SUBJECT/RECOMMENDATION:
Title
Approve a Fifth Amendment to a purchase and sale agreement with Clearwater Bluffs LLC and an underlying Promissory Note. (consent)
Body
SUMMARY:
On August 4, 2022, the 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. On that same date, the City Council approved a development agreement relating to both the old City Hall parcel and the separate Harborview parcel.
The original PSA and development agreements included a City parking contribution (the Parking Contribution). The Parking Contribution is a sum of $17 million payable to the Buyer(s) at closing. The Parking Contribution, which was funded from city parking revenues, is intended to partially offset the construction of new parking that the project will require.
The PSA for the old City Hall parcel was amended most recently and substantively on February 1, 2024, followed by an amended development agreement on June 6, 2024. On November 21, 2025, Gotham and DeNunzio assigned the PSA to Clearwater Bluffs LLC, a special purpose entity set up by Gotham for the development of the old City Hall parcel. Operating under the current framework, Gotham is working diligently toward closing. To that end, their general contractor, Moss, has already obtained all building permits necessary to construct the apartments downtown.
In anticipation of closing, the City Attorney, City Manager, and the Gotham team have discussed the preferred mechanism to fund the City's Parking Contribution. To ensure a successful project and maximize tax savings, the City Attorney recommends updating the PSA to convert the Parking Contribution from a grant into a 30-year, nonrecourse deferred loan (Promissory Note). The amount of City funding remains unchanged at $17 million. The timing of disbursal also remains the same, with the Parking Contribution disbursed at closing. Once the project is complete, the City shall discharge the loan. This amendment represents a win-win for the City and Gotham. It protects the City by securing the Parking Contribution with the Promissory Note, while aligning the City's interests with those of Gotham by requiring the City to discharge the loan upon completion of the project.