leaseholder would move forward once the hotel became outdated and the hospitality market in North Seminole County would change.

The current leaseholder intends to replace the hotel with an assisted-living facility, a land use many in the community believe is not the highest and best use of city-owned property in a prime downtown waterfront location.

“There was a lot of concern about what has gone on in the past, and rightfully so,” said Venny Torre a partner in SWP.

So is this a good deal?

City commissioners think it is and seem likely to approve the dea. Torre and his partners at SWP like the deal, too.

“There was a lot of back and forth, and I would say all our talks were very productive,” Torre said. “It wasn’t easy at times, but we keep working to get it right.”

I think it is a good deal, especially since there are very specific timelines. Each of y’all will have to decide on your own if this is a good agreement.

The project is expected to be done in phases, with each block of land representing its own phase.

Under the terms of the proposed agreement,

Sanford Waterfront Partners is obligated to:

• Purchase the first piece of property within 24 months of a signed agreement. In order to purchase the property SWP would be required to show proof of financing for the project, receive all approvals and permits, and provide specific start and completion dates. If the agreement is approved in April, this means SWP would have to purchase the first piece of property no later than April 2019.

• Submit plans for approval through the city’s Historic Preservation Board.

• Perform all geotechnical work, but only after consulting and gaining the approval from the city. The city will refund the cost of geotechnical work (see below) but does not want to give SWP carte blanche.

• Begin construction 3 months after purchasing property. Again, if the agreement is approved in April, SWP would purchase the property no later than April 2019, and construction would begin no later than July 2019.

• Agree not to flip the property until the entire project earns a certificate of occupancy.

The city is obligated to :

• Fund up to $5.2 million for infrastructure improvements to include utilities, road work and streetscape. This funding will come from the city’s general fund initially, but the money will be reimbursed by the Sanford Downtown Community Redevelopment Agency (CRA). This is a typical CRA infrastructure project, much like what was done on 1st Street in 2004 and a Sanford Avenue in 2014. The CRA has funding for the work, but because the SWP must start construction within 27 months, the city general fund is fronting the monies to complete the infrastructure improvements in time without draining the CRA fund.

• Reimburse SWP for geotechnical work up to $3 million (all work must be pre approved by the city).

• Waive building permit fees up to $1 million and review fees up to $500,000.

• Support SWP’s request to Seminole County for a reduction in transportation impact fees of $225,000.

• Provide stormwater credits.

• Refund the purchase price of the land, valued at $2.4 million.

• Once the entire project is complete, refunding 50 percent of the property’s ad valorem taxes collected through the city’s CRA until 2025. The projected rebate is expected to be $900,000.

The CRA will discuss the agreement at its April 5 meeting, and the City Commission will take the matter up at its April 10 and 24  meetings.