February 2, 2011
On January 24th three of five Winter Park commission members voted down a proposed 50 year commercial lease on the five acre parcel of land owned by the city at the corner of Denning Avenue and Morse Boulevard.
The short form of this long story is that two commissioners wanted you to steeply subsidize a 50 year lease of city owned land in order to “refurbish” a dilapidated building that utilizes 60 percent of the land’s capacity, to “retain” a long time employer who offered an unenforceable commitment to stay in Winter Park, and to “save” trees that are still standing.
My letter to the commission following this vote follows.
January 27, 2011
Dear Mayor and Commissioners,
I offer some thoughts concerning the recent lease opportunity for the Denning property and the future disposition of this land.
While I understand some of you wanted this deal to happen for your own reasons I point out two key reasons why it never made sense for the city.
First, the deal would have made sense for both parties only if the city could have sold, leased, or otherwise used 2.5 to 3 acres of the property for new development while leasing the balance with the existing structure (even if the city subsidized some parking for the lessee on the city’s section of the total parcel). The position and configuration of the existing building made this impossible. Further, it was unrealistic from the beginning to expect CEI to go beyond a lease value justified by the existing 60,000 square foot building, and they understandably declined to do so.
Second, the rational for subsidizing 30 percent to 50 percent of the total property’s lease value based on the possibility of retaining RFL as a local employer was never justifiable. Under the proposal RLF rightfully pursued their best interest by limiting their risk to a 10 year commitment while the citizens of Winter Park were asked to subsidize the lease for 50 years. Further, the proposed 10 year commitment could have included a sub-lease clause that would allow RLF to never occupy or partially occupy the building, and move out of town at any time. Their commitment to Winter Park was never enforceable and it was unreasonable to expect RLF to agree to an enforceable commitment. An unenforceable commitment has no value.
The issue now is how to manage this property going forward.
The reasons for the failure of the CEI proposal make it clear that the existing building lowers the value of the land. Any other proposal to lease the land with this building on it should fail for the same reasons. Accordingly, I suggest the building be demolished and the property grassed over to make the site more attractive for a potential buyer or lessee.
For now, the Denning property serves as a bankable addition to city general fund reserves which is justifiable without generating current income.
I originally supported the view that the land should not be sold. When and if a compelling plan arises for reconfiguring civic venues this land will be of strategic value as it can be sold, leased, swapped, redeveloped for public use, or turned into a park (supporting incremental residential development/annexation). If properly leased, the land could still be sold or swapped with the lease attached at a future fair market value. I am still supportive of this view but with increasing reservations as the possibility clearly exists for a future city commission to misuse this asset in pursuit of personal political agendas or by simply entering into a bad deal. The city is not a real estate management company.
The land belongs to the citizens of Winter Park. It does not belong to any set of commissioners.
As the land is not currently needed it may be sold with the proceeds added to general fund reserves and used to reduce current property taxes. In other words, return the value of the asset to the citizens. If land is needed in the future for civic purposes it would be purchased subject to a referendum, with the civic value justified by the voters on the merits, not because the city happened to own 5 acres of land. I realize this is a difficult view for those who seek to use city assets for their own purposes. However, given a clear understanding of the rights and responsibilities of the citizens and of the elected commission, careful and thorough consideration of this approach is justified.
Regards, Pete Weldon
700 Via Lombardy
Winter Park, FL 32789