Spent three hours today reviewing internal staff emails and other correspondence regarding the Airport Ground Lease with Sandspur Development. It cost the Independent News over $200 for the privilege of seeing the documents and getting copies made of a few choice ones. Some of these same documents were given to other media without such a surcharge, but that’s another fight for another day.
Here’s what I found:
Spring 2005: Airport Director Frank Miller made it known to the Pensacola City Council his intent to issue a Request for Proposal for a feasibility study for a hotel on airport property.
June 29, 2005: Cobbletel, LLC sent a letter opposing a hotel on airport property. Cobbletel includes Jim Cronley and the Highpoint Hotel group that have built hotels within two blocks of the airport entrance. No feasibility study is done.
Winter 2006: Julian MacQueen (Innisfree) contacts Miller expressing interest in the airport hotel.
January 31, 2007 : Miller sends this letter to MacQueen:
Dear Mr. MacQueen:
This office is prepared to enter into negotiations with you for the development of a hotel on land which you would lease for fair market value on airport property. The property in question is located south of Airport Boulevard and east of 12th Avenue and is adjacent to the Blue Angel aircraft, in the grass area which has been used for overflow parking during the Thanksgiving and Christmas holidays.
You will undertake a feasibility study to determine the viability of a hotel on that site, considering the limitations of construction due to the proximity of the east/west runway. At the end of the feasibility study you will notify the Airport of your intent to either begin negotiations for the leasing of airport property for the development of a hotel or that you do not wish to pursue this development. If the determination is to proceed with the development of a hotel the Airport will enter into exclusive negotiations with any final approval of a lease subject to the approval of the City Council.
City Council policy is to advise them of business opportunities on the airport. Therefore, if you intend to proceed with the feasibility study I will notify the City Council of our discussions and intent to enter into exclusive negotiations with you for the development of a hotel on this site
Sincerely,
Frank R. Miller, A.A.E.
Airport Director
February 5, 2007: Tom Bonfield sends a Committee Memorandum to the Enterprise Operations Committee of the City Council: Chair Jack Nobles, Vice-chair Mike DeSorbo, Mike Wiggins, Marty Donovan, P.C. Wu. It tells them of the Airport’s intent to enter into exclusive negotiations with MacQueen for the “leasing of the property and the financial agreement for the operation of the hotel.†There is no committee or council vote. The memo is provided for information only.
Note: There is no mention of subdividing the land into six parcels that MacQueen can develop into other businesses. Donovan doesn’t object even though he forced a referendum on the Community Maritime Park over his perception of lack of public input.
March 5, 2007 City Council is notified the site is changed.
July 6, 2007 9:34 am: Frank Miller sends email to City Attorney John Fleming (CC: Robert Payne) that has a draft exclusivity agreement.
John,
The Airport is in discussions with Innisfree Hotels for the construction of an airport hotel. We notified City Council of this some months ago of the discussions and identified Innisfree as the developer. A financial study has supported the project and Julian MacQueen is ready to continue planning for this development. He has asked that we execute an exclusivity agreement that would guarantee that Innisfree Development will have exclusive negotiating rights with the City and that the City, for a period of 24 months (this may change to 36 months to acknowledge that the airport construction program may not allow the proposed property to be available to Innisfree for that length of time), will not initiate, solicit, or encourage either directly or indirectly, or conduct any negotiations with respect to any proposal to lease or develop the subject site.Please review the attached document for comment. Would this need to go to the City Council for approval for the City Manager’s signature.
Frank R. Miller, A.A.E.
July 6, 2007 3:41 pm: Fleming suggests to Miller – “Staff should consider whether the City should charge a substantial fee for the privilege of exclusive negotiations, especially for a period as long as two or three years.†The draft is no longer for a hotel. It’s for “the development of a hotel complex and related retail and commercial complex on Pensacola Regional Airport property.â€
Note: No copy of the feasibility study was in any of the documents that I was given to review.
July 11, 2007: Cobbletel sends a second letter objecting to building a hotel on the airport. They claim unfair competition.
August 7, 2007: Miller responds stating the Airport did not intend to sponsor/subsidize or provide incentives to Innisfree.
Note: What I question is: Does allowing Innisfree to subdivide the land into other parcels that they can develop for a profit give them an incentive? It is surely more than a simple hotel lease. Also what about the other infrastructure work that Airport is doing as part of the lease. Could that be considered a subsidy?
December 13, 2007 The Pensacola City Council approves the Exclusivity Agreement with Innisfree Development, LLC by 8-2 vote. Only Jewel Cannada-Wynn and Sam Hall voted “No.â€
Note: The term is for 24 months. No fee is paid for exclusivity.
This started out as a straightforward deal for a hotel to be built on airport property. The developer pays for a feasibility study to prove its financially feasible but never has to show the study to the City Council. The site shifts and the deal is expanded to include not just a hotel, but also retail and commercial developments. The developer is given 24 months to work out the deal, but doesn’t have to pay anything for exclusivity.