By Jane Smith
A city agency ceded to the demands of the proposed iPic theater and agreed to reimburse its owner $400,000, contradicting its 15-month-old policy of not subsidizing downtown projects east of Swinton Avenue.
The Delray Beach Community Redevelopment Agency members also agreed to provide at least $75,000 annually to cover the costs of maintaining 90 public parking spaces in the iPic garage. The early March vote was 6-1, with CRA member Daniel Rose saying no.
Rose wanted safeguards attached to the assistance agreement in case iPic failed to move its headquarters, sold a percentage of its company or failed to pay its real estate taxes. David Tolces, the CRA attorney at the meeting, said the conditions were part of the sales contract. If iPic failed to meet them, the CRA could take the theater owner to court, Tolces said. When complete in 2020, the iPic complex will boast 497 luxury seats in eight screening rooms with a total of 44,979 square feet and a 42,446-square-foot office building where iPic has agreed to move its corporate headquarters and occupy 20,000 square feet for five years.
The development also will include 7,847 square feet of retail space and a multilevel garage with 326 spaces, providing a minimum of 90 public spaces. The project sits just south of Atlantic Avenue, between Southeast Fourth and Fifth avenues.
At the March 9 CRA meeting, 13 people, including iPic attorney Bonnie Miskel, commented on the project. Miskel gave an impassioned plea that iPic has met every deadline and blamed the city for holding up the valet plan. But a March 10 memo from an assistant city attorney disputes that explanation, saying Miskel and iPic were not responsive to repeated requests to sign documents and present the valet plan.
At the prior CRA meeting in February, Miskel said iPic had responded in 2013 to a proposal that asked for 50 public spaces. The sales contract written later with the city, though, called for 90 public spaces. The $400,000 would cover a portion of the cost of providing the 40 extra spaces, Miskel said.
Six people who were in favor of the theater urged the CRA board to resolve the outstanding issues.
“The CRA made the best deal in town for those  spaces by offering 30 cents on the dollar for the spaces. It’s not a subsidy,” said Bill Branning, the vice chairman/advocacy for the Greater Delray Beach Chamber of Commerce and former CRA member.
Two residents with real estate and finance backgrounds spoke against the subsidy.
“Stop the corporate welfare tonight by voting no,” said Ken MacNamee, a CPA who was a chief financial officer for a Pennsylvania multifamily housing developer and vice president of two thrifts. He’s also a frequent critic of the commission, but he has saved the city money when pointing out no-bid contracts.
“Delray’s minority community has been given the short end of the stick while the downtown has thrived and flourished,” he said. “There shouldn’t be an additional CRA dollar spent on the downtown commercial development until the alleys and sidewalks are completed in the residential neighborhoods.”
At their Jan. 14, 2016, meeting, the CRA members decided unanimously to pull back their developer infrastructure assistance agreements from covering the entire district, a 1,961-acre area from the interstate to the beach. The new incentive tool would not be given to any downtown projects east of Swinton Avenue and saved for West Atlantic Avenue, where the agency wanted to encourage development.
In early February 2016, the CRA executive director sent a letter to the proposed Atlantic Crossing developers advising them of the change in the incentives. The program they applied for in August 2014, when the agency was run by a different leader, ended Sept. 30, 2015.
Allen “Sandy” Zeller, a semi-retired real estate and land use attorney in New Jersey, said, “I don’t understand why iPic is now being considered under the DIA program when that program was eliminated in January 2016 for the areas east of Swinton.”
Zeller returns to New Jersey one week a month to handle redevelopment work for Deptford Township. He also has represented the redevelopment agencies in three New Jersey cities — Camden, Atlantic City and Cherry Hill.
Under the terms of the Delray Beach CRA assistance program, iPic will use “good faith” efforts to hire at least 20 percent of the permanent theater staff from the local community. The efforts will include holding two job fairs. Tolces requested this condition: that iPic file semi-annual reports on its good-faith efforts to the CRA.
Separately, iPic and CRA staff are still searching for 90 nearby parking spaces that customers and employees can use while the project is under construction.