News Politics

More on City losses at Port of Pensacola

February 20, 2013

The daily newspaper followed up on my blog post regarding Northwest Florida Cold Storage and reported that the company is no longer in operation.

Derek Cosson, the city’s public information officer, said that city has had a letter from the company since November 2012 asking to be released from its lease, which according to Cosson was set to expire in February 2014. NWF Cold Storage pays a minimum annual rent of $304,000.

There are a couple things that should be pointed out. Cosson understated the amount due. It’s closer to $220,000 than $215,000. See port ar report as of 02-15-13

Though the city administration knew that NWF Cold Storage had shut down, it didn’t notify the Pensacola City Council until February in the finance director’s quarterly report for the Oct-Dec 2012.

Finance Director Dick Barker did give a finance report at the Dec. 10, 2012 Committee of the Whole, but failed to mention the issue. His only note was:

“NWF Cold Storage continues to be delinquent with a balance at the end of September 2012 or $228,300 with only one $50,000 payment in October 2012, which leaves them an outstanding balance at the end of November 2012 of $215,900. City Administration, in conjunction with the Port Director is currently in communication with NWF Cold Storage and letters for collection have been sent out from the City Attorney’s Office.”

Three months after the city administration knew that it had a problem, Barker made this statement about NWF Cold Storage at the Feb. 10 Committee of the Whole meeting:

“All Port lease payments have been paid and are current with exception of Northwest Florida Cold Storage, who has requested early termination of their lease with the port. Port and legal staff are working through the particulars of this request and the available remedies through which this customer’s outstanding balance owed can be recovered.”

This report was made to the council the week after the city of Pensacola released to the daily newspaper what has become known as the “Oliver Report” – which showed the maritime park have a projected loss of $270,000. The city put a lot of emphasis on the park loss and tried to get the Blue Wahoos to renegotiate its agreement to help cover the loss, but kept the Port’s $219,000 bad debt and the loss of $304,000 annual revenue under wraps for three months.

BTW: The Northwest Florida Cold Storage lease was an assignment of a 2004 lease with Pate Cold Storage which was for five years, with three five-year renewal options that stretched to 2024. However, Cosson is correct that the city could have terminated the contract in 2014 at the end of current option period.

When the city granted the 2004 lease to Pate, the agreement required a $155,600 deposit. The City Council later waived it. That deposit could have been used to offset the current receivable.

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  • Eric February 20, 2013 at 4:01 pm

    The difference between this and the CMP is that is in part a public works project, which pay off in non-monetary ways. We should promote it and try to get some money back on it, that’s really obvious.

    The port needs to go. I read some players in the area are looking at securing an aircraft carrier museum, this would be a good place for it. would also make for a nice transit center. For when we have, ya know, public transit.

  • Dale Parker February 20, 2013 at 12:03 pm

    My question is this … since they KNEW since November of last year does this income appear in the Budget? If so, then how will they deal with the deficit?

  • Moose February 20, 2013 at 11:54 am

    EPenn, the combination of the loss of “revenue” from NWFL Cold Storage, plus the losses at the MP and potential losses from Airtrain leaving could really hurt Pensacola’s finances. I wasn’t trying to imply the CRA/CMPA finances were related to the loss of NWFL CS. Sorry for the confusion.

  • EPenn February 20, 2013 at 10:50 am

    Actually, your article title implies that these are not the same debts that you have been reporting, but they sure do seem that way… of course it is a potential loss now and not just a debt since the debtor is now defunct… But “more”? Doesn’t really seem that way…

  • EPenn February 20, 2013 at 10:42 am

    I’m not following your logic… Since NWF Coldstorage owes the port money, you seem to try to tie the loss at the “Maritime” Park to it? I think we have two separate issues and in one case the owed money is a one time potential loss since the debtor is now defunct… An annual loss of almost 1/4 million still needs to be addressed and it has active players that could help remedy the problem. btw, its was obvious to even a novice businessperson, like myself, that the park could not turn a profit or even break even with what was being offered… the “Oliver Report” just confirms what many have thought since its construction.

  • Moose February 20, 2013 at 10:21 am

    First, it would have been nice for city council to be aware of the details; however, it’s not really something they could have directed any solutions towards. That’s the mayor’s responsibility. The buck stops with him. He manages city staff and they manage city operations. Council just sets policy or at least it should. That said, the mayor better get it together real quick on the CRA/CMPA, the port and the airport. If I were him I would be lobbying the newly developed RESTORE committee for funds to pay off the CRA’s bond debt on the CMPA. Otherwise, the combination of a depletion of revenues from the airport if Airtran leaves, a loss of revenue and possible budget deficit at the port countered with general revenue hits to offset the losses in the CRA will be a nightmare for Pensacola’s finances.

  • Dale Parker February 20, 2013 at 9:31 am

    I have repeatedly said; The City is BROKE, the CRA is BROKE, the CMPA is BROKE… Not sure about the DIB, but I would assume they are BROKE too. Our City is in Serious dire straits and Mayor Zoolander is the least transparent Mayor on record. It is a shame what is going on, almost 1 MILLION DOLLARS for a surfing fetus … 100s of thousands in additional Admin Costs since taking office … what are we getting for our investment.

  • Freeze me February 20, 2013 at 8:37 am

    Just a series of bad decisions but so goes the prior council’s and staff efforts to enter into bad leases at the Port. Barker made it clear to Council that NWFCS was deeply in arrears on their payments – on 2 occasions no less. Did anyone on council raise any concerns or recommend a course of action for staff to take? Where does the buck stop on matters such as this? Looks like the Mayor, Council and staff all dropped the ball on this.