Start over on Lido Beach

Longboat Key residents probably haven’t been paying much attention to the city of Sarasota’s six-year efforts to renovate the Lido Key beach pavilion and public swimming pool. 

That this project has been going on that long can explain why anyone could lose track or interest. What’s more, Longboat residents likely are not that interested because they’re not frequent users of that beach. 

But its location makes the Lido Key beach project noteworthy for Longboat Key residents — and especially so for our friends who live on Lido and St. Armands keys. What ultimately ends up on this 2.5-acre beach property — Sarasota’s only public beach, by the way — certainly can and will affect traffic through St. Armands Circle and, depending on what ultimately is approved, the character of Lido Key for its residents.

Here we are again — another city of Sarasota saga on something you would think should not take as long as it has.

The five-year chronology

It began in 2011, when the city and a committee of the Lido Key Residents Association created a master plan to renovate the beach pavilion and pool. It presented the master plan to the Sarasota City Commission  Jan. 17, 2012.

Two and a half years later, the city advertised an “ITN” (intention to negotiate), seeking bidders to take on the project. By November 2014, the city had two bidders: Mattison’s and Lido Beach Redevelopment Partners LLC, a company whose operating executives include Sarasota restaurateurs Troy Syprett and Gavin Meshad, owners of the Daiquiri Deck Inc., and Meshad’s father, Sarasota lawyer and developer John Meshad.

In February 2016, Lido Beach Redevelopment presented a proposal at a public hearing. That’s when the angst began. 

The developers proposed a 305-seat restaurant at the pavilion, plus a splash pad, playground, tiki bar and mini-golf course. Many residents protested it was out of scale. 

Six months later, the developers returned with a scaled-back plan that they thought met residents’ preferences: No more mini-golf course, and the restaurant was cut back to 200 seats.

Carl Shoffstall, president of the Lido Residents Association, told the Sarasota Observer then: “They’re showing good faith that they want to work with the neighborhood.”

In January, the City Commission was satisfied enough that it agreed to negotiate a lease with Lido Beach Redevelopment Partners, even though many Lido residents still stewed over how the original idea of renovating the pavilion and pool mushroomed to a bigger venture with a private company.

Eleven months later, at its Nov. 6 meeting, the Sarasota City Commission was set to vote on whether to approve the lease. 

‘Super sweetheart deal’ 

All it took, apparently, were the comments of three residents to persuade the commission to delay a vote.

Martin Hyde, who lost his bid last spring for a City Commission seat, at almost every meeting since the election has made a practice of showing commissioners — in his three-minute speaking time — what he believes to be gross mismanagement of taxpayer money.

In this case, he argued the proposed Lido Beach lease agreement would have given the developers control of the pavilion for 30 years and likely revenue of $120 million to $180 million while city taxpayers would receive “less than $7.5 million” over 30 years.

Ken Ayotte, a former banker and Lido resident, followed Hyde and simply dubbed the lease agreement “a super sweetheart deal” for the developers.

More revealing, however, was Sarasota lawyer John Patterson’s assessment of the proposed lease agreement. Patterson is husband of former Sarasota County Commissioner Nora Patterson and lawyer for Ocean Properties Ltd., owners of five marquee resorts on Lido and Longboat Key.

Patterson submitted to commissioners a three-page, single-spaced memo, critiquing the deal. Among his observations and points:

“A most serious concern is the apparent absence of any economic analysis on behalf of the city and by anyone with expertise as to whether the proposed rent is fair market rental. There is no reference to an appraisal … Why should the city tie up 2.5 acres of prime property for 30 years in a lease without the benefit of an appraisal to determine whether the rent being paid is fair-market rental? Fair-market rental appraisals are not uncommon in significant, long-term leasing transactions.”

Asked whether the city obtained an appraisal, a city spokesman said the city typically does appraisals when it purchases or sells property but not on leases. The spokesman said the city sent the proposed lease to the Cushman & Wakefield office in Tampa, to which its representative gave a strong recommendation to move forward on the lease.

Patterson’s critique also questioned 10 material points in the lease and raises numerous questions, covering the kinds of technicalities that an experienced real estate lawyer knows almost instinctively. Example:

• “Paragraph 3 of the lease states that the term is for 10 years after the first certificate of occupancy, with two additional 10-year renewal options,” Patterson notes. 

“However, there is no condition on the exercise of these options. The tenant could exercise the options now. There is no condition as to the tenant not being in default and having faithfully performed.  

“Normally,” Patterson’s memo states, “commercial leases require, as a condition to exercise an option, that the tenant faithfully perform, not be in default …”

Separately, Patterson wrote in an email to the Longboat Observer:

“The lease is one that no sane landlord would ever sign, even assuming the project is right and the price is right.”

Start over 

To be sure, no one should fault Lido Beach Redevelopment Partners and the lease it negotiated and submitted. It did nothing wrong. Its owners are business people and attempted in good faith to submit a proposal that they thought would benefit Sarasota, its residents, visitors and themselves.

Protecting the taxpayers’ interests is the job of the city administration and City Commission. 

Fortunately, this matter will come before the Sarasota City Commission again Monday, Nov. 20. When it does, it’s likely commissioners will reject the proposed lease. They should. 

They should start over. It’s abundantly clear the neighboring Lido Key residents prefer a pavilion, restaurant and pool that maintains the ambience that has existed for decades.

But this point should not be lost on the City Commission: Here it is, six years gone, thousands of dollars gone for both sides, and the city is on the verge of doing so much of what it should have done right the first time. 

Time and again, the city falters when it comes to real estate deals and development. Why is that? 

It starts at the top.