SPECIAL COUNCIL MEETING
A Special Council Meeting was held on March 3, 1993 at 7:00 p.m. with Council President Christiansen presiding. Members present were Councilmen Lambert, Tudor, Leary, Pitts, Salters, Levitt, Daisey and Hare.
Council staff members present were Mr. Worley, Mr. Rodriguez, Mr. DePrima and Mrs. Boaman.
The Special Council Meeting was called to receive testimony on a proposal by the Downtown Dover Development Corporation for the City of Dover to sell the City owned land located between the Post Office and City Hall. A proposal and request for the City to sign a Letter of Intent has been received from Stoltz Realty.
This matter was reviewed by the City's Legislative and Finance Committee on February 9, 1993 and by City Council during their meeting of February 17, 1993. During the Council Meeting, this Special Council Meeting was set to hold a public hearing on the proposal of sale.
Council President Christiansen declared the public hearing open.
Mayor Aaron O. Knopf addressed the Council and public on the proposal of sale of the City owned parking lot, located east of City Hall. He stated that everyone present at this meeting is concerned with the welfare and continued growth of our City. He feels we should take a proactive position of thought for the future. Mayor Knopf stated that many years ago, this parking lot was a City dump site and in his opinion is not of historic nature. The plan being proposed by Stoltz Realty would provide more benefit to our City by placing the property and all improvements on the tax rolls, providing for 300 new jobs in the City, and bringing people to work and shop in the downtown area. Stoltz Realty has offered to pay the City, during the 12 month option period, $1,000 per month and if the decision is to move forward with the sale, Stoltz Realty will purchase the property for $700,000. Mayor Knopf stated that this is much needed revenue and urged support for the project.
Gary Patterson, President of the Downtown Dover Development Corporation, urged support for the project. He stated that the DDDC has met with the Loockerman Street merchants to respond to their questions and concerns on the proposal. Concerns of traffic pattern around the Post Office will be addressed in great detail at a later date. However, a brief sketch, prepared by Simpers & Haupt Architects was submitted for Council review. The Stoltz plan calls for one or two major financial institutions on the first floor, and other corporate type of tenants, as well as some retail space. A parking facility will hold approximately 500 vehicles. The rental rates will be far above current rental rates on Loockerman Street and should not be in competition for the downtown stores. It is felt that the new structure will enhance downtown Dover since more people will be working in the area.
Questioned by Mr. Tudor, Mr. Patterson stated that the building is planned to be approximately 250' long and 100' wide. Phase I of the project will contain 100,000 sq. ft.
Crawford J. Carroll, former Mayor of Dover, submitted a letter which is on file with the City Clerk. He reviewed the following points of concerns: The citizenry does not know any details on the size of the lot, the size of the proposed structure, or how close the building will sit to City Hall and the Post Office. He relayed concern with the possibility of the City and Post Office being squeezed out and leaving no opportunity for expansion. He asked if during the 12 month option period and until construction, can the City use the lot? Otherwise, the lot could be tied up for several years at very little cost to the developer. He felt that the City should obtain a minimum of three appraisals and they should be based on market and potential value.
Former Mayor Carroll suggested that test borings be made to ensure that underground parking is possible. If not, it could result in a substantial shortage of parking in this area. He questioned if DelDOT has performed a traffic study, stating that this project will create a substantial increase in traffic at this facility. He requested that Council consider leasing the land for development and tax the improvements or get a percentage of the gross rents for the term of the ground lease. At the end of the ground lease, the property and the improvements would revert back to the City's control. He urged Council to maintain its assets. Specific questions by Mayor Carroll on the Letter of Intent by Stoltz Realty are on file with the City Clerk. Although he supports the efforts of the DDDC, he suggested that their efforts be concentrated on the area between State Street and the railroad. Further, he strongly recommended that when considering the sale of an asset belonging to the citizens of Dover, that public meetings on the subject be widely advertised so that all interested citizens are able to participate.
T. Magoo Dorcy - complained that there was insufficient time for citizens to participate in the decision making process on the potential sale of the property. He felt the amount of money received during the 12 month option period would be insufficient to cover the loss of revenue from parking fees. He projected that the City will need this area for future expansion of City Hall. Since the parking lot was a former landfill, he wondered how much it would cost the City for removal of any environmentally sensitive matter.
Pete LaVenia, Chairman of the Dover Parking Authority, reminded Council that sale of this lot would have an impact on the Parking Authority and requested that they be sensitive to the possible loss of revenue from the sale of the lot. He referred to a Resolution adopted by Council in June 1988, which gave the Authority the exclusive right to manage, maintain, and collect the revenue for a period of 30 years. The impact from possible revenue loss could effect other debts of the Authority.
Javan Davis expressed concern with selling the parking lot, stating that he has a difficult time now trying to find a place to park in this area. Although he finds the prospect of 300 new jobs in Dover favorable, he has many questions on the advisability of using this site for the proposed development.
Richard Senato reminded the public that the proposal would create 300 new jobs, would provide additional income to the City of Dover, and would contribute to the revitalization of downtown Dover. He felt that Council must not be afraid to take a stand to help the economy of the City. He cautioned Council, however, to be very cautious in investigating the proposal to ensure that there are no loopholes that could cause problems in the future. Mr. Senato questioned the lack of specific boundaries for the lot and the possible lack of sufficient parking in the area. Although he is in agreement with the project, he stated he still has many reservations as to the long term effects of the project.
Tom Smith, owner of a business in Downtown Dover, voiced his support for the proposal and urged Council to approve the proposed Letter of Intent. The benefits of additional potential customers for downtown businesses is very important. This project will be a signal to other investors that there is faith in the economic future of Downtown Dover. The concerns of parking, competition to existing merchants, and traffic patterns were answered to his satisfaction during a meeting between the downtown merchants and DDDC members. Responding to questions of others as to why the project cannot be built closer to downtown, Mr. Smith relayed his feeling that this lot is close enough for new construction to take place near downtown. To build any closer would require that historic structures be torn down to facilitate the new buildings. Mr. Smith strongly opposes the concept of tearing down the downtown to save it.
Terry Jackson submitted a letter from the Greater Dover Committee. The letter expresses the support of the Committee for the concept of a major office building for Downtown Dover. The letter is on file with the City Clerk. However, Mr. Jackson urged members of Council to review all details carefully before taking final action on the sale of the lot.
Ruth Tee, former owner of a retail store in Downtown Dover, predicted that retail shops would not be successful in downtown. The development of malls on the outskirts of Dover has resulted in the demise of the downtown retail shops. She also voiced concern with the plan of an underground parking facility, stating that the water table in this area is too high.
Robert Berglund, owner of Dover Hardware, stated that Dover's Historic District is an important part of its charm and one of the reasons that people choose to live in Dover. His parents opened their store in downtown because of the attitude of the City of Dover in always moving forward in a positive manner. Mr. Berglund stated that merchants should not be concerned with competition downtown, stating that his sales go up when more stores are open downtown. People need a reason to come downtown. The addition of 300 new jobs in the downtown area will have a significant and positive effect on the downtown retail shops. Noting that a second proposal has been received on the lot, Mr. Berglund suggested that local realtors should follow the lead by looking at other areas in the downtown area to develop.
John Dobbins stated his concern for this proposal. He informed those present that less than 85% of office space in Dover is occupied and he did not recommend new construction for office space. He requested information on the percentage of unoccupied retail space in Dover. He questioned if a traffic survey has been performed in the area of this parking lot, stating that the traffic is already congested and predicted that the roads could not tolerate an additional 500 automobiles entering and exiting. Mr. Dobbins stated his opinion that those who work in the downtown area do not shop there, but rather head for the Malls. He cautioned members of Council that they must protect the citizens of Dover because developers do not care if such a project fails since they then can take a large tax write-off. When obtaining marketing analysis, Mr. Dobbins felt that the City should not use the information generated by those financially involved.
Charles Johnson relayed his concern with the project, stating that it is the wrong building, at the wrong place, at the wrong time. He stated that the building, proposed to be four stories high, would be located in an area where other buildings in the area are only two and three stories high. He felt that the proposed structure is aggressive and would be too large and out of character for this area of Dover. A copy of written testimony submitted by Mr. Johnson is on file with the Office of the City Clerk.
Glenn Mahan stated that he totally agrees with the comments made by Mayor Carroll. He asked who will responsible if the EPA finds environmental problems with this area. He feared that it ultimately could cost the taxpayers a significant amount of money. Mr. Mahan stated that he does not support office buildings on this lot.
Rexene Ornauer stated that she has questions about the Letter of Intent submitted by Stoltz Realty. In paragraph three, it states that "the City of Dover will cooperate and not unreasonably withhold any approvals or variances necessary for the development ...". She objected to the wording "withhold any approvals..." and suggested that the wording read, "consideration of approvals ...". She requested detailed information on the tax incentives, stating that the Letter of Intent implies that the new owners would only pay taxes on the land and not on the improvements. She asked if there will be any free parking available to the public. Mrs. Ornauer also questioned the advisability of offering the options in perpetuity, feeling that it is unfair for Council to bind the citizens of Dover for 20 to 30 years down the road for a decision made today.
Ed Clevenger stated that he loves the City of Dover and urged Council to not allow this monster of a building to be built on the parking lot. He suggested that before any more money is spent by the City, that they concentrate on cleaning up the City and helping the Police Department enlarge their facility as soon as possible. Questioned by Mr. Clevenger on the funding of the Schutte Park, Mr. Worley stated that the Park was funded with grants and park escrow funds and that no tax dollars from the General Fund were involved.
Jack Richter, former Mayor of Dover, stated that he recently opened a business in the downtown area because he believes in downtown. The proposal before Council is not a new idea; it is a concept that has been before the City for the past year or two. Former Mayor Richter disagreed with those that feel traffic is a problem in the downtown area. He drives around this area many times per day and has experienced no problems. When comparing the current parking lot to the number of people that could be working there, he finds no comparison at all. He reminded those present that having people downtown is the most important thing the City can do for the downtown Dover area. He felt that the questions brought forward were good ones, but stated that the only way to proceed so that the questions can be answered is to proceed with the concept of the project. The City of Dover is going to continue to grow and Mayor Richter urged members of Council to be a part of the planning for this growth and to keep moving forward.
Mike Harrington voiced his support for the proposal, feeling that the City is moving in a new direction. He stated that a project of this magnitude would affect many things, both pro and con. However, it was his opinion that the benefits of the proposal outweigh the negatives. He referred specifically to the creation of new jobs, bringing people to downtown, and increased tax and utility revenues to the City of Dover. Although there are many unanswered questions, Mr. Harrington urged Council to move forward so that these questions may be addressed.
James Moore relayed that he could not support the project because he has no information on it. He did address, however, the concept that the project would help to revitalize Downtown Dover. He stated that while improving his property, located on Loockerman and New Streets, the City offered no support for his efforts towards developing his Arts Center. He stated his opinion that the DDDC was created to revitalize and stimulate small businesses in the downtown area. It is Mr. Moore's opinion that the DDDC has done nothing to help small business in Downtown Dover. He suggested that the DDDC stop concentrating on large development and begin to help small businesses which are the heartbeat of downtown.
Mark Schaeffer, realtor representing James Krapf, submitted a proposal for a Letter of Intent, and a check in the amount of $1,000, from KrapfCanDoIt Company, who are also interested in developing the lot. In explaining the purpose of a Letter of Intent, Mr. Schaeffer stated that it is a loose framework from which to work, which guarantees a developer a purchase price and a time frame to perform exploratory studies. He stated that no reasonable developer is going to agree to expend funds to perform expensive studies without some form of a commitment for consideration of sale. Mr. Schaeffer voiced his support for the concept of development of the lot. Details on the proposal from KrapfCanDoIt are on file with the Office of the City Clerk. Referring to concerns of Mr. John Dobbins on available office space, Mr. Schaeffer stated that no lending institution will lend in excessive of $12 million without the proposed building being at least 80% occupied, with signed leases. Mr. Schaeffer reminded Council that if, after signing the Letter of Intent, their concerns are not answered, then they may refuse to sign the final contract.
Jim Carr, relating to the most recent offer from James Krapf, wondered how many other offers may be forthcoming. He stated that for the past few weeks, he has searched for a written City policy on sale of City land. He has not been successful in finding such a policy and strongly suggested that the City look into the adoption of a policy for the sale of public land, such as the policy used by the State of Delaware. Such a policy would address the number of appraisals required and the need for public bids, etc. Mr. Carr suggested delaying a decision on the sale of the City's lot until a formal procedure for sale is in place.
Jerry Street stated that in considering the proposal for sale of the lot, the City should consider (1) the details; (2) other offers; and (3) the process. He recognized that change is unsettling, but reminded Council that they cannot expect to have all the details known at the beginning of the process. Developers need some firm indication of the City's intentions on the sale of the lot before they can expend funds on the tests required. Mr. Street stated his feeling that large projects, or anchors, are the beginning of the downtown revitalization plan. Although all questions cannot be answered in the beginning of the process, Mr. Street suggested that Council move forward so their questions may be answered.
Ann Gniesco stated that although she supports the development of downtown, she has many questions on the proposal. She asked if the public is being told the full story and if there are any other details that the citizens should know about this proposal. She reminded Council that the citizens own the land and should be kept completely informed of all details. If the property is to be sold, Mrs. Gniesco recommended that it be publicly advertised so that all interested parties have an opportunity to participate, which should ensure that the taxpayers are getting the best price for the property. Council President Christiansen assured Mrs. Gniesco that the public has complete access to all available information.
Francis Weyandt, former City of Dover Councilman, stated that before anything else is done, Council must first decide if they want to sell the property. He felt it is a waste of everyone's time to address concerns on this subject if the City of Dover is not interested in selling the land. If the City does intend to sell the land, Mr. Weyandt suggested that they have the lot surveyed so that all parties know exactly how much land is involved in the sale.
Council President Christiansen declared the public hearing closed.
Mr. Levitt reminded Council that the DDDC has spent a considerable amount of time reviewing the proposed Letter of Intent from Stoltz Realty. He suggested that the latest proposal from KrapfCanDoIt also be referred to the DDDC for the same analysis. He also suggested that all comments made by the public during this hearing be referred to the DDDC for consideration, including the proposal for lease of the land as compared to its sale.
Mr. Hare agreed with Mr. Francis Weyandt, stating that it is unfair to ask the DDDC to review and analyze the offers to purchase the property unless the City has first determined that it intends to develop the land.
Although he does not oppose the sale of the property, Mr. Tudor stated that the City must be very careful to take precautions to ensure that adjacent property owners are protected.
Mr. Lambert moved to refer all comments from the public hearing and the proposal from KrapfCanDoIt to the DDDC for their review and recommendations, seconded by Mr. Levitt.
Mr. Leary moved to amend the motion by adding that City Council, during its Council Meeting of March 8th, consider the question of "Does Council favor allowing for the development of the City of Dover parking lot, located on Loockerman Street, adjacent to City Hall?" The motion was seconded by Mr. Levitt and unanimously carried.
The main motion, as amended, was unanimously carried.
Mr. Levitt moved for adjournment, seconded by Mr. Lambert and unanimously carried.
Meeting Adjourned at 9:50 P.M.
DEBRAH J. BOAMAN
CITY CLERK
All orders, ordinances and resolutions adopted by City Council during their meeting of March 3, 1993, are hereby approved.
AARON O. KNOPF
MAYOR
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