Jeremy's Notebook

Dodging Curve Balls

April 17, 2013

cmpaThe Beck Property Company is a step closer to landing a mixed-use development at the Community Maritime Park, but not without last-minute, curveball drama.

“I walk into this building and I never know what to expect,” Pensacola City Councilman Larry B. Johnson told his fellow Community Maritime Park Associates board members. “I’m waiting for the Twilight Zone music to come on when I walk into this building.”

Greg Beck, who along with his son Justin presented the property company’s intent to the CMPA board, tended to agree. It wasn’t exactly the discussion he was expecting.

“I’m on the edge of my chair right now,” Beck told the CMPA board, describing the preceding back-and-forth as the “most outrageous thing I think I’ve ever been exposed to.”

The Becks had laid out their plan to the CMPA’s Audit and Operations Committee on Monday. They want to build a three-story, 18,000-square foot development that features retail, office space and residential. They plan to provide on-site parking, and are making an offer based on the only other development planned for the park, Quint Studer’s office complex.

The proposal received a generally warm reception in the committee. The lone hesitation on moving forward was Fred Gunther, who raised concerns about the lease fee being offered—$20 per square foot—and the fact that a portion of the site in question—parcel one—had been carved out, allowing for the public’s access to the waterfront.

Today, Gunther, who also sits on the CMPA board recused himself from the discussion, saying he would be presenting an alternative proposal from “his client.”

Gunther would later explain to the board that his client had read about the Becks’ offer in the Pensacola News Journal. The client agreed with Gunther about the lease amount.

“The next morning we get a call from one of our clients who said, ‘we agree with you, the price is too low, we’d buy it for more than that,’” Gunther explained. “I said, well, make an offer.”

Gunther said the alternative proposal would generate an additional $10,000 in lease fees, bringing the total up to about $50,000. He suggested that CBRE, a firm being brought on to work with the city’s stock of properties, be given a chance to review both proposals.

“Are you representing this firm?” CMPA member Juanita Scott asked Gunther. “Wouldn’t that be a conflict of interest?”

“Not if I don’t vote on it,” Gunther replied. “I don’t see a conflict of interest whatsoever.”

Scott wasn’t convinced— “I guess I really need somebody to explain to me why this is not a conflict of interest”—and neither were other CMPA board members.

“It is a conflict of interest,” said CMPA Treasurer Jim Reeves.

Greg Beck would later tell the board that he didn’t expect to present a proposal and then have the parcel “shopped around by a board member.” Gunther disputed such notions, maintaining he had the CMPA’s best interest in mind.

“At the straw vote there was only one person against it and it was Fred Gunther,” Beck said. “It looks like a duck and it quacks like a duck.”

There was also some confusion about the city’s current relationship with CBRE, whether the firm was the city’s consultant or agent. When asked by CMPA Chairman Collier Merrill, Mayor Ashton Hayward—having taken a seat in the back of the room—said the city was still in negotiations with the company.

“Just to be clear on the CBRE,” City Administrator Bill Reynolds clarified a few minutes later, “we are still in negotiations at this point. We do not have a signed contract at this point. We are looking at consulting.”

While a motion was made by CMPA board member Mark Taylor to send both proposals to CBRE, that effort failed. The board then voted to move ahead with the proposal from Beck.

Representatives from the CMPA, the city council and the mayor’s office will negotiate the lease. Again, using the Studer-template.

Recently, a proposal to build a new waterfront YMCA went sour, in part, because there was confusion about the leasing process. Justin Beck had similar questions when he floated his proposal to Merrill a few weeks ago.

“He said, ‘what’s the next step?’” Merrill recalled. “I said, ‘that’s a great question.’”

Beck ended up covering all the bases. He approached the CMPA, the mayor’s office and Council President P.C. Wu.

“I kind of shotgunned it,” Beck told the CMPA board.

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  • The truth April 18, 2013 at 9:47 am

    Rick – why have you let numerous prior ethics violations and appearances of impropriety go quietly into the night yet you jump aggressively on this matter? Fess up – Gunther rained on the Studer/YMCA parade and for that he must pay.

    • Rick Outzen April 18, 2013 at 10:43 am

      “The truth” – read the code of ethics. It doesn’t matter how or if Gunther “rained” on others’ parade. Either the code of ethics should be upheld or abolish it.

  • grandot April 18, 2013 at 7:44 am

    With all due respect to the Becks for their offer and to Mr. Van Horn for his offer, the appraisal on record with the CMPA is at $27.00 per square foot with the public access easement in place on included parcel discription. The master plan included a larger buildout than is proposed. The current 18,000 sq ft buildout plan and 20.00 per square foot offering is substantially below the evaluation based on assessed evaluation including the former “wetlands conditioned” easement. If the easement area is excluded, the associated devaluation of property which that “unbuildable” portion contributed would in effect raise the value of the remaining “buildable portion” of the parcel. All in all a net gain of property value and allowably market evaluation. So, the 27 per sq ft mightmore appropriately ascend. It is of note that Musgogee wharf a nearby buildable water property was transferred three years ago at a market value of $49 per square ft. In this rising market and with the prime location fronting Main,adjacent to the ballpark, and approachable by a public easement through Cedar street to the East, this could arguably be a very fine buildable lot valued at least at current appraisal if not significantly more.
    Until a signed purchase agreement is approved and legally executed, I believe it is imperative that all offers and counter proposals be accepted and reviewed so that the best determination based on fiduciary elements be made by the CMPA. Mr. Beck’s admonition is misplaced and he should have welcomed the competition to the up to that point closed opportunity. There are those who felt like a quiet deal had been struck by the Beck submission and some who said if it looks like a duck- from a differing perspective. I suggest that all individuals associated with this opportunity are genuine development and success oriented members of our community and all offers including any not yet on the table should be carefully evaluated and assessed by the full CMPA.As a citizen, I thank them all for stretching their thoughts out of the box and moving with the CMPA development vision. Fred Gunther may have skated close to the edge in process, but I believe the underlying responsibility to move the information forward should be recognized.

    • Rick Outzen April 18, 2013 at 7:54 am

      Gunther more than skated. He violated the city code of ethics. See my post.

  • Flip it April 17, 2013 at 11:30 pm

    Becks are flippers – nothing more, nothing less. In addition they are joined at the hip with fellow good ole boy and IPC member Reeves. Start the circus music boys. Is it any wonder we have multiple vacant parcels in the downtown district?

  • Charles Bare April 17, 2013 at 7:50 pm

    The Becks brought their offer to the table based on a discussion with the Mayor’s staff member, Clark Merritt. CBRE is under a $46,000 contract. At the end of approximately 90 days, they will present a report to the city regarding marketing of the port, airport and CMP property. I look forward to their recommendations.

    I think Mr. Merritt acted prematurely in light of the contract we currently have with CBRE. Why would we hire a group to make recommendations and then not wait for them to present them? It makes no sense.

    Regardless of the quality of the Beck’s proposal, I believe we should wait until CBRE makes recommendations.

  • jeeperman April 17, 2013 at 6:57 pm

    So is there members on committes/boards that vote to keep certain things from becoming reality?
    In Pensacola?
    Surely I must be dreaming of that happening elsewhere, not in Pensacola.

    So I bet the other “offer” will come from Moulton Properties or Russenburger.

    Then we can have more over priced vacant store fronts in prime locations.

  • Ames April 17, 2013 at 6:23 pm

    What a novel concept, someone makes an offer on property below the asking price and no other offer is to be considered, even if the second offer meets or exceeds the original asking price.
    I’m a-gonna go make some offers on some real property within the City limits of Pensacola. Hot diggidy!!

  • George Hawthorne April 17, 2013 at 5:25 pm

    Coorection of last post: I stated,

    “However, as an instrumentality of the City and in an appointed position he is also bound (like all CMPA members) by Florida Statute 112.3412 Section (4) Voting Conflicts of Interest which states.”

    The Statute referenced should be 112.3143

  • George Hawthorne April 17, 2013 at 5:20 pm

    I would respectfully suggest that my good friend Fred thought he was doing the right thing, however, may have unintentionally put himself in a potential area of “conflict of interest.”

    His explanation presented later in the meeting was probably in error as he quoted the language of the CMPA bylaws on conflicts.

    However, as an instrumentality of the City and in an appointed position he is also bound (like all CMPA members) by Florida Statute 112.3412 Section (4) Voting Conflicts of Interest which states.

    (4) No appointed public officer shall participate in any matter which would inure to the officer’s special private gain or loss; which the officer knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained; or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer, without first disclosing the nature of his or her interest in the matter.

    The voting conflicts portion of the ethics law (Chapter 112.3143 F.S.) treats appointed and elected public officials somewhat differently.

    An appointed public officer (like the CMPA members) may not participate in the matter and must file a written memorandum reflecting such conflict prior to the meeting in which the matter is considered. This memorandum also must be incorporated into the minutes of the meeting, must be provided to the other members of that board or committee, and be read publicly at the next meeting held subsequent to the filing of the written memorandum. If the conflict is unknown prior to the meeting, a disclosure has to be made orally at the meeting, a written memorandum has to be filed within fifteen days, the memorandum must become part of the minutes, and the memorandum has to be distributed to the other members of the agency and read publicly at the next subsequent meeting.

    Although, he did disclose his conflict as per the Statute and recuse himself as per the Statute, however, his then presentation trying to “sell” the counter-offer was a violation of the Statute.

    Specifically as it relates to this situation the statute voting conflicts of interest for appointed public officers are further covered under F.S. 112.3143 section 4.c which states”

    (c) For purposes of this subsection, the term “participate” means any attempt to influence the decision by oral or written communication, whether made by the officer or at the officer’s direction.

    My good friend should read this statute clearly and take the steps of filing a written disclosure within the fifteen day period. I know he acted in “good faith” however, he may erroneously be in violation.