‘Worst financial deal’: Fort Lauderdale hits pause on $268M city hall

Fort Lauderdale city commissioners pumped the brakes on a controversial plan to build a new city hall.

The city commission voted unanimously Tuesday night to delay a key vote on signing the interim agreement between the city and the developer behind the $268 million project because of unanswered questions regarding financing. In the meantime, city staff will examine other options, including structural analyses on existing buildings up for sale to possibly refurbish into a city hall. The commission will discuss the matter again in June.

Leading up to the meeting, a majority of commissioners appeared to lean toward approving the interim agreement with FTL City Hall Partners, a team that includes CORE Construction, Stiles Corp., PGAL, the PALMA architectural firm and developer Plenary Americas U.S. Holdings.

But even before dozens of unhappy residents urged commissioners to defer the vote, the commission reached an early consensus while looking at the numbers: they were not happy, either.

According to the unsigned interim agreement, the developer would finance a portion of the project by lending the city $24 million, which the city would pay back at 11 percent interest post-tax. Commissioner John Herbst, who touted his career on Wall Street while speaking on the dais, called it “the worst financial deal I have ever seen in my life.”

“This is like going to a loan shark to borrow money!” Herbst said.

The City of Fort Lauderdale has been in need of a new city hall after the historic flooding of April 2023 ruined its old city hall. In December, a majority of commissioners voted to approve FTL City Hall Partners’ design for a new glass, curved building. (Herbst was the lone dissenting vote.) But Commissioner Ben Sorensen changed his mind on the project after the commission learned in January that the owners of two buildings, 101 Tower and 1 East Broward, were interested in selling their buildings to the city for a fraction of the price of construction.

Sorensen said he was also concerned that the city simply could not afford the hefty price tag of new construction because of the city’s looming budget deficit and the possibility of the state legislature slashing property taxes. The proposed new building would cost taxpayers $24 million a year, adding up to over $724 million over 30 years. Purchasing an existing building would be a fraction of the price.

Unanswered questions

Commissioners grilled lawyer Eric Singer, who was retained by the city to negotiate the interim agreement, on the developer’s high interest rate. Singer said the post-tax 11 percent figure was the developer’s “line in the sand.” Also part of the deal in the interim agreement is that Plenary, the developer, would cover the costs of operations and management for 30 years, which Herbst likened to an extended warranty on a car.

“Has anybody ever told you buying an extended warranty is a good deal?” Herbst asked the residents sitting in the audience. “No, it’s not.”

Commissioners wanted more information than what Singer could provide. Residents at the meeting also grew antsy.

“In your advocacy for the city, the taxpayers, is the best deal at this point to not have developer equity?” Sorensen asked.

“I don’t think we have the information to make that decision,” Singer responded.

“Then don’t vote!” a woman in the audience said.

Herbst said the city doesn’t need the developer to finance the project at all. Commissioner Pamela Beasley-Pittman said she was not comfortable with the deal. Mayor Dean Trantalis, a major advocate for building a new city hall instead of buying an existing building, agreed.

“I don’t like the position we’re in right now because it makes it look like we don’t have all the information,” Trantalis said.

Mayor on board with delay

Ultimately, Sorensen finally got what he had spent months pushing for: a delayed interim agreement vote and examinations of Tower 101 and 1 East Broward to see how feasible it is to turn one into a city hall. Late into the meeting, he asked city staff to examine the nearby federal courthouse building, too.

Even the mayor, who strongly disagreed with Sorensen last week, was open to conducting studies on existing buildings to get more information. Still, Trantalis argued that it is a safer investment to build a new building instead of fixing up an old one. He added that Broward County examined several existing buildings for its government center but decided to build a new one.

“These are things we have to be careful about, assuming that an existing building is going to be cheaper. It’s not necessarily going to be cheaper,” Trantalis said. “If you want to do an examination of what it’s going to cost to build-out an older building, we can go through that exercise, but I just want you to know that the county has done a lot of that work for us.”

Before the unanimous vote to defer the interim agreement decision, commissioners heard from dozens of residents and representatives from local civic associations who urged them to reconsider. While most encouraged the commission to simply delay the vote, others said they thought the proposed building design was ugly and doesn’t fit Fort Lauderdale’s vibe.

“I feel like we’ve run into a brick wall,” said resident Lorraine Saunders. “This is amazing. The building doesn’t look like anything else in the entire city.

Robert Ferencik, a Fort Lauderdale resident of 47 years, said a city hall should be a “building for the people” and the commission should not sign the agreement until it is certain that the people want it and can afford it.

“Stop. Hold your horses,” he said. “Figure it all out.”