Tuesday, September 1, 2015

Pensacola...We are Proud of Our Past, We Just Don't Remember It.

On March 5, 2007 the City of Pensacola CRA entered into a sales contract with Hawkshaw Eastside Inc. to purchase the Hawkshaw Property.

The purchase price was $1,400,000.

Hawkshaw-contract-2007

The principles for Hawkshaw Eastside who signed the deal were two familiar names:
  • William Whitesell
  • James J Reeves
The development never got off the ground because it did not have sufficient stormwater retention space and capacity for the planned development.

The principles above forfeited their $140,000 down payment and walked away.

In 2011, the City completed the Admiral Mason Stormwater Pond at a cost of $1,300,000.


Now the Hawkshaw Property will be able to tie into the Admiral Mason Pond as its stormwater solution making the property more value as space will not have to be used for stormwater retention.

The City had the property reappraised in 2015 at a price of $1,740,000.  Appraisal

In 2015, after the real estate recovery, after the expansive improvements in downtown touted by the Hayward Administration, after large projects being completed downtown at the CMP and underway at the PNJ Plaza, after the completion of Admiral Mason, the CRA once again solicited RFP responses.

And guess what, the value proposed by substantially the same people from before has GONE DOWN.

Proposals Received        Purchase Price     Percent of FMV of Property

  1. Whitesell - Hagen    $1,280,000            73.5%
  2. ITEX                        $1,000,000            57.5%
  3. Gunther                    $1,100,000            63.2%
  4. Granger                    $1,200,000            70.0%
  5. Aragon                     $1,309,000            75.2%
Only in Pensacola.

Anyone ask why Brian Spencer voted to throw all of them out and then state the property needs to be sold?

Why not ask them all who is willing to pay the fair market value?

9 comments:

Anonymous said...

Not sure if you have a good handle on real estate or development.
Does anyone remember the real estate bubble and subsequent recession of 2008? Chances are that if you purchased real estate in 2007 it was worth a fraction of that purchase price in 2009. Values are still down from pre-recession. Don't forget that the property was under about 4' of water in April 2014. You can keep repeating yourself but that does not change the value of the property.
You are, however, on to something regarding follow up negotiations with the proposers. It would have been much more efficient to continue the process in a setting that allowed for the CRA to try and salvage a deal that would be satisfactory to all parties. Certainly the developers would have been at least receptive to negotiations. Doubt that any of them would have ponied up the amount of the appraisal.
But most importantly what's your beef with the deal of 2007? From what you report it seems that the developer and CRA agreed to a non refundable deposit if the deal did not go through. That's how this kind of deal works. Take into account all of the other costs the developer probably incurred to get to the point of negotiating a contract with the city plus the $140k. CRA kept the deposit. Move on.
You are flanking this issue from the wrong direction. Take a look at the dysfunction of the CRA/Council and report to us something we can get behind.

Anonymous said...

Reeves purchased Aragon for 1 million. No rfp, an inside deal.

Maren DeWeese said...

Anonymous,

Did Spencer tank the deal because his hand chosen committee selected the wrong developer or was he exerting his power over those developers?

Let me know if your "support" is requested from Mr. Spencer for his facilitation of the process going forward since he now owns the process going forward.

Maren

Anonymous said...

If you are going to understand the prices that were offered you are going to have to try to understand a few key facts.

FACT #1: When a client PAYS you for a service, you tend to do what is in the best interest of that client. In this case, the appraisal was PAID FOR by the seller of the property. If you read the appraisal with an open mind you will discover that it is highly prejudiced in favor of the seller. The appraisal firm told their client (the seller) EXACTLY what their client wanted to hear. I can give you many examples from the appraisal to support that statement.

FACT #2: The groups that offered hard cash for this property could CARE LESS about the seller’s appraisal. Developers will try to estimate their development costs versus their potential revenue. And in case you are not aware of it, developing anything in Pensacola is VERY risky business.

FACT #3: Yes, two experienced developers lost $140,000 of their own money by “winning” a bid for this same property in 2007. Do you seriously think that their 2007 bid should set the current sales price? It does not. What is does do is scare the bee jeebies out of anyone bidding on the property. How would you like to lose $140,000 and get nothing in return?

FACT #4: Most developers DO remember the past. They remember all of the failed real estate projects in Pensacola. They remember how hard and how slow it is to find someone to occupy their spec projects. They remember the people who have lost a lot of money and gone bankrupt trying to develop projects.

Anonymous said...

Dang, after reading the comment above by the developer, we should pay the "winner" a couple of million dollars to take the property from the City.

Bless their hearts!

Anonymous said...

Hey!!! Wake Up already!!! The PNJ, Studer SOGO News and Rickie's Blog are all back in lock step writing about what is important in town......The return of Springfest. Nice to know that we have three major online news sites covering the Pensacola region and you can count on them to always report on the same issues.

Anonymous said...


To Anonymous at 2:31 -

You seem confused. We are discussing the Hawkshaw property. You seem to be referring to the baseball stadium project where the city taxpayers gave a millionaire 30 acres of waterfront property, built a $58 million facility for his business, financed all capital improvements for him, and made sure that he would never have to pay taxes on his business facility. I agree with you. Bless that millionaire's little heart.

But five developers actually offered to pay hard cash for the Hawkshaw property. They offered to develop the property with their own money and in such a manner that it would bring in needed real estate taxes to our city. The same city council that gave the millionaire the sweetheart deal couldn't bring itself to accept any of the five proposals, any of which would have been beneficial to the taxpayers. Did they have the wrong last name? I know that one of them had the audacity to be from Texas, for crying out loud.

Anonymous said...

Bet Spencer won't call any of the developers looking for support. Not sure why that was brought up.
Also not sure why you think there is a conspiracy with the Hawkshaw proposal. This is simply a case of the CRA/Council being dysfunctional. Don't try to read anything extra into it.

Anonymous said...


If you bought raw land in Pensacola and sold it 19 years later for triple the amount you paid for it, would you be happy?

If you bought raw land in Pensacola and made an 11% yearly return on your investment WITHOUT PAYING TAXES, would you be happy?

If we are going to "remember history" we should remember that the city bought this property in 1996 for $424,000. The city turned around and gave it to the CRA for $100. The CRA (city council) recently turned their noses up at a cash offer for $1,309,000, three times more than they paid for the property.

The purpose of the Community Redevelopment Agency is, supposedly, to "redevelop." The CRA was presented five excellent redevelopment proposals, and turned their noses up at those proposals.

Calling our city council "dysfunctional" is giving them WAY too much credit...! Will someone PLEASE run against them next election?