As the St. Petersburg Municipal Marina deteriorates further, City Council members continue to explore the best course of action to rehabilitate and revitalize the community asset.
During Thursday’s Committee of the Whole meeting, members of council heard an independent review of two possible scenarios: the city leading the implementation of the improvements or handing the project over to a developer. The discussion follows an August city council meeting where council members heard a first reading of the former administration’s plan to hand over management and redevelopment of the public marina to Safe Harbor Development (SHD), based in Tennessee.
Despite a presentation touting the benefits of a long-term lease with SHD, the city council refused to take a vote that would have sent the measure to a public referendum. While some council members were on board with a five-year lease, handing the management of the marina over to a developer for 25 years proved to be a bridge too far.
McLaren Engineering Group’s independent review compared the city leading the project with SHD implementing the improvements and operating and maintaining the marina for the initial five-year term. Marshall Hampton, a senior professional engineer with the city, explained that the city’s scope would include larger, long-term improvements.
“If we want to get a prize, we might as well endorse it once,” Hampton said. “Touch it once.”
Hampton said the city would completely rehabilitate areas around Demens Landing and South Basin Piers 3 and 4, while SHD would simply improve utilities, such as communications and power.
“Their (SHD) hypothesis is correct,” Hampton said. “There is enough life remaining in these piers that they can meet the level of service expected of us over the term of their lease.”
According to the review, SHD would complete the project in 1,989 days, while it would take the city 2,825 days to complete most of the work. Hamilton noted that SHD began the permitting process, selected vendors, and began designs, giving the developer a significant head start over the city.
Hamilton said it would cost St. Petersburg about $63 million to manage the project internally, including a substantial emergency allowance due to the nature of the work and cost uncertainties. The city estimates its total construction costs at $45 million, compared to SHD’s $37.5 million. That’s the minimum cost of the SHD project, and city attorneys would include that figure in the lease — including a fee termination clause.
If the city chooses the developer-led option, it will pay SHD $7.4 million to start the project.
Under the city-led option, St. Petersburg would receive all operating revenue and pay all operating expenses. The general fund is to cover any losses — which city officials say are likely during construction — while the city would split profits between the marina and the general fund.
Under the developer-led option, SHD receives operating revenue and pays expenses. SHD would also pay rent to the city, including a base amount and a percentage of revenue.
The city administration again recommended that St. Petersburg go ahead with a private contractor leading the marina renovations, which would require confirmation from SHD of its guaranteed maximum project cost. City officials would then update the five-year lease agreement, and the deal would go to the full city council for approval.
“We are very happy with the process,” said Rob Gerdes, city administrator. “We know the process was legal. We believe it was transparent. It was open; it was right.
“That’s what we believe.”
Gerdes said if the developer left after the five-year term, forcing the city to buy the improved assets, it would still come at a cheaper price than completing the project on its own. “It’s really our maximum risk,” he said.
Although council members did not vote to accept the deal, they were still concerned.
Board Chair Gina Driscoll noted that the review used the term “a developer” and the name SHD interchangeably and said the company was not the only entity capable of completing the work. She also said the process started with an unsolicited offer from another company. “We have options,” she said.
Gerdes said the city’s failure to select the unsolicited proposal was indicative of the project’s transparency. He added that launching a request for proposals and further delaying the process would lead to increased costs and financial risks, and the city administration opposes such a move.
Council member Lisset Hanewicz asked what the lifespan of the marina was. Hamilton said it was 50 years old by previous building standards. Hanewicz then noted that the city built the central basin in 1963, the south basin in 1976, and the marina bulkheads in the 1910s and 1920s.
“All of a sudden it’s like a fire that we have to respond to,” Hanewicz said. “And those are our limited choices because we are at this stage.
“Now we have to find a way out, and we have options that are not palpable for members of the city council…and maybe that’s why some citizens are pushing us away.”
Council member Deborah Figgs-Sanders said Thursday’s resolution was to finalize contract details before further discussions at a meeting of city council. She said her first priority was the residents living at the marina and she wanted more information about that.
Figgs-Sanders said she didn’t believe the presentation was an “apples to apples” comparison because the city’s projected costs represented a much larger scope of work. Figgs-Sanders also noted that the public may have their say on the issue at a city council meeting.
“I’m not comfortable with a yes or a no,” she said. “But I certainly don’t want to end the conversation because we have too much to invest – and I think as a city, too much to lose.”
Following a split vote, the committee approved a resolution to finalize the details before bringing the matter back to City Council. City general manager Joe Zeoli said he would meet with SHD and the legal department and provide a timeline for the next update “as quickly as possible.”