4580 Economic Development/Tourism Incentive to DK Sanford, LLC03
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Ordinance No. 2021-4580
An ordinance of the City of Sanford, Florida granting an economic
incentive to DK Sanford, LLC pursuant to the supplemental economic
or tourism development program established in Chapter 2, Division 3 of
the Code of Ordinances of the City of Sanford; providing for legislative
findings and intent; providing for implementing administrative actions
in strict conformity to the provisions of the supplemental economic or
tourism development program; providing for conflicts, providing for a
savings provision and the effect of the ordinance; providing for
severability; providing for non -codification as well as the correction of
scrivener's errors; and providing for an effective date.
Whereas, the City Commission of the City of Sanford, Florida enacted Ordinance
Number 4526 to incentivize economic and tourism development within the City which is
now codified in Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford and
entitled "Supplemental Economic Or Tourism Development Program"; and
Whereas, this Ordinance is enacted pursuant to the home rule powers of the City
of Sanford as set forth at Article V111, Section 2, of the Constitution of the State of Florida;
Chapter 163, Florida Statutes; Chapter 166, Florida Statutes; and other applicable
controlling law; and
Whereas, the City of Sanford has complied with all requirements and procedures
of Florida law in processing and advertising this Ordinance.
Now Therefore, Be it enacted by the People of the City of Sanford:
Section 1. Legislative Findings And Intent.
(a). The City Commission of the City of Sanford hereby adopts and incorporates
into this Ordinance the recitals (whereas clauses) set forth herein and the provisions of
Section 1 of Ordinance Number 4526 as the legislative and administrative findings and
intent of the City Commission relating to this Ordinance.
(b). Additionally, the City Commission agenda memorandum and related
GRANT MALOY, SEMINOLE COUNTY
CLERK OF CIRCUIT COURT & COMPTROLLER
CFN# 2021031905 Bk:9869 Page:634-643(10Pgs)
REC: 03/10/2021 1:23:53 PM by jeckenroth
RECORDING FEES $86.50
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materials are adopted as the basis for the action taken in this Ordinance as well as the
detailed testimony of applicant personnel at the hearing before the City Commission.
(c). It is hereby found and determined that the actions taken herein relative to the
incentive award to DK Sanford, LLC is authorized by Chapter 2, Division 3 of the Code of
Ordinances of the City of Sanford and that the requirements of the Supplemental Economic
Or Tourism Development Program have been met with regard to approving the application
and will be implemented in accordance with the terms and conditions of an implementing
agreement. The apartment project described in the application before the City is an eligible
business under the provisions of Chapter 2, Division 3 of the Code of Ordinances of the
City of Sanford.
Section 2. Supplemental Economic Or Tourism Incentive Award; DK
Sanford, LLC. The City Commission of the City of Sanford hereby enacts the following:
(a). The City Commission hereby grants the following incentive under the
provisions of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford to DK
Sanford, LLC:
(i), 70% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the first 5 years in which the
incentivized development is placed on the tax rolls of Seminole County; and,
thereafter;
(ii), 50% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the second 5 years in which the
incentivized development is placed on the tax rolls of Seminole County;
all of which calculated on new ad valorem tax revenues consistent with the provisions and
intent of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford.
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(b). The City's Finance Director shall issue payments to DK Sanford, LLC, or its
successor in interest, consistent with the incentive award approved in Subsection (a) of this
Section after the new ad valorem tax revenues have been received by the City, which
occurs after the final certificate of occupancy is awarded for the project, but no later than
December 31, 2022 to the effect that January 1, 2023 shall be the date on which the 10
year rebate period commences regardless of whether the project has been completed by
December 31, 2022, and in accordance with compliance with the terms and conditions of
the implementing agreement which shall include, together with the normative terms of an
agreement under the provisions of Chapter 2, Division 3 of the Code of Ordinances of the
City of Sanford, a provision which ensures that the development of the property currently
owned by DK Sanford, LLC will be developed as proposed.
Section 3. Implementing Administrative Actions.
(a). The City Manager, or designee, is hereby authorized and directed to
implement the provisions of this Ordinance and to take any and all necessary administrative
actions to bring into effect the provisions of this Ordinance.
(b). All actions of an implementing nature shall occur in strict conformity to the
provisions of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford to
include, but not be limited to, the implementing agreement containing the terms and
conditions of the City Commission's approval of this Ordinance.
Section 4. Conflicts.
All ordinances or parts thereof in conflict with this Ordinance are hereby repealed.
Section 5. Savings; Effect Of Ordinance.
(a). The prior actions of the City of Sanford in terms of the matters relating to any
and all actions and activities of the City pertaining to the economic or tourism development
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of the City, or of an associated nature, are hereby ratified and affirmed.
(b). Nothing in this Ordinance shall be construed to affect any suit or proceeding
impending in any court, or any rights acquired, or liability incurred, or any cause of causes
of action acquired or existing, under any act or ordinance hereby repealed; nor shall any
just or legal right or remedy of any character be lost, impaired or affected by this Ordinance.
(c). Nothing in this Ordinance shall be construed, in any way, to grant any cause
of causes of action to DK Sanford, LLC, or its successors in interest. in any respect or under
any legal theory.
(d). The benefits of this Ordinance DK Sanford, LLC may be assigned to the
successors in interest of the property relative to which this Ordinance relates in conformity
with the provisions of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford.
Section 6. Codification; Scrivener's Errors.
(a). This Ordinance shall not be codified.
(b). Typographical errors and other matters of a similar nature that do not affect
the intent of this Ordinance, as determined by the City Clerk and City Attorney, may be
corrected with the endorsement of the City Manager, or designee, without the need for a
public hearing.
Section 7. Severability.
If any section, subsection, sentence, clause, phrase, or portion of this Ordinance, or
application hereof, is for any reason held invalid or unconstitutional by any court of
competent jurisdiction, such portion or application shall be deemed a separate, distinct, and
independent provision and such holding shall not affect the validity of the remaining portions
thereof.
Section 8. Effective Date.
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This Ordinance shall take effect immediately upon enactment with the incentives
being paid only as set forth herein and in no other way and in no other time frame.
Passed and adopted this 25th day of January, 2021.
Attest: City Commission of the City of Sanford,
Florida.
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Traci Houchin, MMC, FORM, City Art Woodr6ff, Ma
Approved as to form and
Legality:
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William L. Colbert, Esquire
City Attorney
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WS RM X
NANFORD
FLORIDA
Item No. 1.
CITY COMMISSION MEMORANDUM 21.019
JANUARY 25, 2021 AGENDA
To: Honorable Mayor and Members of the Ci ommission
PREPARED BY: Tom George, Deputy City Ma
SUBMITTED BY: Norton N. Bonaparte, Jr., I A -C ity Manager
SUBJECT: Ordinance No. 4580 Granting Inc' tive Supplemental Economic or Tourism
Development Incentive Progra��;,Application Of DK Sanford, LLC.
STRATEGIC PRIORITIES:
F Unify Downtown & the Waterfront
Z Promote the City's Distinct Culture
F-] Update Regulatory Framework
Z Redevelop and Revitalize Disadvantaged Communities
077-M
The City Commission recently enacted the "Supplemental Economic or Tourism Development
Incentive Program Ordinance" (Ordinance No. 4526). That Ordinance is now codified in Chapter
2, Division 3 of the Code of Ordinances of the City of Sanford and entitled "Supplemental Economic
Or Tourism Development Program'.
DK Sanford, LLC is a Florida limited liability company, has applied for an incentive award under
the provisions of the City's Supplemental Economic Or Tourism Development Program. Debartolo
Development, LLC, of Tampa, is the sole manager of the entity. Edward M. Kobel, also of Tampa,
is the sole manager and member. Transit Properties LLC is the owner of the property that is the
subject of the application. The sole manager of the property owner is Kevin M. Wydra. Attachment
4 to this agenda memorandum discloses the various organizational structures and interests relative
to this matter as presented by the applicant.
Ordinance No. 4580 has been prepared to award an incentive under the Supplemental Economic Or
Tourism Development Program to DK Sanford, LLC and is being presented to the City Commission
for approval for second reading and enactment.
The City Commission approved the first reading of Ordinance No. 4580 on December 14, 2020.
The City Clerk published notice of the 2"d Public Hearing in the Sanford Herald on January 3, 2021.
On January 11, 2021 the City Commission moved to continue the 2"d reading of Ordinance No. 4580
to January 25, 2021.
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FISCAL/STAFFING STATEMENT:
City funds are not appropriated in this type of action. Funds received as a result of eligible
development would be received. However, the full benefit of the development would inure to the
City at a time later than the regular time at which that would occur as a result of the City making
incentive payments to the property owner of the incentivized property. The City Commission
determines the level of incentive that would be granted to each applicant.
The applicant in this case has applied, on behalf of the property owner, for an incentive in an amount
of 100% of the tax revenues that are being generated as a result of the development for the first 10
years (that is, an amount equal to the sums paid in ad valorem taxes that have been duly paid to the
City during the first 10 years in which the incentivized development is placed on the tax rolls of
Seminole County calculated on new ad valorem tax revenues consistent with the provisions and
intent of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford). The City
Commission may grant no relief, or any percentage of relief, in its sole discretion.
A return on investment (ROI) analysis has been performed and is attached for review and
consideration by the City Commission.
BACKGROUND:
The City's Supplemental Economic Or Tourism Development Program provides that the City
Commission, at its discretion and on a case-by-case basis, may enter into an incentive agreement
with a person, firm, or corporation providing for incentives in order to encourage and support the
development of real property within the City. Each incentive agreement is subject to approval by the
City Commission by means of the enactment of an ordinance. The City Commission may provide
incentives in any amounts and for any periods of time (up to 10 years).
Incentives may be granted in the form of payments of amounts up to, but in no event in the amount
in excess of equal to, the sums paid in fees and taxes that have been duly paid to the City during a
specified period of time. Upfront abatements of fees or taxes are prohibited and unlawful. Where
incentives continue for a period of more than a year, they may be graduated to increase or decrease
year-to-year as the City Commission sees fit, but subject to monitoring by the City to ensure
compliance with the terms of any incentive agreement. Funds received through incentive grants may
only be used for purposes that are determined to provide for the economic or tourism development
of the City.
Ineligible improvements are the current value of the incentivized real property and improvements
that have been included on the tax rolls prior to the effective date of an incentive award ordinance.
This, the costs of land upon which a new business or an expansion of an existing business is to be
located in not included. Eligible improvements are W to 100% of the assessed value of all
improvements made by or for the use of a development and of all tangible personal property of such
development, or W to 100% of the assessed value of all added improvements made to facilitate the
qualifying expansion of an existing business and of the net increase in all tangible personal property
acquired to facilitate such expansion of an existing business.
In order for a development to be eligible to receive incentives, the City Commission must determine
that it meets, or upon completion will meet, each of the following criteria:
(1). The development must be consistent with the City's Comprehensive Plan as
well as the goals set forth in the Supplemental Economic Or Tourism Development
Program.
(2). Absent the provision of incentives, the development would be unlikely to
occur or unlikely to occur at the level or scale contemplated by the developer.
(3). The development must be located within the incentive area includes, at this
time, all properties which the City determines to serve the economic or tourism
development purposes of the City, but may be specifically delimited in the future by
the City Commission.
(4). The development must have:
(a). Real property acquisition costs of a significant type or nature, or
(b). Significant costs of physical improvements to real property, or
(c). Significant costs of capital improvements to City infrastructure; or
(d). On a case-by-case basis, any other eligibility criteria that must be met upon
completion of a development in order to ensure that the goals are met and that
the development provides benefits to the City (and its citizens) in amounts that
warrant the implementation of incentives.
The referenced "goals" are as follows:
(1). To promote the construction of new buildings or the rehabilitation of existing
buildings within the Incentive Area; and
(2). To support the establishment of the categories of new businesses that the City
Commission determines will:
(a). Significantly increase the overall commercial activity within the Incentive
Area,
(b). Attract the City's residents and tourists into the Incentive Area, and
(c). Increase the property values within the City as a whole.
Other Considerations/Criteria which the City Commission shall be guided by, as determined solely
and exclusively by the City Commission, are the following:
(1). The minimum expected amount of capital investment of $3,000,000.
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(2). The current and anticipated volume (in dollars) of business or production.
(3). The total length (number of years) of the incentive period being requested.
(4). Preference may be given to redevelopment or infill projects.
(5). The likely cost and demand for public services.
(6). The likelihood that the project relocation or expansion would have occur
without the award of an incentive.
(7). If any other publicly funded economic development incentives have been
granted for the project.
No precedent will be implied or inferred by the granting of an incentive. Each application is
considered by the City Commission in its legislative capacity on a case-by-case basis, after
considering the criteria as set forth in Supplemental Economic Or Tourism Development Program
and acting in its sole and absolute discretion.
The development that pertains to the application is a multi -family residential project of 294 units.
Average rent across the 294 units is anticipated to be $1,464 with the lowest rent anticipated to be
$1,100 and the highest rent anticipated to be $1,850. Assuming a 30% income to rent ratio, the
project would be most suitable for families making around $58,000 a year with the lowest being
$44,00 a year and the highest being $74,000 a year. A property manager would be hired at a salary
of approximately $60,000 a year, 2 leasing, accounting, marketing personnel at a salary of
approximately $45,000 a year, and 3 maintenance and ground workers at a salary of approximately
$35,000 a year. The incentive funds would be used to offset fees/permits/insurance/bonds that are
projected to total $4,180,277, real estate taxes/insurance/administration that are projected to total
$123,000, real estate taxes that are projected to total $693,546.The Seminole County Property
Appraiser estimates that each unit would be valued at approximately $175,000 with a total value
exceeding $50,000,000. And, millions of dollars will be generated in purchases over the proposed
incentive period.
The property is located at the intersection of West First Street (State Road 46) and Martin Luther
King, Jr. Boulevard. In additional to enhancing the tax base of the City, the development, as
proposed, will enhance the transportation hub area of the City relating to SunRail and created further
synergy for the enhancement of downtown Sanford economic activity by bringing more residents to
the City who will use the economic drivers of the downtown area. This all will occur without
impacting the historic downtown residential areas in any adverse manner.
The attached ROI analysis results in the conclusion by City staff that the application is one that
should be favorably considered by the City Commission.
Again, the applicant, DK Sanford, LLC, has requested, with the consent of the property owner, relief
in the amount 100% for the first 10 years calculated on new tax revenues (that is, of an amount equal
to the sums paid in ad valorem taxes that have been duly paid to the City during the first 10 years in
which the incentivized development is placed on the tax rolls of Seminole County calculated on new
ad valorem tax revenues consistent with the provisions and intent of Chapter 2, Division 3 of the
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Code of Ordinances of the City of Sanford.). On December 14, 2020, the City Commission approved,
on first reading to award 70% for the first five years and 50% over the last years. The ultimate relief,
if any is granted, will be established in the discretion of the City Commission.
LEGAL REVIEW:
The City Attorney's office has assisted in this matter and has no legal objection to the proposed
action.
RECOMMENDATION:
City staff recommends that the City Commission discuss and consider Ordinance No. 4580, granting
a Supplemental Economic or Tourism Development Incentive tax rebate in the amount of 50% to
100% for the first 10 years calculated on new tax revenues (that is, of an amount equal to the sums
paid in ad valorem taxes that have been duly paid to the City during the first 10 years in which the
incentivized development is placed on the tax rolls of Seminole County calculated on new ad
valorem tax revenues consistent with the provisions and intent of Chapter 2, Division 3 of the Code
of Ordinances of the City of Sanford.).
SUGGESTED MOTION:
"I move to enact Ordinance No. 4580."
Attachments: (1). R01 report.
(2). Ordinance No. 4580
(3). DK Sanford, LLC application packet.
(4). Organizational flow charts.
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