Rec cen­ter pay­ments to be di­vided

Palm Beach Daily News - - TODAY - By WIL­LIAM KELLY

Friends of Re­cre­ation will pay its one-third share of the cost of a new Seav­iew Park re­cre­ation cen­ter in four pay­ments over the course of the con­struc­tion, in­stead of pay­ing all of its share up front.

Ear­lier this month, the Town Coun­cil ap­proved an agree­ment with Friends of Re­cre­ation that re­places a 2016 agree­ment in which the fundrais­ing group pledged to pro­vide its share in ad­vance.

Friends of Re­cre­ation and the Man­del Foun­da­tion each have pledged to pay one-third of the cost of the cen­ter, up to $5 mil­lion each. The town will pay the re­main­der.

The pro­ject has been es­ti­mated at $11.1 mil­lion, but a so-far undis­closed bid from con­trac­tor Hedrick Broth­ers this spring was higher than the es­ti­mate. and town staff is ne­go­ti­at­ing to bring the price down be­fore pre­sent­ing it to the coun­cil next month.

If ap­proved by the coun­cil, Hedrick Broth­ers’ price will be a “guar­an­teed max­i­mum price” for the pro­ject, shield­ing the town against cost over­runs.

Michael Ainslie, vice chair­man of Friends of Re­cre­ation, told the coun­cil that the group has raised $4.3 mil­lion, in­clud­ing $2.5 mil­lion in cash and $1.8 mil­lion in pledges. If the $11.1 mil­lion es­ti­mate holds true and the group’s share is $3.7 mil­lion, it would have to bor­row against the pledges to hand over its full share up front. Ainslie said di­vid­ing its share into pay­ments would al­low it to avoid pay­ing in­ter­est on a loan.

The group looked to the Man­del Foun­da­tion’s pay­ment sched­ule as an ex­am­ple of how it could dis­pense its funds, Ainslie said. Un­der the plan, Friends of Re­cre­ation will pay 40 per­cent of the guar­an­teed max­i­mum price once the con­trac­tors are hired, Ainslie said. Three sub­se­quent pay­ments of 20 per­cent will be paid once con­struc­tion is 40 per­cent, 80 per­cent and 100 per­cent com­plete.

Con­struc­tion is planned to be­gin this sum­mer and be fin­ished by the end of 2019.

Ainslie said the group will es­crow the cash it has re­ceived. He pro­vided a let­ter from Cheryl Culp, se­nior vice pres­i­dent at North­ern Trust Co., say­ing the bank had com­mit­ted to a line of credit for Friends of Re­cre­ation, “to be se­cured by com­pleted and signed pledges,” so the group would have enough money to meet its obli­ga­tion to the town.

“We have 100 per­cent fi­nanc­ing against our pledge cards, which won’t prob­a­bly be called upon un­til the 80 per­cent mark, so we will avoid pay­ing in­ter­est un­til the end of the pro­ject,” Ainslie said.

But coun­cil mem­bers Julie Araskog and Bob­bie Lind­say said the North­ern Trust let­ter wasn’t legally bind­ing and that they couldn’t vote for the pay­ment agree­ment with­out see­ing doc­u­men­ta­tion pro­tect­ing the town and its tax­pay­ers from fi­nan­cial li­a­bil­ity should do­na­tions fall short of the to­tal amount pledged.

“I’m con­cerned with the lack of speci­ficity,” Araskog said. “What if some­one drops out? Who is guar­an­tee­ing it? How many pledges are signed? Are they no­ta­rized?”

Araskog and Lind­say dis­sented in the 3-2 vote to ap­prove the agree­ment, even though the ap­proval came with the con­di­tion that North­ern Trust pro­vide the town a let­ter com­mit­ting the bank to loan Friends of Re­cre­ation the money for any bal­ance due to the town, with the signed pledge cards as col­lat­eral.

Ainslie said Tues­day that the town since has been given that doc­u­ment, which in­cludes terms of the loan agree­ment. At the July 10 coun­cil meet­ing, Friends of Re­cre­ation also will pro­vide a let­ter stat­ing the cu­mu­la­tive amount of all signed pledge cards and North­ern Trust will pro­vide a let­ter stat­ing it has agreed to pro­vide that amount of money, he said.

Of the 95 fam­i­lies or or­ga­ni­za­tions that do­nated to the group, about 25 gave in the form of pledges, Ainslie told the coun­cil. Among those were the Mary Alice Fortin Foun­da­tion; Matt Smith, who is pres­i­dent of Friends of Re­cre­ation; Bob Wright, chair­man and CEO of the Palm Beach Civic As­so­ci­a­tion; and the Fan­juls.

“All are stal­wart lead­ers in our com­mu­nity,” he said. Coun­cil Pres­i­dent Danielle Moore noted that the Friends of Re­cre­ation donors were listed in the coun­cil meet­ing doc­u­ments.

“It makes me sad to think our coun­cil would not have faith in the peo­ple who are on this list,” said Moore, who is on the board of direc­tors at the Fortin Foun­da­tion, which is named for her late grand­mother.

Be­fore the vote, Town At­tor­ney John Randolph, re­spond­ing to ques­tions from Lind­say and Araskog, said he saw no risk in the coun­cil ap­prov­ing the new agree­ment with Friends of Re­cre­ation be­fore it had the bank’s com­mit­ment let­ter. “All this res­o­lu­tion does is al­low it to be paid in pay­ments in­stead of all up front.”

Councilman Lew Cramp­ton, who voted in the ma­jor­ity, said, “I trust the pledge process. I trust the in­di­vid­u­als. The de­tails will be re­vealed. I have a mea­sure of con­fi­dence.”

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