State, city OK mega-yacht complex
If the sweeping Island Gardens mixed-use development rises on city-owned land on Watson Island, and if it proves successful, it could mean more than $12 million a year to the city in taxes, rent and fees.
That was the calculation from Brian May, who represented the developer of the long-planned mega project at the city commission meeting last week.
The plan to turn a corner of Watson Island into a multi-million-dollar resort destination with dual hotels, high-end retail and a mega-yacht marina was given renewed life by city officials last week and an affirmative vote in Tallahassee on Tuesday by the state Cabinet.
It’s again back in the hands of the developer, Flagstone Island Gardens LLC, which must break ground on the lingering project by June 2, a requirement in the latest revised lease with the city.
Mr. May has vowed that the work will begin before time runs out.
When Island Gardens enters its fourth year of operation, Mr. May said, it will mean about $12.5 million to the city in rent, taxes and fees.
The development will mean jobs for the area, too, Mr. May said. During construction, the development is expected to generate 1,600 jobs. Once Island Gardens is completed it will mean 1,100 full-time recurring jobs, he told the city commission.
Mr. May said the target date for full completion of the project is December 2017.
Meeting May 8, commissioners approved two resolutions authorizing the project to move ahead, over the objections of residents opposed to the development citing potential adverse impact on traffic, water quality and more.
Tuesday the Florida Cabinet – meeting as the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida – reaffirmed its approval of deed waivers when it comes to Flagstone’s proposal.
Developers have said numerous delays, including the economic slide and port tunnel dredging, have for years held back Flagstone’s plans, which the city initially approved in 2001.
The city owns Watson Island and is leasing a portion to Flagstone, which has been paying $2 million a year rent. Critics of the project claim the rent is based on outdated appraisals and told the commission May 8 that Flagstone ought to be paying the city $7 million a year.
“This deed violates the city charter,” said Samuel Dubbin, an attorney who represents property owners on the neighboring Venetian Islands who oppose Flagstone’s plans.
City officials must lease city-owned property at “fair market value,” said Mr. Dubbin, and the $2 million a year rate is based on a property appraisal that is more than 10 years old.
“The rent should be $7 million minimum,” Mr. Dubbin told the commission.
Mr. Dubbin also mentioned outdated traffic impact studies, and said it was “deeply troubling” that commissioners were allowing Flagstone to advance the project after so many years of inaction.
Resident Ken Jett asked the commission to reject the resolutions allowing Flagstone to proceed. He said any action “short of turning the land back to the public will be a sad day.”
Questioned by Commissioner Marc Sarnoff, an attorney with the city who’s worked on this matter for years, Robin Jones Jackson, said “we do not have a circumstance where Flagstone has not fulfilled” its obligations.
Ms. Jackson, a senior assistant attorney with the city, reminded the commission that “the entire thing” was renegotiated between the city and Flagstone in 2010 and 2011.
Mr. Sarnoff, again posing questions to Ms. Jackson, asked if it was possible to renegotiate the lease right then during the commission meeting.
Ms. Jackson said Flagstone would have to be willing to do so, and without that willingness, if the commission changed anything in the lease it would be a breach of the agreement.
After there was additional talk of how many millions of dollars Flagstone has already put into this venture, Ms. Jackson told commissioners: “It would be a very, very expensive breach.”
Commissioner Francis Suarez said he can understand the frustration of residents that so much time has passed with no movement on the project. Voter approval of the land use was granted “in another decade,” he said.
“We feel this is the last stand, one way or the other,” said Mr. Suarez. There could be a time when the city renegotiates the lease for the valuable site, but that time is not today, he said.
By the time of the vote, Commissioner Frank Carollo had left the meeting. Before his departure, he voiced opposition to continued support of Flagstone.
Mr. Carollo said he isn’t a movie buff, but dealing with Flagstone all these years is like the film “Groundhog Day.” The developer is “here again and again” yet nothing is done, he said. Flagstone has just been stringing the city along, he said.
Mr. Carollo reminded colleagues that in 2010, when the issue surfaced, he lobbied to have the city take the land back but he was on the losing end of an eventual vote.
“I’m tired of this coming back to us. When does it end?” said Mr. Carollo. “The city is doing a real disservice to the residents.”
The state is involved because it many years ago turned ownership of the island over to the city. Through contracts with the city and Flagstone, the state has managed to stay involved and be the beneficiary of rental proceeds from the developer and the city.
When the state gave the island to the city, it prohibited the city from selling or leasing any portion to a private person or corporation for any private use. The intention of the conditions is that land be used solely for public purposes.
The state approved a modification of those original restrictions in 2004. It was amended again in 2011 to reflect changes in agreements between the city and Flagstone.
The last “Amended and Restated Partial Modification of Restrictions” automatically terminated on Jan. 12, 2012. This was the reaffirmation needed this week by the developer, according to a staff report.
Last year the city granted Flagstone an extension to its lease of the prime island real estate that requires work to begin by June 2.
The planned $640 million Island Gardens complex is to include a five-star luxury hotel, a four-star lifestyle hotel, fractional ownership residences, high-end retail and waterfront dining set on 6.5 acres of publicly accessible and landscaped open space, in addition to a marina for mega-yachts and super-yachts.