Pensacola, Florida
Saturday September 20th 2014

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Outtakes—The Greedy Partner

A few years ago, I was looking into the business dealings of a man who had passed away. Several of his former business partners told me he was always great at the beginning of a business deal, but when the operation began to make money, he figured out ways to cut out his partners.

“He’s not happy with his share of the profits,” said the wife of one former partner. “He had to have yours, too.”

Pensacola Mayor Ashton Hayward and his administration appear to be the same type of business partner.

Eight years ago, Rishy and Quint Studer pledged to enter into a use agreement for the yet-to-be-built maritime stadium for their independent minor league baseball team and to build a $12-million office building near it. The couple has more than delivered on those promises.

Their Blue Wahoos team is a Double-A affiliate of the Cincinnati Reds and has won national recognition of its fan-friendly atmosphere. Their office building has added a fourth floor and now will add $16 million to the tax rolls.

Yet their business partner, the city of Pensacola, wants to renegotiate their use agreement that’s barely three years old, though the city appears to have no legal basis for their demand. The mayor just wants more of the Studers’ share.

The mayor’s dispute over the Pitt Slip leases is very similar. In 1985, the city wanted to create a public-private partnership for a marina project outside the gates of the Port of Pensacola. The city provided the land for a nominal ground lease and the private sector would make the capital investment in the marina and the retail and office buildings.

If the developer owned any of the businesses on the site, he would pay five percent of his gross sales and rents if they exceeded the ground lease payments. In return, the developer got a lease for 30 years that would renew for another 30 years.

For the first 15 years of the lease, a succession of developers failed at delivering on the original vision for the property. That changed in 1998 when Great Southern Restaurant Group rented space for The Fish House, which has become nationally famous.

Now Mayor Hayward wants to change their deal, demanding, apparently with little legal basis, five percent of its gross sales since April 2000. He wants their share of the profits, too.

Maybe greed is just in the DNA of Pensacola. I would hope wiser minds will prevail over the mayor to help him work with, not against, those who have invested in downtown Pensacola.