Wicker PerlisTreasure Coast Newspapers
FORT PIERCE — King's Landing developer Audubon Development has 45 days to finalize an agreement the company is negotiating to hand over primary control to another developer. The ultimatum came from the City Commission.
One city commissioner compared the decision to a football "hail Mary" pass and a final at-bat in a tie baseball game.
If that agreement is not reached, commissioners indicated they are likely to begin a lengthy and costly process of taking back the land, which could put years of litigation between that decision and eventually selecting a new developer for the former H.D. King Power Plant site in downtown.
Letter changed minds, for the moment
Walking away from Audubon, and likely igniting that legal battle, was an option on the table Tuesday, and a majority of commissioners said they woke up that morning expecting to go that route. However, a letter from Harbert Realty Services, received by commissioners Tuesday morning, changed things, at least for now.
That letter proposed Harbert enter into a joint-venture agreement with Audubon, which would answer a number of questions and concerns commissioners had, including whether Audubon has the finances in place to build the development or the relationships in place to bring in a Marriott hotel franchisee.
Commissioner Michael Broderick, who works in commercial real estate, said he is very familiar with Harbert and trusts its ability to follow through.
"Financing is a non-issue. The hotel is a non-issue," Broderick said of Harbert's resources.
A new lead developer?
The specifics of Harbert's potential role were not outlined in the letter, though, which led Broderick to call its representatives throughout the day. What Broderick was told, later to be confirmed by Audubon's attorney at the meeting, was that Harbert would become the primary developer of King's Landing, with a 55% stake. Audubon would become the secondary partner, with 45%.
The proposed arrangement seemed to not only provide proof of funding, but also put in place a developer that might be able to move past some of the conflict that has arisen between Audubon and the city.
"I will not accept Audubon being the underlying responsible party in any further agreements with the city of Fort Pierce," Broderick said at one point Tuesday.
'These guys are the real deal'
For its part, Harbert asked Broderick to give Audubon 45 days to formalize the joint-venture agreement. If an agreement is formalized, Harbert would seek another 90 days to perform due diligence on Audubon and the project. That would mean a maximum 135 days before Harbert could come onboard.
"Potentially, and I stress potentially, this is a game changer," Broderick said. "These guys are the real deal."
Broderick later said it was worth a "spin at the roulette wheel" to see if a Harbert-Audubon partnership could be struck, saving the taxpayers the potential cost of litigation and the city potential years of delay before the site could be developed. If no deal can be reached, the city will be in the same position it is in now, Broderick said.
Last-minute notice to other commissioners
Other commissioners, who voiced frustration with receiving the letter on the morning of the decisive meeting, asked a number of questions of Broderick about the potential deal. All but one eventually came on board.
Commissioner Jeremiah Johnson said the decision came down to one question: Is a 135-day delay worth the chance of getting the project built without litigation?
"Do we go for it or do we not?" Jeremiah Johnson asked, calling Harbert's involvement a potential "45-day hail-Mary saving play."
If it worked, he said, it would be like hitting a walk-off home run in the bottom of the ninth inning with two outs.
Jeremiah Johnson also voiced a number of concerns with leaving the property vacant for three to five years while litigation plays out, including potential environmental impacts on the nearby Indian River Lagoon.
Possibility of new deal sways votes
Commissioner Curtis Johnson began the night as a hard no on giving Audubon further time.
"Right at the top, no," Curtis Johnson said.
However, the fact that Harbert would bring surefire financing, and would take a controlling share, ultimately swayed his vote to a yes.
Mayor Linda Hudson, after receiving assurances from Broderick about the reputation of Harbert, and after receiving assurances from Audubon that Harbert intends to stick to a proposed revised schedule, also voted yes. That revised schedule would see completion of the project pushed back to 2029. It was initially planned for 2026.
"If it saves this deal, that protects the taxpayer," Hudson said of the 45-day delay. "If it doesn't save this deal, then we have to go on to Plan B."
Remaining issues too much for one commissioner
Commissioner Arnold Gaines was the lone member to stick with his intention to vote no. Gaines voiced frustration with the fact that the letter was submitted so soon before the meeting.
"Getting a letter the day of a hearing does not change the way I feel," Gaines said.
Gaines also pointed to a dispute that remained unresolved after Tuesday's meeting. Audubon, in its amended proposals submitted to the city ahead of the meeting, added a bill for about $1.1 million it said is to repay the developer costs of removing an 1,500 tons of concrete buried under the site. The concrete, left over from the power plant, was never disclosed to Audubon at the outset of the project. The city agreed to pay $170,000 when Audubon asked in 2020, but has not agreed to pay the more recent bills.
Disputed bill causes anger from commissioners
Gaines, and others, voiced doubts about the accuracy of those costs, saying the city would not pay them without better documentation.
"I almost laughed at it," Gaines said of the request.
"That agreement that they presented to us should be put through the shredder. It's an embarrassment," Broderick said.
Curtis Johnson called it "disrespectful."
Jeremiah Johnson, though, said he shared his fellow commissioner's criticism, calling it "insulting," said $1.1 million pales in comparison to the overall cost of the project. He said the city can allow conversations between Audubon and Harbert to move forward while also seeking resolution of the disputed bill.
Broderick said he is "open to any reasonable suggestion" about how to resolve it, but he is tired of seeing "fantasyland numbers" presented by Audubon to the commission and the public.
Audubon CEO Dale Matteson and his attorney, Scott Hawkins, declined to comment after the meeting.
During the meeting, Hawkins agreed the $1.1 million could be left for another time. He said he had hoped Harbert would have provided the letter earlier, but that the company has a realty fund with "capacity in the billions" and its involvement should give commissioners confidence.
"They are effectively in control," Hawkins said.
More: New timeline could push King's Landing completion to 2029 from original 2026
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What's next?
Ultimately, the commission agreed in a 4-1 vote to grant Audubon and Habert 45 days to continue discussions. It decided not to formally delay any deadlines in the contract, but also agreed not to issue formal default notices for any deadlines missed during those 45 days.
It instructed Audubon and Habert to immediately notify the city if a deal is reached or if negotiations end without one being reached. It also required weekly updates from Audubon, and pushed both the revised timeline and potential litigation agenda items back to its Aug. 13 regular meeting.
This comes after a previous 45-day extension given Audubon to craft new development timelines. It presented those timelines at a meeting last month, but no vote was taken.
Wicker Perlis is TCPalm's Watchdog Reporter for St. Lucie County. You can reach him at wicker.perlis@tcpalm.com.
