 |
||||||||
 |
||||||||
|
||||||||
Back
|
Airport officials renegotiate mall lease
By JEAN HELLER
© St. Petersburg Times,
The new agreement, approved Thursday by the Hillsborough County Aviation Authority board, will produce an additional $58-million in revenue over the final 65 years of leases that stretch to 2080. The renegotiation was undertaken voluntarily by the Aviation Authority and two developers because the airport said it doesn't want accusations of impropriety and additional federal investigations of the leases popping up again and again. Still, critics say it isn't enough.
"We think the decision (Thursday) was a good start," said Keith Ashdown, spokesman for the group, "but we still believe that airport taxpayers and travelers are being ripped off." The renegotiation is the latest development in a years-long struggle between the authority and the owners of West Shore Plaza, another upscale mall about a mile from the new complex. The West Shore interests have objected to what they describe as the sweetheart deal obtained by Tampa businessman Richard Corbett on the 156-acre tract on the southeast edge of airport property. The parcel will be home to International Plaza, a hotel, three office buildings and other development. Corbett's rent has been based on a 1996 appraisal that set the value of the land at $18,750 an acre, a fraction of the $345,000-a-acre appraisal on a smaller parcel to the northeast. Corbett's supporters, including Tampa Mayor Dick Greco, a member of the Aviation Authority board, have dismissed the West Shore complaints as the sour grapes of a competitor. On Thursday, Greco complimented Louis Miller, executive director of the Aviation Authority, on getting more out of the agreements. "They didn't have to pay you anything," Greco said. "Good job." Critics, including the watchdog group and the U.S. Department of Transportation's inspector general, have contended that the mall deal shortchanges the airport and its customers by millions of dollars each year.
On Thursday, John Flavin, president of Grosvenor Atlantic Ltd., owners of West Shore Plaza, called the renegotiated lease a "minimal adjustment" still falling far short of market value. "I think this is a gesture under pressure," Flavin said. Al Austin, an aviation board member and a developer, voted for the deal but wasn't completely happy. "It just isn't the amount of money we should be getting for this property," Austin said. He noted that the escalator clause that increases the rent doesn't kick in for 15 years and asked staff to continue trying to improve the lease. The land under the mall and an anticipated hotel, all leased by limited partnership headed by the Taubman Co., a Michigan developer, will cost 40 cents a square foot when construction is completed. The two structures will total a little more than 1.5-million square feet, for a total annual rent of almost $603,000. The new escalator clause will increase the rent every five years beginning in 2015 by the percentage of the increase in the Consumer Price Index or by 10 percent, whichever is less. Another 17-acre section of the tract, which contains six outparcels leased by Corbett and his Concorde Companies, will build to about 500,000 square feet. At 40 cents a square foot, the land lease after development would total $200,000 a year. This lease also contains escalator clauses. Leases on land under what will be three office buildings are under discussion, Miller said. John Simon, vice president for development at Taubman, and Corbett did not return phone calls Thursday. The FAA requires that airports get a fair market value for land leased for non-aviation use, and despite the doubts expressed by its parent Department of Transportation, FAA auditors signed off on the lease deals, saying that by the time they worked out to full development in 2010, the arrangements would reach the fair-market level. The FAA did not require any renegotiation of the leases beyond 2010. Had the agency found against the Aviation Authority, it could have withheld millions of dollars a year in development grants until the leases were brought into compliance. "But the FAA didn't speak to the fair market value beyond 2010, and we didn't want to go through all this again," Miller said. "So I sat down with people and suggested that to avoid any future potential problems, we needed an escalator factor. "Obviously, they didn't jump on it. But eventually they accepted it on the condition that the FAA sign off on it first." Miller received a letter dated May 21 from David Bennett, director of the FAA's office of airport safety and standards, giving the new deals a stamp of approval. But it included a caveat that the deals require continued monitoring. Miller also acknowledged this might be the end of the matter. He said he understands the concerns of board member Austin, and even shares several. "As I understand Al's concern, the inflation thing is great, but the (lease) rate today is too low," Miller said. "A lot of us might feel that way. But we have binding agreements. Still, if I get instruction from my board to go back and negotiate some more, that is what I will do." - Times staff writer Sydney P. Freedberg contributed to this report.
 © 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 
|
Headlines From the Times local news desks |
Taxpayers for Common Sense, a Washington, D.C., budget watchdog group, had given the FAA a Golden Fleece Award for accepting what it called a "bargain-basement" deal on the land for the International Plaza mall, which is set to open in September.
