Once upon a time, there was a city devastated by a massive hurricane. The town leaders wanted to build a public works project that would revitalize their community. They approached a retired vice admiral, university president and a nationally known health care leader who owned a baseball team and asked them if they wanted to be a part of the effort. The men agreed, and the Community Maritime Park was started.
In most fairy tales, there is a happy ending. But this is Pensacola. We kill dreams and destroy visionaries. Ask Don Tristan de Luna.
On the eve of the Community Maritime Park Associates Board of Trustees meeting on the final construction budget and the use agreement with the Blue Wahoos, Mayor Ashton Hayward and CMPA chairman Collier Merrill were hit with shots to the head and gut. The CMPA team had miscalculated the budget, the project was $4 million over budget, and CMPA Executive Director Ed Spears believed Quint and Rishy Studer, who owned the baseball team, owed the CMPA $4.3 million, not $2.05 million as previously discussed.
The construction budget was slashed the next day, but the decision on whether the Studers made two pledges of $2.25 million and $2.05 million remains unresolved as of our print deadline on Tuesday evening.
The CMPA will meet on Wednesday, Aug. 3 to settle the dispute. According to CMPA board member Jim Reeves, no one on the board believes that the Studers made two pledges. “I see us approving the agreement—which we’ve already done once,” he said.
The IN interviewed those involved in this issue. We reviewed dozens of emails, letters, contracts and board minutes. The only person unwilling to be interviewed was Ed Spears.
“I’m not going to comment on that,” Spears said. “That’s a matter for the board. We’ll take it up on Wednesday.”
Even without Spears’ direct input, the IN has been able to put together this narrative on how this latest issue unfolded.
THE GIFT FOR THE MARITIME MUSEUM
As part of the original CMP proposal, the Studers agreed to give $2.25 million to the University of West Florida for the maritime museum. That gift was included in the Master Lease between the City of Pensacola and Community Maritime Park Associates:
“The University of West Florida has committed funds to the initial development of the Maritime Museum Project with terms and conditions acceptable to Lessee and Lessor, including a pledge by Quinton D. and Mary P. Studer for a contribution of Two Million Two Hundred Thousand Dollars ($2,250,000) to the Maritime Museum Project, or in the event the Maritime Museum Project is not developed, then applied to the Public Improvements Costs.”
The lease was signed March 27, 2006 by Quint Studer as a trustee of CMPA.
The contribution was made to UWF and not the CMPA because UWF believed it could get a dollar-for-dollar match through the State of Florida Alec P. Courtelis program. The Studers were convinced by UWF and city officials that would be better than giving $2.25 million directly towards the construction of the stadium.
The Master Lease was silent to how the $2.25 million would be applied to the park or who got to decide how it would be used if the museum was not built. UWF didn’t sign the agreement, so they weren’t obligated by this agreement to return the funds. Neither Quint nor Rishy Studer was asked to individually agree to this clause in the Master Lease.
Since that Master Lease was signed, the only party to fulfill its commitments has been the Studers. UWF was committed to use of the Conference Center Project for classroom and office space. UWF was committed to build the Maritime Museum. Ed Fleming and Ed Spears didn’t write demand letters for the conference center lease or museum. At the time the Master Lease was signed, the stadium was to be a $16 million project.
Quint and Rishy Studer made their contribution for the Maritime Museum to the University of West Florida Foundation in December 2007. The Alec Courelis match was never received because the state legislature quit funding the program.
On May 26, 2009, attorney Bob Hart sent, on behalf of the Studers, a letter to City Manager Al Coby to confirm the Studers’ agreement that “if the Maritime Museum is not built, the Funds will be contributed to the Community Maritime Park Associates, Inc. to be used for construction of that part of the Public Improvements that is the Multi-Use Facility.”
MARITIME MUSEUM FALTERS, DOUBLE A OPPORTUNITY
In the fall of 2010, UWF and its vice president for university advancement, Kyle Marrero, talked to the Studers about the UWF Foundation’s desire to keep the $2.25 million since it had become obvious that the maritime museum wasn’t going to be built. Other donors to the maritime museum had asked for and had their donations returned. Marrero showed Quint and Rishy Studer drawings of the Health Services Center with their names on it. He also tried to convince them to put the money into a proposed multi-cultural museum.
The Studers told UWF that they wanted the contribution returned. In an email dated Nov. 6, 2010, to Marrero, Quint Studer wrote, “We do feel with the current community maritime park and downtown community needs that the two plus million dollars needs to be utilized very quickly to create a better park and community and admire UWF’s integrity in reviewing the situation and providing donors the opportunity to receive these funds back.”
At the same time, Quint Studer was negotiating for the purchase of a Double A baseball team. Spears and Studer had several conversations about the Double A stadium requirements.
He had a conference call with Eddie Todd, then chairman of the CMPA, and Spears to inform them of his negotiations. Spears said that with the contingencies and other savings there were sufficient funds to expand the stadium.
Over the four years since the Master Lease had been signed, the stadium budget had been cut drastically–from $16 million in 2006 to $12,871,700 when the CMPA presented its plans to the Pensacola City Council in September 2008. The Design-Build contract for MPDP further reduced in 2010 the stadium budget to $11,148,514. Since March 2006, the stadium has been cut by over $4.8 million.
JANUARY 31 CMPA WORKSHOP
Studer had his baseball team, led by Bruce Baldwin and Chuck Tessier, meet in January with Spears and the contractors to figure out necessary improvements to the park to get up to Double A standards. He thought Spears had the funds to do it.
The stadium enhancements were agreed upon and prepared to be presented to the CMPA board:
Additional 2,050 seats: $2,025,000
Minor design changes: $240,000
Signage package: $100,000
Concession equipment: $500,000
Scoreboard enhancement: $500,000
Concession stands MEP: $260,000
AV Media Communications Enhancement: $350,000
FF&E package: $800,000
Right field restroom building: $200,000
Design fees: $250,000
By December 2010, Spears was aware that UWF was not building the maritime museum and that donors were getting their donations refunded. He told Studer that an additional $2,050,000 was needed to complete the work. Studer reluctantly agreed to give the money for the stadium expansion.
Spears didn’t mention the $2.25 million that was donated for the museum. He did ask for clarity on from where the money is coming. He didn’t tell the board when he made the presentation to the CMPA board that he believed that there was an additional $2.25 million coming to the project because of the decision by the UWF Board of Trustees.
Was Spears aware of the UWF decision? Yes, according to an email Spears sent to John Asmar, Mayor Ashton Hayward’s Chief of Staff. In that email dated July 22, Spears argued that the Studers made two pledges and stated, “In late 2010, The UWF Board of Trustees voted to abandon the Maritime Museum.”
Spears did not notify the CMPA board of this at the Jan. 31 workshop on the proposed stadium enhancements. He also made no mention in his Feb. 9 management letter that was included with the audited financial statements for the CMPA.
In fact, Spears stated that no additional funds would be needed to accommodate the Double A team. There was no mention of UWF cancelling the maritime museum or that the CMPA would be receiving $2.25 million from the Studers in his letter or the notes that accompany the financial statements. A $2.25 million receivable is a material fact that should have been disclosed.
On Jan. 26, Quint Studer sent an email to Hart and wrote about how upset he was that Spears was not delivering on his assurances that no additional funds would be needed for the stadium expansion. “From what Chuck has heard, the stadium will need about $2 million dollars privately,” said Studer. “This will mean all money from UWF going that way.”
At the Jan. 31 meeting, attorney Bob Hart, who represents the Studers, made the announcement that the Studers would give the needed $2.05 million. Hart read a brief statement from the Studers, “We are grateful God has provided us with the opportunity to be in a position to provide an additional $2,050,000 in private funding to help the stadium and the park be one that will excite citizens, visitors and new businesses.”
For the Studers, the word “additional” meant in addition to the funds that Spears said that the CMPA could contribute to the enhancements.
After Hart’s statement, the CMPA board approved the stadium enhancements. After the meeting, neither Spears nor Fleming contacted the Studers or Bob Hart to draft a written agreement or memorandum of understanding for the contribution to the park. The Studers had no idea that the two Eds thought the $2.05 million was not part of the $2.25 million commitment.
Such a document would have clarified how and when the funds would be transferred and if they were coming from a source other than the UWF donation.
NO MENTION IN FINANCIALS
From Jan. 31 forward, the CMPA was constantly changing and modifying the construction budget. None of the financial reports given to the CMPA Board of Trustees by Spears show receivables for both $2.25 million and $2.05 million. The CMPA board was working under the assumption of only one pledge from the Studers.
“I never heard anything but one two-plus million pledge,” Ed Gray told the IN. Gray is the executive director of Capital Trust Agency, which provided the New Market Tax Credits to the project. He has sat in on all of the budget meetings for the project since the NMTC were approved last year.
It was never brought up as a possible receivable to help with the finances. “It was not in the numbers,” said Gray. “There was never a mention of the Studers owing the project $4.3 million. In fact, we were still waiting to get the damn bids out on the rest of the project, particularly the most expensive pieces to come.”
Jim Reeves said he only found out about Spears believing a second $2 million was possibly owed when the July budget shortfall—which he called “a bad case of the shorts”—was discussed.
“If that was a possibility,” he said, “why didn’t anybody tell us that there was another $2 million out there lurking?”
CMPA SHORT ON CASH
In May, the Studers were refunded their donation by UWF, and they deposited the funds in a separate account. They didn’t immediately transfer $2.05 million to the CMPA because they were concerned over cost overruns and changes in the agreed-upon design.
Was Studer justified in being concerned about the cost overruns? “Absolutely,” said Gray. “You couldn’t tell who was in control. You couldn’t tell when they would finally arrive at a final construction budget.”
He added, “Ultimately, his concern was if they kept eating into other parts of the project with a few hundred here and few hundred there with overruns, what was his $2 million going to go towards?”
In June, the CMPA ran into cash problems. Mike Horton with Hoar Construction had a $2 million change order to increase the Stadium Enhancement. Spears wrote Horton an email on June 20 stating that approval for the change order was dependent upon receiving funds from Quint Studer.
On June 21, Horton replied, “When we get in a situation that a sub needs to be released and there are no funds available to do so, the project in essence will come to a stop. I hope resolution of this matter is the #1 priority of the CMPA/City staff because without this issue being resolved the completion of the stadium within the timeframe needed for baseball could be jeopardized.”
John Asmar, who was copied on the email, wrote Spears, “Ed: What is the proposed resolution?”
Spears replied, “We need a check from Quint. The money was offered for the stadium expansion. We have designed and are constructing the expansion and now have to pay for it. That’s the simple solution.”
Asmar, who was on vacation, notified Scott Remington, who was handling the use agreement negotiations for the Studers and the baseball team, of the issue. Remington asked for a meeting. “We need to get the stakeholders in one room as soon as you get back in town,” wrote Remington to Asmar. “Our goals and expectations are aligned; I think we can get to where we need to be quickly.”
Spears forwarded the Horton emails to Remington on Friday, June 24. The same ones Asmar had already sent to him.
Remington responded, “So we are perfectly clear and on the same page. The Studers are not the sole or exclusive source of funds for the public project…The Studers’ individual donation will require the same sort of accountability and definitiveness that the NMTC people are demanding prior to funding.”
Within six minutes of Remington sending his email, CMPA attorney Ed Fleming responds:
“Scott, The CMPA has committed to build the stadium per approved plans and specifications, and those plans and specifications have (as I understand it) been reviewed and approved by team representatives.
The CMPA was required to put their own money, bond proceeds, into the bank for the back to disburse as construction proceeds. Your client agreed, in return for the CMPA moving substantial funds from reserves and elsewhere, committing in effect every dime it had to the stadium enhancements/league requirements, an amount certain.
That amount certain should be deposited the same place the CMPA has put its money–into the construction loan account,
This will create all sorts of issues with the lender, and will give Magi an excuse for delay.”
“I am unsure what position you are asking reconsidered. Before the Studers fund the gift they would like to know that the funds are in place to complete this project. To date the completion price has been a moving target. Without more information, the Studers cannot make a reasoned or rational decision other than previously stated–this position has been unchanged since my initial involvement two weeks ago.
Specifically, I am still unclear how much money the CMPA needs to finish, what specifically is in jeopardy of delay, how long the delay would be, and why NMTC is being held up.
As stated earlier, the Studers and the Ball Club are both anxious to move forward–but we need basic information and consensus on unresolved issues.”
Later that evening, Fleming wrote Remington. He reiterated his earlier position, adding that Ed Gray was going to make sure that the funds were available to complete the overall project. He didn’t want an additional meeting.
Fleming didn’t include in his email anything about the $2.25 million. There was no mention of two pledges, even though he admitted that the project was financially strapped.
The meeting was held. Magi Construction presented a contract recap that showed $9,569,841.57 was needed to complete the project. According to Remington, the Studers were prepared to give $2.05 million at the meeting, but it was revealed over the course of the discussion that the contractor only needed a couple hundred thousand to carry the project until Aug. 15.
Gray agreed to move around funds to cover that, provided the Studers gave him proof that the funds were available and gave the CMPA a signed agreement to contribute the funds towards the stadium.
There was no mention of an additional $2.25 million at the June 27 meeting. However, Spears did walk over to Remington and show him the Master Lease Agreement clause about the $2.25 million, according to Remington. Remington can’t remember what he said to Spears, but he was surprised that Spears brought it up.
Nothing was said to Ed Gray about an additional $2.25 million. No email was sent to Collier Merrill, the CMPA board chairman, Mayor Hayward or Asmar.
When Asmar returned from vacation, he and Remington worked on completing the use agreement for the ball club. Both Asmar and Remington were told by Spears that the CMPA needed an additional $1.7 million, outside of the Studers’ pledge, to complete the park.
“Quint and Rishy said they would consider lending the CMPA the money or buying surplus property from the City, CRA or CMPA,” said Remington. “We were unequivocal–we are donating $2.05 million and will be creative in helping the CMPA come up with the $1.7 million to finish the park.”
Still, Spears had not brought up the $2.25 million to Asmar, the mayor or again to Remington. “I thought the issue was dead,” Remington told the IN, but he was leery of what might happen next, so the attorney was careful how he worded the gift commitment letter that Gray had requested.
The letter, dated July 1, was addressed to Spears:
“Please accept this letter as our agreement to contribute the sum of $2,050,000 to Community Maritime Park Associates, Inc. on or before August 15, 2011 to satisfy any and all charitable pledges made by us to the Community Maritime Park Associates, Inc. and or The City of Pensacola.”
There was no response from Spears or Fleming. Gray was satisfied. “At the point in time, as far as I was concerned, Quint had officially committed to contribute the $2 million.”
Asmar and Remington began meeting one-on-one with CMPA board members explaining the agreement and the final construction budget, which set the total cost of the park improvements at $54, 541, 230. The board members were told about the $1.7 million shortfall, but the Studers had agreed to help by buying city or CRA property or loaning money to the CMPA if the contingencies weren’t enough to cover the overrun.
On July 19, Remington met with the CMPA Operations and Audit Committee. They approved the construction budget and the Use Agreement. “I went home early for the first time in weeks and took my family swimming,” said Remington. “I felt I could relax and put this to bed.”
At 7 p.m., Remington’s bliss was burst when he got a phone call from Asmar asking him to come to Jackson’s Steakhouse. While Remington was picnicking with his wife and kids, Asmar, Mayor Hayward and CMPA chair Collier Merrill were hearing from Spears how a $2.3 million error had been made by not including the soft costs in the budget. The total cost had jumped to $58.6 million.
It was then for the very first time Spears mentioned to his bosses that he thought the Studers owed an additional $2 million. When asked at Jackson’s, Remington didn’t hesitate. The $2.05 million was part of the $2.25 million commitment in the Master Lease.
The decision was made to cut the budget to get it in line. If a review proved that there were two pledges, then items could be added back to the project. Remington and Asmar stayed up most of the night working on the recommendations.
The next day the CMPA board voted unanimously to delete the marina, Medjool and Sabal Palms, roadway pavers, shrub materials, amphitheater rear house (for dressing rooms, restrooms and storage), Gulf Power lighting, and to reduce the level of irrigation–reducing the budget by nearly $3 million.
ONE OR TWO PLEDGE DEBATE
On that Wednesday, July 20, Remington got an email from Fleming at noon to meet with him before the CMPA meeting:
“Is Quint going to be at today’s meeting? Could you and Quint be there before 1 p.m.? Issue has come up in the Master Lease for $2.25 million contribution to museum, or–if the museum not built–to the “public improvements” at the Park, and relationship of that commitment (in a document approved by CMPA, City Council, signed by Quint Studer as Trustee), and the commitment for $2 million contribution to more expensive stadium.”
The Studers’ attorney replied within four minutes that he would be there. “I can tell you these are literally the same dollars,” wrote Remington. “Further, in every meeting Asmar had with the CMPA board members last week, we stated unambiguously that the Studers were not donating any more money to the park.”
Remington arrived early. Fleming was a no-show.
The next day Remington wrote both John Asmar and Ed Fleming. He asked Asmar that the mayor stay involved in the process to be sure the Use Agreement is executed and that a follow up be done to determine how the additional $2.3 million shortfall occurred.
“Asmar and the mayor were critical to getting the use agreement worked out,” said Remington. “The CMPA was so dysfunctional that we never would have gotten it done. We wanted them to stay involved.”
The email to Fleming asked him to review a change in the agreement that CMPA board member John Merting requested and determine the proper execution protocol. He also wanted to finalize the gift agreement with the CMPA. Fleming didn’t respond.
Behind the scenes, Spears was scrambling to defend his position that the Studers made two pledges and owed $4.3 million. In a series of emails, dated July 22, the CMPA executive director sent Asmar and Fleming information on how the $2.25 million was referenced in the Master Lease and Master Developer agreements. “These agreements were in full force and effect prior to the acquisition of the Double A baseball team and any agreements to expand the Multi-use Stadium to accommodate that new team’s needs,” wrote Spears.
He included, without giving any context, a June 7, 2011 email from Studer in which the baseball team owner wrote, “I went out in good faith with purchase of Double A team. At the team I had not planned on the 2 million dollars for stadium based on team.” Spears offered this email to defend his position that Studer had not intended to use the UWF refund for the stadium enhancement.
Spears didn’t mention his and Todd’s conversation with the Studers or Spears’ commitment that the CMPA had the funds to expand the stadium from contingencies and other savings–which is to what Studer was referring.
Asmar has confirmed that Spears never mentioned the late 2010 conversation with Studer.
Spears wrote that he wasn’t sure that UWF had returned the $2.25 million contribution. He incorrectly told Asmar and Fleming that Studer was the sole trustee of CMPA in March 2006. He was not. UWF President John Cavanaugh and Pensacola Mayor Emeritus Vince Whibbs Sr. were also trustees. Spears argued that not knowing if the donation had been returned then “it would not have come up on the ‘radar screen’ of the CMPA’s Trustees.”
Spears didn’t mention how he confronted Remington about the Master Lease clause in late June.
Asmar told Spears that this was a CMPA issue and that he needed to get his direction from the CMPA chairman Collier Merrill.
On July 25, Remington emailed Fleming the gift agreement. To clarify any confusion over the Studers’ commitment, the new gift agreement stated that the Studers would be giving the CMPA $2.25 million: “This Agreement satisfies any and all pledges, whether oral or written, made by the Studers to CMPA for construction of the Public Improvements at the Park, including any obligation under Section 7.04 of the Master Lease.”
In the cover letter, Remington told Fleming the $2.25 million was in a segregated account waiting for CMPA approval of the gift agreement.
On July 26, Spears provided Asmar with a “Studer Donation Chronology.” He didn’t mention the May 2009 letter from Bob Hart to City Manager Al Coby confirming that any funds returned by UWF would go to the stadium. He didn’t mention his commitment over the phone to Studer that no additional funds would be required to meet the Double A requirements.
Spears did claim that he was told by Hart that these were new funds. “Mr. Studer’s team announced during one of the planning sessions that funds would be made available to cover the deficit,” wrote Spears. “During these discussions, it was specifically asked of Hart if these funds were the UWF donation. He advised they were not. He stated they were, ‘new funds.’”
Asmar asked Spears if he had anything in writing to confirm Hart’s statements. Spears said he had an email.
On July 27, Spears wrote Asmar saying he hadn’t found the email (as of our Tuesday, Aug. 2 publication deadline no such email had been produced).
Two days later, after not receiving any response from Fleming or the CMPA, Remington wrote Fleming. “We are disappointed we have not received a response from you or the CMPA to any communication we have sent since last Wednesday noon,” said Remington. “I have written to you on at least three occasions with questions or to address your concerns. The silence is surprising and worrisome.”
The Studers requested a CMPA board meeting to resolve issues between the CMPA, the Studers and the baseball team.
Fleming finally called Remington, who made it clear that there was only one pledge and the Studers would not sign the use agreement unless the gift agreement was also signed.
On Friday, July 29 at 10 a.m., Spears sent out a notice of the meeting setting it for Wednesday, Aug. 3 at 3 p.m.
It is still too early to tell if this fairy tale will have a happy ending. Maybe Pensacola will surprise us.