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HomeMy Public PortalAbout09- September 30, 2010 Special Meeting Minutes CITY OF OPA-LOCKA "The Great City" CLERK'S ACTION SUMMARY MINUTES SPECIAL COMMISSION MEETING September 30, 2010 6:00 p.m. City Commission Chambers 777 Sharazad Boulevard Opa-locka, FL 33054 1. ROLL CALL: The City Commission of the City of Opa-locka, Miami-Dade County, Florida, met in special session on Thursday, September 30, 2010 at 6:14 p.m. in the City Commission Chambers, 777 Sharazad Boulevard, Opa-locka, Florida. The following members of the City Commission were present: Vice Mayor Myra L. Taylor, Commissioner Rose Tydus, Commissioner Timothy Holmes and Mayor Joseph L. Kelley. Also in attendance were: City Manager Clarance Patterson, City Attorney Joseph S. Geller and City Clerk Deborah S. Irby. Commissioner Dorothy Johnson was not in attendance because she was out of town. 2. INVOCATION: The Invocation was delivered by Mayor Joseph L. Kelley. 3. PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was recited in unison. 4. DISCUSSION: a. Final Judgment of Foreclosure/Town Center Properties b. Possible Commission Action regarding city hall administrative offices As a result of the discussion and documentation presented during the Regular Commission Meeting of September 22, 2010 relating to the judgment of foreclosure, Mayor Kelley said he called this special meeting in order to give the City Manager direction, but also to provide information to make a decision as they move forward. Manager Patterson provided the Commission with a copy of the proposed relocation of the administrative complex which included short term plan options, long term options and his recommendations. The city is in receipt of the appraisal for Town Center and after reviewing it with the City Attorney, they don't agree with the appraisal because it uses for it comparable places in Miami Lakes, Doral and Miami Gardens. Those properties are not comparable to those properties in Opa-locka. Special Commission Meeting Minutes—09/30/2010 1 He further explained the short term and long term options listed in the handout provided to the Commission with his recommendation being the construction of new building. Attorney Geller stated for the record that the City of Opa-locka was never made a party to this foreclosure and that process was never served upon the City of Opa-locka. Based on extensive research because the city was not named, not served and is not a party to this lawsuit, the final judgment cannot control their rights. If there is a sale, the successful bidder would have to sue the city which would be a minimum of months before they could get a judgment to get them out of the property. Should anyone try to terminate the lease, the city has good defenses to the foreclosure particularly being superior in right and title. The city's lease predates the mortgage and so the mortgagor presumably took this property with knowledge of the lease and that may be sufficient to defeat any attempt to terminate the lease. In addition, regardless of what someone might or might not try, it's obviously not logical for anybody not to want the city as a tenant. The attorney representing the holder of the judgment, JWV Properties LLC, has indicated if JWV Properties LLC is the successful bidder at the foreclosure sale then they would honor the city's lease. The lease runs for up to ten years but it's subject to annual appropriation by the Commission. Although the sale is scheduled to go forward on October 5, 2010, he said there is a possibility that it will not because it is not on the list of properties to be sold on that date; but the city has taken steps in case the Commission wanted to bid on the property. The bottom line, regardless of who is the successful bidder, is that the city is in a good position legally and was not a party to the lawsuit. The lease is older than the mortgage and nobody could be putting them out anytime quickly without the opportunity to defend and possibly win. But at least they would have enough of an opportunity, if necessary, to look into the other alternatives provided by the City Manager. He further stated that the Commission could take action on any of the options presented by the City Manager and in abundance of caution he prepared agenda item 4C which authorizes the City Manager to bid at the foreclosure auction. Based on the research and conversations with the judgment holder, he said he doesn't think it is necessary to bid on the property at this point. Because Commissioner Johnson was not present at the meeting, Vice Mayor Taylor said it would have been good to have everyone present at a meeting of this importance. She asked, why is the City Manager providing options when the new mortgage holder/receiver is not bothering the tenants? She further asked, did the city not know this day was coming in terms of the foreclosure? Attorney Geller said that the city never received notice. Vice Mayor Taylor disagreed with the City Attorney because the previous City Manager had mentioned the possible foreclosure to the Commission, and now if the city moves out then they must spend money to fix it back. She asked, is the lease for ten years or one year? Special Commission Meeting Minutes—09/30/2010 2 Attorney Geller said the lease is for ten years, but it is subject to the city appropriating the money. If the city appropriates the money then the lease continues, but if it doesn't then they have an out. Vice Mayor Taylor said that the city was appropriating monies because they've been paying the lease every month and the new mortgage holder is not interested in the city leaving because they are the anchor tenant. Attorney Geller replied, yes, they confirmed that in writing. Vice Mayor Taylor asked, why does the city need options that will cost money to leave and money to go somewhere else? Attorney Geller explained that when this issue first came up they considered it a matter of the greatest seriousness and wanted to be positive that the city under any set of circumstances would have options available. He is confident that the city can force anyone to honor the lease. He said that it is fair to say that the Commission does not have to do anything except to know that whatever happens, the city is protected legally and with options. As this matter has developed, the city does not need to take any action at this time. Vice Mayor Taylor asked, with the options provided, where would the money come from because the budget is set? Attorney Geller stated that he and the City Manager met with the financial advisor and the fact is that when the Commission is ready to look at that option the city does pay a good deal of money currently for office space. By putting the money being paid towards a bond issue, the city presumably for the same amount of money may be able to afford a bond issue and not have additional expenditures. Vice Mayor Taylor said she didn't feel comfortable making a decision at that time especially since one of the commissioners is not present and this issue is too important to not have a full board. She expressed her concerns as to where the money would come from for the options presented. Since the city is already in the lease perhaps when its time to review the lease, the city could renegotiate with the new owner after the sale. She suggested that the Commission slow up and not make any rash decisions. She said if the City Manager bids the money then they are talking about getting another bond even if the Commission went with the resolution. Attorney Geller explained that if the city would have decided to go forward with bidding on the property in order to protect the city's position there would probably be a way to do that using city funds and then seeking other financing; but this may just be a mute issue. At this point, he is not recommending to bid because there isn't a need to do so to the city's position being secure to continue on as is without action. Special Commission Meeting Minutes—09/30/2010 3 Commissioner Holmes said that the city is currently paying approximately $45,000.00 per month to lease space at Town Center and that same amount of money can be used for a bond or purchase of that building. He was in favor of authorizing the City Manager to bid up to an amount of 7 million dollars. He said he was not concerned about being put out of Town Center because no one would terminate the lease with the amount of money being paid for rent. Perhaps the city should renegotiate the lease amount with the new owners to see about having it reduced. He continued by saying that he wasn't in a rush to move to Historic City Hall if it wasn't necessary. It would be cheaper to construct a new building for city offices than to purchase Town Center for $7,000,000.00. The Commission must look at the whole picture and not just one piece of it to see what can be done. There are numerous of options to consider and he would be in favor of bidding up to an amount of$7,000,000.00 for the purchase of the building. Commissioner Tydus said she was thinking of the most cost effective action to take but any action at that time would be premature because of the many different variable: foreclosure versus non foreclosure, whether there would be an actual auction on October 5, 2010, the financing and purchasing versus new construction. This is a lot of information for her to make a decision and any action would be premature. Mayor Kelley explained that the Commission found out about this matter at the commission meeting on September 22, 2010 and they all received a copy of the judgment indicating that the building would be "sold" on October 5, 2010. At that point they had no knowledge as to the validity, how accurate, any variables relating to the sale or foreclosure, therefore, he asked that the City Manager begin looking at the authencity of it and the position the city is in. Also, he had requested that the City Attorney look at the variables and the reason for calling the special meeting is because only the Commission has the authority to give the City Manager on what or what not to do. Because the next meeting is not until October 13, 2010 and the sale is scheduled to take place on October 5, 2010, he asked the City Manager to prepare for discussion the one resolution should the Commission decide to authorize the bid. In reviewing the City Manager's proposal and listening to the City Attorney, it is clear that the Commission doesn't have to take any action but they didn't know that on September 22, 2010. The Commission was at a position where they had to protect the city's interest as well as the residents. He further stated that his intent was to have the City Manager prepare the options, as provided, for discussion purposes because the Commission could not wait until the next meeting on October 13, 2010 to discuss it. However, he is glad to hear the City Attorney mention that everything has seemed to have fallen the city's way where they don't have to take any action. Although he recognizes that Commissioner Johnson is out of town, in order to give the City Manager direction they had to at least meet. He was of the opinion that the Commission didn't have to make a decision at that time, but he would still like to explore the third option for the construction of a new building because that is where the city should be headed if something doesn't go right. The City Manager could be looking at that and making the comparison of numbers. He stated to his colleagues that they needed to meet to hear the presentation just in case action was needed from the Commission to give the City Manager direction. Special Commission Meeting Minutes—09/30/2010 4 In hearing the comments from the City Manager and City Attorney, Mayor Kelley said it is up to the Commission whether or not they want to bid on the building; but they didn't have all the variables at the last commission meeting on September 22, 2010. He asked the City Attorney whether he stated that the city was in a good legal position in terms of honoring the lease and any other related issues that the city is not getting put out of the building and have not been named a party to the foreclosure action. Attorney Geller replied that is correct. The city would have to be sued and they might win because of the priority of the lease. Mayor Kelley asked, if the Commission were to ask the City Manager to bid up to an amount just so that he can have that option, would that action necessary dictate that he would have to do it based on the wording of the resolution? Attorney Geller said that resolution would give the City Manager the authority to do so but it wouldn't require him to do so, but the city must post a bid bond and register. The City Manager like the City Attorney does what the Commission says so authorizing him is one thing but then at least individually they need to provide some guidance as to whether they want him to move forward with it. Mayor Kelley said that the point remains but that is only if the Commission authorizes the City Manager to bid; but the City Manager doesn't feel comfortable based on the appraisal being high. Vice Mayor Taylor said she wouldn't agree to authorize the City Manager to bid anything because to bid this out or even get into the bid process is a debt on the people because somebody has to pay. She further stated that she is in agreement that the Commission should stand still and get in a position with the new owner to renegotiate the agreement. In hearing the comments from Vice Mayor Taylor about the money to pay for a new building, Commissioner Holmes said that the city is currently paying over $40,000.00 per month for the lease at Town Center and that money would be applied towards a bond or payment to do what they need to do. The Commission will not put a burden on the people because the budget includes the $40,000.00 per month for the lease. Mayor Kelley asked, what are the cost variables for the bid bond? Attorney Geller explained that the city would have to post 5% of the anticipated high price and he anticipates the max bid as being the $6,541,000.00 that the final judgment consists of. Using that number, the city needs to post approximately $330,000.00 as a bid bond and if they are not the successful bidder then that money gets returned within a two week turnaround. However, if the city is the successful bidder then they would need to come up with the money and pay it by noon the day following the auction. If that is the pleasure of the Commission then he could Special Commission Meeting Minutes—09/30/2010 5 discuss ways in which that could be done on a short term basis and then how it would be done on a longer term basis. The only thing that is stopping the city from registering aside from the bid bond is the fact that in order to register for an auction, it has to appear online and this property is not showing up on the list of online properties due to a problem with the scheduling that may in fact require that it be canceled. As the policy makers, Mayor Kelley said that the Commission must give the City Manager direction. All of the variables which they didn't know at the time seem to have broken their way so they could stand, pat and do nothing but that information was not available on September 22, 2010 when the issue came. The City Attorney has given his opinion and the City Manager has provided his recommendation which is to construct a new building and not pursue the bid. He continued to say that he would like the city to pursue looking at constructing a new building unless they could negotiate something for the purchase. Commissioner Holmes made a motion to authorize the City Manager to bid an amount not to exceed 7 Million Dollars for the purchase of Town Center. Vice Mayor Taylor disagreed with the motion to bid because the city has not notified the citizens and this is a cash on hand process. She said that her question would be where did the city get the 7 Million Dollars from because $498,000.00 is not 7 Million Dollars. She continued by saying that if the city has the money in the budget to bid for this property then it had to be from something else and somebody has to pay it back. Mayor Kelley asked about the financing numbers to purchase the building should the Commission decide to go that route. Attorney Geller stated that the city has money in various accounts and they would have to take approximately $3,000,000.00 sitting in the general fund that is unrestricted and doesn't constitute the reserve minimum required. The additional money over and above that, believing that it is permissible for the city to borrow, would come from the Enterprise Fund. Mayor Kelley said that the City Attorney is talking about a package of financing put together which the Commission doesn't have information on. Vice Mayor Taylor suggested that a special meeting is scheduled for Monday, October 4, 2010 to allow for Commissioner Johnson to be present and Commissioner Tydus to give it some thought because this is a major move for this city. Mayor Kelley directed the City Manager to provide the Commission with the financing scenarios as stated by the City Attorney by 12:00 p.m. on Monday, October 4, 2010 and call a special meeting. Also, the City Attorney would know by Monday, October 4, 2010 if the auction is still scheduled for October 5, 2010. Special Commission Meeting Minutes—09/30/2010 6 He directed the City Clerk to post the notice for a special commission meeting on Monday, October 4, 2010 @ 6:00 p.m. to include the same agenda items relating to Town Center. c. Resolution: A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA- LOCKA, FLORIDA, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO BID UP TO THE AMOUNT OF AT THE FORECLOSURE AUCTION SET FOR OCTOBER 5, 2010 OF THE PROPERTY KNOWN AS TOWN CENTER ONE. Sponsored by C.M. 5. DISCUSSION: a. Commissioner Timothy Holmes Reference: Tony Scott, 2540 Superior Street, Opa-locka, Florida Tony Scott property owner of 2540 E. Superior Street, Opa-locka, Florida residing in Los Angeles, CA came forward and briefed the Commission on the outstanding water bill and code enforcement liens placed on his property in excess of$1,000.00. Because the Commission didn't have the information and facts, Mayor Kelley directed the City Manager to provide them with the documentation relating to this matter as well as the recommendation from staff. He further suggested that Mr. Scott look into getting a caretaker for the home while he is away in California. Commissioner Holmes and Mayor Kelley informed Mr. Scott that staff would be in touch with him. 6. ADJOURNMENT: There being no further business to come before the City Commission, it was moved by Vice Mayor Taylor, seconded by Commissioner Tydus to adjourn the meeting at 7:15 p.m. r ■111■■ -...w/1=11111. • YOR ATTES . CI LERK Special Commission Meeting Minutes—09/30/2010 7