Thursday, January 24, 2008

Mooring Field and Marina Jack - A Saga

"There's a war going on here over who owns the water-the rich or the many."*
Written by Harry Hilson in 1980, these words ring true today, as does much of his satirical Ahoy City Hall*. In this little book, Hilson made a direct attack on City Hall's efforts to get rid of the perceived riffraff occupying the Sarasota bayfront and also on the lucrative contract awarded to Marina Jack. Today's debate about the creation of a municipal mooring field has its echoes in this earlier era.

It seems there is always a certain tension between those who want things neat and orderly and those who prefer the picturesque and a more laissez faire approach. In 1980, the orderly crowd got the upper hand and the City Commission took steps to control the bayfront by passing a new regulation requiring boats to moor in an approved location. The number of approved locations was significantly smaller than the number of existing boats, and the regulation was widely perceived as an effort to get rid of the more eccentric elements of the bayfront community. Turned out that it also stepped on a lot of middle class toes, and within two weeks boaters collected 1,000 signatures protesting this action. Although the regulation was approved by the City Commission, community sentiment prevailed: the police chose to enforce it in such a fashion as to render it meaningless.

Municipal involvement at the bayfront has a long history. A public marina for Sarasota was first proposed in 1959, but voters rejected it in a referendum. Nevertheless, by 1963 the project was underway, using $500,000 from a bond issue and $100,000 in general funds. (This time around, they skipped the problematic referendum.) The money provided not only the land for the marina, but Island Park itself, all created with fill and completed by 1965.
The initial contract to build and run the restaurant, pier and docks was never put out for public bidding, and the history of this lease is very complex. Although the first contractor, Marina Mar (i.e., Gulf Oil), successfully completed the construction, they quickly ran into problems actually running the marina, and rent payments to the City became sporadic. Long-time residents still recall the many problems of this early phase.

In 1968, Marina Jack (then owned by Jack Graham) bought rights to the contract and then signed a formal lease with the City, essentially taking on the original 30 year lease which provided for a rent payment of 3% of gross sales. In 2006, that contract gave the City $327,433 on gross sales of just under eleven million dollars. Seems like a pretty attractive deal for Marina Jack, doesn't it? Hilson thought so too:

"What is this - some new form of government? A City Commission which acquires prime real estate, builds a complex facility, and then leases it for only 3% of the gross? It almost sounds too crooked to be true: but it's not crooked at all, just a far out deal."

Flash to 2005: the deal continues. Although the existing lease was not due to expire for another 22 years (due to numerous lease extensions that had already taken place), Marina Jack, now owned by Bob Soran, requested a twenty year extension to 2047. Having recently acquired O'Leary's, Marina Jack asked that the O'Leary lease also be extended (another 33 years) so that both leases would expire at the same time in 2047. In exchange for this additional time, Marina Jack agreed to take on the management of the soon to-be-created public mooring field and - in 2027 - slightly increase the minimum rent. In 2047, this contract will have been in effect for 84 years without once having been put out for public bidding. To date, no independent audit of Marina Jack has ever been performed and the last appraisal of the lease was done in 1994.

Why would the City agree to a 20 year extension? The City wants an organized mooring field for a variety of reasons including environmental concerns, insurance issues, and aesthetics. Not everyone agrees that a mooring field is desirable, but for the moment let's accept that we need a mooring field and that someone will have to operate it - either City employees or a contractor.

Given its long term relationship with Marina Jack, perhaps it is not surprising that the City would look to this known entity first. And perhaps Marina Jack's suggestion that they might exercise the no competition clause in their contract also had something to do with the decision? A 10/27/2005 memo from Deputy City Manager Schneider notes that "Marina Jack would not exercise its non-compete provision in its lease with the City if the lease extension were approved." In an article in the Pelican Press, the City's director of general services gave another reason. She said that "Marina Jack has made significant capital improvements to the leasehold in recent years and it needs the extension to amortize those." (Pelican Press, 11/23/05). Yet another factor is that state law requires there be no profit generated by the mooring field - this is a condition for the City obtaining the submerged lands lease from the State. The most frequent reason given for the extension was that that since there could be no profit and Marina Jack needed to be compensated in some way for their cooperation, a long extension of the current lease was justified. Whatever the reason, the City decided to move ahead without competitive bids and without making the lease more favorable for the City.
What is most surprising, however, is that in spite of the long process that the mooring field proposal has gone through, few financial details have been hammered out with Marina Jack. The agreement brought to the Commission for approval was almost embarrassing in its lack of detail and clarity. It seemed clear that the agreement was a long way from being ready for approval and yet, there it was to be voted on. At that City Commission meeting (12/17/07), Commissioners Clapp and Kirschner asked a great many questions and Mayor Palmer insisted that the Memorandum of Understanding currently being worked out with Marina Jack be returned to the Commission for approval even though Deputy City Manager Schneider said he thought this was unnecessary.

This Memorandum of Understanding is essentially the only card the City has left in negotiating details of an agreement that will expire in 2047. Surely that deserves some serious attention to detail. As Ronald Reagan famously said years ago, "Trust, but verify." Particularly when agreements are being made that will span decades, it is the City's fiduciary responsibility to its citizens to ensure that public dollars and property are being protected.

Kate Lowman
Guest Contributor

*Ahoy City Hall or throw me a line I'm sinking, Harry Hilson 1980, J.R. Isgur Co., Houston TX

[Part II follows]


Anonymous said...

We know who "owns" the waterfront - at least for the next 40 years. Charles Senf

Casey said...

It's going to be a sad day when we look out over the bay and all of the modest liveaboard sailors are gone.


frosty said...

I agree with casey. Not only Marina Jack but Sarasota as well is heading down the path that Miami Dade and Broward Counties have gone. Normally this coast has taken there mistake's and learned from them but latley we just seem to be following them. Im in the miltary and i travel all over the world, bu this is home and everytime i come back a little bit of it is gone.