Pensacola Mayor D.C. Reeves has received some criticism about renting out Port Warehouse #4 for an indoor sports facility (Comment on Belmont Hall post). He responded on “Real News with Rick Outzen” this morning.
“First thing I always frame it this way, I was born in 1984, and the last lease on the building in question is 1979,” said the mayor. “Any citizen has had 45 years to let us know who are these (potential) long-term tenants.”
He continued “The delta we’re talking about here is the revenue of what’s proposed here and what we consider market rate on an aging building of which we will be due to have improvements ourselves…We cannot just look at what is the rent rate and assume that that’s the maximum return on investment for the city of Pensacola.”
Mayor Reeves said the economic impact on downtown Pensacola is much greater than the annual rent. He also pointed out the proposed agreement doesn’t give the tenant control of 200 parking spaces but says the parking will be available.
WKRG 5 in Mobile “just” had a story describing that the LLC’s lease was for 15 years. I called to clarify that the lease term is “55 years,” the LLC has up to 15 years to invest $2 million, that the LLC doesn’t really have to meet certain requirements prescribed in the lease and that the authority to renew the lease would be delegated to the Port Director with nothing ever coming back to the council. In 15 years of reviewing council agendas, I’ve seen a lot of horrific one-side lease agreements presented to the council for its approval but this one is far and away the worst. What Mayor Reeves says above makes no sense. It’s gibberish. On Monday, at the agenda conference, he didn’t seem to know the project details and expressed also that the LLC was pressing the city (him) for a fast decision. The LLC is giving the council its one-sided presentation tonight after which the council is expected to rubberstamp the deal without an objective assessment of the lease or even an analysis of alternatives for Warehouse 4 to include what would happen if the City were to do the exact same project itself using its plentiful LOST, CRA or ARPA revenues but made it a city facility operated for the benefit of city residents. Of note and special concern, the LLC’s principal is a business partner with Mayor Reeves’ father Jim Reeves in another corporate venture. Tying up the port with a 55-year lease seems a very reckless move.