Council discusses options on town hall
During a Monday afternoon work session, the Fort Myers Beach Town Council discussed several different scenarios concerning a place to call home. Town Hall, which houses the town staff and meetings rooms, is currently in a month-to-month extension agreement since the building’s lease with landlord First States Investors 5200, LLC (a Delaware limited liability company) expired on June 30, 2010.
One option for Council is to buy the building which has unoccupied commercial space vacated by Bank of America. Recently, the town paid $2,500 for a commercial appraisal and found the property to be worth $1,095,000 after Lee County Property Appraisal listed it to be more than $2 million, according to Town Manager Terry Stewart. However, it is unsure if the landlord is willing to sell.
During the most previous interaction with the landlord, Stewart negotiated a three-year lease with a 10-percent reduction. The base rent minus taxes and surcharges during the renewal term includes $9,003.06 per month during the first year; $9,273.15 for the second; and $9,551.34 for the third, according to Town records.
“We negotiated the lease down 10 percent with the three-year lease to go back where we were in the year 2005-06,” said Stewart. “If the property owner decides to sell, and they’ve kind of been reluctant to our approaches, we’d get the first right of refusal.”
Another choice is a lease/option-to-buy clause that will be viewed by town staff more closely. Again, this case is subject to the landlord willing to sell the property.
“I would like to see it on a rent/option with a 10-year balloon,” said Councilman Bob Raymond.
Another scenario would be to vacate the building and move elsewhere. Newly county-purchased Seafarer’s Mall was one commercial property considered, but the parking situation doesn’t appear viable. Other than building a second floor on Bay Oaks Gymnasium -which was discussed but would require rebuilding the whole structure on stilts- there are not many properties on the Beach suitable to fit all the Town’s needs.
“No matter what we do, we are going to need a lease on this,” recommended Stewart. “You can sign the lease today and go into negotiations to purchase tomorrow.”
Some of the councilmen believed that tactic might backfire. If a three-year agreement is signed, the property owners may be happy not to enter negotiations to sell. A one-year lease and two-year lease were also discussed.
Town Attorney Marilyn Miller of Fowler White Boggs and Stewart suggested an independent financial advisor to help out not only with purchasing a town hall but with the water utility replacement. With the consensus of his council, Mayor Larry Kiker gave Stewart direction to pursue that avenue.
“In my experience in financing, I can tell you that a financial advisor is invaluable,” said Stewart.
“We have a very narrow field of options. There are not that many places on this island that would provide a location that would enable us to do all of the things such as offices, a place for vehicles and room for a storage facility. There is a fairly good size piece of property here.”
Eminent domain was also discussed.
With property values continuing to decline, buying may be the best option at this time or in the near future.
“Assuming that it will continue to decline and that lessens your risk, we may even be able to do a lease/ option with 10 percent going towards the purchase price and make them a deal,” said Kiker. “Three years from now, we’ll do an appraisal, the property owner will do an appraisal and we’ll have a third-party appraisal. You take all three appraisals, do a combination of the three and add 10 percent to it and that’s what we’ll buy it for. We hope the prices go down and they hope the prices go up. We have nothing to lose and everything to gain. It’s just a thought.”