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Monday October 20th 2014

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More on City losses at Port of Pensacola

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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.