Jeff Bergosh Blog: The Original Leases Look to Be Perpetually Renewing....

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Friday, August 31, 2018

The Original Leases Look to Be Perpetually Renewing....

I came across two of the very first, original leases for Pensacola Beach entered into between citizens and the Santa Rosa Island Authority in 1949.

They are interesting documents, I will publish them below.

As we move toward standardizing the renewal language of the beach leases going forward, to prevent the taxpayers from being taken to the cleaner like we were with the Beach Club renewal--it is instructive to look at the language utilized in the very first leases.

The language is straightforward and appears to allow for the perpetual renewing of the leases for consecutive 99 year terms (see highlighted portion of these leases below)

In the period after the late 1940s and through today--the language has changed, modifications have been made, and there is now a hodge-podge, mix and match grab-bag of different leases with different stipulations and language in force for Pensacola Beach properties.

This has created issues and led to litigation. We need to standardize the process and the language going forward to curtail litigation and to make the leases uniform in the future.

Importantly: If we make the changes I am suggesting, and make the leases perpetually renewable--it appears as though this language will align with the original leases that were made and also with the lease we made with Santa Rosa County for their portion of Santa Rosa Island.

But as I called for earlier, I am all for allowing the TENANT to choose whether or not they want perpetually renewing lease language, which would result in ad-valorem taxes being charged legally to the land portion---or--a lease subject to renegotiation with an initial 99 year term and with a modern, market rate lease fee that has a cost of living escalation clause written-in as well.

It should be their choice--but the language should be standardized for either scenario going forward to avoid the messy confusion and outright inequity between lease holders on the beach currently.

Check out the language in these first series of leases (residential and commercial), below. Is this language tantamount to a conveyance of the land in perpetuity if the lessee so chooses--?