VGTI. Digital Domain. Torrey Pines. City Center. Southern Grove.
Port St. Lucie has taken on hundreds of millions of dollars in debt over the years on what even the mayor calls “bad bets” in the so-called jobs corridor of Tradition. Trying to diversify the economy, the city’s leaders invested in development – be it scientific research centers, public-private ventures, or establishing large swaths of commercially available property.
One by one, each of the bets failed, leaving the city to figure out a way to absorb the debt.
Digital Domain has become a large church. Torrey Pines – though mostly vacant – still has some life inside its walls. City Center hosts numerous events each year, though the vacant land around still holds the promise of future construction. And Southern Grove is now in the city’s hands after Tradition Land Company walked away.
VGTI – now the Florida Center for Bio-Sciences – is the subject of an interested buyer. That buyer has offered $14.5 million for a facility that cost the city $64 million to build. The building was appraised for $14.5 million. If the sale ultimately goes through, Port St. Lucie will take a financial hit – having to continue to cover the cost of the remaining $57 million debt until it’s paid in full.
City Manager Russ Blackburn explained that the VGTI facility was not over-built or over-priced. But, because it is such a specific-use facility, with no other like it in the region, the property appraisal team had to look elsewhere in the country to come up with comparables to base its value. Blackburn said that if VGTI were to be built today, it would most likely still cost more than $60 million.
City Center has garnered the attention of another prospective buyer. But a deal to buy must be struck with the Securities Exchange Commission, not the city. City officials don’t have a timeline for when or if a deal could be approved.
Still, Mayor Gregory Oravec is optimistic about the city’s financial future. “The city has weathered every shot the economy threw,” Oravec said during the city’s budget preview. “From here on out, it gets better every day.”
In a prepared statement, Oravec said it would be fair to call these “bad bets, at least so far, at roughly the 7-to-10 year mark.”
He added that Port St. Lucie continues to work to divest itself of them as quickly as possible.
It’s not all bad, though, he said. As parcels sell and develop in Southern Grove – the jobs corridor south of Tradition proper – the city can lessen its financial obligations. With VGTI sold, the investor/developer plans to bring in one or two tenants within a year, helping the city to not only collect property taxes again, but also breathe life into the facility and attract even more tenants.
City Center’s possible sale, too, would clear the way for private development again, which would revitalize the area. The city’s plans had called for restaurants and a hotel along with other uses.
“And now that the debt associated with the last of the bad bets is priced into the budget, our already strong financial position should steadily improve from here on out – barring acts of God, the Florida Legislature, etc.,” Oravec said in his prepared statement. “In fact, with the potential sales of VGTI, City Center and parcels of Southern Grove, the improvement could be quite dramatic.”
