HALL QUEST: The moves for owning government space
The quest for ownership of governmental office space with combined provisional space for additional services offered by the Town of Fort Myers Beach continues.
Could Town Hall be sold or has prior negotiations with a trust company proved futile?
Town Manager Don Stilwell has stated he is still involved in discussions with the agents for the property that houses the Beach municipality’s existing home base. Council members have given him clear direction to be persistent and expedient in his pursual.
Town officials are currently near the end of a three-year lease (it expires July 31, 2015) on Town Hall, but hold a two-year renewal option with Gramercy Property Trust. They have been leasing at the present location for more than 16 years by paying an average of a little more than $100,000 per year. This year, the price for the 6,815 square foot property was listed at $121,596.24 for a yearly base rent.
“It doesn’t make sense to keep paying lease payments year after year on something long term like this and not having something to show for it. You don’t do business that way,” Stilwell said at a recent meeting.
In past negotiations, Town officials have been unsuccessful in efforts to purchase the existing Town Hall site due to the present owners’ fear that breaking up a trust of approximately 100 properties tied up in a real estate investment to sell one would be too costly for them.
“Eminent domain is the only way we are going to get this building because it is held in a trust fund,” Stilwell told Council members. “It’s my sense there is a good probability that in inverse condemnation they would be a seller.”
That legal “business” move has been mentioned in prior Council discussions. During the downturn of the economy, town officials stated owners would not sell the property due to a debt service and a particular multiplier tied to the trust restriction that would have attached certain penalties and interest.
Back in March 2013, then-Town Manager Terry Stewart said that selling any of the properties would create a large pre-payment penalty of roughly $16 million to $18 million and the penalty cost essentially took away any thought of the Town seeking eminent domain.
Stilwell said courts have removed so-called restrictions from lump properties in the past.
“I think if the courts were to prove that it would be appropriate for the Town to buy it, the courts could remove it and then there is custody for that,” he said. “I think it’s a reality move. In my opinion, we need to cut our losses in all of this.”
Beach Mayor Anita Cereceda, who has stated the property should be acquired by any means necessary, has a vision to have Town Hall as a “one-stop shopping” facility -one where a Beach resident or visitor can come to and do all the necessary functions that he or she needs to do. She has viewed the adjacent vacated space (listed as 5,773 feet) within the town hall structure and sees a lot of opportunity if the whole building would be owned by Town government.
“Imagine that this was one-stop shopping for everyone who lives here,” she said. “This (could be) the place to pay their water bill, their parking ticket and all the places that we are currently paying rent on (elsewhere) would be here.”
Cereceda stated she gets “furious” every time she walks into town hall and sees someone sitting in “that plastic chair in that two-by-two (foot) cubby hole trying to fill out a permit.” She would like to see the purchase of the property and renovate the building “to the point that it is a comfortable and a pleasant experience” for residents.
“It is disrespectful to the person coming here to town hall for that service, to be in that little space where they have no privacy to talk about their business,” she said. “We have outgrown this space. We need to be better with the people we serve. This building has served us, but it is not serving us in its current configuration.”
While no headway has come out of buying the current property, Stilwell said officials with Gramercy Property Trust have been cordial in discussions otherwise. The leasing agent company has said it is interested in leasing the front of the building that used to be occupied by Bank of America and is open to a longer lease.
“They are willing to give us a five-year lease or a 10-year lease,” said Stilwell about the option. “We need to talk to the town attorney to make sure we are protected if we do extend some kind of a lease to make sure we still have the right to go eminent domain.”
A chart with leasing options was provided to Council. Currently, the Town is paying $17.84 per square foot for base rent, after annual three percent compounding increases during the past four years.
Two proposed options involve the current space and the vacant space as a package. Option A is for 64 months at $14.50 per square foot for base rent, while option B is for 90 months at $14 per square foot.
The location of the current town hall and its property at 2523 Estero Blvd. has been called ideal. It sits in a civic-oriented area of the community.
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.
Finding alternative Beach locations for future usage have proven difficult.
“There is always talk about other locations and building a structure. I personally have no interest in building a town hall,” said Cereceda. “I would like at this time next year for someone who is coming to town hall, come through that front door, have a place to sit and wait, an office to go in to conduct their business with our staff, and that we are providing our residents with world-class service.”