Fort Lauderdale is forging ahead with plans to build a $200 million City Hall despite concerns there will be no money to build it should voters across the state approve property tax reform.
Commissioners are expected to vote in April on an interim agreement with FTL City Hall Partners, a development team chosen last year. A comprehensive agreement would likely come to the commission for approval in November.
If all goes well, the developer would break ground in January 2027. The commission chambers would open as soon as the summer of 2028. The City Hall tower would open by spring 2029.
But on Tuesday, Vice Mayor John Herbst said he’s worried Fort Lauderdale might have to terminate the deal if property tax reform passes.
Herbst and Commissioner Ben Sorensen urged the commission to instead consider buying the 101 Tower for $86 million.
Mayor Dean Trantalis and Commissioners Steve Glassman and Pamela Beasley-Pittman objected to buying a 25-year-old office tower that would require extensive renovations to accommodate 700 city employees along with a modern commission chambers.
Fort Lauderdale will have the option of terminating the new development project for any reason while the interim agreement is in place, consultant Eric Singer told the commission on Tuesday.
“Until we get to the marriage of the comprehensive agreement, using the city attorney’s analogy, the city will have the right to move in a different direction if it desires,” Singer said.
Calling the whole deal off would come with a price.
Fort Lauderdale would be required to reimburse the development team for out-of-pocket expenses and also be on the hook for a developer fee that represents an additional 5% of those expenses. That fee could go as high as $900,000, depending on how much work has been done.
Herbst and Sorensen both objected to the developer fee.
“Normally when you break off an engagement you’re not paying people to go away,” Herbst said. “I’ve been divorced. I’ve paid somebody to leave in that context. But I’ve never paid a girlfriend to go away.”
The owners of Tower 101 in downtown Fort Lauderdale want the city to buy their building to serve as City Hall. But the commission has decided to move forward with plans to build a new City Hall. (Amy Beth Bennett/South Florida Sun Sentinel)
The consultant said the fee was standard, especially considering the risk involved.
Herbst argued the developer agreed to an inherent risk by agreeing to a public-private partnership, commonly called a P3.
“If we back out of this, it’s going to be because the building is unbuildable or unaffordable,” Herbst said. “The risk we’re talking about is that property tax reform passes and guess what? We can’t afford the building anymore and we’re not going to do it.”
Herbst then zeroed in on how much of a profit the financing team was going to make on the deal.
“As you run those numbers, I’d like to know how much extra they’re making on the financing side of this,” he told staff. “At the end of the day, P3s make more money for the financing team than they do for the construction team. I want to know how much the financing team makes on this. Because the taxpayers wind up paying for it.”
Rusty Warren, one of the owners of Tower 101, appealed to the commission to buy his building.
“It’s the right size, the right layout, the right location,” Warren said. “Take a breath. Spend 30 to 45 days evaluating this idea. We just think it’s not too late for the city to do this.”
An owner of Tower 101 sent an email to the city in July offering to sell the building for $86 million. The mayor and commissioners didn’t find out about the offer until getting an email from the city manager on Jan. 16.
Nick Matthews, a lobbyist representing Tower 101, told commissioners they could save up to $200 million if they bought the existing building instead of building a new City Hall.
“We think the numbers are real,” Matthews said. “We just want you to flirt with us a little bit. Engage in this conversation.”
Glassman had this retort: “At this point in time, I don’t look at it as flirting. I look at it as we would be committing adultery.”
The mayor chimed in, arguing that the commission has already made a commitment to move forward with a development team that was selected back in December.
“There was a solicitation out there for unsolicited proposals and you guys passed it up,” Trantalis said. “When you had the opportunity to participate, your client decided to pass on it. And now after the 11th hour, you want us to stop everything and look at your proposal. All of a sudden because you guys decide you want to unload your building, we’re supposed to stop the process.”
Marilyn Mammano, former chair of the city’s Infrastructure Task Force, spoke up in favor of giving Tower 101 a chance.
“We’re not at the marriage stage,” she said. “We’re not even at the dating stage. I’m still sitting at the bar. I want to go talk to those guys … and save me $200 million.”
Mammano insisted that residents are not looking for a fancy new City Hall.
“We’re looking for an economical functional City Hall that doesn’t cost an arm and a leg,” she said. “If (property tax reform passes), we’re going to be in a very difficult financial situation. What are we going to do? Fire police so we can pay the mortgage on this new City Hall?”
Glassman reminded Mammano that the task force she once chaired had come up with a long wish list of what its members wanted to see in the new City Hall. The list included hurricane impact glass, common area renovations, lobbies, elevators, bathrooms, roof replacements and HVAC replacements.
“When you say we’re going to save $200 million, I have to say that that’s hogwash,” Glassman said. “To get to the point where we have in (Tower) 101 everything we’ve asked for, I think we’re going to get to about $170 million. Your Infrastructure Task Force talked about all the spaces you wanted to see in City Hall. Well none of that is in 101.”
Retrofitting the 25-year-old building would take the city “down a rabbit hole of expenses,” Glassman warned.
Sorensen made one last appeal to take a good look at Tower 101.
The mayor and Beasley-Pittman both said they did not want to go down that path.
“Whatever the analysis tells us, many of the points that Commissioner Glassman outlined for us speaks so vividly in favor of (moving forward with the current plan),” Trantalis said. “At the end of the day, I do not want 101 as our City Hall.”
Susannah Bryan can be reached at sbryan@sunsentinel.com. Follow me on X @Susannah_Bryan