|The Beach Club lease renewal will result in lease fees that are so incredibly low, the unrealized revenue to SRIA/Escambia County will amount to $50 Million dollars over the life of this lease term. How was this allowed to occur?|
The 128 unit Beach Club condominium complex at Pensacola Beach recently renegotiated their lease with the Santa Rosa Island Authority.
The original 1949 lease had been amended in 1985 (but this amendment was not recorded) and it was amended again in 1985 a second time (recorded). The original lease was set to expire in 2048--but instead the Island Authority renegotiated this renewal, ahead of schedule and on VERY favorable terms for Beach Club. This happened in 2017 and the parties signed a new amendment in January of 2018--starting the clock on a brand new 99 year lease.
Because of the changes made to this renewal that was just completed and finalized this year--the properties on this land will only pay ad valorem taxes on improvements, not on the land. The property's owners will pay a lease fee to the SRIA.
This lease fee, according to the property appraiser, is a total of $23,593.78 yearly----- or just $184.33 per unit per year!!
This amount of a lease fee for such a valuable piece of Gulf-front property is ridiculously low, so much so that I feel it is borderline scandalous. Why was this rate negotiated down to such a small amount? Who decided this was appropriate? Why are the taxpayers that own this land being treated so unfairly in this deal? These are questions I am asking and that I will continue to ask until I get a good answer. So far I have received no good answers. (Similarly priced condominiums on the Gulf of Mexico in Perdido Key pay in excess of $4000 MORE yearly in taxes and fees as do the 128 owners of Beach Club now as a result of this "re negotiation.")
Meanwhile, a quick look at section VI of the second amendment to the original Beach Club lease, signed in 1985, clearly states that the minimum rent [lease fee] will be $25,000.00 or $500.00 per unit per year, whichever is greater.[EMPHASIS ADDED] So why is the lease fee only $184.33 per unit 20 years later in 2018 when the minimum per unit 20 years ago was $500 per unit? Why?
This same section, section VI, goes on to state that the rental amounts will be tied to the "CPI, 1967,
all urban consumers" and recalculated every 5 years based upon this rate. I am told this escalation did not occur in 2015, nor was it enforced in 2010. I have asked if contract provision was enforced in 2005 and I have been told by the Island Authority that "we're not sure."
($500 dollars today, in 1988 dollars, is $1,065.25)
$500 dollars today, in 1967 dollars, is $3773.02
What the heck is going on out at SRIA?????