One comment: “It didn’t go the way I thought.”
Next up:Modifying the city’s travel procedures.
Kisela; “Instead of bringing back receipts and all that documentation, this is a straight per diem.” And it’s within IRS guidelines.
Wood: How will mileage be calculated? Kisela: It’s a per/mile rate based on the price of fuel. Goes up and down with the price (much as at The Log).
Seevers: You changed the word “dinner” for “supper”in the ordinance. Bragg Farmer, finance director: “It means the same thing” but as a southerner, he prefers supper.
Unanimous.
Next up: A grant that would put more traffic patrols on the road. Seevers makes a motion for the city manager to execute the $75,000 grant. Weidenhamer seconds.
Kisela: “What this does, it gives us for fiscal year 2010, $75,000 for that purpose. We’ve been working with the public works/public safety committee” on some of their concerns. It’s about 2700 hours of traffic enforcement “so it will be pretty substantial, not just on highway 98 but throughout our neighborhoods … If you’ve got a heavy foot, you might want to lose it throughout 2010.”
About a third of this will be used in spring break and summer, particularly the heavily pedestrian-trafficked area between Gulf Shore and Airport Road (I think that’s it).
And the motion: Unanimous.
City Manager comments;
Nov. 16, groundbreaking for Scenic Hwy 98 Phase 3.
CRA board meeting for next Monday but it may be deferred.
Coastal Planning, a city consultant may make a presentation soon on the effect of oil drilling on the sand source for beach restoration.
And there’s lots of events still to celebrate this week! check the Log for details!
Comments from the audience; Betty Kenyon gets up. “My daughter … voted against incorporation in 1984. I think I was living in Virginia.”
22nd Oct., she was rear-ended on 98 by an Alabama driver. “Something has got to be done about the speed limit in the city .. from the city limit to the bridge, make it 35 mph an hour, just one consistent speed limit throughout the entire city.” Traffic enforcement is a problem. Since 98 is a state road, who would have to decide?
DOT, several people say. Craig: Federal actually. But we have just approved the added patrols. “We believe it will hopefully accomplish the goal you’re seeking.”
Bagby: If it’s 35mph, I can drive my golf cart!
Trammell: “I feel your pain, but I was sitting at a stop light when I was rear-ended in October.”
And no more speakers–we’re adjourned!

Jim Bagby says it should also include the merits of buying the St. Andrews property.
Unanimous with Dewey and Kelly abstaining.

Kisela reminds everyone this is only one of three sites the city wants to acquire.
Weidenhamer: He would like to see a financial analysis. Even if the lease is half the price of payments, “it’s still cash flow. If we’re spending half of the money we’re spending otherwise, the other half might go to another parking location … There’s only so much cash flow.”
Kisela: We have a financial advisor, we can have him go over the lease. “I hadn’t wanted to spend that money unless there was a policy direction.”
Jim Bagby: “if that was a motion, I will second it, but I will tell you what it’s going to tell us … it’s going to tell us to lease” subject to a couple of technical points.
Kisela: Parking garage costs will be the same on either site. He can bring back an analysis on the parking-lot price in a couple of weeks.
Craig: He doesn’t think the lease is the clear winner when you consider that 30 years down the line, one would still have us owning property.
Trammell: We’ve discussed building condos on a parking garage–would the church be OK with that? Kisela: We would have that right.
Weidenhamer: We need to consider the residual value, but cash flow will be important. “I don’t care what the residual value will be 50 years from now, it won’t buy you more parking spaces today.”
Dewey: 50 years ago, his grandfather sold a harbor parcel for $5,000; today it’s worth $50 million. In the harbor district, residual value can count for a lot.
Seevers: Do we have a closing date for the Clancys?
Miller: No. My position is that you have in your hands the enforcement of the contract.
Seevers: There is a huge value in owning the parcel, and the value is going to go way up when redevelompent starts. How will the analsysis figure that in?
Greg: “I will defer to the financial advisors. This is not the first time someone’s been asked to evaluate lease versus purchase.” The advisor will make the call.

Buying is good, overpaying isn’t, and we’d be playing $3.6 million for a property that’s maybe worth $1 mill today. And “as somebody says, we’ve danced with these folks almost six months, longer than six months–we’re still dancing and I’m tired of dancing.” He’d much sooner see a right-to-own deal worked out with St. Andrews. “I can’t support the Clancy piece, we’ll be dancing here six months from now and paying for a property that might be worth $2.6 million then.”
Dewey: The key points: Which piece is going to be used more? Definitely the Clancy land. With the church we’d need a shuttle probably and to promote it to make the public aware of it.
Second question: How do we get people across the harbor? An overpass is a big decision point (putting one on the St. Andrew’s property is impractical because it clashes with the church’s front entrance).
Craig: Multiple harbor plans have failed in the past. He remembers one group of owners he gathered together to discuss the boardwalk, and the landowners were emphatic that was a no go without public parking.
“This is one of those rare occasions where engineers like Mr. Bagby and I can look at things objectively from a financial standpoint.” It’s simple to look at the debt service compared to the lease payments, it’s not an apples to apples comparison. He’d like to see more due diligence, more thought put into it. “I don’t think we should have a policy directive until we figure out the best deal” based on financial analysis.
Kisela: Can report back on the cash flow, but I don’t want to get into a lengthy debate over discount rates and stuff–that can skew current values.
Barker: I think this is one case where intrinsic values can settle things; if he were voting, it would be based solely on the best deal. But he realizes other values might be in play.
Weidenhamer: Agrees with Bagby about the possible drop in value; could we get another appraisal? Otherwise there might be legal questions.
Miller: “You have an enforceable contract until you vote otherwise and that’s the only face I have to show.” Mr. Bagby’s view does not change his opinion unless a majority votes to change their position.
Windes: We don’t want to bad data to kill us the way it’s killing amberjack fishing. Can we be sure of getting a Tier Two parking fee? Or any Tier Three fees? By the time we know everything we need to know, it might be too late.
Kisela: I would be happy to bring a financial analysis back to you at the next meeting. Windes: But we won’t know anything about the fees.
Kisela: I’m strictly looking at the cost of “the dirt”–not building the garage, just putting the basic spaces on the ground.

“If you can buy it, you’d better buy it, because it’s only going to accrue value down the road.”
There’s only so much distance people will walk from the parking, and the St. Andrews parking lot will probably end up exceeding that. She’s also concerned about the right-to-own parking lot because if we buy it, it would become a nonconforming property: The church wouldn’t have enough parking of its own.
Kisela: He thinks the intent was to give us that option if the church decided to move.
Trammell: And we have the same problem with both properties: When someone slows down to turn, it slows things up. One option is a deceleration lane, but if we put one in at St Andrews, it’ll take part of the parking. “Their driveway is huge” to cope with that.
Generally, she favors the buy. And we have the money, so she’s not worried about it; she is worried about ingress/egress on both properties, however.
Kelly: “This is one leopard who does change his spots.” Bagby’s always keen on buying land when we can, but suddenly he’s Anti?
“This situation is apples to apples”–a winding parking lot on Mountain Drive, a greater distance to walk to the harbor; and we’re going to have money for construction, from one of the Tier Three projects and (if the fee the city has proposed eventually becomes law) from large Tier Two projects.
“What’s in the best interest most of the time of the people long-term in the CRA? It’s not the mountain drive parking lot—if we can swing the deal,” buying is better. “What are we talking about doing? Reneging on a contract we’ve already signed. I’m not changing my spot.”
Seevers: In seven years on council, she’s learned that once you make a mistake by “spending money on something you don’t own” you don’t repeat it. Buying property is a good investment, leasing isn’t, as she tells her kids; putting $50,000 a year into a lease property means “at the end of 50 years, you own nothing—nothing.” That’s a raw deal for the citizens. “People aren’t going to have an investment for the future.”
She wants to try Clancy one more time, then look at the alternatives.
“Another thing that was not brought up, we buy this parcel and there’s nothing that says we, the city council, have to be the ones to build the parking garage. The city could lease it out and have someone run it and eventually build the garage.
Jim Bagby: Kelly’s right, he does prefer buying

If we were building a parking garage now, we might have that problem–it would be more of an issue if the garage were required immediately rather than a long-term plan.
Wood: Could someone negotiate to use that parking as part of their parking requirement?
Kisela: That’s something we’d have to negotiate in a development hearing.
At some point, he adds, the price of parking would probably require charging after the garage started going up.
Bagby: Is there a limit how much we can go over an appraisal?
Kisela; You can pay less than the appraised value. To pay more than appraised value it requires a supermajority. And any purchase over a half-million requires two approvals, which we’ve gotten.
Bagby: What’s the date? “An April appraisal or even a May appraisal is not good in November” given the market–prices have stabilized below the April/May level.
And the cost isn’t just $3.125 million, because there are also Realtor’s fees and construction that puts it up to about $3.6 million.
He thanks St. Andrew’s for the offer, though he predicts “we’ll be wrestling with these choices for a long time.”
Getting back to the deal, Bagby says it doesn’t make sense to buy the Clancy land; maybe in 50 years, we will, but transportation, as Wood says, might have changed a lot. “I’m not willing to bet my kid’s future on that.” It doesn’t make sense from a business perspective, legal perspective; the policy perspective is that the city wants parking on the harbor and promotes more people, fewer cars.
The lease keeps the options open.

Kisela: The two oustanding issues were that the contract requires the land be free of occupancy, and there’s commercial and residential occupants.
Miller: There’s a couple of items I do not have absolute satisfaction on.
Kisela: And they still want us to pay their realtor fees.
Miller: “Unless y’all break face with me, I put it to them in no uncertain terms that all the gamesmanship is up … I expect those issues likewise to put to sleep.” If not, “I’ll have some negatives to report back to you.”
Kisela; “We’ve been to the dance with these folks before” and they didn’t deliver. The occupancy issue is real.
Miller: He wants to make clear that when talking to the Clancys he and Greg have always made it clear that these issues are dealbreakers if they aren’t resolved.
Weidenhamer: At this point we’re not planning to charge for parking. We’re looking at spending $245,000 to $195,000 depending on whether we take out a 20 or 30 year mortgage. That’s way more than the St. Andrew’s property. “Fifty years from now we may not need a parking garage or the type of parking garage we’re thinking of today.” “With a purchase, we’re thinking of paying twice as much per year as with a rental or lease.”
Wood: If the money we were going to spend on purchase isn’t used, could it be used on Royal Melvin? Was it in the Mountain Drive loan we took out?
Kisela: The $8 million Mountain Drive loan goes on Mountain and the harbor boardwalk. This comes out of other funds.
Wood: He has a real worry that the parking won’t get used very much except during the major events such as Christmas. “I don’t care whether we buy or lease, I don’t much like the prospects.”

So we have an alternative to the Clancy land, a comparable transaction just across Marler Street from there, starting at 52,000, then 100,000 if they buy more. The church is open to negotiating right of first refusal if it decides to sell; there are concerns about the driveway width from the neighbors but he thinks that can be worked out.
The Clancy property is a better site, right across the street from Royal Melvin Heritage Park, and it will accommodate an overpass better. However, it would save almost $3.1 in capital by leasing rather than buying. So there’s pros and cons.
Jerry Miller on voting conflicts: Dewey and Kelly should both obtain because of their property interests. Sandy Trammell has an interest in three properties on Mountain, and Weidenhamer’s SOS Printing is a tenant in one of her properties; however, neither Trammell nor Weidenhamer stands to gain more of a benefit than anyone else on Mountain so that’s not an issue.
Since his last report on the Clancy property, he’s received updated information, including confirmation the mortgage holder has launched foreclosure, which is a big incentive to the owners to sell. Another piece of litigation against the Clancys has been wrapped up.
And the Clancys seem to be working on getting the loose ends wrapped up. “Unlike my previous report when I thought there were an awful lot of issues … many of those black clouds are now gone. We can probably deal with establishing a closing date and documenting all of those pending issues.”
Craig: If the council signed to purchase the Clancy parcel, you believe the city would receive a clear title?
Miller: We know all the conditions that exist, and we have title insurance. I think what you’d need is a supplement to the existing contract updating the title situation.

Greg: You’ve asked me to look for alternatives to the Clancy Company parking lot sale. We’ve been told they’re removing the obstacles to closing but we’ve been told that before. And the word is the first-mortgage holder is launching foreclosure, though issues with the second-mortgage holder have been resolved.
However, St. Andrews is now offering parking. This came up before closing on Clancy land; Kisela told St. Andrews if the Clancy land fell through, he’d be willing to talk. It fell through, St. Andrew’s and Greg have been negotiating a lease comparable to the Clancy deal.
It’s a two-tier plan, starting with one piece, then having the option to acquire more property (I’ll go into this in more detail in my article).

The first week he was in, he was shown evidence the data was flawed–but eight years of Destin pushing that message hasn’t done the trick yet. However, he’s seeing questions raised in Tallahassee and Washington that makes him think people are beginning to doubt. “The data is wholly inconsistent with what anyone who goes to the Gulf of Mexico and fish on a regular basis sees… We need to embrace this hard and heavy and never give up until sound management practices are put in place.”
Seevers: Thanks Bill Nelson for looking into this almost immediately after being asked.
Someone from the Destin Chamber says the chamber has already announced its support and would like to sign on to whatever initiative the city launches.
Craig: I’d like you to come out for the Saturday protest. “it’s ironic that Saturday morning we’re celebrating our history and heritage and it’s our history and heritage that’s being threatened.”
Bagby: We should push for a thorough review of the data, a full inventory. No matter what they do, we need that to settle the question once and for all.
Dewey: “i’ve been involved in these issues for more than 20 years. It’s all being driven by the reauthorization of the Magnusson Act” which handles fisheries management. The act says it doesn’t have to be accurate data, it just has to be the best available—”It doesn’t have to be right, it doesn’t have to be close to right.” They can’t not manage fisheries, so we have to give them a better plan with better data; once we have one, we should use our congressional people to set up a meeting.
Kelly: “We’ve been working on better data for years” such as electronic logbooks “but they always have reasons why it can’t be done.” If every fare-carrying vessel wrote down what they caught, they’d have more information. Right now, the researchers come down, look at a couple of boats and conclude if one boat caught x, the fleet as a whole catches 50x or whatever. “That’s not data–I have a word for it, and it’s not data.”