FORT PIERCE — Plans for a $90 million project to build a hotel, restaurants, shops and homes on the old H.D. King Power Plant site may be in jeopardy because of a glitch in the contract.

Jonathan Snyder, president and chief executive officer of Nevada-based Snyder Development LLC, wants the city to donate 6.87 acres of waterfront property on Indian River Drive to build his project, but language tied to the deed says the city has to use the land for a public purpose or the property reverts back to the state.

The glitch might kill the project, Snyder said.

The City Commission, seated as the Fort Pierce Redevelopment Agency board, will discuss the city’s options during a 12:30 p.m. Wednesday meeting at City Hall.

Redevelopment agency Director Jon Ward said he discovered the language in the deed last month just before commissioners were to vote on whether to give the land to Snyder.

“The problem is we’re using the land for public benefit, but if we give it to (Snyder) we’re then using it for private enterprise and then the reverter clause kicks in,” Ward said.

To move the project forward, Ward said, the City Commission would have to agree to donate the land to Snyder, and the city would then have to buy the property back from the state.

Snyder’s company, a subsidiary of Snyder Worldwide of Palm City, is proposing to build Atocha Village, a mix of retail, restaurant and residential. The land Snyder wants to build on is occupied by the old H.D. King Power Plant, which is being demolished to make way for the project.

Leasing the property is not really an option, Ward and Snyder said, because lenders are hesitant to lend money on leased land. Snyder wants the land as a developer incentive. He said with current market conditions, the banks require him to put 50 percent down on a $90 million loan. Plus, he said, he’s proposing to build residential homes on the land and the law prohibits homes from being built on leased public land.

The land used to be the bottom of a creek bed until the state filled it in during the early 1900s, Ward said. During that time, the city bought the land from a land protection fund, agreeing it would be used for a public purpose.

Snyder said he has been in negotiations with the city for 18 months and was disappointed city officials didn’t do a title search before talking with him about the project.

“I would have thought they’d learned their lesson when they ran into a similar problem with another property down the street and cost the taxpayers money,” Snyder said. “I’ve incurred a substantial amount of costs based on our negotiations.”

Palm Beach Gardens-based developer Catalfumo Construction tried to buy property from the city for the defunct Marina Square project in 2006 but ran into problems when the city later told the company the land had a reverter clause tied to it. Catalfumo couldn’t close on the deal and later sued the city.

Ward and City Manager David Recor said they had no comment when asked why the city didn’t conduct a title search before negotiating with Snyder.

“The project could not go forward as it looks now,” Snyder said. “It would have to be adjusted within legal requirements and then it would have to be reevaluated on whether it would work from an economic standpoint.”

Mayor Bob Benton said he would not support giving the land to Snyder, especially considering the state of the economy and real estate market. He said the land could be worth up to $10 million when the market eventually picks up.

“I’ve made it clear that if the developer wants to buy the land we can move forward,” Benton said.

By Alexi Howk

Tags: bui, chief, contract, development, driving, hotel, lender, loan, money, property, restaurant, retail, vote

This entry was posted on Wednesday, February 25th, 2009 at 10:04 am and is filed under Courts, Economy, Fort Pierce, State. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.