STUART – A June 23 update by Martin County staff and consultants on the planned funding and construction of a $74 million operations center west of I-95 revealed majority Commission support for the facility needed to replace current operations at Withan Field and that changing course now would do substantial harm to the county’s AA credit rating.
Officials have known for years they needed to combine the operations of several departments currently scattered around the county but that became more apparent last year when the Federal Aviation Administration began to threaten legal action for not removing those non-aviation related entities from airport property. Ultimately staff and consultants chose the novel P3 approach, a public/private financial partnership allowed by state statute to bypass the normal municipal bidding process. Assistant County Administrator Matt Graham began the lengthy discussion that day.
“Today’s presentation is an overview of the unsolicited proposal process, the independent evaluations performed, the Board actions, the financing decisions made and the current status,” he said. “Florida statute authorizes local governments to receive and evaluate unsolicited proposals for qualifying public infrastructure projects. The purpose of this statute is to provide public agencies with an additional project delivery tool that can encourage innovation, leverage private sector expertise and potentially accelerate the delivery of needed infrastructure.”
Graham detailed the comprehensive evaluation of two such proposals the county received, first from Building Tomorrow’s Infrastructure last Oct. 31 and subsequently from Florida Development Solutions. Staff ultimately recommended the former’s 114,000-square-foot structure for $649 per square foot over the latter’s slightly smaller structure because BTI’s quote was $5 cheaper a square foot and two months quicker for completion.
“The statute requires substantial public oversight,” he explained. “The process includes public meetings, public comment opportunities, consulting evaluations, a public interest determination, Board actions, a negotiation of a comprehensive agreement, publication in the Florida Administrative Register and final Board approval before the project can proceed.”
Graham also highlighted the project’s support by the non-partisan Florida Tax Watch organization before inviting CPZ Architects President Joe Berry to the podium. The latter recalled working on the operations facility project a few years ago before it got bogged down.
“We were brought back in to do a peer review of a P3 proposal,” Berry said. “We found that the proposal supported the objectives of the original project. The site plan generally aligned with the goals of the project, and we felt the programming was in line with how we left the project prior to the P3 proposal being offered.”
District 5 Commissioner Ed Ciampi immediately asked for clarification on the square-foot costs.
“Can you share in your professional experience how you feel these numbers are?” he asked.
“We found the dollar amount to be in line with what we expected,” Berry replied. We just completed construction of a 13,500-square-foot fire station in Palm Bay. The calculated cost finished at $585 a square foot. We went out to bid on a fire station in Lakeland, and that price came in at $593 a square foot. We’re in design in Bro ward County for a a little bit larger facility than what we’re talking about today. That number per square foot is $563. Again, the P-3 proposal was very much inline.”
Berry emphasized that the finished structure would be much more than a shell.
“It is everything – the building, systems, interior build-out, all the finishes, walls [and] doors,” he explained. “It is all the utilities brought into the site, the paving, wheel stops, fencing, fuel station, furniture, fixtures and equipment.”
Commissioner Blake Capps then referred to a presentation chart compiled by General Services Director Sean Donahue comparing other recent projects, all in the $500 to $800 per-square-foot range.
“We’ve had reckless charges out there on social media that buildings like this should be built for $200 a square foot,” he said. “I think that’s outlandish. You have a professional staff overseeing this that deals in this world all the time. The evidence is here that this is a good and fair project.”
District 1 Commissioner Eileen Vargas, however, expressed the opposite viewpoint.
“I’m really disappointed in my fellow commissioners,” she said. “This is not the time to be spending this kind of money. I will go out and find rental property that will have bays and office space, and it’ll be a lot lot less expensive. We need to hit the pause button hard on this.”
Since routing decades-old Commissioner Doug Smith nearly two years ago with her slow-growth platform and belt-tightening rhetoric, Vargas has earned a reputation for putting everyone – staff, developers and her colleagues – on the defensive. Earlier during the same meeting, Commissioner Ed Ciampi admitted he’d begun to lose respect for her. Now she returned that volley with both barrels.
“This is a reckless spending of money,” she continued. “You can build $200 a square foot. You talk about desks, electrical components, bay doors – some of the schools and fire houses have been built extravagantly – we don’t need that. It’s a smoke-and-mirrors-type thing, and I’ve called that out. It’s an unpopular opinion because some folks on the Commission have been here way too long. We are in an era when people demand accountability, and I’m the lone voice up here.”
When Commissioner Vargas rambled on and referred to potential ad valorem property tax cuts coming down the pike this fall, Chairwoman Sarah Heard – at times her only ally on the Board – reined her in.
“We’re not going to be using ad valorem to pay for this,” the latter said. “This agenda item was at your request to gather facts about this project. Let’s allow our staff to present the facts that you asked for.”
After Donahue tag-teamed a staff presentation with Budget & Management Office Director Stephanie Murley, the latter invited the county’s contracted financial consultant Jay Glover of PFM to provide his professional insight.
“We analyzed all the financing options, including doing financing through your P-3 partnership,” he said. “We ultimately recommended the county isolate the financing mechanism in the public/private partnership and do the stand-alone financing, [which] would allow for more cost-effective borrowing. Of all the available sources the county could pledge for the issuance of the bonds, we determined your half-cent sales tax revenues were a stable source. We received 10 competitive bids to purchase the bonds, and they were awarded.”
Commissioner Ciampi then posed a pivotal question.
“You’ve heard the suggestions that we should stop what we’ve done thus far,” he said. “In your experience – if it were to happen – what would happen?”
“The reality is, the debt is secured by half-cent sales tax revenues,” he replied. “Regardless if the project moves forward, you are responsible for repaying the debt. If you decided not to do that, you’d be defaulting, which is catastrophic from a financial perspective. That would essentially limit your ability to access capital markets for a very long time, including for water and sewer projects the county has pending.”
After further back and forth Commission debate, Chairwoman Heard made her sentiments known.
“I am a true fiscal conservative,” she said. “I have voted against far more projects than anyone else on this dais has throughout the last 20 years for what I thought were compelling reasons. This isn’t one of them: This is one I fully support. The people who brought this project to us are clear-eyed professionals who have thoroughly evaluated every opportunity and every option. We decided that the P-3 project, this proposal we got from Building Tomorrow’s Infrastructure, was in our best interests.”