Fort Lauderdale may not build a futuristic 14-story City Hall after all.<\/p>\n
After hearing from a chorus of critics Tuesday night, commissioners agreed to look into buying an existing office tower and delayed a vote on an interim agreement with the developer chosen to build the new City Hall tower.<\/p>\n
The agreement would have locked taxpayers into covering up to $18.9 million in pre-development work required for the project to break ground in March 2027.<\/p>\n
The new City Hall \u2014 a replacement for the old City Hall building ruined during a record-breaking flood on April 12, 2023 \u2014 would cost $268 million to design and build.<\/p>\n
The total cost would be much higher: $725 million over the next 30 years, or $24.2 million a year.<\/p>\n
Commissioners agreed to defer the vote on the interim agreement until June 2 to give the city time to research the viability of retrofitting two office towers into a new City Hall.<\/p>\n
The owners of the Tower 101<\/a> building at 101 NE Third Ave. have offered to sell the building to the city for $86 million. The owners of 1 East Broward have offered to sell for $122.5 million.<\/p>\n The city is currently renting space in both towers.<\/p>\n Vice Mayor Ben Sorensen suggested the city also look into retrofitting the old federal courthouse to make way for a new commission chambers and offices for city staff.<\/p>\n \u201cIt\u2019s not big enough for City Hall,\u201d Sorensen told the South Florida Sun Sentinel on Wednesday. \u201cBut it is big enough for commission chambers and some offices. We would still need to buy a building or keep renting. Plenty of options. My position has always been to explore all options.\u201d<\/p>\n Much of the debate Tuesday night centered on the heavy tax burden the city would be taking on to build a controversial City Hall<\/a> in the midst of an uncertain financial climate.<\/p>\n Commissioner John Herbst, who frequently refers to his role as a \u201cnumbers guy,\u201d was fiercely critical of the deal.<\/p>\n Under the interim agreement, Fort Lauderdale would be required to pay developer equity as well other costs that would bring the developer a profit.<\/p>\n Part of the deal would allow the developer to finance 10% of the project by lending the city $24 million. The city would be required to pay back the loan at 11% interest post-tax.<\/p>\n Vice Mayor Ben Sorensen pointed out the city could borrow the money on its own at 4.5% interest.<\/p>\n Paying the developer an 11% interest rate on a $24 million loan would require the city to pay $3 million a year for 30 years, Sorensen noted.<\/p>\n \u201cSo taxpayers are paying about $90 million total,\u201d he added.<\/p>\n Herbst and Sorensen had several pointed questions for Eric Singer, the attorney hired to help negotiate the contract on behalf of the city.<\/p>\n Singer told them it was too soon to answer many of their questions because the financial details had yet to be worked out. That would happen only after the interim agreement was approved and executed, he said.<\/p>\n Singer characterized the payments as insurance for the city, saying the developer was committed to covering the replacement of the building\u2019s elevators and other equipment for 30 years. But without the equity payment, there was no deal, Singer told the commission.<\/p>\n Herbst, who worked on Wall Street before his days as a city auditor, blew up.<\/p>\n \u201cYou know what, this is like going to a loan shark to borrow money,\u201d Herbst said. \u201cI spent 25 years in municipal finance. This is what I do for a living. This is the worst financial deal I have ever seen in my life.\u201d<\/p>\n Herbst continued on.<\/p>\n \u201cIf you negotiated this on our behalf, shame on you,\u201d he told Singer. \u201cI am fed up with this. This is horrible. We don\u2019t need their money. We have the best bond rating you could ever possibly have. You\u2019re characterizing this as insurance. And no matter how you try and dress this up as insurance, this is not insurance! This is an absolute rip-off to the taxpayer.\u201d<\/p>\n Mayor Dean Trantalis tried to intervene, telling Herbst: \u201cCalm down.\u201d<\/p>\n Herbst replied: \u201cI\u2019m not. I\u2019m not calming down. I\u2019m emotional. Because we\u2019re saddling the taxpayers with a $725 million obligation for the next 30 years.\u201d<\/p>\n During a meeting earlier in the day, Trantalis argued the city could not keep on renting space forever.<\/p>\n \u201cWe need a building,\u201d he said. \u201cThere\u2019s offices (here and) there. It\u2019s totally dysfunctional. It\u2019s very difficult for staff to coordinate services.\u201d<\/p>\n