Okaloosa County BOCC — April 18, 2017 — Okaloosa Island Pier Lease and Assignment — agenda request — reading text

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: April 18, 2017 TO: Honorable Chairman and Members of the Board FROM: Jason Autrey SUBJECT: Okaloosa Island Pier Lease and Assignment DEPARTMENT: Public Works BCC DISTRICT: 2 STATEMENT OF ISSUE: Chris Cadenhead of Pier Associates, Inc. has executed an Amended and Restated Lease for the Okaloosa Island Pier and Restaurant. This item was first presented to the Board of County Commissioners on March 7, 2017, however it was tabled to allow for repair work to be done and payments to be made. At the same meeting, Mr. David Moon of Angler's Beachside Café, Inc., presented a request to the Board of County Commissioners for an assignment of the lease. This item was tabled at the March 7 meeting for consideration again on April 18. BACKGROUND: As presented on March 7th, there were several outstanding issues related to the County's lease with Pier Associates, Inc. concerning the Pier. Due to the deficiencies the Board continued the matter to allow completion of the various repairs at the pier and for the payment of all moneys due. At this point, certain events have occurred which are relevant to the consideration of these issues. This item is presented for discussion purposes as to the following matters:  There has been an unfortunate history of problems in the compliance with the lease with respect to the maintenance of the area. Staff has continued to actively monitor the physical maintenance of the pier and it appears as though the deficiencies noted have been addressed, though it has taken well over a year to finally resolve those issues. Some of these constituted safety issues. Routine inspections will continue and a timely response to maintenance items noted will be expected.  The second item of concern relates to various payments associated with the pier. Though the rental payments are current, reimbursements to the County are due for payments made on the State Submerged Land Lease and a sales tax liability, which was determined by the Department of Revenue in its audit. Both of these payments are a direct result of the commercial operation by Pier Associates at the pier. A copy of the letter to Pier Associates, Inc. dated February 28, 2017 outlining the payments due is provided. The Board previously directed that all those payments were required to be made prior to the consideration of the assignment, but as of this date they have not been paid. Staff has received a letter from Mr. Dana Matthews, counsel for David Moon of Angler’s Beachside Café, Inc., which indicates that the money is being held by his law firm and would be paid once the Board approves an assignment of the lease to Angler’s. A copy of this letter is attached for reference.  Third, legal counsel for the County prepared an Amended and Restated Lease, which has been executed by Mr. Cadenhead on behalf of Pier Associates, Inc. That Amended and  Restated Lease was presented to the Board on March 7th, but tabled at that time due to the outstanding maintenance and payment issues described above. The request for consideration is presented again as requested by the Board.  Staff has received a request to assign the pier lease from Pier Associates, Inc. to Angler's Beachside Café, Inc. Prior to that assignment being effective, the Board must consent to the assignment and under the terms of the existing lease, such consent may not be unreasonably withheld. Two letters from Mr. Matthews related to this request (one dated March 10, 2017 and the second dated March 28, 2017) are included for reference.  Finally, though all of the above matters have been pending for a while, staff was notified of a new development which might impact the decision making process of the Board. On April 11, 2017 a letter from Mr. Cadenhead was received indicating that he has entered into a management agreement with a third party company to provide future management of the pier and its operations. That third party is Pier Resort and Development, LLC, which is managed by Joe Winkler and Pat Barcus. It appears that this approach would be an alternative to the assignment. The letter spells out the scope of the services that will be provided pursuant to the management agreement. The letter from Mr. Cadenhead outlining this agreement and associated conditions is attached for review and consideration. At this point, staff has not been able to fully vet this alternative and believe that it would be premature to consider the assignment of the lease to a third party without providing the Board the opportunity to potentially consider another alternative. As such, staff believes it is prudent that all of the issues related to the pier be postponed to a later meeting to allow this matter to be fully investigated. OPTIONS: There are multiple items for consideration herein. They are:  Approve/accept the Amended and Restated Lease with Pier Associates, Inc. for the Okaloosa Island Pier and Restaurant.  Approve/deny the request for Assignment of the lease to Angler’s Beachside Café, Inc.  Table all items related to the lease to allow staff to investigate the management agreement as it relates to the pier lease and any potential assignment. RECOMMENDATIONS: Due to the recent information provided by Mr. Cadenhead with respect to the introduction of a management agreement, staff recommends the matters be tabled until the Board's May 16, 2017 meeting so that all matters related to the lease can be properly presented to the Board for consideration. RECOMMENDED BY: APPROVED BY: John Hofstad, County Administrator