600-800 West Atlantic Ave RFP Process & Selection

600-800 West Atlantic Ave RFP Process & Selection

Delray Beach Residents,

Traditionally, I believe that all City/CRA related communication should come directly from the entities to ensure optimum transparency and accuracy as it relates to decisions made at city hall. In my opinion, Commissioners should not be regularly communicating (and campaigning) via their own dedicated email campaigns, Facebook pages, etc. Because of the incredible amount of misinformation that is sadly being championed rather than corrected by members of our community – I felt it was necessary to produce the below piece and post it on BetterDelray.org, a website I launched a few years ago.

This will also assist me in quickly answering questions via email as the process continues. Thank you for your engagement – and continuing to put Delray Beach, as a whole, first.

Let’s start with how we got here.

The Delray Beach CRA has been working for years to develop three blocks that took more than a decade to accumulate.

In early 2018 the CRA board ended negotiations with a group called Equity in regards to a project they called Uptown. After several years and many missed deadlines – the CRA decided that it was best to put the land back out to RFP (Request For Proposals).

In March, 2018 a new City Commission (four out of five seats including the Mayor’s) were sworn in. One of the commission’s first actions was to replace the CRA board with themselves. A board that had been independent from inception, over 20 years ago. An unexpected move that came with no warning. In face – it was not even a talking point during the campaigns. I was the sole board member to vote against this takeover without a plan in place. Shortly after, the Equity group submitted an “unsolicited” letter to be reconsidered by the new CRA board. Accepting said letter would see us negotiating with a sole provider – and going against the processes put in place to ensure a transparent and fair form of governing.

Once the letter was received by CRA staff, it opened up a 30 day window for any other letters of interest. The CRA received approximately six letters of interest. The board agreed not to move forward with any of the submissions. Three of the board members (Mayor Petrolia, Angie Gray and Adam Frankel) wanted to move forward with the letter submitted by Uptown. The other four board members felt that the most transparent process would be to continue as the previous board planned – and put the project back out for bid. This time with an expedited timeline and refined RFP that would include expanded project requirements (increased community benefits and a height limit reduction from four stories to three).

LINK TO RFP – It is long boring read – but it is important to understand the “ask” before criticizing the selection.

The RFP stipulated that a steering committee made up of CRA and City professionals would be formed to review the proposals. Using a grading scale that mirrored the core requirements of the RFP, this committee would rank all six proposals. The three top proposals would present to the CRA board. A final choice would be made from these three. This process is commonly used by organizations to ensure optimal transparency and is a best practice.

LINK TO CUMULATIVE STAFF SCORING SHEET

The steering committee ranked Jones New Urban, Prime and Kayne Anderson 1, 2 and 3. Meaning BH3, Uptown and Land America did not make the cut. To my surprise, several board members expressed interest in ignoring the process and staff recommendations. I pleaded with my board – not to deviate from the publicly posted process that was embedded in the RFP. Unfortunately, a majority of the board voted to let BH3, Uptown and Land America be reconsidered.

On a related note – prior to the board reinstating Uptown, we received the below letter from their lead Managing Member insulting our staff, board and process. He quickly rescinded that letter once allowed to reenter the field.

READ LETTER

On Tuesday, January 28th, all five respondents were given 10 minutes to present and 20 minutes to answer board questions. Some board members had more questions than others. I came prepared with key questions for each group. Once the presentations were complete we went into discussion. Few board members cared to discuss their thoughts at length. I provided my full analysis of each project and explained how I would not consider Uptown. Not only did I rank the project last, but it was 30 points behind the fourth place project. Uptown also did not adhere to the requirements of the RFP by submitting a four story project and we had recently been provided with a glimpse of what that working relationship would be like in the form of the letter provided above.

At that time – the Mayor decided that we should each write our top two picks on a piece of paper and pass them to staff to read. Our city attorney agreed and stated that this was simply an exercise to see if there are any commonalities between our rankings. Those rankings are below – followed by the actual sheets for reference.

  • Petrolia – Uptown/BH3
  • Boylston – Kayne Anderson/BH3
  • Bathurst – Jones New Urban/Uptown
  • Frankel – BH3/Uptown
  • Gray – Uptown/BH3
  • Johnson – BH3/Kayne Anderson
  • Brinson – Uptown/Prime

 

As you can see, Uptown ranked last by our professional staff, included a four story building (in an area the community has limited to three stories), and ranked last in almost every major category (jobs, parking, green-space, etc.) – yet it was somehow ranked number 1 by several board members. Another common thread however was that BH3 was listed by 5 individual board members. Both the Mayor, Angie Gray and I ranked it as our number two pick. Adam Frankel and Shirley Johnson ranked it number one. Seeing that it was between Uptown and BH3, I made the motion to accept BH3’s proposal. Although not my first pick – I was confident that accepting staff’s 4th ranked project, that had elevated itself in presentations, over a distant 5th ranked project was in the best interest of our city. The vote was seconded by Commissioner Johnson and the role was called. Pam Brinson, Commissioner Frankel, Commissioner Johnson and myself all voted yes. Shortly after, board member Brinson realized that she voted from the wrong project. Although it seemed that my vote would fail if put to a revote – I voted to allow Brinson to rescind her vote. I would never vote to withhold a fellow board member from clarifying/changing their vote. This time Pam Brinson voted NO, but Bill Bathurst voted YES. The vote to move forward with negotiations with BH3 passed 4 to 3.

You can watch the full meeting HERE.

In the days following the meeting – I have received several questions. Some due to the nature of our decision and some due to individuals in our community who spread and champion misinformation. Below are some of those questions – with my answers.

WHAT HAPPENED TO THE ORIGINAL PROCESS?
I was the sole board member that wanted to stick to the process and only evaluate the top three candidates – which did NOT include BH3, Uptown or Land America. It is common best practice to have proposals first reviewed by staff to ensure compliance with RFP requirements, then for them to be graded and narrowed down by a steering committee of professionals. Our steering committee was made up of four development professionals (two CRA staff members and two City staff members). They used a grading scale that properly weighed all elements of the responses (projects) and how they aligned to the RFP that was crafted with input from the community, staff and board. Unfortunately, my fellow board members voted to alter this process once the top three proposals were announced. Staff’s cumulative scoring sheet below.

WHAT WERE YOUR TOP TWO PROJECTS WALKING INTO THE MEETING?
After many days and nights looking over all the proposals – I came into the meeting with Kayne Anderson and New Urban as my top two picks. I used the same rating scale that staff used to score the project. My score card is below.

WHAT ELEMENTS WERE MOST IMPORTANT TO YOU?
One of the most important factors for me was the ability of the development team to execute and deliver. Who has a proven track record of executing large scale completed mix use projects? What if the economy turns?  Who has the financial strength to ensure the project is still completed as promised? As you can see from the RFP ranking process – that is one of categories with the most possible points. From there I weighed the value of the project itself.

WHAT WERE YOUR TOP TWO PROJECTS AFTER PRESENTATIONS?
I felt that although New Urban had an excellent team and track record – there was a disconnect regarding their vision for the project. They referred to the project as a “complement to the destination” rather than a destination itself. I was hoping to better understand their residential and surface parking heavy design – but concluded with more questions than answers. Prime is a fantastic organization, but their project included a brand name extended stay hotel – which was not in our RFP and is not identified as a need in any of our community driven plans. The private sector is currently filling that need in our city with more than 4 new hotels in development. In contrast, I felt that BH3’s presentation did a good job of clarifying their unique financial component. This project will outlast most of us and selecting the best one is critical. Kayne Anderson and BH3’s were at this time my top two selections – in that order.

If you would like to review the projects, financials and presentations CLICK HERE for all documentation. I am confident that your conclusion will be very similar to mine.

WHY DID YOU VOTE TO “GIVE AWAY” THE LAND?
No one is “giving away” land. In order to acquire the land – BH3 has to invest over $100 million dollars into our city, while delivering on an aggressive list of community benefits that include a 200 space public parking garage, 20+ affordable homes, relocation of business, development of public co-working space for small businesses – and the list goes on. I have always said that I am looking for the project that provides the most value. Although I was hoping for a project that coupled a reasonable cash offer with a heap of benefits that include and expand on what was required in the RFP – I was always willing to discuss proposals that offered more value via the project itself and less cash. That is a key word – value. A CRA’s job is not to flip properties for a profit. It is to ensure they are developed in a way that fills the needs of the community and returns value. Sometimes that means providing discounted land for affordable housing – in which the value is not weighed with dollar signs. And in other cases, land is discounted to ensure quality projects are developed and produce a return in the form of tax dollars. This is an important element that ensures the CRA continues to have a steady and growing revenue stream to invest in programs that do not have a large monetary value. Below is a table showing the taxes that will be generated from this project compared to others. These figures were generated by a third party consultant hired by the CRA.

LINK TO 30 YEARS OF DELRAY BEACH CRA WORK PDF

LINK TO 30 YEARS OF DELRAY BEACH CRA VIDEO

ARE YOU WORRIED ABOUT GENTRIFICATION?
Always. In fact – that played a big part in me rating Kayne Anderson number one. Unfortunately, my fellow board members did not share the same view. BH3, like Kayne Anderson, not only included an additional off-site affordable housing component – but also had the most amount of community green space. It is important to note that ALL respondents agreed to the benefits agreement. I will continue as both a City Commissioner and CRA Board Member to be a steward of the NWSW community vision. I am a champion of past CRA/CITY/DDA developed plans and reference them daily. One of the most important plans to understand in reference to this decision is the SET TRANSFORMATION PLAN. Below is a link to all CRA plans. Also important to note – BH3 ranked a close second in jobs created at 310 (see table below).

CLICK HERE TO VIEW CRA PLANS

WERE YOU SWAYED BY THE RENDERINGS?
Far from it. I actually chose the project with arguably the least attractive renderings. I used the grading scale that was tied to the RFP. It had elements that weighed design – but not over more important elements. Remember – I only wanted to include the three responses that scored high across the board. Uptown and Land America, not only scored poorly – but they should have been discarded for not following the RFP requirements. But the board chose to include them – so I reviewed both (until Land America was pulled). I rated Uptown as I rated all projects.

WHY WASN’T THERE MORE DISCUSSION?
Unfortunately, my fellow board members were not willing to have a constructive conversation about how they rated/reviewed projects. I wish everyone went through the same process that was suggested by staff. The same one the steering committee and myself went through. We would have been able to have a transparent conversation about what project checked the most boxes. Had the process been followed – we would have had a pretty straight forward conversation about three high scoring responses each with their own imperfections. New Urban presented a plan that was heavy on residential and didn’t see itself as a destination project. Prime presented a plan with an extended stay hotel that was not requested in the RFP. And Kayne Anderson included a project with polarizing design and architecture. I would have preferred to discuss these three projects in a constructive and professional manner – and weighed which one of their shortcomings could be addressed in through the development process.

WHY BH3?
Although, I rated Kayne Anderson number one – I think it was courageous of the CRA board to see that they could lose out on $4 million in the short term, and gain an affordable housing complex, a 200 car public parking garage and an increase in TIF generated from the project in the long term. Keep in mind – if it wasn’t for the subsides (which has already been removed in negotiations) staff may have ranked this project in the top three. This project will ensure over $100m is invested on those lots and generate an incredible amount of funds that can then be reinvested into the CRA district.

CLICK HERE fo BH3 Overview

HOW MUCH IS A 200 SPACE PARKING GARAGE WORTH?
Pompano Beach just built a parking garage for $20,000,000. It has 663 spaces. That is $30,000/space (pretty much the going rate). If the CRA were to build a parking garage, which we are regularly asked by the public to build – it would cost us between $5,000,0000 and $6,000,000. Depending on how you look at it – if the CRA does see funding a parking garage in its future, we may have just saved the city $1,000,000 to $2,000,000.

Pompano Parking

CAN THEY FLIP THE LAND, DEVELOP DIFFERENTLY THAN PROMISED, NOT DELIVER ON THEIR PROMISES, BUT STILL GET WHAT THEY WANT?
The simple answer is No. The CRA and its attorneys put many safeguards in place to ensure these things cannot happen. As we enter negotiations with BH3 these safeguards will be defined and set in stone.

WHAT IS UP WITH UPTOWN?
As a resident – I question how a submittal that did not abide by the requirements of the RFP, was ranked last by CRA/city staff, stayed alive only because processes were blatantly ignored/changed, and was paired with a letter from their principal criticizing our city staff in an unprofessional manner – was ranked number one by several board members with ZERO reasoning or explanation provided. In addition, the applicants history with Delray Beach and surrounding area should have been discussed. See links below. Lastly I can’t grasp why a board members that have fought for heigh limitations of three stories on Atlantic Avenue would fight for a project that is four stories. I am the only commissioner in the last six months who has consistently voted strongly against four stories on Atlantic Avenue.

SUN SENTINEL – DELRAY GOT EARLY WARNING ON PROMOTER
SUN SENTINEL – LITIGATION FOLLOWS BUSINESSMAN BOCA INVESTOR SAYS HE NEVER PLANNED DIRECT INTEREST IN MISSION BAY

On a final note, when it comes to governing – I believe in procedure. I believe in best practices. I believe in full transparency. I practice it every day as your City Commissioner – and ensure that you are well informed of my decisions/votes. If you ever have a question, don’t go to Facebook – just call me. 🙂

Ryan Boylston