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Signing For 3 More Years at City Market Place, Palm Coast Explores New City Hall Options

| April 24, 2012

Upstairs, downstairs: the Palm Coast city government's loveless relationship with City Market Place will continue until at least 2015. (© FlaglerLive)

In the past two years the Palm Coast City Council flirted with notions, enabled by all sorts of creative if not imaginary financing, of building itself a new city hall in Town Center. Public opposition obliterated the plans. Today, the Palm Coast City Council agreed to extend for three years its city offices at City Market Place, the shopping center near Walmart. Palm Coast signed its first lease there in November 2008, paying $20,000 a month for 21,000 square feet.

But the council also went far afield from its discussion on the lease, reviving talk of a new city hall and more novel ways to get there.

The new lease at City Market Place is actually cheaper: the city will pay $17,000 a month through next April, then pay $19,000 a month for a year, then $20,000 a month for the final year, suggesting that bank that now owns the property, after it went into foreclosure, is eager to keep the city there, for its own reasons.

“The bank doesn’t want this lease,” City Manager Landon said. “The bank wants to flip it. They’re going to try to sell these units, and so their whole thing is the future, that’s why—OK, we’ll make sure we get you to stay. We’re willing to take a little bit of a hit now, but we’re going to sell it so that’s why we want the higher price in the future so that it increases the value of the property. If you know what the other side is interested in, then that’s how you can come up with these kinds of numbers.”

The new lease also enlarges the city’s square footage somewhat, adding one storefront unit that could, potentially, be turned over to the Flagler County Sheriff’s Office for a substation there, though when city council members questioned City Manager Jim Landon about it, it appeared that he hadn’t had direct conversations about that possibility with Sheriff Don Fleming, but rather with Mark Carman, the sheriff’s captain in charge of Palm Coast policing. The sheriff provides law enforcement for the city on a contractual basis.

The added unit did not represent an additional cost. “They threw that added unit into the lease after we negotiated the price,” Landon said. Should the sheriff use it, the city would provide labor to fix the place to the sheriff’s specifications, but the sheriff would then pay utilities there—no rent. There’d been rumors earlier this month of a meeting between Landon and the sheriff—which never took place—for discussions about moving the sheriff’s operations to City Market Place, now that the sheriff is eager to leave his present, cramped headquarters on Justice Lane, at the edge of Bunnell.

For now, Palm Coast’s city hall will remain at City Market Place. “We knew three years ago, three and a half years ago, we got a very good deal, because the landlord at that time was pretty desperate to get us in here.” That hasn’t changed. “This is very competitive,” he said.

What might have been a dry discussion limited to the formalities of a new lease then took a turn for the unexpected when Bill Lewis, who last year had opposed a new city hall, raised a new possibility when he asked: wouldn’t this be a good time to look at lease-purchase opportunities? The question, which had a hint of the rehearsed, triggered a long discussion about the city’s eventual plans away from City Market Place, in a city hall of its own after all.

Long-term, Landon said, owning is better than renting. The city will have spent about $1.5 million in six and a half years at City Market Place, between November 2008 and April 2015, “with nothing to show for it,” Landon said. He suggested that a private-sector developer could build a structure at the city’s specifications, lease it to the city with an option to buy the building after a set term. But the city’s charter requires any lease-purchase arrangement that exceeds three years to be approved by voters. (A straight lease doesn’t have to be voter-approved.)

City Council member Frank meeker took the conversation in yet another unexpected direction: He said he doesn’t consider Town Center the “center of town” anymore, because the city approved two major developments to the west and north of the city, which will move the city’s center of gravity in that direction.

Meeker has been a foe of the way the Town Center development was set up from its earliest days. Town Center is a so-called CRA—a Community Redevelopment Agency, which is a special taxing district. All taxes generated in that zone, above a base amount, stay in that zone, essentially denying the city and the county a share of taxes that would normally have gone to those two governments’ general funds. The county isn’t fond of the CRA concept, wither, for that reason. The Town Center CRA might have had a better reputation had it actually produced the desired development. But it hasn’t. “Right now, the project is languishing,” Meeker said. (For details on the Town Center CRA, go here.)

Except for the retail businesses at its rim, along State Road 100 (Target, Panera, several other chain restaurants and stores, the Hilton garden Inn) and the Epic Theatre within it, Town Center has been a gaping failure—one of those projected successes that turned into a sprawling bust, typifying the real estate crash. Meeker now sees an opportunity to cut the CRA’s life short, allowing the city to “cash out” its expenses (by calling in its loans to the CRA) and redistributing the CRA’s taxes more evenly in subsequent years. Of course, the CRA and the city are not that different: the CRA board is the city council, and whatever cashing out takes place still ends up affecting taxpayers one way or another. But the CRA, which generates about $1.2 million in taxes every year, still represents a pot of money that, to Meeker’s thinking, should be used to finish the Bulldog Drive entrance (that is, “beautifying” it by enlarging it) to Town center, and using some of the CRA’s dollars to perhaps pay for an eventual city hall, either through a lease-purchase arrangement or by other means.

That $1.2 million a year, compared to $15.9 million in property taxes for the rest of the city, council member Jason DeLorenzo said, “that’s a pretty good chunk that could come back to the city if you could accelerate the growth in Town Center.”

“Now, will a city hall moving to that area be what’s necessary to jump start it? I don’t know,” Meeker said.

“That’s a question I would like to put to the private developers,” Netts said.

“The private developers will probably say it’s a great idea as long as I don’t have to put any money into it, and that’s where really our stumbling block. I think the citizens don’t have a problem with a new city hall in the Town Center. The problem is we don’t have the money to do it. But if you Mr. developer were to build one, and it was one that was, as Mr. Lewis says, necessary to our needs as a city government, why wouldn’t we consider leasing it?”

“That’s something we should at this point start looking at,” Lewis said.

“Getting Bulldog Drive is a needed thing to get us paid back in the general fund,” Meeker said, “and getting that money gives us a little bit more flexibility to accomplish some of these other things. I’d like to jump-start Town Center somehow and get that producing something and then, get rid of the CRA, move those taxing benefits back into the general fund, back to the county—it’s hurting the county too, you know, the CRAs hurt both, in essence, right now.”

Landon, the city manager said some companies specialize in lease-purchase arrangements such as the one council members are discussing. But even though the city is just now signing a new, three-year lease to extend its office arrangements at City Market Place, Landon said it would have to start to plan for its next arrangement soon, especially if it’s a lease-purchase arrangement that would result in transferring offices from one place to another.

While the city administration could work out a new long-term lease arrangement elsewhere, Netts said he would in no way condone a long-term arrangement that doesn’t involve voter approval: he was recalling last year’s furor over the city administrations’ plan—reached with city council support—to build a city hall supposedly without raising taxes, through a complicated shell game between city funds, but without going to voters, either.

“The reality is I’m not going to be comfortable with anything that appears to circumvent the intent of the charter. We established this city saying we’re going to go to voters with this kind of issues. If we can’t make a compelling case, then we shouldn’t do it.”

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14 Responses for “Signing For 3 More Years at City Market Place, Palm Coast Explores New City Hall Options”

  1. Question says:

    Why doesn’t the city just buy City Market Place and then all the empty units can be rented to small businesses at a lower cost? Not only will you save the tax dollars on building a new building you then have rent from all the small store fronts of local small businesses. This is a perfect location for little niche businesses like Beach Street in daytona or St George Street in St Augustine.

    I would rather see my tax dollars go toward City Market Place then building a new City hall. If City Market Place is in foreclosure why not purchase it?

    Just a thought..

  2. blondee says:

    I would like to know more about these two new “major developments” north and west of the city.

    [Blondee, those are the Neoga Lakes development (or Development of Regional Impact, as planners call them, DRI for short), in west-central Palm Coast, a 7,000 homes development, plus 2 million square feet of commercial and industrial development, that the council approved late last year, and Old Brick Township, northwest Palm Coast, that one with a potential 5,000 homes, 1.15 million commercial and industrial development, that the council also approved.–FL]

  3. some guy says:

    Why well i think it is not “NICE” enough for those in high places to have as theirs. Also when taliking about why polititions do things with OUR money and how WE pay for it are not high on their agenda.

  4. palmcoaster says:

    Agree!

  5. popo3984 says:

    just let the city build a city hall already who cares let palm coast become a city if all of yous dont wanna pay for it then move

  6. Palmcoaster says:

    Excellent point made, the City is renting at $9 a sq ft on average for 3 years. The total square feet for City Marketplace is 167,000. If each business paid $10 per square foot less the 21,000 the City has it would bring in $1,460,000 per month. Trust me if you rented at $10 a square foot there would be a waiting list to get in.

  7. Joe A. says:

    I think a perfect location for city hall would be that yellow building on Palm Coast Parkway just west of Belle Terre. Right now there are a handful of businesses in there. But the opportunity for it to be a city hall is great. There is plenty of parking (large lot and underground parking garage), they could put all of their offices in there, including a large enough auditorium to hold council meetings there.

    It is just an idea, as the building stands nearly empty. From the outside it looks very regal and dignified like a city hall should be.

  8. palmcoaster says:

    @Palmcoaster. Like I said, I agree.

  9. Initialjoe says:

    I like Joe A’s Idea. It would make Palm coast look awesome for using an already existing building!!! That would be them being green! As long as they don’t build a taj mahal like the county haha.

  10. Question says:

    Palmcoaster,

    Who do you think would be the best person to send that idea too (buy City Market Place)? Maybe our friends at Flagler Live could contact the city? Currently BB&T owns it.

    he auction for City Marketplace, behind Walmart on Cypress Edge Drive, came to a close noon Friday, Jan. 6, with BB&T submitting the winning property bid.

    Because the deal had not yet officially been approved by a judge at the time of press, BB&T Communications Vice President David White said that the closing sale price as well as other specifics on the deal could not be disclosed.

    Bidding for the four-building, 167,000-square-foot property, which houses Palm Coast’s City Hall, along with several art and dance studios, restaurants and other stores, started at $5 million, and took place in $25,000 increments, with a $100,000 deposit required.

    Regarding that yellow building on Palm Coast Parkway just west of Belle Terre I believe there are some major structural issues with the building. I believe it is called Roma Court. I know a few large companies were in the process of moving in there and had to pull their offers off the table. I actually heard it might need to be torn down unless a buyer comes in and repairs the issues. Again that is the Palm Coast Buzz.

  11. w.ryan says:

    Isn’t City Market Place an appealing local? Aesthetically, City Market Place is one of the better looking developments in Flagler County. It has a unique enough look that may rival some city hall’s of other small cities. Buying City Market place and supporting small businesses including the growing arts community would be a smart move in bringing more people to Palm Coast creating badly needed revenue and good attention. Improvements can further enhance this local. Using public arts would be fabulous. Art in Public places. There is also the plot of land where the fires was that can be used to build an amphitheater or some other attraction. The prior owner wanted to build a community center on that plot of land. Lets make it work. Excite people to visit and spend their money.

  12. Barney Fyfe says:

    Where do I start?

    1. Palm Coast City Council flirted with notions, enabled by all sorts of creative if not imaginary financing, of building itself a new city hall in Town Center. Public opposition obliterated the plans. – Really? or was it the economy stupid. Creative in toying with the idea of imminent domain – read strong arming – property take over. How much money has been spent over the years between EIS, architects, traffic studies, legal fees, lawyer fees, and every other guvment regulation/fee/study requirement to build a new city hall to have it simply flushed down the toilet to sign a new three year lease at below market value prices? And don’t forget about tax paying business owners (except for a few city hall favorites that the city left alone) that have been affected through this whole apparatchik operation. Business owners that provide needed services, pay taxes and were dragged through years of litigation to lose thousands of dollars through the whole process only to see the city sign a three year below market value lease. Isn’t that nice? TAKE THAT you tax paying minions.

    2. “We knew three years ago, three and a half years ago, we got a very good deal, because the landlord at that time was pretty desperate to get us in here.” That hasn’t changed. “This is very competitive,” he said….. Well that’s interesting! You knew that long ago and still went through lawsuits and badgering and harassing local hard working business only to sign a new below market value lease? Isn’t that nice?

    3. The city will have spent about $1.5 million in six and a half years at City Market Place, between November 2008 and April 2015, “with nothing to show for it,”….. I disagree. You should be explaining to the taxpayers how much money this has saved taxpayers in the current economic environment. Building a new building and floating a 30 year bond to pay for it does sound like such a good deal. You would have to raise tax rates to pay for it and then do the math to equate the return on investment of money saved with below market value rent versus bonding out many millions and the cost to the taxpayer.

    4. He said he doesn’t consider Town Center the “center of town” anymore, because the city approved two major developments to the west and north of the city, which will move the city’s center of gravity in that direction….. Brilliant! So now you have a moving target. Hmmmm, let me see. Just where should we build a new Town Center or should we build a new one every 10 years as the center of gravity moves. Dolts.

    5. First let me say this…. This is more government regulation which is killing this country. It is happening in every state, county, city, town, and village. Government is too big. …… RA—a Community Redevelopment Agency, which is a special taxing district. All taxes generated in that zone, above a base amount, stay in that zone, essentially denying the city and the county a share of taxes that would normally have gone to those two governments’ general funds. The county isn’t fond of the CRA concept, wither, for that reason…….. Of course they don’t like it! Apparatchiks want full control. Period. But you and I will suffer along the way until they get what they want.

    6. …I think the citizens don’t have a problem with a new city hall in the Town Center. The problem is we don’t have the money to do it. ….. Really? where did the money come from for study after study, lawsuit after lawsuit, legal fees, lawyer fees, etc. only to decide now that we don’t have the money to do it? Disgraceful.

    7. “Getting Bulldog Drive is a needed thing to get us paid back in the general fund,”…. get rid of the CRA, move those taxing benefits back into the general fund, back to the county….. Do you see the pattern here? and don’t kid yourself. They are not interested in getting any tax benefits back to the county. It’s all about they city and how they can control YOUR money.

    8. Netts said he would in no way condone a long-term arrangement that doesn’t involve voter approval:….recalling last year’s furor over the city administrations’ plan—reached with city council support—to build a city hall supposedly without raising taxes, through a complicated shell game between city funds, but without going to voters, either….. See the pattern? you minions get in the way of “progress” Believe me it they can do this without your approval it will be done. With that said, why did it take so long for them to reconsider? Lots of money spent by the city and business owner to have it come to a grinding halt? How fair is that?

    All in all a disgraceful display of City government flexing their collective muscle to go out of their way to get whatever they want whenever they want, hoping along the way that the minions simply roll over, give up, and go away.

  13. gatorfan1 says:

    this place needs a city hall just like every other town in the united states of america. what is it with these people with all the whining and crying? this is baffling. would they just as soon have city hall in a horse barn? you can’t make this stuff up! BUILD A NEW CITY HALL AND YOU WHINERS GROW UP! it has to be the new york transplants that think they own palm coast and can’t afford to live in south florida doing all the belly aching. they want a steak on a hamburger budget.

  14. Howard Duley says:

    government just doesn’t give dam about it’s own citizens. It has it’s own glorification in mind when they do anything. they obviously are smarter than anyone. the way i feel about this country right now i wouldn’t lift a finger to defend it. my attitude has been brought on over the 51 years since i was discharged form the air force.

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