Harborview Center In a Pickle
By Nick Fritsch
CLEARWATER - The Harborview Center was born in controversy and continues in that same mode. And it will likely succumb one way or another in controversy. Originally, the intent was to remodel the old Maas store and keep downtown alive with a good retail destination tenant. Then the commission of the mid-1990’s wanted to add conference or convention space that might not only revive downtown, but also the local hospitality businesses. Initially, construction costs nearly doubled the outlay; and it still had some shortsighted design and construction issues. The conventions never came and failed promises of conference bookings continue to plague the center. City and county bookings dominate the center’s use.
There are three contracts that govern the Harborview Center: Stein Mart, Pickles Plus, and Global Spectrum LP, the management firm for the conference areas. None of the contract lengths coincide which adds to the problem. Decisions have to be made by piecemeal that obscure a reasoned big-picture analysis and decision. At the work session on Monday the current “trigger,” a contract renewal with the conference management firm for September 2009 through 2010 initiated the debate. This seems too far in advance to renegotiate a contract, but because conference bookings are generally made more than twelve to eighteen months in advance, it is customary. Stein Mart’s lease also concludes September 2009. Recent top management and real estate management changes have delayed their disclosure of their future plans.
As we listen to the staff and the council sort through the details, it appears that sweetheart deals with Stein Mart and Pickles Plus add to the taxpayer burden of not only operating the complex, but affect closing a portion of the three elements. Stein Mart’s annual lease payment of $150,000 plus $40,000 based on sales figures is so favorable compared to market rates, that it is almost absurd.
Pickles Plus’ lease makes Stein Mart’s appear as a “bad deal.” Pickles Plus has about 12 years remaining on its contract. That unreasonably long term was more than ten years beyond the Stein Mart lease and was one of the giveaways by the city in trying to make the conference center work by having a contiguous restaurant. If Stein Mart decides not to renew, Pickles enjoys a large buy out clause. If Stein Mart renews, they want capital improvements, which will again likely befall the city taxpayers.
Presently, the city has to pump $300,000 a year to offset operational costs. However, the cost to close all operations, but keep the center in “mothballs” was estimated by staff to be $100,000 per year; not including the added cost of buying out the contract of Pickles Plus. In all fairness, nearly every city conference center requires taxpayer subsidy. Perhaps a name change is in order to Sweet Pickles Plus.
The present council’s concern is that with shrinking revenues and increasing costs, “Can the city afford to continue the $300,000 annual subsidy or endure the cost to close it, pay off Pickles Plus and demolish the building.” This murky situation is not likely to be a pleasant outcome. Thursday, at the council meeting more discussion will seek to formulate the next steps on a slippery slope.
At this same work session, we heard about another ill thought venture with another group seeking a $2.3 million purchase or bail out of the Clearwater County Clubhouse and parking lot. As council member Gibson pointed out, there seems to be no end to entrepreneurial ventures seeking city money to rescue them.
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