King’s Landing project is in contract default, uncertain future | St. Lucie County

FORT PIERCE – The developer of a proposed up-scale Marriott hotel, considered a linchpin of the downtown waterfront King’s Landing project, says it needs $15 million from the City of Fort Pierce to fill a financing gap it can’t meet.

Records show Mainsail Lodging and Development, the primary force behind the proposed downtown hotel, has already missed at least three deadlines in contracts with the city, including a requirement to have the hotel’s financing “fully and finally closed” by July 15.

Several city commissioners have already indicated they are a “hard no” on the city contributing $15 million to keep the hotel project alive in exchange for a proposed 60 percent ownership in the hotel.

However, a representative for Live Oak Holdings Group LLC–another player in the King’s Landing project– has proposed seeing if it can get $15 million worth of commitments from another set of potential investors to fill the financing gap. In an email to city officials, Bill Ware, Live Oak development manager, has asked the city for 180 days to see if Live Oak can find that capital commitment.

King’s Landing is on tonight’s city commission agenda where officials are expected to decide if they are willing to grant the 180-day request, and consider setting a special meeting to discuss another amendment to the original development agreement or whether and how the development plan should be abandoned.

City Manager Richard Chess also suggested another hotel developer could be identified to take over that part of the King’s Landing proposal.

The city’s other option would be to end its King’s Landing development agreement and take back the downtown waterfront property due to the developer’s contract defaults.

The roller coaster of development hurdles dates back more than five years when the city issued a request for proposals (RFP) from potential developers for a visionary, multi-use plan for the former H.D. King Power Plant site. A proposal from Audubon Development Inc., of Palm Beach, was given the nod to build six buildings by the end of 2025, including a hotel, condominiums, restaurants, retail and office space, single-family residences and apartments. So far, none of the buildings have been done.

The city originally had agreed to contribute by rebating half of the property taxes collected on the new development for the first five years, up to $1 million.

The initial agreement has already been amended three times and a fourth amendment to the terms has been requested by developers. However, Sara Hedges, city attorney, has said she would not recommend the city agree to a fourth amendment “without the financing being resolved.”

The financing gap that threatens the project first became public in July when commissioners met as the Fort Pierce Redevelopment Agency (FPRA) board. The reaction then ranged from suggestions that the project be scrapped to “a glimmer of hope.”

“I think it’s time to say goodbye and develop another RFP,” said Commissioner Chris Dzadovsky. “This property is too valuable to be left sitting vacant. I won’t be moving forward on a fourth amendment. We need to bring this back in house and start over.

“I’m at wits end at this point. This project doesn’t even remotely look like the original RFP at this point.”

Commissioner Michael Broderick cautioned that pulling the plug now could land the city in years of costly litigation because Audubon Development currently owns the property, potentially delaying any development there another 10-12 years.

Ware acknowledged in July that his firm–partnering with Audubon–was “surprised” to learn in April that there was a hole in the hotel financing plan. Ware was the only representative from any of the development partners to appear in person at the July FPRA meeting.

Commissioner Arnold Gaines said in July he was a “hard no” on the city contributing $15 million to the hotel financing.

“I will not put the taxpayers’ money in this,” Gaines said. “If a person who builds hotels can’t find the money, where do you get it? If we say no to the $15 million, can this project be completed?”

“That’s our intent,” responded Ware, while unable to provide a guarantee.

“It’s gotta come from somebody else,” said Mayor Linda Hudson. “I don’t want the City of Fort Pierce to be in the hotel business.”

This is one of several city-backed real estate ventures that has gone sour in recent years. The award of a lease to two, then-city employees for vacant land on Avenue D has resulted in the pending prosecution of former city manager Nicholas Mimms for bid tampering and official misconduct. And the city is on the hook for more than $200,000 in unpaid taxes and rent for the Crabby’s restaurant downtown in a lease agreement it signed with another private interest. Also, the city now looks at $2 million in necessary repairs to the former Means Court building in a lease with Incubate Neighborhood Center, a nonprofit that received substantial funding from a Catholic charity before INC shutdown shortly after opening due to building code violations.

Tonight’s city commission meeting begins at 5:05 p.m. in the city hall commission chambers.