CRA 01/14/2011 Minutes - Laserfiche WebLink

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Community Redevelopment Agency January 14, 2011 Page 3 explained that a number of things have changed since the City has started discussions with Chef Keogh that went into his financial decision. He said the market was a lot tighter and a return of 8% was something he could sell to his investors; however since that time the casual dining market has changed. He said Chef Keogh would need to deliver a 12% return in today's market. Mr. Martin explained that the City's financial consultants calculated the return at 7%. He said adding the loan to the project reduces the return to the investors. Mr. Martin stated that Chef Keogh was emotionally attached to the property; however there is a fiduciary responsibility for soliciting funds for this project. Mr. Martin explained that the city does not control the proposed changes being made to the stormwater requirements. Mr. Martin said that he explained to Chef Keogh that the stormwater requirements are applicable throughout the state of Florida unless he found a site that was vested for all the stormwater but any new site would have that unknown factor. Mr. Martin said that Chef Keogh's restaurant concept is meant to include the I-10 corridor including such states as Louisiana and Texas. He explained that the state of Louisiana has incredible state incentives for new businesses that are not available in Florida. He said due to these incentives, Chef Keogh may be able to find a site in Louisiana that would provide a 12% return for his investors. He said that the only way the City could compete with the Louisiana incentives is to change the loan of $920,000 to a 100% grant and the City Commission was not willing to do that. Mr. Martin said even with the 100% grant option, Chef Keogh would still need to raise the price points on his food sales and determine if the market would support the increase in meal prices. A general discussion ensued regarding the feasibility of the Estado 11 project if the loan was converted to a grant and increasing the price points on food sales. Ms. Linda Mills-Alexander, 408 Bridle Path, Casselberry, Florida came forward. Ms. Mills-Alexander said that she believes he is interested in the property and he is trying to get more from the City. She suggested that the City make a final offer and move on if the offer is not accepted. Mr. Ritchie stated that he attended all the presentations regarding the development of Estado 11 and the Chef was quite clear regarding the amount of capital needed for this project. He said Chef Keogh needed $2.5 million up front and a site ready pad to make the project work. Mr. Ritchie said Chef Keogh has 25+ years experience in the restaurant industry. Mr. Ritchie felt that Chef Keogh has not changed his position and in his