Pensacola, Florida
Saturday December 16th 2017

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Why The Studers Walked Away

By Rick Outzen

On Thursday night, Quint Studer was at the Maritime Park Stadium waiting for his Blue Wahoos to play the Biloxi Shuckers when he began receiving phone calls from reporters.

Studer and his wife, Rishy, had been negotiating with the city and its Community Maritime Park Associates Board of Trustees for nearly nine months to lease three parcels at the park. The reporters wanted his reaction to a press release from Mayor Ashton Hayward and Council President Andy Terhaar stating the city was rejecting the CMPA-approved leases.

He was stunned that the mayor’s office would make such an announcement without calling him beforehand. His attorney, Scott Remington, had only met with the city’s legal counsel, John Daniel of Beggs & Lane, the prior afternoon. Studer and Remington were to go over the 22 changes the mayor wanted the following Monday. Remington had told Daniel he would get back with him on Tuesday, July 28.

“Scott told me that the mayor wanted 22 changes, that maybe 15 or so were minor, but several were substantial departures from our negotiations with the CMPA,” Studer told Inweekly. “I had my grandson Quin in town and told Scott that we would discuss the leases on Monday.”

However, Studer said he wasn’t too surprised by the mayor running to the media.  The mayor’s office had communicated very little with him and Remington since the June 18 council workshop. At that meeting, the council endorsed his proposal to invest $20 million to build the Center for Entrepreneurship and a conference center at the park. Though the council said it wanted leases brought back to them in less than 30 days, the mayor’s office hadn’t reached out to work on the leases.

“The mayor’s office went dark,” Studer said. “Scott (Remington) kept reaching out to them and got nowhere.”

Meanwhile, Remington was able to negotiate leases for parcels 3, 6 and 9 with the CMPA board, which it approved on July 15. The next day, Mayor Hayward told the council that he supported the Studer proposals, and only a few “tweaks” were necessary for him to recommend them to the council.

The press release on the CMPA-approved leases wasn’t the only announcement from the mayor’s office on July 23. Two hours earlier, the city announced the creation of a new “Transparency Pensacola” section on the city’s website. The first topic of the section was the Studers’ leases.

“I began to sense the mayor’s office was setting us for something,” Studer said. “For the past year, there have been dozens of issues that deserved more transparency, including the city’s dealing with CBRE and its Miami developer. Why we were being singled out the day after our attorneys met?”

Studer didn’t have the stomach to continue fighting with the city over lease terms after he and his team had spent months negotiating with the CMPA. It was time for them to look at other options.

“When that release came out that we were completely unaware of and a website came up, it just didn’t smell right to me,” Studer said. “That’s when we decided for sure to step away.”

He told the News Journal and WEAR-TV that the changes the mayor wanted incorporated in the leases no longer made his projects economically feasible at the maritime park.

Appearing on WEAR-TV, he said, “This is our third time that we’ve gone to the mat and not had a good experience. It’s probably me, but I’m just obviously not cut out to do these type of projects with the city.”

The next morning, Fountain and Remington did interviews on local talk radio shows.

Fountain told Andrew McKay on Newsradio 1620 that the mayor’s office had only gotten the leases in late June.

She said, “The first one was the lease for parcel 3, and that was brought through in the middle of June. Then at the end of June, the leases for 6 and 9 were brought through. At that point, you have something concrete to evaluate. Until that point, you’re having a discussion about ideas.”

Fountain said that the mayor had not rejected the CMPA-approved the leases.

“He and Council President Terhaar said that they were not going to accept it summarily, that it needed to have some changes,” she said. “Some things still need to be negotiated, some language needs to be clearer, and that’s very standard practice in any big real-estate deal that you’re going to do. They didn’t reject the leases.”

She said, “We want UWF at CMPA, but we need to make sure that what’s in the lease matches the proposal, and we need to make sure that what’s in the lease is in the best interest of the city.”

On News Talk 1370 WCOA’s “Morning Show,” Remington told host Don Parker that Studer had received no substantive comments from the mayor’s office until July 22, five weeks after the council workshop.

“The breadth and depth of the changes that they want to make now just render the project unfeasible,” Remington said. “The process, which continues to shift and change, has lead the Studers to the conclusion that they’re much better focusing their efforts elsewhere.”

The attorney said the Studers were offering to pay fair market value and terms that they felt justified a $20-million investment in developments that aren’t moneymakers.

Remington said, “It’s hard to recoup that investment out of a conference center, a child care center and a university branch campus so we were stretched as tight as we could be.”

He left little room for the Studers to make any counter offer to the mayor’s office.

“Quint and Rishy are invested in downtown Pensacola and probably their efforts are best spent working on their own private property and outside of the government.”

Andy Terhaar dropped by the Inweekly offices to discuss the July 23 press release and the Studers withdrawal of their offer. He said the withdrawal surprised him.

“I understand how frustrating it can be to deal with the city,” said the council president.

He didn’t feel that the city had rejected the CMPA-approved but had made a counter offer to the Studers.

if we want to reject or put it forth the council to decide.”

He said that the mayor had called him about doing the press release. “I was actually in favor of it because it got the issues out there.”

He said the CMPA-approved leases were slanted too much in favor to the Studers, and the city should have gotten in front of the problem by voicing its positions earlier.

Terhaar saw the press release as part of a negotiation. “I told Ashton if he came back and only agreed to a few of the changes, we should take it the council and let them hash out the leases. Quint could either sign it or not.”

He admitted the city had not done a good job of getting out its issues with the leases, and the press release did that, in his opinion. The council president said they wanted the Studer leases to become the new template for all future leases at the park.

“These leases are to be the template for all other leases moving forward,” Terhaar said. “I think it was important that the city get things in there that it wants, like oversight of the council of what goes on a parcel, like the terms you have to start construction.”

CMPA board chairman Jim Reeves told Inweekly that neither the mayor’s office nor the city council told him that they wanted certain terms in the Studer leases while the CMPA was negotiating them. They never said they wanted a new template created for all future park leases.

He was bewildered at how the mayor’s office was negotiating with the Studers.

“I know people that have done less intelligent things,” Reeves said, “but I just don’t understand why you’d give up a bird in the hand for nobody in the bush.”

When Inweekly caught up with Scott Remington, the attorney said the Studers’ decision to withdraw their offer wasn’t as much about his clients being upset with the 22 changes proposed, but the Studers losing trust in working with the mayor’s office.

“For months, ever since the YMCA debacle in 2013, Quint Studer, Andrew Rothfeder (president of Studer Community Investments), and I have begged the mayor and city council to outline a firm process for approving leases at the maritime park,” Remington said. “Quint stood before the council at its last meeting and talked about how time consuming, costly and ambiguous the process has been for the parcels 3, 6 and 9.”

The attorney said he had hoped the mayor hiring CBRE as the city’s real estate broker would have helped, but it didn’t.

He said, “CBRE put out an RFP. The Studers responded. CBRE brought in a Miami developer and wanted them to have the right-of-first-refusal on the parcels the broker knew my clients wanted. The mayor and COO Tamara Fountain allowed them to keep that term in their last proposal, which was presented to the council in June.”

Despite statements by Hayward, Fountain and Terhaar that they hoped the Studers will reconsider, Remington said it wouldn’t happen.

“Quint told the mayor and council at the July 16 council meeting that if he and his wife were asked to start the negotiations anew, they might put their energies and resources elsewhere,” he said. “He did exactly what he said they would do.”

After the Studers’ withdrawal announcement, Terhaar did send an email to Studer:

“I am sorry to hear you will not be moving forward with your project at the park. I appreciate the hard work the CMPA put forth to get the leases to the city, but the city itself must be diligent to make sure the taxpayers are protected for the life of the lease. The lease presented to the city had issues that needed to be resolved before it could be moved forward. I understand your frustration and hope you will reconsider.”

Studer replied that all leases are based on relationships.

“In a lease, how the process is handled is a good indication of how a relationship would go after a lease is completed,” he wrote. “We wish the mayor’s office, advisors and council nothing but the best.”

Studer has received no emails or phone calls from Mayor Hayward. Instead, the mayor posted on Facebook his response to the Studers’ decision:

“Everyone at City Hall was disappointed to learn that Quint and Rishy Studer have withdrawn their proposal for parcels 3, 6, and 9 at the Community Maritime Park. The City Council and I have strongly and vocally supported the Studers’ proposal from day one, and we’ve been looking forward to getting this deal done.

“Unfortunately, the leases the CMPA approved aren’t consistent with the exciting plans that were presented in the media and to the City Council. As much as we respect the Studers, and as excellent as their track record may be, the public’s interests must be protected in writing. The leases approved by the CMPA are available on the front page of the City’s website, and I encourage citizens to read them.

“I’m just as excited about the Studers’ proposal today as I have been for the last month, and I still believe that we can get this deal done. All indications have been that the two sides aren’t that far apart. Nobody questions the Studers’ commitment to our community. I hope that Mr. Studer will come back to the table and continue to work with me on a lease that makes sense for the taxpayers.”

 

On News Talk 1370 WCOA’s “Pensacola Speaks,” Studer was asked if the mayor and his staff’s actions showed that they strongly supported his proposal.

“No, maybe there’s another deal out there, maybe something I’m aware of,” Studer replied without hesitation.

“We’re not here to fight, we’re not here to argue. We don’t do this to please elected officials or displease elected officials. We do this to improve the quality of life for the community,“ he said. “We remain very committed to the Pensacola metro area.”