Commission authorizes negotiations on non‑binding option with First Street Credit Union for 1st Street housing site

The Sarasota City Commission on April 6 directed the city manager to negotiate and return with a non‑binding option agreement with First Street Credit Union that would allow the city to consolidate parcels for a proposed 1st Street attainable workforce housing development.

Wayne Appleby, the city’s economic development and real estate manager, told the commission the letter of intent signed Feb. 26 establishes an exclusive negotiation period and outlines a potential option structure: an initial one‑year option with up to four one‑year extensions (five years total), a 90‑day due‑diligence window after an option is executed and a $50,000 non‑refundable payment due when the city exercises the option. Appleby said the LOI anticipates that a developer would likely pay a $150,000 refundable deposit tied to the purchase and that the city would convey a 65‑by‑100‑foot lot for the credit union’s relocated branch rather than a direct cash payment.

Appleby described the next steps: the city will bring forward a contract for a real estate consultant (already selected through solicitation) to run financial pro‑formas, help commissioners frame objectives (income limits and unit mix) and draft the solicitation for a developer to design, build and operate the project.

Several local developers and residents urged caution and asked for full financial vetting. Mark Van Groff (managing partner, 1 Stop Housing) said his unsolicited proposal modeled a 150‑unit building at a substantially lower total cost and said the project could include units at 60–80% of area median income without relying on uncertain state funding. Van Groff asked for an opportunity to have his unsolicited bid considered as part of an RFP response.

John Harshman, a downtown commercial broker, urged rigorous pro‑forma analysis, warning that the site was chosen “on an emotional decision” and that rising downtown construction costs could create a large subsidy requirement.

Martin Hyde, a frequent public commenter, criticized past city purchasing decisions and cautioned that the city lacks development expertise; he urged the commission not to absorb unmanageable long‑term subsidies.

Commissioners pressed staff on timing and a threshold of approvals: several members said they expect the option agreement to be returned to the commission for approval before any non‑refundable payment is made. Commissioner discussion focused on defining policy objectives — how many units at 80% AMI, 60% AMI or other thresholds — before the solicitation is issued. Appleby said realistic AMI mixes and subsidy implications will be produced by the real estate consultant.

The commission first voted unanimously to accept the staff presentation; it then voted 4–1 to direct the city manager to negotiate the option agreement and return it to the commission for approval. The vote did not bind the city to purchase; the LOI and option are non‑binding until the commission approves final terms.

What’s next: staff will return with the real estate consultant contract for approval, continue exclusive negotiations with the credit union, and bring any option agreement back to the commission for final decision.

Speakers quoted or relied on in this article are listed in the article speaker roster below. No assertion beyond what speakers said or the city’s stated documents is included.