jkm - News - The Coastal Star2024-03-28T23:31:32Zhttps://thecoastalstar.com/profiles/blogs/feed/tag/jkmBoynton Beach: Mediation sessions are latest chapter in Town Square disputehttps://thecoastalstar.com/profiles/blogs/boynton-beach-mediation-sessions-are-latest-chapter-in-town-squar2021-08-04T15:13:00.000Z2021-08-04T15:13:00.000ZThe Coastal Starhttps://thecoastalstar.com/members/TheCoastalStar<div><p><strong>By Jane Smith</strong></p>
<p>As Boynton Beach’s dispute with the Town Square private developer went into its second mediation session in early August, frustration over the terms of the contract and missed deadlines showed in the comments of the city’s commissioners.<br />Although a majority of the commissioners have shared their frustrations, Mayor Steven Grant continues to support the developer, John Markey, and his firm, JKM, despite the drama caused by the firm’s failure to meet deadlines on the promised construction of two parking garages.<br />Grant, who has a friendly relationship with Markey, has tried to calm the differences. The mayor and Markey are golfing buddies who played together for years, Grant told The Coastal Star on July 21. Markey also watched Grant’s dog while his daughter was being born in late March 2020.<br />Although all the public buildings in the nearly 16-acre site opened last year, the project still lacks the private pieces of the $250 million Town Square. <br /> Missing are a hotel, new apartments, shops, restaurants, offices and garages to provide parking for city staff, library workers and patrons, and visitors to the renovated historic high school and Schoolhouse Children’s Museum. <br />In July 2020, on the same day Boynton Beach leaders and elected officials celebrated the city’s centennial with the opening of the new city hall/library building, the commission found out that JKM would not be able to deliver the garages on time, as it had promised.<br />JKM has since allowed Boynton Beach to park cars on the Town Square land the firm owns, according to a deal worked out by an ex-assistant city manager.<br /> At the July 21, 2020, commission meeting, Commissioner Justin Katz questioned if shoveling more money into the project from the city solidifies the deal or converts it into a city project. “We should be in the position to take the reins back if we are doing everything other than building it,” he said.<br /> The city sued JKM in November 2020, asking a judge to decide whether it had met all terms of the deal. By affirming the city has met its obligations, the suit claims JKM has not upheld its part of the contract and the relationship can be severed. Even if the city wins, JKM will still own the land. The city gave three parcels of Town Square land to JKM. The firm also received nearly $2 million in cash “for considerations,” according to the original March 2018 agreement. The city had an options clause in the agreement that allowed it to buy back the land for $100 a parcel. The options clause was removed in December 2018 after JKM received city approval for its site plans. <br /> At a June 15 commission meeting held one week before the first scheduled mediation session, Katz expressed his frustration again over the contract terms when he called Markey a “property hostage taker.” <br /> Grant disagreed. <br />“I have a different perception,” he said. “If we can get a better project that we could not have received three years ago, that is something the commission should look for.”<br />Commissioner Ty Penserga has asked for an investigation of how the deal was created, and Vice Mayor Woodrow Hay requested a workshop to explain how the deal came together. Neither one was on the commission in 2018 when the Town Square pact was made. Each suggestion failed for a lack of support at the June 15 commission meeting.<br /> “Maybe I am taking it a little bit personally,” City Manager Lori LaVerriere told commissioners at that meeting. “There was no action taken on this project in terms of agreements or modifications to any documents without the commission being fully aware of it, voting on it and being informed. I just want to make that clear for the public. Nothing happened in the back room.”<br /> The first mediation session was held June 23 at Boynton Beach City Hall. Markey proposed a revised agreement then, and each city commissioner received a copy of it from the city attorney, Grant said. Commissioners then were supposed to tell the city attorney whether the deal was acceptable. <br /> A second mediation session was Aug. 2 at the law offices of Tripp Scott in Fort Lauderdale. The law firm’s president, Ed Pozzuoli, is the mediator. He also is a former chairman of the Broward County Republican Party and a Fox News analyst, according to his profile on the Twitter social media platform. <br />The second mediation produced a workable agreement that the City Commission will discuss behind closed doors in mid-August, Grant told The Coastal Star. If a majority of the commissioners support the deal at that session, then the commission would discuss the settlement publicly in September.</p>
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<p> </p></div>Boynton Beach: Developer blames parking garage delay on lawsuithttps://thecoastalstar.com/profiles/blogs/boynton-beach-developer-blames-parking-garage-delay-on-lawsuit2021-03-31T14:42:57.000Z2021-03-31T14:42:57.000ZMary Kate Leminghttps://thecoastalstar.com/members/MaryKateLeming769<div><p><strong>By Jane Smith</strong><br /> <br />Town Square in Boynton Beach has new municipal buildings, a renovated historic high school and a new fire station. But the lack of parking garages makes the area appear unfinished. <br /> Boynton Beach has been waiting for nearly two years to have garage parking for 465 vehicles, promised by JKM BTS, its Town Square private partner. While the city waits for the garages — estimated to cost $34 million — construction costs are rising by an estimated 5% annually, according to analytics on EdZarenski.com. The website provides in-depth analysis on the economics of construction.<br /> In late November after more negotiations seemed fruitless, Boynton Beach sued JKM BTS, asking a judge to decide whether the city had met its obligations under a March 2018 developer’s agreement and can sever that relationship.<br /> JKM built the Cortina apartment buildings and a dog park west of the interstate in Boynton Beach. <br /> Boynton Beach sold 7.68 acres to JKM affiliates in three parcels for $10 each in 2018. It also gave JKM nearly $2 million in cash for development costs and redid the streets in the entire Town Square area — including new water and sewer lines, storm drainage and buried power lines. <br /> To its credit, the firm did supply 301 surface parking spaces on the land it received from the city, as required in the March 2018 developer’s agreement. Those spaces are used during the day by the city, Community Redevelopment Agency, the Schoolhouse Children’s Museum and library workers. Customers doing business at City Hall and visitors to the museum and library also use the parking spaces during the day. “Negotiations between the city, potential workforce housing developers and separately with JKM have taken place,” read a written update by John Markey, a JKM principal, presented at the March 16 City Commission meeting. <br />“Pending litigation has negatively affected the prospects of obtaining any project construction financing.” <br /> Commissioner Justin Katz contradicted Markey by saying no workforce housing negotiations are taking place. He was backed up by the city manager.<br /> “The financing fell apart years before COVID and the litigation was filed,” Katz said at the meeting. <br /> In mid-March 2020, Boynton Beach and cities worldwide shut down to help stop the spread of the coronavirus. <br /> Markey finally appeared virtually at the second City Commission meeting in July, saying he and his wife had stayed home for a few months to avoid catching COVID-19. He missed four months of virtual meetings, even though Katz had asked for monthly updates. <br /> The south garage received a building permit on Sept. 5, 2019, and was supposed to be finished by June 5, 2021, Colin Groff, then assistant city manager, said during the July 21 Town Square update. The north garage was estimated to be finished by Dec. 5, 2021. <br /> But no work on the garages has begun.<br /> “The timelines are completely gone,” Markey said at the July 21 meeting. <br /> He asked for taxpayer dollars from the city’s Community Redevelopment Agency to help underwrite the private portion of Town Square. <br /> Katz said “absolutely not” to that, pointing to the low cost of the properties, the $2 million in cash and the redone streets. Developers normally would do road improvements on their own.</p>
<p><strong>History of the deal</strong><br /> Boynton Beach signed a developer’s agreement with Markey in March 2018. The agreement detailed what the city was supposed to do and the obligations of Markey’s affiliates that had been set up individually for each project.<br /> The financing mechanism changed from having the city set up a community development taxing district to serve the area’s long-term needs to an outside nonprofit that specialized in public/private partnerships and could issue the Town Square bonds quickly. <br /> The $78 million in bonds were issued by Community Facility Partners of Minnetonka, Minnesota, in July 2018. But the nonprofit could not finance private projects, Markey found out in the fall of 2018. That left him scrambling for financing for the two projects. <br /> As of June 30, JKM had spent nearly $5.8 million on development costs of the three parcels, Markey said at the Sept. 1 commission meeting.<br /> The three parcels that Markey’s firm purchased for $30 in September and December 2018 were appraised at $19.7 million in May 2018. That was several months before the old City Hall and library were demolished to make way for Town Square.<br /> The city agreed in December 2018 to remove its right to repurchase the land after JKM said it needed that clause lifted in order to gain construction financing.<br /> Both City Attorney James Cherof and Markey declined to explain their reasoning, citing the lawsuit. <br /> But official county real estate records do not show a construction loan taken out by JKM on the Town Square parcels.<br /> On Dec. 28, 2018, a $3.5 million letter-of-credit was lent by City National Bank of Florida, secured by the three Town Square parcels. That loan was satisfied on Feb. 7, 2020. <br />Another $5.5 million “bridge” loan was given by BI 58 LLC on Dec. 23, 2019. The Miami-based partnership specializes in short-term financing for commercial real estate projects. JKM paid off that loan on Dec. 17, 2020. <br /> In the fall of 2019, Markey said, city staff was working toward becoming a co-guarantor of the garage loans that would be financed by Iberia Bank. Then the city decided that was too risky, he said, without owning the land.<br /> In February 2020, the city talked about borrowing $34 million to build the garages by agreeing to “pre-buy” them. <br /> Then, Markey said, the finance world shut down because of the pandemic. Ú</p></div>Boynton Beach: City files lawsuit after declaring Town Square dispute a stalematehttps://thecoastalstar.com/profiles/blogs/boynton-beach-city-files-lawsuit-after-declaring-town-square-disp2020-12-02T16:30:30.000Z2020-12-02T16:30:30.000ZMary Kate Leminghttps://thecoastalstar.com/members/MaryKateLeming<div><p><strong>By Jane Smith</strong></p>
<p>Boynton Beach wants a circuit court judge to declare the city has met its obligations to the private developer in the city’s public/private Town Square development project, according to a Nov. 19 lawsuit.<br />At issue are three items the developer disputes: natural gas lines the city says it has supplied to each of the three parcels, geotechnical reports the city says it has made available saying each parcel is cleared and ready to be developed, and verification that contractors for the public portion of the project have removed their equipment and materials from each parcel. <br />The items are part of the March 19, 2018, developer’s agreement the city made with John Markey, principal of JKM Developers. Markey plans to build mixed-used residential buildings with retail and restaurants on the ground floor. He has agreed to set aside public parking spaces in two garages.<br />By affirming the city has met its obligation, the suit claims Markey has not upheld his part of the contract, which gave him 18 months to finish one parking garage and 24 months to finish the other.<br />At the Nov. 4 commission meeting, City Attorney James Cherof told the commission that lawyers for both the city and Markey were going to maintain their positions on the stalemate and it was time for a judge to say which party was correct. The commission then agreed to file the lawsuit, estimated to cost $10,000 to $20,000 to initiate.<br />JKM has until Dec. 31 to respond to the suit.<br />JKM gave no definitive deadline in the contract for the construction of the two garages the city needs for staff and public parking, Cherof said. Boynton Beach’s combination City Hall and Public Library building was finished in July and officials hoped to have at least one of the parking garages completed when it opened to the public.<br />“The effects of the COVID-19 pandemic on construction debt lending are unknown and indeterminate in nature,” Markey wrote in an Oct. 2 letter to the city. Boynton Beach, like other cities around the country, temporarily shut down in mid-March in an effort to mitigate the spread of COVID-19, a respiratory infection that can be fatal.<br />Markey added that he hoped to get financing in the first quarter of 2021.<br />Cherof, though, called that statement “wishful thinking” at the Nov. 4 meeting. <br />“It’s not anything you can hang your hat on,” he said. Cherof referred commissioners to a Dec. 17, 2019, letter sent by the city to JKM, saying the city had met its obligations.<br />But JKM's attorney wrote the city on Oct. 2 saying the city's obligations had not yet been met.<br />The city gave JKM three parcels that total about 8.6 acres, $1.9 million in cash and new water and sewer lines and underground utilities at no cost in its Town Square project. <br />Town Square is a private-public partnership between the city and its Community Redevelopment Agency and private developers. The 16.5-acre area sits between Boynton Beach Boulevard and Southeast Second Avenue. <br />When complete, the $250 million Town Square will have a mix of municipal buildings and privately developed apartment buildings, a hotel, restaurants and shops. The city’s share is slightly more than $118 million.<br />The south garage was supposed to be finished by June 5, 2021, Colin Groff, assistant city manager, said in July. The north garage was to be finished by Dec. 5, 2021.<br />“The timelines are completely gone,” Markey said at the time. Ú</p></div>