'Another setback': FEMA votes against funding replacement of Panama City Marina Civic Center

Samantha Neely, The News Herald
·5 min read

Editor's note: This story has been corrected with the correct name of the three-person panel of judges, which is the United States Civilian Board of Contract Appeals.

PANAMA CITY — Nearly four years after Hurricane Michael destroyed the beloved Marina Civic Center, Panama City officials received word Tuesday evening that the city lost its battle for arbitration with FEMA to replace the dilapidated center.

In a 2-1 decision, the United States Civilian Board of Contract Appeals determined the city did not satisfy the "50% Rule" in which the cost of the improvement or repair exceeds 50% of the market value of the structure, therefore the center is not eligible for replacement with FEMA funding.

Panama City officials lost the battle for arbitration with FEMA to replace the Marina Civic Center, pictured here July 8, 2021. The center was damaged in Hurricane Michael.
Panama City officials lost the battle for arbitration with FEMA to replace the Marina Civic Center, pictured here July 8, 2021. The center was damaged in Hurricane Michael.

City officials first filed its appeal in July of last year after being denied and sought arbitration in January of this year after a lack of response from FEMA within 200 days .

City Manager Mark McQueen held a press conference Wednesday afternoon to discuss these results and what it means for Panama City's road to restoration, highlighting what a disappointment the decision is for the community.

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"This is discouraging news because clearly, the city of Panama City is struggling to get back up on its feet," McQueen said. "This is another setback for the community, but yet we have the resolve that we're going to continue to rebuild the arts within the city of Panama City and have a replacement for the civic center."

With the 50% rule, McQueen said the city needed to prove Hurricane Michael caused over $2 million in damage, the main focus being on the damaged HVAC system.

"The cost to replace the HVAC system was $3.7 million ... that would be certainly necessary to prove that the city met its 50% obligation if we can get the HVAC system recognized by FEMA that it needed to be replaced," McQueen said. "That will take us over the 50% threshold and therefore we would be eligible for a full replacement for the Civic Center."

City officials said their argument consisted of proving that wind-driven rain and saltwater came in and ruined the system.

McQueen said they had experts come in to test the system to confirm it was destroyed.

Jim Keeney with NOVA Engineering and Environmental talks in June 2021 about how his company plans to simulate a Category 5 hurricane at the Marina Civic Center in Panama City. The test was authorized by the city as part of its appeal to FEMA for more federal funds to repair or replace the center, which was severely damaged in Hurricane Michael. This week, Panama City officials learned they had lost the battle for arbitration with FEMA to replace the center.

On June 10 of last year, NOVA Engineering and Environmental conducted a test to simulate Hurricane Michael's effects on the center. McQueen said the results proved "without a doubt" that all of the electrical components in the HVAC systems were saturated by the wind-driven rain.

"We also had engineers that were not only there watching this experiment take place that proved that saturation took place... we had our engineering firms of CPMY, we had Mott MacDonald, we had system service engineering, we had our building code officials," McQueen said. "We even had (Congressman Neal Dunn)'s office all witnessing this alongside, for the first time ever, a FEMA individual setting footprints in that entire Civic Center property."

McQueen highlighted that FEMA officials did not step into the damaged facility until two years after Michael hit. During their test of equipment, it was reported to not be functioning and started smoking.

City officials presented multiple reports and testimonies from experts during a hearing on April 19 and 20 that showed that the HVAC system was destroyed by Michael.

FEMA officials did not agree with their reports, despite a FEMA Field Inspector agreeing with the results.

"FEMA's argument was that even if the HVAC system had gotten wet, we could have simply wiped it down... obviously, we did not believe that would be the case," McQueen said. "Two of the three judges in the arbitration panel accepted FEMA's argument and stated that the city did not prove that Hurricane Michael caused the damage to the HVAC system, which would otherwise require the replacement of the entire building and therefore they ruled against the city."

Panama City officials lost the battle for arbitration with FEMA to replace the Marina Civic Center, pictured here July 8, 2021. The center was damaged in Hurricane Michael.
Panama City officials lost the battle for arbitration with FEMA to replace the Marina Civic Center, pictured here July 8, 2021. The center was damaged in Hurricane Michael.

One judge agreed with the findings, stating in his report that the arbitration record shows that "the effects of wind-driven rain and salt water from Hurricane Michael caused the damage to the HVAC system and that there was no other cause for those damages."

As for what's next, McQueen said it will still be a FEMA project, it will just now be a repair project. City officials will now go back to see what the repairs will cost as of today and present it back.

City officials will also be looking at additional funding sources in the meantime.

He added they will continue on their path toward restoring arts in Panama City, saying city officials and residents have already started working on bringing the civic center back.

"We're going to continue to look to see what is the right way to do this. This obviously puts a wrinkle in how we were thinking we would be able to do it, but we're going to be able to get there," McQueen said, "We're gonna have to work harder, we're gonna have to find other ways of funding to be able to support the effort that we have, which is to rebuild and build back a Performing Arts and Events Center that meets the needs of the community."

City officials hired Wilson Butler-Fentress last year for architectural and engineering services for the new performing arts center, holding town hall meetings with residents to get their input.

"They've done a lot of work and there is still more work to be done. We're anxious to see what their assessment is and what their opinion is and what they think is right for our community," McQueen said.

McQueen said after a hectic four years, having a civic center they can be proud of again is what residents deserve.

"I think what I'm really proud of in our community is the fact that our citizens continue to show their resolve and determination to build back... that's no less the case, in this circumstance," McQueen said. "We're going to pull ourselves up by our bootstraps, and we're going to press on... we're going to build back a facility that's going to meet the needs of our community."

This article originally appeared on The News Herald: Panama City Civic Center won't get replacement funding, FEMA votes