Lakeland city commissioners voted 6-1 today to donate a half-acre of city-owned land at the corner of Main and Massachusetts to Catapult Lakeland to be used for parking when the business incubator moves to the former Cash Feed building nearby.
Commissioner Justin Troller opposed the donation but supported donating two smaller strips of land directly adjoining the Cash Feed property.
Most of the discussion involved the 203 N. Massachusetts corner lot, seen in the photo above as the lightened area at the left side of the yellow-bounded property. (The photo was taken before the Central Vacuum building was demolished,)
[box]Check weekend coverage for background. Disclosure: I’m a co-worker at Catapult, which means I pay a small amount monthly for a place to work and other benefits, such as entrepreneur workshops.[/box]
The donation gives Catapult’s parent organization, the Lakeland Economic Development Council, control of a contiguous strip along Lake Mirror’s northwest corner from Massachusetts Avenue to the Amtrak station, The Ledger pointed out in its coverage of today’s meeting.
While details of the donation were only recently released to the public, LEDC President Steve Scruggs recounted two meetings in September in which Mayor Howard Wiggs, City Manager Tony Delgado and and key city staff members agreed with the overall Catapult plan, including the land donation. The only dissent, he said, came from Community Development Director Jim Studiale.
The LEDC’s $10 million purchase and renovation of Lakeland Cash Feed and Central Vacuum, funded by anonymous donations funneled through the GiveWell Community Foundation, was based in part on support by city staff, Scruggs said.
Scruggs said he and Delgado met with city commissioners individually April 25 and 26 to lay out the plans.
Troller raised questions at today’s meeting about whether the city should hold on to the corner lot and allow Catapult to use it, but when it came time to vote, he was ready to settle for changing the city’s five-year “clawback” to 10 years. During the clawback period, the property would revert to city ownership if the Cash Feed building was no longer used as a business incubator. He failed to pick up support for the 10-year reverter, and the donation as approved includes the previously negotiated 5-year period.
Below are audio from the hour-plus discussion, some key quotes, and Twitter coverage of the meeting.
(Apologies: A few minutes of audio were not recorded around the 9:40 mark when I used my recording device/iPhone as a camera. Lesson learned: Next time I’ll bring two devices.)
Key Quotes
Here are some of the key comments made during more than an hour of discussion, starting with an exchange between Troller, Scruggs and Brian Philpot, chair of the LEDC board:
Commissioner Justin Troller:
“What’s the difference between the city owning the .4 acres and Catapult owning it?”
Philpot:
“The big difference to us, our investors and our board, is when you invest, it’s 10 million in facility and another 5 million for programs we’ve raised. If it doesn’t work down the road or we outgrow that or something that happens to the fire station site and we have to look for other uses for that site, we’ve invested a lot of money if that piece goes back and we lose our parking. It’s just too much money to spend and not be able to nail down the parking long term.”
Scruggs:
“The reason we think putting these properties together is what makes them valuable is (with separate ownership) you can’t make something happen there. By us buying that vacuum cleaner property and connecting it to yours, all of the sudden we’ve got a piece of property where you can really do something special. So our goal, Justin, for sure is to get a taxable use on there. There’s no use to do another nonprofit. We think there should be another multi-story building there with residential or apartments or retail or whatever. And we think what we’re going to do in that building next door will help make that a taxable piece of property. We don’t have plans for that but that would be the goal. The goal would be not a surface lot on Lake Mirror.”
Troller:
“If you own it and put a taxable entity on it, then where would you park? Are you going to come to us to look for more parking?”
Scruggs:
“If somebody buys that piece of property, they’re going to be responsible for providing us parking, not you.”
Troller:
“Would you be opposed to a 10-year clawback?”
Philpot:
“What would be the reason? Why five vs. 10? We know with our programs we can look out five, but we can’t look out five to 10. In this world with its fast pace, its hard to come up with a 10-year plan. So we feel comfortable with a five-year plan and we hope you do, too … It boils down to when we raised that much money, we’ve got to, from our perspective, protect the value of that investment … What I’m getting down to is 15 million vs. whatever it’s worth, from out perspective that $15 million investment is much larger. We’re taking the larger risk. And I hope you can trust us on that.”
Troller:
“You guys are tax-exempt, right? So we wouldn’t realize any taxable revenue until the property is sold?”
Philpot:
“That, or you will realize it in the increased values that we will spawn to the north and on your piece by having 300, 400 entrepreneurs down there creating lifestyle businesses.”
Troller:
“What/s your apprehension to go to a clawback at all?”
Philpot:
“If you’re investing that much money in a property, you’ve got to have parking long term, so the value of that investment — what’s that 40,000 square foot building worth with parking and then without it? … If we lose the parking because we have to go somewhere else or some other use has to happen, then we’ve lost a significant value of that investment.”
Troller:
“At the end of the day, within five years, that building is going to be sold and we’re going to use all benefit of that corner.”
Philpot:
“Why would we sell it? As a non-profit, we’re protecting the investment and the fiduciary, so why would we sell it? From a real estate perspective, we would never get all that money out of it. It’s been sitting there because it’s 40,000 square feet with structural problems. No one will spend money on it except for us. With the parking, it’s worth less that what we’ll put in it. Without the parking, it’s worth less even more. That doesn’t make sense. That’s not rational.”
Scruggs:
“We are not doing this with the intention of being real estate moguls and selling the building. I see this stuff on Facebook or whatever, and I’m telling you flatout right here on TV, we have no intention of selling it. The whole purpose of this is to give back to the community.”
Scruggs, at the beginning of the meeting, quoting from a document discussed in meetings with downtown stakeholders:
“The city of Lakeland will give Catapult land directly east of the Cash Feed building for access to Catapult’s kitchen. The city will also give Massachusetts lot adjacent to the vacuum cleaner property and Iowa Avenue for Catapult parking. Catapult will consider alternative parking options including a lease-back option and even long-term, off-site parking options.”
He continued, in apparent reference to social media comments from people surprised by the land donation: “There are no secrets. We made this ask back in September in front of all of our community partners before we bought the land and building. We made it again on April 25 and 26 with you. No one but our community is benefitting from this ask. We would not be asking if we didn’t need it.”
Commissioner Edie Yates:
“This is a phenomenal opportunity for the city, and this piece of property is our promise to the next generation and upcoming entrepreneurs that we are a progressive community and we do believe in Catapult and what it’s doing and we’re willing to make the small investment of a piece of property that has been vacant for 42 years.”
Commissioner Don Selvage:
“I was surprised … that less than half-acre would impact a $10 million investment. To me, this has always seemed like a no-brainer. They have to have parking. But Steve, there’s been an emotional component that’s been inserted into this whole debate and that has spawned more than a few constituent complaints about purportedly you have said if we don’t get this or we don’t get the design that we want, Catapult walks away. And as you can understand that spawns an emotional response from people … Can you elaborate on that?”
Brian Philpot, LEDC chair (answering Selvage’s question):
“No, we have not said it’s all or nothing, you’ve got to give this to us. The issue is staff has told us we have to have parking and this is the only option, and we were very upfront in those initial meetings. If we can’t agree on this piece of property, we don’t need to buy it. We’ve already incurred several million dollars on the property, and we didn’t want to do that until we had fair assurance that this .4 acres was going to be part of it.
“Now there’s a chance this doesn’t happen. Well, we don’t have parking. We can’t send $10 million on this building unless we have it and there’s no other parking nearby. So that’s what we mean. If we don’t get this half-acre, we’re essentially done at this point.
“And when we talk about the five-year (reverter clause), we feel like that five-year window gives everybody a good chance to know if Catapult is working. We think that’s a high likelihood. But you can’t spend $10 million on a property that you may lose the parking on down the road.”
Selvage:
But would it be appropriate to ask Mr. Studiale to tell me why what seems to me looks like a perfectly legitimate business deal, why Jim Studiale is opposed to it>
Studiale:
He opened by reading from a Sept. 18 memo summarizing a Community Development staff meeting: “Cat(apult) wants to control property west of the vacuum cleaner lot. Staff recommends that, if and when the applicant demonstrates a need for this property, it be made available for expanded parking with some of the eastern edge retaining landscaped appearance. The city desires retaining control of the property given this site’s critical linkage to the former fire station property immediately across Main Street. However, if the applicant or the city receives a proposal for a new and appropriate, taxable development on this site and/or a combination of the site and a portion of the vacuum cleaner site, then at that time the city and applicant can discuss options for purchase or conveyance.
“The applicant and city should remain in close communication about any such offers to ensure the new use is compatible with surrounding use and vision for the Lake Mirror area as well as the long standing city desire to see a return on the significant public investment made along the lake.” (end of the memo quote)
“The entire concern was how do we do this jointly … I wrote Tony (Delgado) a memo about how to do this deal cooperatively where they would end up with the Vacuum Cleaner (building) and the other thing (corner lot) and one of the other of us would develop this property so that Catapult for $1 a year would have use of 100 parking spaces, but we might put the parking in the police station site where we were moving toward that being the No. 1 solution, or we might put a parking garage on this site, but we would ensure they had their 100 parking spaces. And it listed six items .. and it ends in the bottom: I want to support Catapult on this terrific new effort but I hope that the above will allow us to do it in a way that is sustainable for our parking system.
“A few things I am keeping in mind. 1. We may build a bigger garage in year four or year six … Secondly, the Lake Mirror Overlook Development Site, which is what we call the fire station site, is another trigger to develop that ultimate parking solution with buildings and parking arrangements and a garage. We need the flexibility to move all the parkers around and use the train station site.”
Deputy City Manager Brad Johnson:
“It was the consensus of staff that this land was needed for the project to be successful, that we were supportive of it being part of our support.”
City Commissioner Jim Malless:
(After calculating the cost of putting enough spaces for Catapult in a new garage at $1.8 million) “In my mind, I don’t see parking ever going away on that corner because of the fiscal impact on it … This will be a big deal for the city … and it does preserve, whether you like the design or not, the Cash Feed building, I building I think was endangered because of the scale and the costs with it. So for that reason I support it.”
Yates:
“Our return on investment in the city is that we’ll be able to do something with those parcels (the “fire station” lot across Main Street and the city’s vacant 10 acres north of the railroad tracks) at a lower cost to us because they’re going to be so much more attractive because of the investment that Catapult is going to be making across the street.”
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