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HomeMy WebLinkAboutMinutes Council 022290 SpecialCITY COUNCIL ® SPECIAL REGULAR MEETING CITY OF PALM BEACH GARDENS FEBRUARY 22, 1990 The Special Regular Meeting of the City Council of Palm Beach Gardens, Florida, was called to order by Mayor Martino in the Assembly Room of the Municipal Complex, 10500 North Military Trail, Palm Beach Gardens, Florida at 8:00 P.M.; and opened with the Pledge of Allegiance to the Flag. ROLL CALL The Secretary called the roll, and present were Mayor Martino, Vice Mayor Aldred, Councilman Kiselews',i ani would be arriving late. Vice Mayor Aldred made a motion to recess the Special Regular Meeting to immediately following the Workshop Meeting. The motion was seconded by Councilman Kiselewski and unanimously adopted by the City Council. Mayor Martino tailed the Special Regular Meeting to order at 9:37 P.M., with all members of the City Council being present. PUBLIC GOLF COURSE Attorney Brant explained the reason why he is using an Ordinance for the purchase of the land. Attorney Brant stated there are three parts in the proposed Agreement. 1) land acquisition, 2) construction of a standard golf course; and 3) proposed management agreement with Public Golf Corporation. Attorney Brant explained the City would retain the sum of $275,000, which is the profit, to a point in time when the golf course is completed and turned over. Upon Mayor Martino's suggestion, Attorney Brant explained the changes that had been made. Councilman Russo was con- cerned with the number of days allowed to sell the bonds following the obtaining of the approvals. Attorney Brant stated Attorney Raymond, bond ® counsel, felt that was enough time. Attorney Brant also stated that the CITY COUNCIL SPECIAL REGULAR MEETING, 2/22/90 PAGE TWO City issues no bonds and this contract fully does not click in for land acquisition or cr„ struction until such time as all of the approvals have been obtained from DER, County Environmental Section, South Florida Water Management District, Corp of Engineers, and Special Exception from the County. Attorney Brant stated July 31, 1990, has been set as an outside date, in the event these approvals are not in place: then, at the option of either party, this contract can be terminated. If the approvals are in place, the City Council would be requested to adopt a Resolution authorizing the issuance and sale of the bonds to fund this project. The first step then would be land acquisition. The proposal does not contain firm bids at this time. In the event the final bids are 110% or more, then either party has the right to terminate. Councilman Kiselewski wanted clarification re: final bids. Attorney Brant stated that the per- formance bond will be from a licensed surety company or insurance company which is acceptable to the City. Public Golf Corporation will not be giving the City a bond, it will be coming from a third party. Mr. Orr stated there will be a bond covering the construction and development costs, however in the event there is a major override of X number of dollars, the bond will not cover it, leaving the City at risk for that amount. Councilman Russo felt the performance bond should be 110% of the costs. Mr. Orman informed the Council the City will be holding back 10ro on every draw. Mr. Orman asked if they gave a performance bond for 110 %, he would like to negotiate the $275,000 profit retainage. Attorney Brant stated ® that the bonding company does not have to complete the project, and only guarantees payment up to the face amount of the bond. Mr. Orr stated that CITY COUNCIL SPECIAL REGULAR MEETING, 2/22/90 PAGE THREE 0 the bondable amount was $3.5 million. Mr. Orr didn't know if we could get a performance bond to cover the total amount of construction costs as opposed to the individual contractors. Mr. Orman stated that Public Golf Corporation has agreed to a $3.2 million overall bond to assure the construction costs. Councilman Kiselewski asked if Public Golf Corporation is going to give us a bond that says this golf course is going to go in for $4.5 million or just give us a bond for the construction. Mr. Orman stated that no one gives that kind of bond. Mayor Martino suggested we go with a performance bond which increased the construction costs of $3.2 million by 10% and still retain the option on the profit. The Petitioner agreed to 110% Master Performance Bond and the $275,000 profit to remain as originally discussed. Councilman Russo wanted to change the wording on page 15, 2.5 to read as "The Seller shall deliver to the Buyer a Master Performance Bond in the amount of $ . Councilman Russo wanted a bond in the amount of $4 million. Mr. Orman stated they cannot deliver a bond in that amount. Councilman Russo feels the building should be included in the bond amount, which would bring the total bond to $3,588,000 plus the 10% for a total bondable amount of $3,948,000. Bob Norris stated that Public Golf Corporation is not capable of delivering a bond in the amount of $4 million, but is capable of deli- vering a bond for the total construction of the golf course, including the buildings, but not including the soft costs, equipment or land. Councilman Kiselewski suggested that the bond be based on the bid. Since the City is paying the premium for the bond, it was the consensus of the ® Council that they were willing to pay for the extra premium. The Petitioner agreed to try to get the $4 million Master Performance dond. CITY COUNCIL SPECIAL REGULAR MEETING, 2/22/90 0 PAGE FOUR Mr. Orman stated that the County had agreed this morning to the Excemption for the Traffic Performance Standards. Vice Mayor Aldred stated that the $4 million Master Performance Bond and the conditions laid out by Attorney Brant are acceptable to him as a minimum, however, asked for an investiga- tion as to cost. Vice Mayor Aldred felt the contract should specify a performance bond of 110% of construction costs and should be in a form acceptable to the City. If a "turnkey" bond is available, that point can be reopended and the City can look at adding costs to this to cover the bond. If a "turnkey" bond is available, the City would agree not to hold Public Golf Corporation's profits until the end. If a "turnkey" bond is not obtainable, then the City will continue to hold the profits and the Master Performance Bond which would guarantee the construction of the course as it is designed. Attorney Brant explained that the public liability insurance had been inserted and would be $100,000 over $300,000. Another point is the amount of coverage they are going to carry as a contractors' risk coverage. Councilman Kiselewski suggested deleting "double wide mobil building" in Exhibit "C" Section B. Councilman Kiselewski wanted page 17, Section 7.3 to have "a mutually agreed upon engineer" inserted in the second sentence. Vice Mayor Aldred wanted an explanation on page 7, Item 258. Attorney Brant explained it meant there would be no exceptions to the title except as set forth in the contract. In other words, no easements, no minerdl rights and no right to mine exploration. Attorney Norris explained that If Public Golf Corporation cannot perform only because the City objected • to title on grounds of a title defect and they make a reasonable effort to CITY COUNCIL SPECIAL REGULAR MEETING, 2/22/90 0 PAGE FIVE correct that defect and can't, it is not a default on their part; they cannot give marketable title and the City can cancel the contract without penalty. Councilman Russo was concerned with Page 6, Section 11 -C, wanting to know if that paragraph included water. Attorney Brant informed Councilman Russo that was dealt with in another section. Councilman Russo was concerned with the fact that the City had an appraisal stating the land was worth $10,000 to $10,500 and could possibly be worth up to $12,000 to $12,500. The City Manager stated that the City and Public Golf Corporation each had an appraisal, Public Golf Corporation's coming in higher than the City's Public Golf Corporation's appraisal came in at $12,000 an acre. The difference was that with all the approvals, special exceptions and other things permitted for a golf course there was another comparable in South county and a possibility of 20% differential in costs for the approvals being granted. Based on that, the City's appraiser said he could possibly live with a 20% increase in costs. There is nothing to justify that other than the comparables. Mr. Orr stated that the city does not known wnat Public Golf Corporation is paying for the property, the only time we will know is after the deal is closed, and it becomes public record. Mr. Orr stated that the City has to be assured that they are getting the best deal they can, Mr. Orr stated he cannot guarantee, other than the information they have from the appraiser, as to the value of the property. The value of the raw acerage is $10,000 to $10,500 per acre: the other is subjective. Mr. Orr stated there was an option on the property for $8,300 an acre. Attorney Norris stated that any option on the property or whatever they pay for the property, is being purchased "as is" without approvals. Mr. Orman stated that Public Golf Corporation CITY COUNCIL SPECIAL REGULAR MEETING, 2/22/90 PAGE SIX ID is raying $12,000 psr acre for the land. Attorney Norris stated that the $12,600 per acre was negotiated between $14,500 and $12,000 or $12,500. Attorney Brant stated that the maximum the City could go was $12,500 or $12,600 with legal justification. Vice Mayor Aldred suggested separating the Management Agreement from the main contract. Councilman Kiselewski suggested a change on page 4, Section 6: delete "shall unconditionally" and add "may ". Mayor Martino stated that we were separating the Management Agreement out of the contract and we were not going to conclude those negotiations by March 1st. The Council will look at the Management Agreement and if they are not satisfied with what Public Golf Corporation proposes, they may look elsewhere. Councilwoman Monroe suggested a Special Meeting to finalize the Management Agreement on Monday or Tuesday or next week. Mr. Orr stated that due to the changes made tonight, there cannot be a vote. Councilwoman Monroe suggested recessing this meeting to a date and time certain, once the changes have been made. Attorney Norris wanted a consensus of the Council that they agree on the actual language subject to the changes. Attorney Brant advised the Council not give a consensus as to opinion. Attorney Norris stated there will be a revised document ready for the Council by Friday. Mayor Martino felt the Staff needed to look at the document before it came back to Council. Mayor Martino stated that 4 of the 5 Council members must vote for the contract. Councilman Kiselewski made a motion to recess this meeting until Wednesday, February 28, 1990 at 8:00 P.M., seconded by Vice Mayor Aldred. This motion was unanimoulsy approved by the City Council, ADJOURNMENT There being no futher business to discuss, the meeting was recessed at • 12:06 P.M.