Pensacola, Florida
Sunday June 25th 2017

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Negotiation Blues

Studer and the City Struggle for Big Win
By Jeremy Morrison

Quint Studer is hoping to construct a $12 million dollar office complex on a parcel of land located at the Community Maritime Park. And while officials with the city of Pensacola seem to desire the same, hammering out an acceptable deal is taking some effort.

Im used to being in the barrel, Studer told the Community Maritime Park Associates board July 18. Ive got a bit of vertigo, so Im the right guy to be in the barrel.

Studerowner of the Blue Wahoos baseball teamtold the CMPA board that he wanted to exercise an option in his 2009 agreement and lease a parcel at the park, but that negotiations with the city were a learning situation.

Most cities would love to have what were offering, Studer said a couple of days after the CMPA meeting.

If Studer leases the downtown parcellocated at the corner of Spring and Cedar streetsfrom the city, he plans to construct a 60,000-square-foot office building. The facility would be capable of housing 240 employees, some of which would hail from Studers health care consulting firm, which he plans to relocate to the property.

Its a land lease, Studer said. Its pretty simple.

But its not that simple. Studer and the city have been unable to resolve several lease specifics. And the negotiation process itself was apparently somewhat unclear.

CMPA Chairman Collier Merrill met with the Wahoos owner and Mayor Ashton Hayward the day before the July 18 meeting. He then tried to catch his board up, chalking the overall process up to being as clear as mud.

Merrill explained to the board that the CMPA was to now act as an agent of the cityI didnt think we were involvedand negotiate acceptable lease terms with Studer. Those terms would then need the approval of the mayor and the Pensacola City Council.

Thats where I think we are, Merrill said.

Later in the week, Merrill explained that normally the city would be negotiating with prospective tenants.

But in this one instance, were supposed to be the agent of the city, he said. And, thats fine.

During the CMPA meeting, Studer explained that the sticking points in negotiations were the length of the lease, as well as the costs. While he wants to pay around seven percent of the propertys $1.6 million appraised value in annual lease fees, and get the property for 60 years, the city has pushed for 40 years and between eight and 10 percent.

I think the difference on percentage is something like one percentwhich is $16,000which I dont think is a deal breaker, Studer told the CMPA.

He later said the differences on the leases length would be a deal breaker.

Many times, its the lenders that dictate the length of time, Studer said.

Studer said he could also walk away from the property. He encouraged the CMPA to put out a Request for Proposal. Merrill seemed to shy away from that option.

We do not have a lot of people knocking our door down, obviously, he said. Thats why I think its important Mr. Studer is here.

Studer stressed to the board that he was not asking for incentives or a sweetheart deal. Later in the week, he compared his project to the citys dealings with Pen Air (it wrote off a debt) and Hixardt (which was asking for incentives).

Pen Air had to do with a parking lot, he said. This is probably more similar to Hixardt and the fish hatcheryand Id put this side by side with those any day.

During a July 16 city council meeting, Councilwoman Maren DeWeese had brought the issue of Studers lease up for discussion. Like the rest of the council, she had received a letter from Studerwhom she referred to as the last man standing in economic developmentand wanted to know why the city had yet to reach a deal with him.

We have $12 million staring us in the face, DeWeese told the council.

At the CMPA meeting a couple of days later, Councilman Larry Johnsonwho also sits on the CMPA boardechoed that sentiment. He noted that he had requested to be involved in the negotiating process and was disappointed that the mayor had denied his request.

I thought it was just very unfortunate that we didnt have a council person involved, Johnson said to his fellow board members.

A few minutes later, the mayor entered the meeting room. Taking a seat behind Studer, he was there to tell the CMPA board that the city hoped to make the negotiating process painless and encouraged all parties involved to move it along.

Everyone cant be anymore excited, Hayward told them.

The mayor left the meeting shortly after someone on the CMPA board suggested negotiating the terms with Studer lets do iton the spot.

We can negotiate it on TV as far as Im concerned, Studer said. Youre only as sick as your secrets, Ive heard. The more out in the open, the better.

The Wahoos owner went on to say that he would not be interested in building on or leasing the property if Hayward was not on board.

We would not move forward if it were not a unified front, Studer told the CMPA board. We think that his support is important. And, also, if he doesnt want it, thats important.

Earlier in the day, during the citys rebranding event at the Saenger Theater, a reporter from a local radio station had asked Mayor Hayward if the negotiations with Studer were progressing.

Of course, Hayward replied. I had a meeting with Quint yesterday. Its a big win for us.

Councilman Johnson later said that the lease discussions thus far had involved some frustration possibly related to the mayors recent absence during an overseas tripduring that time, Mr. Studer reached out to the counciland also some other issues Id rather not go into.

Some things werent going as smoothly as maybe it was presented this week, the councilman said. Ill just leave it at that.

The day after the CMPA meeting, the Pensacola City Council decided to throw Johnson into the negotiations. His involvement triggered Sunshine laws, meaning the deal will be worked out in an advertised public meeting.

Id rather just do it in the sunshine, Johnson said. Not only does that make it in the sunshinewhich I dont think that anyone has a problem withI can go back to the council and assure them weve hammered it out and have a good deal, and I think theres importance to that.

Merrill, the CMPAs point person for the negotiations, said that once a meeting is scheduled a deal should be reached shortly.

This really could be knocked out within a day, he said.