A deal to build a nine-story office building on city-owned land on the northwest shore of Lake Mirror is headed to city commissioners Monday for discussion and an expected approval.
Summit, a Lakeland-based workers compensation claims and insurance company, plans to build the estimated $50 million, 135,000-square-foot building for 500 local employees. The company is currently based on Commerce Point Drive off of U.S. 98 S.
The main portion of the deal, which has been seriously discussed since at least 2018 and intensely negotiated since this summer, is the sale of the city-owned “Old Fire Station lot” to Summit for $2.5 million and the city’s lease for 30 years of at least 150 parking spaces for nights and weekends.
The city is also contributing $1 million in cash and waived development fees and is responsible for any improvements made offsite that come as a result of the new office.
City Manager Tony Delgado said these yet-unknown costs for things like pedestrian improvements or street beautification would be $500,000 at most, though he asserted that these have not been identified as necessary and the final tally would likely be lower.
All told, it’s reasonable to see the city’s expense on this project to be about $1.4 million, Delgado said.
“It’s quite possible we’ll look at pedestrian crossings and see if it’s necessary,” he said. “I think we’re going to have areas we have to look at, but I don’t see us spending $400,000 to do that.”
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The deal does not include the kind of multi-year property tax relief often included in projects like this, so it will immediately begin paying into the city offers, Delgado added.
“I think it’s a wonderful picture of an appropriate level of investment for the city’s part and an appropriate level of responsibility on Summit’s part,” Mayor Bill Mutz said.
The funding for the city’s contribution will come from a mix of Community Redevelopment Agency money, the public utilities and the city’s “catalyst fund,” a sum set aside this year to spur downtown development beyond the abilities of the CRA.
Mutz, Delgado and Commissioner Stephanie Madden all said they believe the addition of 500 employees downtown will create a significant benefit for existing downtown vendors and may lead to additional development. Further, there may be some symbiotic benefits with Mirrorton, the upcoming 300-unit apartment complex across the CSX rail tracks north of the new Summit site.
“That is a game changer for our downtown businesses,” Madden said, “to have 500 people you can solicit to come to your business and they don’t have to come down to find a parking space — that is huge for our downtown.”
Direct intent, circuitous negotiation
Previous versions of the proposed agreement reviewed by LkldNow earlier this year saw the city paying significant operations and maintenance costs on the 150 parking spaces, and insurance liabilities. The operations and maintenance was estimated at about $50,000 each year, Delgado said, or $1.5 million over the life of the contract.
And the earlier drafts only gave the city rights to the parking spots for 20 years; the final draft saw that timeframe extended to 30 years.
The earlier drafts also included provisions seen as untenable by the city’s professional planners because they subverted the city’s building and land development processes. A draft reviewed by LkldNow on Nov. 19 included some of those provisions, but since then there had been two newer versions where those items were changed, Delgado said.
Though that negotiating took many turns with significant changes in the city’s subsidization of the project, the intent to build has been well established for at least a year and has been treated as a sure thing. For example, the city undertook soil testing on the site at Summit’s request prior to the commission’s approval.
And unlike other notable downtown developments on city-owned land, the Summit deal has not seen the same kind of iterative and highly public discussions seen with NoBay Village and Mirrorton deals where both developers faced other bidders for the right to undertake their projects.
At least one other developer — a major hotel chain — was interested in the site, LkldNow learned through city emails received from a request for public records. The lot had been earlier identified by city staff members in the downtown Catalyst plan as ideal for a hotel.
That developer’s request for the city to take on the burden of building parking was a non-starter for that deal, Delgado said.
“They wanted to rent 150 spaces; that was a big consideration. We wouldn’t build a garage just for a hotel. If we built a garage, it’d be (500 to) 600 spaces to assist some other development in the area.”
And that was too much, Delgado said.
And the Summit deal did ostensibly face a public bidding process, though clearly designed to match the project already on the table. The city placed a public notice in the Oct. 4 edition of The Ledger for sale of the project. Requirements included:
- A 135,000+ square-foot office building.
- At least 400 parking spots with 150 available for public use.
- The building be at least eight stories.
- A purchase price of the land would be no less than $2.5 million.
- The project had to create or relocate 400 or more jobs in Lakeland.
Mutz, the mayor, said the public notice received no other interested bidders.
When asked about the discrepancy between the NoBay and Mirrorton deals and the more recent Summit and Heritage Plaza parking garage deals — which emerged into the public fully formed — Mutz said he wasn’t concerned.
Different developments have different considerations, he said, and ultimately it’s not the city putting up the majority of the cash to make these things happen, it’s private investment.
“When you do a master plan (like the Catalyst Plan), you obviously can dream on the things you’d like to include absent the realities of the people who want to make those economic investments. The magic is matching the people who are willing and motivated to make an economic development with the wise use of the spaces, and taxes and area enhancements,” he said.
“I do think there were a lot of attempts to be as amenable with this as possible, but recognizing you have to go the dance with the people who want to make it happen,” he added.
Absent from the Summit project is the kind of “mixed-use” development with first-floor, publicly accessible businesses that has been a goal of downtown planners and vision-makers for at least five years.
But sometimes you get as much as you can out of a project and it doesn’t meet all those goals, Madden said.
“I would like to see some mixed use,” Madden said, but ultimately, the need for downtown parking took precedence.
“At this point I feel excited,” she added. “We didn’t get everything we wanted, it’s not exactly like our catalyst plan, but of all the complaints I get about downtown, 99% is parking. I think that’s what put me over the edge and I see this as a win.”
And by adding 500 people downtown during the day, there will be more vibrancy downtown, Delgado said, even without new commercial space.
“I think it will spur additional opportunities for retail and restaurant,” he said. “To say just because it doesn’t have a Starbucks downstairs doesn’t make it a bad deal.”
The other project
Included in the deal with Summit is a requirement the building be designed to accommodate the passage of a “highline” pedestrian walkway from north of the railway to Allen Kryger Park, where the angry swan statue spreads its belligerent wings.
The idea of the highline is to connect Mirrorton to the rest of downtown more directly for pedestrians. It could eventually connect with Catapult, the business incubator expected to open early next year, and a parking garage next to the LPD headquarters.
The price of that project is still unknown, Delgado said.
Mutz has been a champion for the idea and would like to see movement start quickly.
“Our goal is to do the highline as concurrently as possible,” Mutz said. “We’ve got to work on how we fund that piece. … to celebrate this project as a whole would be an admirable goal, where we have the Summit building and the highline done as close together as possible.”
To do that, the city would need to negotiate a deal with freight rail company CSX to approve any projects that cross its land.
A memo describing the Summit deal was released by the city Wednesday as part of the agenda for Monday’s commission meeting. Commissioners will first discuss the project together at a work session at 10:30 a.m. ahead of the 3 p.m. regular meeting. The work session was moved to Monday from Friday for Thanksgiving. Commissioners are expected to cast their votes on the deal Monday.
The city memo on the Summit deal: