Once again, the City of Port St. Lucie finds itself in the position of cleaning up after a developer’s mess.
“The last of the ‘big bets’ has failed,” Mayor Gregory Oravec said last week during a special City Council meeting to discuss the future of the jobs corridor in Southern Grove, an area of Tradition. “And that’s good.”
The mayor explained that the previous bad bets – City Center, Digital Domain, VGTI – did not break the city, and this last one wouldn’t, either.
Tradition Land Co., the property owner, informed Port St. Lucie officials earlier this year that it had no plans to pay the taxes and special assessments on its unsold land, and it was going to walk. Doing so would mean defaulting on millions of dollars’ worth of bonds if the city doesn’t pick up the tab. That tab this year would be about $1 million. Next year, the tab is estimated around $5 million.
The jobs corridor includes 1,247 acres of unsold property that fronts Interstate 95 south of Tradition Parkway. The corridor also includes the developed northern end where Tradition Medical Center, Keiser University, Torrey Pines Institute for Molecular Studies, and the Florida Center of Biosciences are located, and where City Electric Supply is moving in.
Those properties are not affected by Tradition Land Co.’s leaving.
By the end of nearly two hours of presentations and discussions, the Port St. Lucie City Council ultimately decided unanimously to move forward with Tradition Land Co.’s request to transfer ownership of the unsold land.
Council members agreed that if the city were on the hook to pay the taxes, special assessments and the like, it might as well have the property in hand and under city control.
“There were times when I thought that might be the best action,” City Manager Russ Blackburn said of just letting the property sit and not take it over. But a deal in the works for homebuilder Mattamy Homes to purchase all the low-density housing property in Southern Grove would disintegrate if the city took no action. And, if the city did nothing, it would default on the bonds it issued a decade ago to pay for the infrastructure – roads, water, sewers, etc. – in Southern Grove, which helped spark development of the Tradition Center for Innovation and the Tradition Center for Commerce.
“It’s not a choice,” Blackburn said, “because we don’t want to default on our bonds.”
The city would have to carry the property or risk a downgrade to its bond rating. A lower rating means higher costs for debt. “Our decisions don’t get better by taking no action,” Blackburn said.
By accepting the land transfer, the city would become the master developer of the jobs corridor. “We control our destiny,” Blackburn told the council, adding that it would be a burden, but worth it.
Blackburn recommended to the council that they approve the land transfer contingent on an environmental survey and other due diligence. They agreed and noted they wanted it all worked out prior to May 24 so they could vote on finalizing it.
After taking possession of the property, the council agreed they would want an update to the market study that was done in 2004 to determine the best uses for the property.
The city will also have to market the property and, to that end, suggested seeking a joint venture partner or two to assist.
Vice Mayor Shannon Martin raised a concern about government being in the real estate business, but agreed that since the city has to cover the carry costs on the land, it might as well have ownership.
“I have to support it,” she said.
Oravec said the proposal has many moving parts and that it would be fair to call the issue complex. He added that he could feel “the weight of history. I really believe it’s that important.”