SUBJECT/RECOMMENDATION:
Title
Approve a loan from the CRA to Clearwater Bluffs LLC and a promissory note, in connection with the approved funding contribution for the residential project on the Bluff.
Body
SUMMARY:
On August 4, 2022, the City of Clearwater City Council (City Council) - subject to voter approval - tentatively approved a purchase and sale agreement (PSA) with Gotham Property Acquisitions, LLC (Gotham) and the DeNunzio Group, LLC (DeNunzio). The PSA contemplated the sale of the city-owned old City Hall parcel, located at 112 S. Osceola Avenue to Gotham for the construction of a new attached dwelling development project (Project). On that same date, the City Council approved a development agreement relating to both the old City Hall parcel and the separate Harborview parcel.
On February 1, 2024, the City Council approved a fourth amendment to the PSA that created a new closing condition being a funding contribution from the CRA (Contribution) in either the amount of $2,250,000.00 (if closing on the Old City Hall Site occurs after March 1, 2026) or in the amount of $3,250,000.00 (if closing occurs on or before March 1, 2026). The amendment to the PSA also provided that either the $2,250,00.00 will be disbursed at time of substantial completion of the Project or the $3,250,000.00 will be disbursed at time of commencement of construction of the Project. On March 18, 2024, the City of Clearwater Community Redevelopment Agency Board of Trustees (Trustees) formally approved the Contribution.
On November 21, 2025, Gotham and DeNunzio assigned the PSA to Clearwater Bluffs LLC (Clearwater Bluffs), a special purpose entity established by Gotham for the development of the Project. Operating under the current framework, Gotham is working diligently toward closing. Their general contractor, Moss, has already obtained all building permits necessary to construct the Project.
In anticipation of closing, the City Attorney, City Manager, CRA Executive Director, and the Gotham team have determined the preferred mechanism to fund the Contribution. On December 4, 2025, the City Council approved a fifth amendment to the PSA providing that the Contribution would be in the form of a loan with a promissory note to be approved by the Trustees. The amount and timing of the Contribution’s disbursal remain unchanged. Once the project is complete, the CRA shall discharge the loan. This change represents a win-win for the CRA and Gotham. It protects the CRA by securing the funding with the Promissory Note, while aligning the CRA interests with those of Gotham by requiring the CRA to discharge the loan upon completion of the Project.
Therefore, to ensure the success of the Project and maximize tax savings, the CRA Executive Director recommends converting the Contribution into a 30-year, nonrecourse deferred loan taking the form of a promissory note.
APPROPRIATION CODE AND AMOUNT:
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