Plans for a sports fishing boat factory at the Port of Pensacola are now in doubt.
Streamline Boats, a Hialeah-based company, is facing eviction from its South Florida factory as the company has come under full control of Pensacola investors.
Streamline Boats of Northwest Florida signed a lease with the city of Pensacola in 2020 to build a sport fishing boat factory and create at least 45 jobs at the port.
Attorney Bart Houston with The Houston Firm, a Fort Lauderdale law firm, notified Port Director Clark Merritt on July 17 that the ownership of the company had changed. James Dillard, John Levitan and his law firm were now principal officers of the company, according to emails obtained by the News Journal.
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The founders of Streamline Boats, Peter Garcia and Osniel Sanchez, were no longer associated with the company, Houston wrote.
Streamline Performance Boats Corp. is also fighting eviction from its headquarters in Miami-Dade County for the third time this year for failure to pay more than $15,000 in rent, according to court records.
Houston has filed a motion in Miami-Dade Circuit Court try to stop the eviction.
Streamline Boats maintained an active presence on its social media accounts, posting between once to twice a week with photos from its boats in action or photos of boats under construction at its Hialeah facility. However, since May the company has gone quiet on all of its social media.
Records with the state of Florida show that Dillard, Levitan and The Houston Firm are now listed as officers of both Streamline Boats of Northwest Florida and the original company Streamline Performance Boats Corp. as of July 16.
Streamline Boats of Northwest Florida's lease with the city requires the city to approve continuing the lease if more than 50% of ownership occurs with the company.
Merritt acknowledged the change of ownership in an email July 26 after a review with the City Attorney's Office.
In an email to the News Journal, Pensacola Mayor Grover Robinson did not address questions about the lease's 50% ownership requirement but indicated it was up to Streamline Boats to meet the construction deadline of March 2023 for its facility at the port.
He said he was aware the original founders from South Florida had been bought out of the company.
"I am not aware why this has happened or what it means to the company long term," Robinson said.
Robinson added he was unaware of the eviction proceedings in Miami-Dade County until he was contacted by the News Journal.
The original lease proposal for the boat factory faced scrutiny in 2020 over environmental concerns as well as who was investing in the project. A tour by city officials of the Hialeah factory assuaged any environmental fears, but questions still remained over its Pensacola-based investors.
In 2020, the two officers of the Northwest Florida Streamline Boats were Dillard and Sanchez.
Dillard is a principal at the Pensacola investment firm South Palafox Group. Dillard, along with other principals at the company, were also investors in South Palafox Properties, the firm that ran oversaw the Rolling Hills landfill in the Wedgewood community in Escambia County.
The landfill, which operated as a construction and demolition landfill, allowed the dumping of unauthorized waste, including toxic chemicals that contaminated the soil and led to protests of nearby residents, before the landfill was shut down by the Department of Environmental Protection and Escambia County.
The City Council approved the lease because it contained a provision that the city could cancel the lease if the ownership of Streamline Boats of Northwest Florida changed by more than 50%.
Deputy City Administrator Amy Miller, who was the port director at the time, told the City Council in 2020 that South Palafox Group would retain only a 49% ownership stake in the company.
In her current position at the city, Miller oversees all of the city's enterprise operations including the Port.
In July, Miller appeared unsurprised by the news that full ownership of the company was now in the hands of South Palafox Group principals, according to emails obtained by the News Journal in a public records request.
"As further info, this was somewhat expected," Miller wrote to Assistant City Attorney Heather Lindsay on July 18 after the city was informed of the ownership change. "We knew that local shareholders were planning to 'buy out' the Miami interests."
Miller also said she did not believe approval by the city was required under the terms of the lease as she viewed the change as an "internal" restructuring allowed under the lease.
However, the lease specifically states that any "transfer of more than fifty percent (50%) of the equity ownership of the Company (Streamline Boats of Northwest Florida), whether such transfer of equity ownership occurs pursuant to a single transaction or a series of a related transactions, shall be deemed to be an assignment of this lease" which requires city approval.
Miller clarified what she meant in her email in a written statement to the News Journal.
"When I indicated the buyout of the South Florida portion of the company by the North Florida portion was 'somewhat expected,' I didn't say or mean that it's been expected since inception, only that the City was aware a buy-out was in discussions for some period of time before we were officially notified," Miller said.
Miller also added that when she told the council in 2020 that the original company would hold 51% interest in the Pensacola company she didn't mean to imply that would never change.
"When I stated in 2020 that the South Florida interests would own 51%, I certainly didn't indicate that would never change, as I would have no way of knowing what the future might hold for this or any other business," Miller said.
Other emails obtained by the News Journal show the city is working on a Triumph Gulf Coast request for the Port of Pensacola and was planning on including all the port tenants, including Streamline Boats, as a co-applicant on the Triumph application.
South Palafox Group is now also under new ownership, with Dillard and Levitan listed as company officers as part of a new Delaware corporation called Invictus Holdings Inc.
Dillard and Levitan are also suing their former business partners who have been removed as officers of South Palafox Group, according to Escambia County Circuit Court records. The suit alleges the former business partners took South Palafox Group's business records from a Pensacola storage unit and have refused to return them to the company.
Houston is representing Dillard and Levitan in the suit.
The News Journal reached out to Houston for comment but has not heard back.
The initial lease required Streamline Boats to begin construction on the project within one year and required construction to be complete at the end of two years. In the wake of Hurricane Sally, the city extended that deadline for construction to start until March 2022 with construction set to be complete in March 2023.
Robinson told the News Journal he visited the port on Thursday and heard the latest update about the situation. He said construction on the 92,000-square-foot boat factory at port warehouses No. 9 and No. 10 have been "stopped for some time."
"I have been told (the construction halt) is related to both a supply side issue and financial issue that stems from the change in ownership," Robinson said. "This has had me concerned since construction stopped. On my visit today, I was told rental payments begin Spring of 2023 regardless of whether the space is finished or not."
The lease requires $127,875 per year for the first five years of the lease and $255,000 each year for the second five-year term of the lease with for renewals up to 40 years.
In 2021, the city also promised $1.5 million in insurance proceeds from hurricane damage to the port warehouse to Streamline Boats on a reimbursement basis for construction costs.
Robinson said the city could use those proceeds to complete the buildings itself and market them to another tenant.
"While I would love to see boat manufacturing as a part of the port, there certainly is the possibility that the Streamline Boats may not be able to meet its obligations for construction or the lease," Robinson said. "If they are not successful, the city will pursue a new course on finding another tenant. The good news is the port has more opportunities and less vacant warehouses than when we started with Streamline."
Robinson also said that the Port of Pensacola has had its best financial years since he became mayor.
"We soon hope to bring a Triumph request to kickstart research possibilities on the undeveloped northern portion of the port that can be removed from the fence line," Robinson said. "Between the port plan and potential research growth, we have more port prospects than we have had in the past. It is certainly possible that Streamline does not meet its obligations. However, if that happens, I think we are positioned to actual do better with new opportunities."
Jim Little can be reached at firstname.lastname@example.org and 850-208-9827.
This article originally appeared on Pensacola News Journal: Pensacola port tenant Streamline Boats facing eviction in Hialeah