The Coastal Star

Delray Beach: Tax-dollar incentives an issue in iPic discussions

By Jane Smith

    The iPic development team is asking Delray Beach’s Community Redevelopment Agency for more money, even though it has not closed on its contract to buy the 1.6 acres for $3.6 million from the agency.
    The seventh amended contract had a Jan. 31 deadline, but the agency’s attorney said the contract was still valid. The closing date will be 30 days after iPic secures all of its permits, according to the CRA attorney.
    For the proposed eight-screen, luxury movie theater at the corner of Atlantic Avenue and Federal Highway, iPic wants to charge the Delray Beach CRA for its share of operating and maintaining 90 public parking spaces in the project’s garage.
    That annual cost was not adjusted for inflation, which the iPic owners want.
    Then, the theater owners want to be repaid for providing 40 extra spaces, required by the city for a total of 90, with $400,000 in tax dollars spread over 10 years after the project is finished.
    The 90 public spaces could be sold to the CRA as space for condos, iPic’s attorney said. That price was not revealed at the Feb. 23 CRA meeting, nor was information provided on how that concept would work.
    The four board members agreed to let their staff and the iPic attorneys continue negotiating and bring it back at their March 9 meeting. The board members received only partial details at 2 p.m. on their meeting day.
    At the start of the Feb. 23 meeting, iPic’s attorney, Bonnie Miskel, said, “My client bid on a proposal that required 50 public parking spaces.”
    The iPic CEO also attended. “We were supposed to build 50 spaces, now we are building 40 extra parking spaces,” said Hamid Hashemi.
    The Delray Beach City Commission had to approve the project, which it did in March 2016.
     “Specifically, the developer, at the time of receiving approval, understood and agreed to construct an additional (40) spaces to correct what was, in my view, a flawed request for proposal in this regard,” Mayor Cary Glickstein wrote in an email on Feb. 24. He voted for the project.
    Commissioner Shelly Petrolia, who voted against the approval, attended the Feb. 23 CRA meeting.
    “I was shocked at what I witnessed at the CRA meeting,” she said. “I had no idea that additional incentives were in the mix when they got such a sweetheart deal on the property and the alleys for free.”
    CRA Chairman Reggie Cox said, “The extra spaces were agreed to. … At this point in the project you want to recoup some of that cost, I understand that.”
    But that incentive of taxpayer dollars is not sitting well with some Delray Beach residents.
    “It is commonly accepted in Delray Beach that development east of Swinton Avenue does not need to be subsidized by taxpayers,” said real estate broker Chris Davey. “The CRA should take revenue from that area and use it in the northwest and southwest communities.”
    Davey voted against iPic in July 2015 when he was on the city’s Planning & Zoning Board. At that meeting, he said, “They are trying to put 10 pounds of something into a 5-pound bag.”
    With a projected completion date of 2020, the iPic complex will contain a 44,479-square-foot movie theater, 43,880 square feet of Class A office space, 7,487 square feet of retail and a multilevel parking garage with 326 spaces. The bottom two floors will have 90 public spaces that are metered. The city will collect that revenue.
    The CRA staff and iPic have been negotiating the parking cost sharing agreement since December. Initially, iPic had asked for $460,000 annually, which was reduced to $115,348 after taxes and debt service were eliminated.

    The CRA’s consultant, PMG Associates of Deerfield Beach, recommended paying $74,996 annually with just $50 set aside for reserves. The consultant based the amount on a new garage that Fort Lauderdale is building at its beach. It’s a municipal garage but with added touches, said Phil Gonot of PMG.

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Comment by Barry Jacobs on March 3, 2017 at 8:27am
Great coverage, thanks Coastal Star. I am both nervous and excited about the development at iPic and Atlantic Crossing. But glad to see so much thought going into the development plans.

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