The Community Maritime Park Associates Board of Trustees approved yesterday an lease agreement for a new master developer who promises to investment $65 million into the waterfront park across from Pensacola City Hall.
Miami-based developers MCM-BAP said they will build on Parcel 4, which is currently parking space committed to the Studer Group and its tenants, a select hotel – either Marriott, Hilton or IHG – that will have frontage along Main Street. In his letter to CMPA Executive Director, Willy A. Bermello , MCM-BAP president, wrote, “We project that the hotel will represent a $20 Million investment for MCMâ€BAP.”
MCMâ€BAP proposed to pay a ground rent which is the greatest of 7.5% of the annual revenue earned by the hotel, or a minimum annual base rent of $100,000.00. Rent shall commence the earlier of (a) completion of the hotel facility and commencement of hotel operations; or (b) the 12th month after procurement of a building permit; or (c) the 24th month of entering into a ground rent lease agreement.
For Parcels 7 and 8, which are on Pensacola Bay, the developer proposed 200 affordable luxury housing rentals, with potential for condo conversion subject to market conditions – investment $45 million.
MCMâ€BAP proposed to pay a ground rent which is the greatest of 7.5% of the annual apartment rental revenue or a minimum base rent of $175,000.00 per annum for both parcels. In the event that MCMâ€BAP opts out of the apartment business model and proceeds with a condominium development instead, the financial offer to the City will be based on a 7.5% of adjusted gross condo sales (i.e. gross sales revenue minus brokerage commissions). Rent shall commence the earlier of (a) the completion of construction and issuance by the City of a Certificate of Occupancy; or (b) 18th month following issuance of a building permit; or (c) the 24th month after entering into a ground rent lease agreement.
Next step, CBRE will prepare a memorandum of understanding to be approved by the Pensacola City Council. MCM-BAP said it would start construction on the hotel within 2 years of signing a master developer contract.
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Note: Inweekly has heard of two other hotel projects proposed for downtown Pensacola, both of which could be completed before 2018. Also the Studers and Bobby Switzer have said that will be building apartments on Palafox and Jefferson streets. I would recommend the Pensacola City Council ask for the developer’s market analysis before signing off on this deal, especially since the projected revenue is three or four years away. Also the council needs to see how firm the commitments are from Marriott and Hilton to put a hotel on parcel 4. We’ve been down this path before and it cost the city millions.
