Pensacola City Councilman Charles Bare will be placing on the agenda for the April council meeting a motion to terminating CBRE’s listing agreement for the Maritime Park.
The agenda item reads as follows:
In 2013, the City of Pensacola engaged CBRE Inc. to assist in the marketing of properties at the port, airport and community maritime park. After completing a study, CBRE and the city administration produced a draft exclusive lease listing agreement. This agreement included the following compensation language in paragraph 3: “City agrees to pay CBRE a lease commission of 4% of the total value of any new lease including escalations for the term of the lease.†Paragraph 5 provided additional guidance by stating that “Commissions payable to CBRE shall be paid by City to CBRE from first rents received by City from a lessee pursuant to a lease agreement until such time as commissions due under the lease are paid in full.†This language clearly states that CBRE would receive its 4% fee during the life of the lease, not upfront. The City Council reviewed this agreement and authorized the mayor to execute it in November 2013. The agreement was subsequently signed in February 2014, maintaining the compensation scheme described above.
In September 2014, CBRE published a Request for Proposals (RFP). It is unclear who reviewed this document prior to publication. However, it is very clear that the RFP was a significant deviation from the agreement reviewed by the City Council in November of 2013 and the agreement signed in February 2014. CBRE’s compensation is covered on page 22 of the RFP. It states that “CBRE shall be paid a success fee of four percent (4%) of the overall project value. The fee will be paid by the selected developer.†It further states that “Fees will be due and payable to CBRE within thirty (30) days of execution of a Development, Joint Venture, or any other Agreement between the parties.â€
The RFP issued by CBRE appears to be a breach of the contract between the city and CBRE Inc. At no time was the council asked to approve this change. CBRE Inc. acted without the City Council’s approval. Regardless of who reviewed this RFP, it is invalid. CBRE Inc. is acting outside of the parameters of the existing contract, as executed by the Mayor with City Council’s approval. To avoid any further damage or confusion, the council should terminate the contract at this time.
Councilman Bare will be on Pensacola Speaks this afternoon to discuss his proposal.
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