FORT PIERCE — The future of a proposed hotel at King's Landing remains uncertain after the Fort Pierce City Commission signaled it will revisit the project next month as the developer seeks more time to close a $15 million funding gap.
The request comes after the developer sought financial assistance from the city, a proposal that failed to gain support during a FPRA board meeting earlier this year.
Economic Development Director Shyanne Harnage said the city instead asked the developer to provide a timeline for obtaining additional private financing.
"He came forward requesting a financial commitment from the city or the FPRA. We discussed that at the FPRA board meeting, and while there was no official vote taken, there was no consensus to support or participate in that. After that lengthy discussion, we discussed giving them a requesting within two weeks for the developer to provide an estimated time frame to secure private equity partner or commitment. He has since emailed that to us. It's attached to the agenda. He is requesting 180 days to secure that commitment," she said.
The project cannot move forward until the remaining financing is secured. Live Oak CEO Paul Bertozzi said finding new investors will delay construction but would allow the development team to establish a revised schedule once funding is in place.
"We have looked at the timeline and it will extend the timeline for completion. We've talked through that with main sale as well. If approved, we'll present a schedule to everybody that is concise once funding is in place," he said.
Bertozzi said rising construction costs have widened the project's financing gap since its original budget was developed.
"As we've seen construction costs continue to bloom, we've had those challenges across multiple industries, but that is a portion of the cause of the delta that is being created. The initial budget to the budget now has changed and therefore it leaves that delta within the financing that now, yes, the bank can still contribute to the 65%, but that equity check grows to a larger number as well. And that delta is what is trying to be overcome," he said.
The request for additional time drew criticism from some commissioners, who questioned whether the project can be financed after multiple amendments to the development agreement.
Commissioner Chris Dzadovsky said the latest funding request raises concerns about the city's growing investment in the project.
"The $15 million ask certainly shook everybody up up here. Like, where did that come from? The fact that the property went from approximately $2.5 million of value when it was first provided, as an incentive, to approximately $8.5 million today. The request for $15 million on top of that, so now we're looking at $23 million of investment from the city as part of this process. Live Oak and the presentation was only $6.5 million on that side of the equation. Are we supposed to put the taxpayers through this continuously?" he asked.
He added that he no longer believes the project can be financed.
"In my opinion, if we haven't been able to finance it from day one, whether it was the previous iterations, amendment one, amendment two, amendment three, now asking for amendment four, are we going to get there? My position, my thought process is the absolutely no."
Dzadovsky said he will not support any future motions related to the hotel project.
Commissioner Curtis Johnson said he would support holding a special meeting to discuss the proposal but wants the commission to establish clear expectations for that discussion.
"So we can schedule a special meeting, but we don't have to hear from this. Let's talk about scheduling a meeting if we're going to do that. But then let's set the parameters of what that meeting is going to look like and what we're going to discuss, and then we'll make a decision," he said. "That's where I'm at, because right now, I'm beyond frustrated."
Commissioner Michael Broderick, meanwhile, cautioned that attempting to terminate the agreement with the developer could result in lengthy and expensive litigation. While he opposed providing additional public funding, he said allowing the developer more time to secure private financing offers the best path forward.
"So this whole thing about coming in at the last minute, 'we're $15 million short, we want a municipal contribution,' I understand the logic behind making the ask, but the city of Fort Pierce does not have the money. We're not going to bond the money," he said. "That is not in the best interest of the citizens of the city of Fort Pierce. But getting this project out of the ground in a reasonable timeframe is in the best interest of the citizens of the city of Fort Pierce. And I believe that this is the only avenue that's available to us to succeed at that."
The commission is expected to discuss the project's future again at its Sept. 14 meeting, followed by the FPRA meeting on Sept. 15.