Town to review Hall lease options
Town of Fort Myers Beach officials are exploring different lease options for its home base at Town Hall.
Town Manager Terry Stewart spoke to Gramercy International, the leasing agents that run the property at 2523 Estero Blvd. There are hopes that trust owners of the property will consider a longer lease to provide more security for Town office space, operations and its property.
Currently, according to the Town Charter, debt cannot be incurred more than a three-year period. Town attorneys have identified a non-funding clause in the charter to allow a longer term, says Stewart.
“The owners have agreed to negotiate on a longer term lease, perhaps five to 10 years in length,” he said during the Council meeting on Monday.
The current lease runs out this year, but Stewart notified Council that he was able to add two more years due to a lease clause.
“There is a clause on the lease that states if (the leasing agents) are notified six months before the end of the lease, the Town can automatically preserve an additional two years on the lease,” said Stewart.
The leasing agent asked Stewart if the Town would be interested in leasing the front of the building that used to be occupied by Bank of America. Two proposals will be made available to Town officials in the near future.
“‘I have asked them to put together a proposal that would include a) one with the front area and b) one without the front area. I told them we do not plan on paying the same square footage that we are paying for this area,” said Stewart.
The Town manager cited the front area has a “sizable amount” taken up by a bank vault. That space could be used as storage.
“I don’t want to pay a premium for that space as well,” said Stewart.
The Town has been leasing at its present location for more than 15 years by paying an average of $100,000 per year. The current lease was acquired at a 10-percent reduction from previous cost.
In past negotiations, Town officials been unsuccessful in efforts to purchase the existing Town Hall site or get a larger lease option, due to the present owners’ fear that breaking up their trust of approximately 100 properties tied up in a real estate investment to sell one would be too costly for them.
Stewart said he was recently provided “much more of a detailed and understandable explanation” why the owners wouldn’t sell the particular property that the Town leases. The reason stemmed from a result of the downturn of the economy and debt incurred during that time.
“They have to show an income that has to have a particular multiplier, and that multiplier is generally accepted as being 1.2 times your obligation for that debt service,” said Stewart. “So the package that includes this building and approximately a total of 100 buildings, with a lot of those buildings sitting empty, their multiplier fell below the 1.2. As a result of that, within their contract, they have to face certain penalties and interest and also their ability to pre-pay goes away.”
Thus, selling any of the properties would create a large pre-payment penalty of roughly $16 million to $18 million. That penalty cost takes away any thought of the Town seeking imminent domain, says Stewart.
“If we force them to sell this property off, they would have that additional cost and they may have the opportunity to say you cost us this additional money, so you have to pay that cost,” he said. “I don’t think this building is worth $18 million.”
If the economy improves to the point that the debt multiplier goes above the obligation for debt service, the Town has a lease option with a first right of refusal to purchase.
Stewart is expecting to bring back any negotiations between the two parties possibly by the April 1 or April 15 Council meeting.
Finding alternative Beach locations for future usage has also been difficult.
Back in January 2012, Fort Myers Beach residents overwhelmingly rejected a referendum allowing for the issuance of bonds not to exceed $7 million to finance the acquisition and possible construction of a Town Hall building. The bonds were to be paid back through property taxes.
Historical artifacts recovered
Many of the artifacts designated for usage in the yet-to-be-opened Mound House museum have been recovered after being feared lost or stolen.
The historic items, roughly 20 to 30 of them, were found during an extensive search through all Town storage facilities, box by box.
“We expanded the search to every storage facility we have. I asked staff to open every box and every container,” said Stewart. “I doing this, we found them in a storage shed that was not set aside for Mound House items. Materials there were stored but not indicated so on the boxes.”
Stewart told Council members part of the problems stemmed from no documentation about storage details. Some items, though not museum-quality items, were also discovered being preserved at laboratory facilities. Again, the items failed to have documentation.
“I asked Miss (Patty) Evans (Town Parks director) to contact every lab within the state that we might have any items,” said Stewart.
A Calusa bowl was discovered in a Florida Museum of Natural History in Gainesville. It was being preserved there. Eight items have still not been found.
“We were able to locate those items and fill out the appropriate paperwork so that those items could be returned to the Town,” said Stewart.