Loused Up Lido Lease

Note: This column originally appeared in SRQ Daily’s Weekend Perspectives on December 30th, 2017. I’ve included some additional information, however, at the end.

The Sarasota City Commission recently approved a lease for the Lido Beach Pavilion which has the potential to tie up what is arguably the City’s most important public asset at a bargain basement price (from $80,000 to potentially $140,000 a year) for the next thirty years. In the most recent meeting regarding this lease, the Commission’s confusing deliberations had the three supporting Commissioners not only wholly accepting the applicants’ attorney, Bill Merrill’s, arguments that an enforceable contract exists, but these Commissioners seemed to argue the applicants’ case for them. These three attorneys on the City Commission outlined why they legally believed there was no turning back. In doing so, you have to wonder if they truly appreciated what they were doing and whose interests they are supposed to represent. A subsequent memo to the City Commission from another attorney, John Patterson, raises important questions.

Bill Merrill provided the Commission a number of examples of case law indicating that the approval of the lease must stand. But, as Mr. Patterson pointed out in his memo, Merrill’s examples were relevant to leases which resulted from RFPs (Requests for Proposals), or bids. The City’s lease negotiations were the result of an ITN – Invitation to Negotiate – not an RFP. The two are substantially different, and an ITN is subject to the City’s procurement code, which states: “The CITY reserves the right to accept or reject any or all Responses, in whole or part, for any reason whatsoever…”

John Patterson also points out in his memo that no City Commissioner has seen a completed proposed lease, which the ITN expressly requires. I requested a copy of the approved lease a few days ago and was told that it wasn’t ready yet. If the City’s ITN procurement code requires the lease to be in writing before it can be approved, it appears the City Commission’s vote on the non-existent Lido Beach Pavilion lease is invalid.

Another fundamental question raised in the Patterson memo – can the City negotiate with an entity that doesn’t legally exist? According to documents, the City negotiated with “Lido Beach Redevelopment Partners LLC”. However, Patterson points out that Lido Beach Redevelopment Partners LLC “was never formed. It has never had a corporate name; a corporate address, officers or directors; assets; financial statements or any other indication of “financial responsibility”; no taxpayer identification number; no employees; no company history; no experience providing the products and services called for in the ITN; or any authority to conduct business in Florida.” An ITN requires detailed information about the entity or person with whom the City may enter into a lease. Given that the named negotiating entity has no legal existence, again it appears the City’s vote on this lease was invalid.

Patterson also points out that the City Charter requires a supermajority affirmative vote from 4 or more Commissioners to approve any lease for greater than 10 years. This lease was “approved” by a 3-2 vote.

Mr. Patterson’s memo makes mincemeat out the claim that this lousy lease is legally valid. His arguments are worth consideration by anyone concerned with the future of Lido Beach Pavilion, and certainly by the City Commissioners who owe us due diligence in the management of this hugely valuable City asset. Commissioners would do well to understand what City residents who protested this lease know: it never should have happened.

Additional Notes:

The “Magic Question”?

A number of citizens told the City Commission that they asked for information on the status of the lease negotiations and were told there was no information to be shared. At the November 30, 2017 meeting the City Commission asked City Attorney Bob Fournier to address this concern. He told the Commission that a citizen could have requested a draft of the Lido Beach Pool and Pavilion lease at any time. The Commission seemed satisfied with this answer.

It’s a confusing answer when you think about it. When citizens were told that there was no information on the Lido Beach Pool & Pavilion Lease agreement, were they being brushed off because they failed to ask the “magic question” – that is, “Can I have a draft copy of the lease?”. City residents shouldn’t have to know what magic question to ask. If a citizen asks for information, the City should turn over whatever it has. That would include drafts of the Lido Beach Pool & Pavilion Lease.

Administrative Approval

It’s fair to say that City residents feel betrayed by their government regarding how this lease was negotiated and the accompanying lack of transparency. As one former Commissioner put it, the lease appears to be a “rip off” for the citizens. This transaction does little to inspire confidence in how City staff handled the future of a major City asset.

City staff would like to be empowered to use administrative approval to move development projects forward. But this lease agreement and all the accompanying legal, process and transparency questions does little to inspire trust in an administrative approval process.

What now?

In order for this lease to move forward, the applicants must obtain site plan approval and permits for construction. This issues are expected to come before the City Commission this spring. If you are concerned about this lease and live in the City, contact your City Commissioner(s). Meet with them, write to them. Let them know what you think. There is no substitute for personal communication.

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