The future of the King’s Landing project in downtown Fort Pierce could be in jeopardy after Fort Pierce Redevelopment Agency (FPRA) board members were told that the Marriott Tribute Hotel could not move forward without an infusion of $15 million due to increased costs.
“The cost of building and the cost of capital has increased substantially since our initial dealings in Fort Pierce. The climate for building new hotels in a market that is untested for full-service hotels has become very difficult, and in some markets, impossible,” reads in part a letter from Joe Collier from Mainsail Lodging and Development.
The letter was read to the FPRA board on July 14 by Bill Ware of Live Oaks of Jacksonville, who is leading the King’s Landing project and is required to update the board each quarter.
Mainsail, the hotel managing operations partner, is asking the city to consider “providing a bond financing for equity and participation in ownership” of the proposed hotel.
“We just need a partner of the city and we will deliver a quality hotel in which we will all be proud and will create catalysts for the city. If Fort Pierce believes in the growth and positive momentum of their town then they should feel OK about this structure. Their risk is capped, ours is not,” the letter continues.
The letter cites a project in Fort Myers where that city provided $30 million in incentives plus tax abatement to get the deal done, and there is no hotel ownership in the deal. “We are offering Fort Pierce a much better package,” the letter continues.
The need for the $15 million came as surprise to board members. It was just last quarter that the final approval from Marriott development for the construction of a Marriott Tribute Hotel at the King’s Landing site was announced. There was no mention of increased costs at that time.
Since the King’s Landing presentation was part of the regular required quarterly update, no action was taken at the meeting, but FPRA board members agreed that a special meeting should be held to discuss the project, and that it should be held at time when the public would be available to give input.
A date for the special meeting has not yet been set.
“I am a hard no on $15 million, or $1 million or $500,000,” said County Commissioner Arnold Gaines. “I will not put the taxpayer money in this project. I’m not voting on a fourth amendment. I’ve got to represent the taxpayers of the city of Fort Pierce.”
“I think we should start to ramp down the city components of this and bring it back in house and start over,” said Commissioner Chris Dzadovsky. “It’s an asset that this city should not lose.”
Commissioner Michael Broderick expressed concerns saying that the project could be tied up in litigation for years followed by another request for proposal process. “We’re looking at a 10-to-12-year turnaround cycle on this. This is going to be a decade before we see something coming out of the ground.”
“During the course of the drafting of the fourth amendment, we got word about the financing challenge and it was a surprise to us,” Ware said.
“The $15 million that came as a surprise to you certainly came as a surprise to us,” said Mayor Linda Hudson.
During the April quarterly update, discussions ensued about a fourth amendment because Live Oaks was in default on a deadline date in the third amendment, which would make them late and default on subsequent dates. The number of items in default is about to grow.
City Attorney Sara Hedges confirmed that items in default in the third amendment could be waived once the fourth amendment is finalized. Hedges and her team are in the process of reviewing the amendment, but with the timing and financing for the hotel, it will be delayed.
“If we say no to the $15 million, can this project be completed?” Gaines asked.
“Well, that’s our intent for sure,” Ware said. “Please know that Live Oaks is fully committed to bring King’s Landing to fruition. Millions of dollars have been invested to date. We firmly believe in the project.”
Live Oaks is planning to take steps to procure private financing, Ware said. “We plan to pick up the ball and do what we can do.”
The amendment is basically a schedule of deadlines for specific parts of the project, and Ware said he hoped that the path forward would grant Live Oaks some time to procure the financing.
King’s Landing on the H.D. King Power Plant property is the centerpiece of Fort Pierce redevelopment efforts. The mixed-use 7.5-acre project at Indian River Drive and A.E. Backus Drive includes plans for a Tribute Hotel by Marriott, condominiums, residences, retail, restaurants, The Villas townhomes and parking.