Commissioners unhappy with hotel proposals

The majority of the Sarasota city commissioners said this week they wouldn’t approve a downtown hotel project on a city-owned Palm Avenue parcel if financing help or a long-term lease agreement were part of the proposal.

Those conditions are factors in the only two hotel applications the city has received. The commission is scheduled to review them for the first time Monday.

Sarasota-based Floridays Development Co. wants to build a 180-room independently operated boutique hotel on the Palm Avenue site, on North Palm Avenue at Cocoanut Avenue.

But to build the hotel, Floridays needs the city to sign a credit-tenant lease. City staff has voiced concern about the risk involved with such a lease, which allows the developer to use the city’s credit rating to attain a lower interest rate.

To assuage those concerns, Floridays officials have said they are willing to put up $9 million in cash, as “firewall protection buffers” the city could use to make payments if the hotel operator was unable to do so.
The other developer, Atlanta-based Jebco Ventures Inc., wants to build a 175-room Embassy Suites hotel, but it can finance the construction only if the city is willing to lease the property for 25 years; it has offered to pay 2% of the hotel’s gross revenue per month as part of such a contract.

“I have qualms, absolutely, about taking on financing for this project,” said Vice Mayor Terry Turner. “We are not in the position to be financing hotel projects, especially with city debt that’s outstanding in the amount of half a billion dollars.”

Commissioner Paul Caragiulo suggested that neither proposal adhered to the guidelines the commission had set forth for the downtown hotel project.

“I’m not so sure at all this is what the commission asked for,” Caragiulo said. “They are both good proposals, for what they are, but I’m not crazy about the financing structures.”

If Caragiulo had to choose between them, he said, “A ground lease is more attractive than the financing-structure proposal.”

“But aspects of both cause me concern,” Caragiulo said.

Commissioner Shannon Snyder voiced the least willingness to consider either proposal.

“Both projects are attractive as presented and need to be complimented,” Snyder said. “Having said that, I’m not going to be anybody’s landlord or anyone’s bank.”

Snyder said he’s just as opposed to a long-term land lease as he is to the credit-tenant lease proposal.

“I would rather a deal be worked out and the land be sold for a dollar, so we can get the tax-base revenues off of this parcel,” Snyder said.

When asked what type of hotel project appealed to him, Snyder said he favored any project that didn’t involve assistance from the city.

“At some point, everyone needs to stop asking government to help them finance a project for them,” Snyder said. “We shouldn’t be in the business of subsidizing everyone else, especially when we’re in the middle of a severe budget crisis.”

Although both Mayor Suzanne Atwell and Commissioner Willie Shaw expressed hesitation about the proposals, they said they were willing to consider the options, if one would result in the construction of a premier hotel downtown.

“There are financial risks, and we really need to look at our financial obligations in the long run with both proposals,” Atwell said. “Hopefully, we can work out something with one or the other (developer), so we don’t have to start this process all over again.”

Shaw said he’s waiting to hear the March 5 presentation on the hotel proposals and the concerns from city staff.

City Attorney Bob Fournier also is scheduled to discuss with the commission the legal concerns he has regarding the projects.

“We as commissioners don’t have enough in-depth information on the proposals to make a decision yet,” Shaw said, “although some of what’s been presented could give us pause to move forward.”

Both hotel developers will have a chance to address all the concerns raised by city staff, the city attorney and the commissioners during the commission’s March 19 regular meeting.

County commissioner makes search suggestion
Sarasota County Commissioner Joe Barbetta has a cost-saving suggestion for the city of Sarasota commissioners as they seek a replacement for City Manager Robert Bartolotta, who resigned last month: Use the county’s research.

Barbetta told the Sarasota Observer this week that he had mentioned to Mayor Suzanne Atwell that he’d be surprised if the County Commission’s second and third choices for the new county administrator didn’t make the candidate list for the city manager position.

The County Commission narrowed its choices to four finalists last year, before selecting Randall Reid, then Alachua County manager, as the new administrator.

“I was just trying to save the city some money,” Barbetta said. “I understand the reasoning behind hiring a search firm … but our top choices were very good.”

The County Commission’s other finalists were York County, S.C., County Manager James Baker, West Palm Beach City Administrator Edward Mitchell and Augusta, Ga., Administrator Fred Russell.

Of those three, only Russell replied to a question from the Sarasota Observer about whether he would be interested in the city manager position: “I like the area,” Russell said, “and I have always enjoyed a challenge.”