Thursday, December 01, 2005

42 More Years for Marina Jack?

Marina Jack is asking the city for a 20 year lease extension. An article in the Pelican Press gives some details. This would lock up the bayfront and parking for the next 42 years.

Apparently Marina Jack has spent money on docks and now wants the city to guarantee a return on their investment.

A fair question might be: what other small business owners get such favorable treatment?

At this point in time many of the local small business owners are struggling with rapidly increasing real estate taxes and insurance costs. If they are leasing, the landowners are looking for ways to recover these same costs. Yet Marina Jack wants to be insulated from these increases.

We would like to see an independent analysis of the current value of this city owned property (including all the parking currently used exclusively by Marina Jack). What would be the tax for this land and buildings? What is a fair lease value for this land - considering it is prime waterfront land.

Currently the general public is excluded from parking; the bay views are blocked by boats (many from out of city); sidewalk space around the basin is used for boat lockers, utilities, hoses, bikes, etc. This is not a benefit to city residents.

The city should have a policy that periodic review of these lease agreements is required and that they be done by independent expert auditors. A fair market value lease should be independently established by experts. (We would remind readers of the two recent land value issues: the Orange Dolphin fiasco and the State St parking lot appraisal that apparently caught officials off guard as it was much higher than they expected).

As far as managing the mooring field is concerned, the city should establish what is required and ask for bids from qualified individuals or businesses. While Marina Jack may be the most convenient one to do this, competitive market conditions need to be allowed to operate here in order to get the best deal for the city. Any hint that Marina Jack would manage the mooring field in exchange for an extended lease agreement should not be considered. Agreements like this need to be clearly spelled out so that all citizens can fully understand the costs and benefits.

The same should hold true for Marina Jack as a whole. Ultra long term leases should not be established for anyone. Marina Jack can choose to take risk by installing docks or improving the restaurant, but the city should not be asked to guarantee payoff on the investment through a "sweet" lease arrangement.

Locking up the bay front and parking for the next 42 years is not justified. The current lease doesn't expire until 2027. This gives Marina Jack plenty of time to recover their investment.

It would seem that when the current lease expires that would be a good time to review the use of the bay front and determine whether we wish to continue with the same amenities (restaurants and boat docks) or whether some other use is more appropriate. A lot of things can change in 22 years.


Anonymous said...

The backup package available online would appear to indicate that the private relationship began as far back as 1964. If it is allowed to continue until 2047, that would add up to eighty-three (83YRS) years?

In Deerfield Beach, (Broward County, FL) they ran five-year (5YR) leases [on the waterfront lease) and opened the bidding up every time.

Note, too, that Jack does not calculate fuel sales or yatch sale commissions in determining his gross receipts for the purposes of the lease.

And that dredging, sewall repairs must be borne by the City under this agreement.

COST OF LIVING increases are suitable for some lease agreements but private sector leases generally allow for a significnat adjustment mechanism after every five years.

Look to banks who "adjust" your mortgage every year or two or three.

Moreover, in light of the phenominal property value increases the City has experienced (71% over the past three years alone) one might expect the rent base established in 1989 or 1990 would need to be tripled or quaddrupled to reflect the increase in value of this City asset.

That the City would call for a consultant to advise them on signage ("wayfinding") and not do so for an a lease intended to out another 41 years is patently ridiculous.

As I've suggested many times before, the City needs a Real Property Advisory Board to help us use best practices to get realistic returns on our real property transactions.


Anonymous said...

failed communication in last entry. see sail magazine feburary Anchoring rights.

Sarasota county has no legal right to stop anchoring outside mooring field. New state law bill 7175