City approves (sort of) purchase of waterfront property

Submitted by Suanne Z. Thamm

Reporter - News Analyst

December 3, 2015 12:51 p.m.

After some discussion and reassurances, the Fernandina Beach City Commission (FBCC) approved at its December 1, 2015 Regular Meeting the purchase of waterfront property at 101 North Front Street, commonly known as “the Vuturo Property.” The city and the property owner—Front Street Glad, LLC—agreed to a purchase price of $685K, following the city’s receipt of two independent appraisals for $600K and $715K.

The purchase and sale agreement includes a due diligence period of 90 days which will include a feasibility study to be conducted by the city or its consultant to determine if the subject property is feasible to expand the City Marina in order to minimize the continuous need for expensive dredging.

Because the purchase of this land was not anticipated in the FY 2015-16 Budget, the commission will be required to approve a budget amendment when the feasibility study is completed.

As the CRA Advisory Board FBCC liaison, Commissioner Robin Lentz renewed the committee’s request for the city to fund and conduct a study on needed stormwater mitigation for Front Street and a survey to map existing stormwater infrastructure. Commissioners tasked City Manager Dale Martin to investigate both issues and report back. He indicated that he planned to attend the CRA Advisory Board meeting on December 3.

Lynn Williams

Audience member Lynn Williams supported the purchase of the property. He cited an earlier study that recommended the purchase of this property to allow the city to move the City Marina slips north of their present location. Because of better water flow, the new location would eliminate or significantly reduce the need for regular marina dredging.

Williams said, “We believe that we will have room for forty approximately 50-foot boats in the new location. If these were transient boats, the city would realize about $120K in monthly rental fees.” Williams added that because transient boat revenue is primarily limited to a few months of the year, slips would rent at a lower fee for longer-term rentals. He said, “The best estimate we can get is that this should produce easily $75K in rental income per month.”

Williams talked about obtaining grants or borrowing around $3M to move the marina and set it up for new business. He presented several scenarios for loans, grants and monthly payments. He said this would be a good investment for the city because the increase in usable boat slips would bring more people to the city and save dredging costs.

Commissioner Pat Gass asked Williams, “You keep referring to ‘we.’ Who are ‘we’?”

Williams replied to audience and commission laughter, “The people who hang around the marina.”

Gass joked back, “So it was a scientific study?”

After the laughter subsided Williams said that he had put together the numbers with help from marina manager Joe Springer who, according to Williams, “really does know what goes on there.”

Williams cited a growing list of boaters seeking long-term slip rentals who are currently turned away for lack of availability. What may appear to be empty slips in the existing marina are not usable because of heavy siltation buildup.

Commissioner Tim Poynter said, “It’s a good thing to look at this property, but obviously we are having studies done to make sure we can do what we anticipate doing before we write this check. I just want to make sure everyone understands this.”

Williams agreed, but he cited a potential problem that might imperil a permit from the Army Corps of Engineers (ACE). When the city had previously explored moving the marina, all required permits had been issued to move the channel. The permits expired after previous commissions failed to take action in a timely manner. Now the ACE appears to have had second thoughts about moving the channel to permit a marina north of its current location.

Commissioner Pat Gass raised questions about purchasing the property. While she believed its acquisition was positive for the city, she asked where the money would come from. She suggested a scenario where following due diligence, the city found that all its conditions were met, but that commissioners could not agree on how to fund the purchase. She asked where that would leave the city. Commissioner Poynter replied, “In default.”

City Attorney Tammi Bach said that she had not placed a fiscal non-funding clause in the contract. Bach said, “If you approve this item tonight, it says if this feasibility study says the purchase meets our needs we are going to pay you this amount [$685K] on the closing date. It doesn’t say if we can’t agree on where the money comes from, we can get out of the agreement.”

After ten minutes of discussion, the FBCC voted unanimously to approve Resolution 2015-168 approving the purchase and sale agreement in the amount of $685K.

Editor's Note: Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city. We are grateful for Suanne's many contributions to the Fernandina Observer.