Detert continues to argue that none of six proposals reflects potential value of property’s redevelopment
This week, Sarasota County Commissioner Nancy Detert continued to argue that none of the offers that the county has received for its downtown Sarasota Administration Center property — including two parcels used for parking lots — reflects the potential value of the site.
Nonetheless, she joined her colleagues on Sept. 28 in authorizing County Administrator Jonathan Lewis and his team to pursue negotiations with Benderson Development Co. That firm, based in University Park, had raised its original offer from $20 million to $25 million. That surpassed all but one of the other five proposals from companies that responded to the county’s Invitation to Negotiate on the land at 1660 Ringling Blvd., along with two parcels located on Morrill Street.
Gateway Mega Investment LLC, based in Miami Beach, also proposed $25 million.
The highest amount among the initial offers was $23.5 million from The Seng Co. of DeKalb County, Ga., and Weaver Capital Partners. They raised their offer to $23,750,000.
“I still think that it looks bad for us to sell for $25 million when the next person is probably going to get $60 [million] to $80 million for it,” Detert said of the 1660 Ringling Blvd. and Morrill Street property during the Sept. 28 discussion.
Chair Alan Maio reminded her that, at the conclusion of the negotiations with Benderson, if the majority of the commissioners are unhappy with the final offer, they do not have to accept it.
On Sept. 8, Matt Osterhoudt, director of the county’s Planning and Development Department, presented details of all six proposals for the downtown Sarasota property. On Sept. 28, he reported that Benderson subsequently had submitted the top revised proposal.
The other two amended offers that staff included for board consideration this week were from Tricera Capital LLC of Miami and Twenty Lake Management of Stamford, Conn.
Those and the revised offer from Benderson were “the best financial packages,” Osterhoudt said.
“In black and white, their offer is better than everyone else’s offer,” Detert noted of Benderson. The company had dropped what she called the “laughable clause” in its original proposal, she noted, which said that it would provide space for the new county administrative offices on property it owns around the Mall at University Town Center.
Yet, Detert also voiced concern that, if it takes four years for the county to construct a new administration center on its property located at 1301 Cattlemen Road, the commission still might have to contend with expensive repairs to the downtown Sarasota building.
Staff’s estimates of repairs and renovations involving the structure at 1660 Ringling Blvd. were the primary reason that the commissioners agreed during their December 2019 retreat that they needed to relocate the administrative offices. Staff in May 2020 continued to assert that maintenance and renovation expenses could total as much as $32.5 million over 10 years and up to $49 million over 20 years.
Therefore, on Sept. 28, Detert asked that, during the negotiations with Benderson, staff try to win the company’s agreement to cover any repairs and maintenance while Sarasota County Government remains a tenant in the downtown Sarasota building. “Who’s paying for the repairs is going to be my main voting point next go-round,” she told her colleagues.
Detert pointed out that landlords typically do handle repairs, and the county would be paying Benderson $1 million per year in rent.
Commissioner Christian Ziegler said his two primary concerns in regard to the negotiations were the sale price and that Benderson agree to let the county out of its lease early, if the new administration center can be completed faster than the county’s Capital Projects Department leaders believe possible.
Ziegler also indicated support for Detert’s comments about the repairs issue.
“We’ve certainly heard some board dialogue that we can weave into our negotiations,” Osterhoudt of Planning and Development responded just before Maio called for the vote.
Pros and cons
During the discussion, Commissioner Ron Cutsinger did ask Osterhoudt for clarification that the Benderson offer included “a very quick closing date.”
“Yes, sir,” Osterhoudt replied. The company has asked for a 45-day due diligence period and another 20 days for the closing, Osterhoudt added. That was better than the terms in the other proposals, Osterhoudt said.
Cutsinger also noted that Benderson is not calling for an escalation of rent in each succeeding year. Moreover, he said, county staff can “put away” the $25 million from the sale, which could earn some interest until the funds are needed for construction of the new administration center.
Chair Maio also asked Osterhoudt about the projected timeline for concluding the deal if the board gave staff the go-ahead that day for negotiating with Benderson.
“A member of the organization is here in the audience,” Osterhoudt responded, indicating that Benderson representatives are interested in moving quickly.
Maio then asked whether County Administrator Jonathan Lewis would instruct the staff of the Procurement and Capital Projects departments — and any other employees who would be involved in the undertaking — to proceed with final negotiations “as quickly as possible” after board authorization.
“No,” Lewis said with a chuckle, “because I’ve already told them to do that,” if the board members that day signed off on the process.
Following that exchange, Detert raised her concerns about the real value of the property. “The 25-million price [Benderson is offering] is probably the top price for … a government building that needs lots of repair,” she said. However, she continued, “We know that that’s not the highest and best use of this piece of land,” she added.
“So why don’t we work with the City [of Sarasota] to rezone [the property]?” she asked, emphasizing that the 5-acre site, “in the middle of downtown Sarasota, a booming place to be in today’s real estate world, is worth a lot.”
She pointed out that the city and county leaders have a much better relationship than they did several years ago, and the County Commission had agreed to provide close to $100 million out of property tax revenue over the next 30 years to help pay for the construction of amenities in the city’s 53-care Bay Park on the Sarasota waterfront. Perhaps city leaders would agree to a hastened rezoning action, she suggested.
“I don’t know that negotiations are over,” Chair Maio responded, referring to the Benderson proposal. “I think there’s some facts that may not be readily apparent.”
Maio also pointed out that he did not believe Lewis would allow staff to start working on the new administration center until the downtown Sarasota property had been sold. Maio further noted that it could take as long as 18 months to accomplish the rezoning of the land to a use that would allow construction of condominiums, for example, which Detert had indicated would be a much more valuable use.
Every year the county offices stay in the building at 1660 Ringling Blvd. means a “bigger bite out of that $40 million in repairs over 10 years,” Maio continued. Moreover, he said, referring to one of her estimates for the “highest and best value” of the property, “Maybe it’s $60 million in two or three years; maybe it’s not.”
Anyone taking a look at the building could see leaks from an upper floor have damaged a couple of lower levels, Maio continued. “I think it’s in less good shape than we suspect it is.”
Commissioner Michael Moran characterized the potential costs of maintenance and repairs as “that looming, dark massive cloud hanging over us …”