Recommendations of Sarasota City CCNA Regarding Management of Public Lands With Emphasis on Leases (For Public Release, April 18, 2018) Page

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1 With Emphasis on Leases (For Public Release, April 18, 2018) Page 1 Introduction Executive Board of the City of Sarasota Coalition of City Neighborhood Associations (CCNA) at its January 2018 meeting authorized formation of a City-wide leasing committee (CWLC) to study increasing concerns regarding the wide-ranging disparity in City leases and the creeping privatization of public lands. CWLC was formed in response to multiple, immediate leasing challenges and changes facing the City of Sarasota at Lido Beach, the Bayfront, and Mote Marine. Currently there are 255 City-owned real estate parcels, of which 51 are leased that have an aggregate value of over $300,000,000 ($300 million dollars.) The aggregate value of the remaining 201 parcels is unknown. The annual income from the leased parcels is less than $1 million dollars or 1/3 of 1%. Parcels are leased to both non-profit organizations and to for-profit organizations. Methodology. CWLC members include: Chairperson Mary Anne Bowie, FAICP, Pearlee Freiberg, Jim Lampl, Pam Mones, Steve Roskamp and Bob Sirgant. In conducting its work, CWLC reviewed certain leases, lease renewals, administrative regulations, ordinances, public and private documents, Internet resources; and conducted extensive interviews with City staff, City Commissioners and interested parties. It quickly became apparent that City lease challenges were part of a larger issue, which is the lack of overall City of Sarasota management of public lands. In April 2018, draft CWLC recommendations were presented individually to each City Commissioner and to CCNA membership. These are now presented for consideration to the CCNA Executive Board at its April 18 meeting and to the full CCNA Membership at its May 5, 2018 meeting. After final approval, these recommendations will be presented in May 2018 to the City Commission with a request to them for discussion and appropriate action. Context. City of Sarasota, Florida is not alone in struggling with the ways that Public Lands are leased. For instance, from an Internet search, we found this information from the City of San Antonio, Texas: After discussing the unfairness of some non-profits paying hourly rental rates, while some non-profits had essentially free leases, one councilman noted, We must ensure we are being wise and fiscally responsible with all City resources. And that means we must audit these rent strategies and make any adjustments to the agreements for the benefit of all. Councilman Brockhouse, January 4, 2018 Lease standards of cities of Chico, California and Baltimore, Maryland are found on the Internet and serve as a useful resource moving forward. Cities such as New York, are sophisticated in handling leasing of public lands. Much research is possible on this topic. Mission and Findings 1

2 With Emphasis on Leases (For Public Release, April 18, 2018) Page 2 Mission. CWLC adopted the following mission statement: Evaluate City of Sarasota existing lease conditions and create recommendations to ensure that City-owned property, when leased, incorporates leading edge, excellent, best practices. Findings. As noted above, it quickly became apparent that City lease challenges were part of a larger issue, which is the lack of overall City of Sarasota management of public lands. Significant findings include: 1) Inside the City Staff of Sarasota, management of public lands and development of lease terms and conditions is random (one-off) and is not centralized. Many different departments have much or very little input. Missing is an overseer who would supervise consistent evaluations, decision-making, terms, processes and procedures. Any input from the City Attorney, who reports directly to the City Commission, occurs at the end, rather than at the beginning of the lease process. Thus, new lease and renewal lease language originates with staff, not with attorneys. Decisions to renew leases, with existing terms, appear to be automatic. 2) City staff has a tendency to encourage public-private partnerships of public land to avoid both management responsibilities and maintenance and capital improvement costs. Thus, creeping privatization of public lands continues. Once a such a route is pursued, other options appear to disappear. To avoid City maintenance and capital improvement costs in 2011, perhaps leasing Lido Pavilion to the Boys & Girls Club or the YMCA or the Senior Friendship Center might have been a better option than the 2018 potential of creating 238 seats of sit-down restaurant and bar use from a tenant who is not required to spend a promised $4 million, because that amount is not even included in the lease documents. 3) There is an inequity of the non-profit use of public land. Some non-profit organizations pay $1 or $10 per year and they are not automatically required to provide space to other non-profits for free or reasonable fees. At the same time these non-profits can sub-lease their City-owned buildings and they do not have to provide information to the City regarding such sub-lease income. 4) Missing is a long term fiscal strategy for acquisition and comprehensive land use of public land. For instance: 1) most of Sarasota s larger public land parcels were acquired before WWII or from donations; 2) relocation of Van Weasel Performing Arts Center to a new site, away from the Bayfront, where sea level rise would never be an issue, is not even proposed in The Bay plans; 3) For the fifty-one leased properties that have an aggregate value of over $300,000,000 ($300 million dollars) leased properties have a tiny annual return on investment of 1/3 of 1% ; and 4) there is no long-term acquisition plan for additional public land nor a plan to increase income from existing public lands. CCNA City-wide Leasing Committee Recommendations 2

3 With Emphasis on Leases (For Public Release, April 18, 2018) Page 3 1. City property should be leased only when it serves the Public Interest, either because it serves a defined public purpose or provides a public benefit. For each lease, the Public Interest needs to be clearly defined and justified based upon results of a social, environmental and economic impact analysis. The mere threat of a potential lawsuit during a City Commission meeting, should never again be the sole cause of forcing the execution of a lease by the City Commission. 2. A Director of Public Lands (and Buildings) should be identified. This person would report directly to the City Manager and would serve as the point person for protecting the Public Interest regarding the use of Public Land. This person, supported by a team of existing staff personnel, would signal the strong commitment to protect Public Property in line with expressed public purposes and public benefits. Professional expertise of staff required to support the Director of Public Lands position includes: comprehensive planning capabilities (AICP), commercial investment management (CCIM), lease negotiation and lease management experience, Board certified Real Estate Attorney or an experienced Real Estate transactional attorney, and a Certified Fund-Raising Executive (CFRE). 3. Develop basic standard lease terms and conditions to be included in all City Leases that favor the City, as landlord; also include City Attorney at first stages of lease renewal or lease preparation. These lease terms and conditions would be prepared by a professional (Board Certified Real Estate Attorney) and applied for all lease renewals and all new leases based upon best practices. New lease standards would include lease language: allowing or disallowing sub-leases, and if sub-leases are allowed, requiring approval by the City and full disclosure of the sub- lease terms; termination clauses that are consistent and favor City, not the tenant; noting that changing conditions in City or on site requires new lease negotiations; reasonable lease terms; clear definition of the specific public purpose and public benefit, etc. If legally possible, these terms and conditions would also be applied retroactively to all existing leases. Such application may require adoption of additional Resolutions or Ordinances by City Commission. 4. Always answer the question: to lease or not to lease before any new leases are begun or before renewals occur, including conducting a complete social, environmental and economic impact analysis. 5. Develop an external review procedure that ensures that all residents of the City receive Community notice and adequate Community input opportunities for all real property actions and plans affecting use of Public Land. 6. Develop a consistent internal review process inside of City for leases and actions regarding real property. 3

4 With Emphasis on Leases (For Public Release, April 18, 2018) Page 4 This might be similar to the Development Review process. Leases should be considered Development Actions, and thus must be consistent with the Comprehensive Plan and with all land development regulations, such as consistently with Government Use zoning. 7. Compile a notebook (that eventually can become virtual) of all administrative regulations, resolutions, standards and ordinances that are to be considered in regard to leasing, purchasing and disposing of public land. Once compiled, these documents need to be reviewed and recommendations for improvement need to be made. 8. Develop strategies for equity of Public Use of all non-profits. 9. Develop an inventory of all publicly accessible spaces and other commitments regarding public use of land contained within other City agreements and ensure that these commitments are being met. 10. Comprehensively manage the City s public land portfolio. Inventory and value all public land, establish most appropriate use, identify land use needs and establish long term purchase plan for additional properties to meet future needs. Plan funding streams for future purchases to include: 1) non-profit City foundation, 2) grants, 3) increased lease rates on existing properties, 4) user fees, 5) tax related income, and 6) other methods. ****************************************************************************** The position Director of Public Lands should include the following responsibilities. 1) Manage the entire portfolio of public land - (owned and leased- to and from) to ensure that together and individually, all public land is being excellently managed, efficiently used and economically operated to best serve the public interest. 2) Serve as the internal client inside the City for any decisions regarding public land use. 3) Protect publicly owned property by a) identifying changing needs and conditions in the City, b) changing conditions in leased properties, and c) advocating for changes in existing leases, proposed leases and lease renewals. 4) Review and suggest revisions to existing City procedures, policies, administrative regulations and ordinances regarding all publicly owned lands to ensure they incorporate best practices. 5) Analyze all existing public leases to achieve maximum Public Interest. 6) Creating fantastic public spaces. 7) Identify the most appropriate uses of all public lands to best serve the public interest. 4

5 With Emphasis on Leases (For Public Release, April 18, 2018) Page 5 8) Recommend leasing public land to non-profit organizations that need support in their struggling financial days, which have a direct nexus to furthering a City priority and/or benefit the public as a whole; monitor those leases to ensure that other non-profit organizations also share in the special financial benefits granted by the City via existing $1 and $10 annual leases. 9) Ensure non-profit tenants make their event rentable spaces and excess office spaces available to other non-profit organizations for reasonable fees. 10) Ensure that leaseholders do not enter into sub leases unless such leases are pre-approved by the City and that copies of all sub-leases and amended sub-leases are provided to the City. 11) After first ensuring that Public Interest and needs of the public are met, recommend commercial leases only when such leases would foster direct benefits to the City of Sarasota, and would maximize the return received by the City in both financial and operational terms. 12) Ensure that no lease renewals are automatic. Six months prior to renewal, or in the event of changing City or lease conditions, recommend lease renewed based upon defined public purpose and public benefit and results of a complete economic, environmental and social impact analysis to be paid for by party current leasing or interested in leasing the property; 13) Evaluate how existing leased land can/should be repurposed. Develop a short and longterm plan and strategy for additional acquisition of public lands. 14) Set reasonable lease terms. For instance, Selby Foundation which grants funds for capital improvements, requires only a 10-year lease commitment, thus 10 years plus one day may be an appropriate initial lease term. All leases should be revisited and revised at least every five years to ensure that up-to-date City requirements (such as shared use with other non-profit organizations) are included in the lease documents. 15) Negotiate all leases and lease renewals and manage all public leases, making sure that all terms are met, especially those regarding public access and use of agreed upon spaces. 16) Assure that City owned properties are inspected at least once a year. 17) Track all City agreements related to public land use, in any lease or economic development agreements, such as required natural shoreline construction, accessible public spaces being provided in exchange for tax benefits paid, etc. 18) Advocate and respond to the increasing need for more public facilities on public land. For instance, create: a) a standard outstanding design/construction modular handicapped accessible, zero-energy rest room facility that can economically be placed in parks and 5

6 With Emphasis on Leases (For Public Release, April 18, 2018) Page 6 beaches; b) construct necessary public buildings within or on the edge of park space to contribute eyes on the street energy for public spaces; and c) encourage donations of public land as part of new development. 19) Ensure public spaces and facilities have appropriate short term and long-term capital funding through taxes, utility and other money-saving strategies, and by establishing a non-profit foundation to increase outside funding and fundraising solutions that will allow purchase of more land to create fantastic public spaces; and 20) Ensure all buildings and facilities on publicly owned lands have City approved plan in place to meet the requirements of national safety and accessibility requirements and all current City ordinances and resolutions, including Sarasota Ready for 100% Clean Renewable Energy for All Resolution. For Media Contact: Mary Anne Bowie, This document was prepared by Mary Anne Bowie, FAICP, BowieFAICP@gmail.com To hear a podcast on these recommendations, search: WSRQRadio, The Detail show of April 13, 2018, found at : 6