CITY OF TALLAHASSEE
CITY COMMISSION AGENDA ITEM
ACTION REQUESTED ON: May 27, 2009
SUBJECT/TITLE: Lease of property to Delta Kappa Omega Foundation Inc. to develop and operate Providence Community Center
TARGET ISSUE: Economic Development

STATEMENT OF ISSUE

The Delta Kappa Omega Foundation Inc. has presented a proposal to construct and operate a Community Center in the Providence Neighborhood. The proposed center would provide after-school youth programs and adult educational programs. The proposal calls for the Tallahassee Community Redevelopment Agency (CRA) to contribute $550,000 in funding and the City to donate the property to support the construction of the facility. On May 18, 2009 the CRA Board of Directors approved the $550,000 funding request for the project. The CRA funding approval is contingent upon the City providing the property for the Center.

The City purchased the subject property in 2004 for use as a neighborhood center under the Renaissance Neighborhood Program. To date the neighborhood has been unable to meet the terms and conditions that the City established for development of the neighborhood center. The Foundation will contribute $100,000 for the construction of the facility and will provide the funding and staffing for operating the community center.

RECOMMENDED ACTION

Approve option 1: Approve the lease of the City-owned property to the Delta Kappa Omega Foundation for the Providence Community Center subject to the terms and conditions referenced in this agenda item.

FISCAL IMPACT

No direct fiscal impact to the City, but recommendation would require donation of City property valued at $110,000. The Office of Budget and Policy has reviewed this agenda item and concurs it meets budgetary guidelines.

Thomas H. Lewis, Director, Economic and Community Development

Anita Favors Thompson, City Manager

For information, please contact: Michael Parker, Assistant Director, 850-891-6457

SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES

In 2004 the City spent $110,000 to acquire a 1.03-acre parcel in the Providence Neighborhood to house a community center. The CRA, as part of its 2005 budget, allocated $375,000 to support the construction of the neighborhood center. This was done to support the Renaissance Neighborhood Program, which was a multi-agency neighborhood revitalization effort. The conditions for the neighborhood to access the land and funds for construction of the center were that: (1) the community had to raise $100,000 to support the construction costs, and (2) the community had to demonstrate they had the necessary volunteers and resources to operate the facility once it was constructed.

Over the next several years there were initiatives undertaken by the Renaissance Partners, community leaders and area churches to help the Providence Neighborhood Association raise the funds and resources to meet the aforementioned conditions.

The Providence Neighborhood was unable to meet these conditions, and in 2008 the CRA reallocated the $375,000 that was allocated for the neighborhood center. This action was necessary because the statutory deadline for expenditure of those funds was approaching.

Last year the Delta Kappa Omega Foundation submitted a proposal to the City to construct and operate the Providence Neighborhood Center. The Delta Kappa Omega Foundation Inc. was created in 1996 as a means for expanding community service programs. The Foundation has a membership of over 250 women dedicated to serving Tallahassee neighborhoods and residents. The Foundation is aligned with the Alpha Kappa Alpha Sorority and shares its objectives of: sponsoring economic growth for families through non traditional entrepreneurism, mentoring, and networking and strengthening family cohesion through youth mentoring and educational programs. The Foundation has been active in the community providing resources and services to support these objectives, such as sponsoring a Saturday tutoring program for Grades K-12 at Smith Williams Community Center in partnership with the Bond Library from the early 80’s into the 90’s.

The Foundation has collaborated with the Providence Neighborhood Association on the proposal. The proposal stipulates that the Foundation will provide $100,000 to support the construction of the facility. The Foundation will provide the funding and staff to operate the neighborhood center. Their proposal calls for the construction of a 5,000 square-foot building that would provide classroom and meeting space for programs and services for the community.

The Foundation will administer the community center and will be responsible for all operational costs. The community center will offer after-school programs from 3 to 6 PM during weekdays. The center will also offer adult programs and classes in the evenings and the facility will be available for community meetings. The Foundation has estimated that the annual operating costs for the facility will be $55,000 per year. They have provided written commitments from a number of organizations pledging to donate staff time to support programs and services at the community center. The Foundation has pledged that they will provide the funds for the operational expenses of the center.

City staff has been working with the Foundation to further refine their proposal. We have been able to: (a) advance the proposed facility design through preliminary site plan review to further develop the construction cost estimates, (b) verify that the Foundation has sufficient financial resources to meet the commitments in the proposal, and (c) develop terms and conditions to give the City recourse if the Foundation were not able to maintain the services outlined in the proposal.

The preliminary site plan for the community center was reviewed on January 29, 2009. Based on the input from that review the construction estimate for the project has been adjusted with an estimated final cost of $617,070. The Foundation has been awarded a $550,000 grant from the Redevelopment Agency to cover a portion of the construction costs. The Foundation will contribute $100,000 to the project which will cover the balance of the construction costs and costs to furnish and equip the center. The Foundation has provided financial documentation that demonstrates they have sufficient funds for their $100,000 contribution to the project.

On May 18, 2009 the Community Redevelopment Agency Board of Directors approved the $550,000 in CRA funding which the Foundation requested. The CRA funding is subject to action by the City Commission to lease the property to the Foundation. The terms of the CRA funding approval will match the proposed lease terms that are outline below.

The Foundation has agreed that the donation of City land and the CRA financial support will include terms and conditions. The terms will cover the following areas: (a) guarantees for proper maintenance of the building and grounds and to establish an appropriate replacement reserve fund for the facility, (b) operational requirements including minimum hours of programs and services and public access to the facility, and (c) operational standards including maintaining proper insurance, safety improvements and equipment appropriate for the programming being offered at the facility. The Foundation has agreed that the City property would be provided under a seven-year lease at an annual cost of One Dollar ($1) per year. If the Foundation meets all the lease terms and conditions during the seven-year term, the property will be donated to the Foundation. Additionally, the terms of the property donation will include a reverter clause that stipulates the facility must be operated as a neighborhood center for a minimum of seven years after the property ownership is transferred to the Foundation. Any change of use for the property during that seven-year period would have to be approved by the City Commission, or the ownership of the property would revert to the City.
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CHARITABLE CONTRIBUTIONS

Not Applicable

OPTIONS

Option 1: Approve the lease of the City-owned property to the Delta Kappa Omega Foundation for the Providence Community Center subject to the terms and conditions referenced in this agenda item.

Pros:
· Would support the construction and operation of a community center for the Providence Neighborhood.
· Would allow the property which the City purchased for a community center to be put into productive use.
· Would allow for enhanced services to the Providence Neighborhood without additional financial commitments from the City.

Cons:
· Property will not be available for other City programs or for sale to recoup purchase costs.
· If the Foundation does not successfully operate the facility, the City might have to assume operational responsibility for the Center and reclaim ownership and maintenance of the facility.

Option 2: Deny request from the Delta Kappa Omega Foundation for the lease of land to support the Providence Community Center Project.

Pro:
· Would not commit the City-owned property, leaving it available of sale or for other City uses.

Con:
· The Community Center, as represented in the Foundation Proposal, would not be constructed.
· The City-owned property would not be utilized for a community center, which was the justification for acquiring the property.
· The City would not be able to leverage the volunteer services available through the Foundation to benefit the Providence Community.

ATTACHMENTS/REFERENCES

Attachment 1: Delta Kappa Omega Foundation Funding Proposal
Attachment 2: Map showing location of property