Hotel developers reveal hands

The chief executive officers for two Sarasota development companies vying to build a hotel downtown showed commissioners their hands Monday night when they both said they were willing to purchase the designated hotel site that sits directly next to the Palm Avenue parking garage on North Palm Avenue at Cocoanut Avenue.

City attorney Bob Fournier previously told the Sarasota City Commission he was concerned with the legal implications involving both proposals for the city-owned site.

In particular, Fournier said he had concern with a Florida constitution provision that prohibits a municipality from helping with lending or using its taxing power to aid any corporation, partnership or person.

Sarasota-based Floridays Development Co., which wants to build a 180-room independently operated boutique hotel for the site, pitched a credit-tenant lease (CTL) for the property, but city staff is concerned about the risk involved with a lease that allows the developer to use the city’s credit rating to attain lower interest rates to build the hotel.

Fournier said the premise of the lease itself violates the constitutional provision.

Floridays CEO Angus Rogers told commissioners Monday night he’s willing to purchase the property for the appraised price (the site has previously been appraised for $3.4 million) if that’s what it takes to build the hotel.

“We are fully prepared to simply purchase the site at the appraised value without changing the product type,” Rogers said. “I want to do another noteworthy project and look forward to having that opportunity here.”

But, when Floridays attorney Brenda Patten said the company would be willing to further discuss the CTL structure with staff and commissioners because no subsidy was required by the city, commissioners quickly ended any hope of the CTL being part of the proposal.

“I think you said the letters ‘CTL’ 10 times in eight sentences,” Commissioner Paul Caragiulo said. “Those are three letters I never want to hear again.”

Jebco Ventures Inc., which wants to build a 175-room Embassy Suites flagship hotel on the site, originally took the stance it could only finance the hotel if the city were willing to lease the land to the developer for 25 years through a 2% gross revenue stream in monthly payments.

But Jebco Ventures Inc. CEO Jim Brides also took to the podium Monday with an offer to purchase the land and rights to parking garage spaces — for $1 million.

While commissioners noted that the property’s appraised value has been earmarked at $3.4 million, Bridges made it known he’s willing to negotiate further with the city.

“We are open to counter proposals and we are here to negotiate,” Bridges said. “We know we can make this project work and do something this city will be proud of.”

Caragiulo and others made it clear the commissioners were in no mood to consider any proposal that caused the city any liability.

“I think you both have a sense of our financial problems,” Vice Mayor Terry Turner said. “We can’t absorb the economic risk of any project and the terms need to be clear on that.”

Because both applicants agreed to purchase the land as part of their proposals and eliminate any future discussions on innovative leases, Fournier told the commission he recommended staff continue discussions with both companies.

Commissioners are hopeful a city staff recommendation can be made in the next couple of months for their review.