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Tentative Deal Outlined for New Aquarium Project


Published:   |   Updated: August 14, 2013 at 02:44 PM
CLEARWATER -

City officials have negotiated a “memorandum of understanding” with Clearwater Marine Aquarium that outlines new details and financial specifics for the $160 million facility that CMA has proposed for the downtown waterfront on land where city hall now sits.  
 
The memorandum provides a basis for future documents that will be required between the parties subject to city voters' passage of a Nov. 5 referendum that seeks public approval for the aquarium to lease the city-owned property for 60 years.
 
Monday, city council members discussed the memorandum for the first time publicly in a work session.
 
“This is not a document in which we can sue each other,” said City Attorney Pamela Akin. “It is simply the intent of the parties and doesn't obligate either side.”
 
Compensation to the city of Clearwater is a key point addressed in the memorandum. The aquarium has agreed to pay the city 50 cents per admission ticket not to exceed $7.5 million to replace city hall and $150,000 thereafter for annual rent on the land.
 
Additionally, CMA agreed to pay the city for the existing tennis courts at $75,000 each and be responsible for costs associated with demolishing the aging municipal office building other than the removal of any asbestos, which would be the city's responsibility.  
 
Mayor George Cretekos expressed concern that the 50-cent surcharge on ticket sales with a cap of $7.5 million would not be enough. He suggested that the $150,000 ground rent start from the beginning of the lease and the ticket surcharge remain in perpetuity. He said he thinks voters will be more amenable to the project with better financial terms for the city. 
 
“I'm having angst about recouping money for city hall ... and we're going to have a lot of expenses, we're going to have to look at Coachman Park for redesign,” said Cretekos. “Assuming the aquarium gets a million customers a year, at 50 cents per ticket it would take 15 years to get our money back.” 
 
“There is a whole lot of economic benefit without the 50 cents,” Vice Mayor Paul Gibson said. But he agreed with adding some sort of inflation factor to the rental rate per Councilman Bill Jonson's suggestion. 
 
CMA will be responsible for all costs of design, construction, maintenance and funding of the new aquarium and must have funding commitments in place by Aug. 1, 2016. Those are expected to be a combination of private gifts, grants and bank financing.
 
The city would have no obligation or liability in the event of default by CMA on its loans. City land can't be offered as collateral. A creditor's recourse would be limited to taking over management of the aquarium and assuming all of the rights and obligations of CMA for the remainder of the ground lease. Alternatively, the creditor could abandon the city property, disassemble the buildings and collect CMA's assets.
 
The city has agreed to vacate city hall within 180 days of receiving solid evidence that all funding commitments necessary to start construction have been secured. Aquarium officials predict that the new facility will take two years to build.  
 
The acquisition of a parcel for use as a parking garage will be CMA's responsibility; however, the city must approve the purchase. The garage parcel may be conveyed to the city to construct, operate and maintain, providing parking revenue for Clearwater' coffers.  
 
The city will consider extending CMA's lease of the Harborview Center, currently being used for the aquarium's Winter's Dolphin Tale Adventure exhibits, from April 2014 until 60 days after the grand opening of the new aquarium.  If voters reject the referendum in November, the city will consider extending the Harborview ease for an additional two years. 
 
The city will be responsible for improvement of the Pierce Street extension to Drew Street and for building a roundabout at the western end of Cleveland Street. According to the city's engineering department, the cost would be about $615,000.
 
After Monday's work session, the city council was to resume discussion and then vote on adopting the memorandum of understanding on Wednesday evening. Results were not available by the Clearwater Gazette's publishing deadline.
 
CMA now operates a marine animal hospital in a former water treatment plant on Island Estates. The aquarium's biggest attraction is Winter the dolphin, star of the 2011 family movie “Dolphin Tale.”
 

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