West Palm chooses Boat Show-backed company to build a $16 million Flagler Drive marina

West Palm Beach will begin negotiations with City Harbor LLC to build a $16 million marina off Flagler Drive that will generate an estimated $324,000 per year for the city and protect one of its signature cultural events, the Palm Beach International Boat Show.

Backing from Informa, the international events firm that puts on the boat show, was critical to City Harbor's proposal, which beat out one submitted by Safe Harbor LLC, the largest owner and operator of marinas in the world.

"This is a very exciting day for our city," Mayor Keith James said. "Just the opportunity to discuss having a world-class marina on the front door of our waterfront is extremely exciting."

The marina negotiations are a major step forward in a process that started two years ago, when City Harbor made an unsolicited bid to expand the city's two docks into a marina.

Rather than accept City Harbor's proposal, the city announced its intention to consider other proposals for a marina.

Three firms submitted plans and projections — City Harbor, Safe Harbor and Leisure Resorts LLC, which ultimately dropped out of the running.

James and city commission members held a special meeting on Monday to decide whether to rank and choose a bidder and begin negotiations, delay the process or end it.

Commissioner Christy Fox argued in favor of delaying a decision to give the public more time to weigh in, but her colleagues voted to rank and choose a bidder and begin negotiations. Fox initially refused to rank either bidder, but, after City Attorney Kimberly Rothenburg told her she was required to offer a ranking, she joined James and three of her Commission colleagues in ranking City Harbor first and Safe Harbor second.

Commissioner Cathleen Ward, who had noted the far larger revenue projections Safe Harbor included in its proposal, ranked Safe Harbor first and City Harbor second.

Why did West Palm choose City Harbor for the marina?

The way the city decided to move forward with City Harbor — no request for proposals process, no public meetings with dueling proposals upon which the public could comment or shape — appeared to frustrate Fox, just as it frustrated a Downtown Development Authority board member, who spoke to The Palm Beach Post anonymously because of fears of retribution.

"Normally, with a project like this, the city would do all sorts of outreach," the board member said. "I'm all for a public-private recreational use, but the public should have been involved in specifying what that recreational use was."

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The city has seen other large development projects hit snags as they undergo public scrutiny and feedback.

The most notable instance of that occurred with the Sunset Lounge, a 1920s-era supper club the city has rebuilt with at least $16 million in public money. Multiple firms vied for the lounge's management contract, and, after one was selected during a contentious, protracted public meeting, the city later determined the firm its violated anti-lobbying rules.

The city moved to the second-place management bidder, but determined that it, too, violated anti-lobbying rules. The first management bidder sued, arguing that it did not violate rules against lobbying. A judge ruled in its favor, but the legal questions surrounding who would manage the lounge has delayed its re-opening.

West Palm Beach avoided that type of drama with the rebuilding of its municipal golf course.

After a redevelopment project at the golfing site failed to get financing, James reached a handshake deal with Seth Waugh, chief executive of PGA of America, who asked for an exclusive period during which he would raise money to redesign the facility.

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Waugh said he raised $53 million in donations to rebuild the course, which has drawn rave reviews from golf experts. But Waugh has refused to disclose who, specifically, paid for its reconstruction, and high prices at the course have drawn complaints from some golfers. It's not clear if the city has the authority to alter rates at a course it, technically at least, owns.

James said he was motivated to move forward with Waugh's vision for the golf facility because it included numerous community benefits, particularly for children.

That, he said Monday, is the reason he backed City Harbor's proposal, which foresees various programs at the marina that would give children and those who aren't wealthy equal access to the water.

What would the new West Palm marina feature?

City Harbor's proposal included sightseeing cruises from the marina, as well as ecotours, educational trips for children, a water taxi, day fishing trips and dive excursions.

West Palm Beach would retain ownership of the marina under City Harbor's proposal, which includes 84 slips for vessels as long as 130 feet.

City Harbor has proposed a 100-year management contract, though that term is subject to negotiation.

Safe Harbor's proposal is significantly different. It pledged to build a $34 million marina and retain ownership of it.

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The firm's plans call for dinner and sunset cruises as well as water taxis at a marina that includes 97 slips for vessels as long as 284 feet.

Safe Harbor said it would pay the city a $500,000 acquisition fee for a 40-year lease with options for two 15-year extensions. The firm estimates its real estate taxes would be $250,000 per year, and it has promised to give the city $986,000 per year, which it estimates would equate to about 12% of its gross revenues from the marina.

Commissioners noted that Safe Harbor's proposal offered the city more money.

Commissioner Christina Lambert said, while she appreciates "the additional revenue that is on paper" as part of Safe Harbor's proposal, "for me, that wasn't the primary goal of this project."

She added: "Many times, we're presented with projects and we're looking at evaluating who is the best partner for the city, and, sometimes, we choose the one that isn't the most revenue for the city."

Safe Harbor, which came up with a marina project after City Harbor, was fighting an uphill battle once officials for the Palm Beach International Boat Show told commissioners City Harbor's marina plan was the only one that worked for the boat show.

What is the impact of the Palm Beach International Boat Show?

One study showed that the 2022 boat show had a statewide economic impact of $1 billion. Residents and others from far and wide crowd onto West Palm Beach's waterfront each spring, providing a steady stream of patrons for downtown restaurants and bars.

After questioning from James, Safe Harbor officials said they had discussions with the boat show and that its marina project would be a fit.

"From where I sit, I wasn't satisfied with the answer to the boat show question that I asked," he said. "There were a lot of word gymnastics there that didn't really address the issue. There must be a reason why the boat show went with one of them and not the other."

Boat show support for City Harbor's plan was critical, as James and other commissioners cited it in discussing the dueling proposals.

"The boat show is very important to our city," James said. "It's a tremendous economic driver. And anything that can be done to ensure the future of the boat show of our city, I think, is in the city's best interests."

Wayne Washington is a journalist covering West Palm Beach, Riviera Beach and race relations at The Palm Beach Post. You can reach him at wwashington@pbpost.com. Help support our work; subscribe today.

This article originally appeared on Palm Beach Post: West Palm Beach moves forward with Boat Show-backed $16M marina