Blue Wahoos owner Quint Studer met with officials from the city of Pensacola and the Community Maritime Park Association this morning in an attempt to hammer out a lease for a parcel of property located at the Maritime Park.
“We’re close,” said CMPA Chairman Collier Merrill at the end of the meeting.
Studer is attempting to lease a parcel of land at the park in order to construct a $12 million office complex. After initial talks with Mayor Ashton Hayward’s office were unsuccessful, it was announced that the CMPA would act as an agent of the city in the negotiations with Studer; both Merrill and Studer today referred to the arrangement as “unusual.”
Before today’s meeting, Studer and the city were unable to agree on the length of the lease, as well as the annual rate that would be paid. Hayward was pushing for a shorter lease with the annual fee based on a higher percentage of the property’s appraised value, and Studer preferred a longer lease and a lower percentage.
“We’ll come up with some terms that I think everybody can live with and go forward from there,” Merrill said this morning.
Negotiations are usually held behind closed doors, but today’s meeting was held in public because the Pensacola City Council triggered the Sunshine law when it decided to put Councilman Larry Johnson (also a CMPA member) at the table. While Hayward was not present during today’s meeting – he’s apparently in New York, speaking with media outlets—the mayor did relay his thoughts via text messages to Merrill and Studer.
“His response is – I’m so excited about this deal, we need this deal,’” Andrew Rothfeder, a Studer representative, read from the mayor’s text message.
What Hayward is not excited about is Studer’s proposal to increase the annual lease rate by five percent every five years. The mayor apparently wants an increase of two to three percent each year. That issue was left undecided this morning.
Terms that were agreed upon included a lease length of 55 years and an annual fee amounting to 7.25 percent of the property’s appraised value. Another negotiation meeting was scheduled for next week to hammer out specifics on the adjustment rate and the amount of CAM (Common Area Maintenance) fees Studer should pay.
Another factor still undecided is the exact size of the parcel of land, and thus its appraised value – the property’s size likely falls somewhere between 69,000 and 80,000 square feet, and its value between $1.4 and $1.6 million. Those factors will impact the lease fee number, but the parties agreed to a minimum of $20 per square foot.
Councilman Johnson said this morning that he was anxious to reach an agreement, pointing out that the development would be good for the city’s and the CRA’s tax revenue. He also said the process needed to move quickly to meet a September deadline laid out in an earlier agreement with Studer.
“I’m ready to see some ground pushed around across the street,” Johnson said.
Councilwoman Sherri Myers -who is also the newest council appointee to the CMPA, replacing Councilman Brian Spencer – noted that the terms of the lease did not require the mayor’s approval. She said that it was up to city council to eventually approve the terms.
“It kind of concerns me to hear you say you have to run something by the mayor,” Myers told Merrill.
Merrill replied that he wished the “CMPA wasn’t in this negotiation” and that the “only reason the mayor’s involved” was because Studer had earlier stated that he sought Hayward’s approval.
“I think the mayor has a responsibility for economic development,” Studer said today. “So, you certainly want a project that the mayor support.
Merrill noted that Studer also wanted the mayor’s approval because the city would be involved in various aspects pertaining to the property in the future. Moving ahead without Hayward’s nod, he said, could make logistics difficult for Studer down the road.
“It’s not a box he wants to be in,” Merrill said.
The involved parties will meet again Aug. 7 to work out the remaining details of the lease. That negotiation meeting will be held at 9 a.m. at Pensacola City Hall.
