Submitted by Suanne Z. Thamm
Reporter – News Analyst
April 6, 2021
Fernandina Beach City Commissioner Chip Ross is a determined researcher. While he has been criticized on occasion for “getting into the weeds” when it comes to the level of digging he often does, sometimes his persistence pays off. In the most recent case, it may pay off to the tune of $50,000 per year to the City of Fernandina Beach.
The City has been engaged in a long running dispute with the Ocean Highway and Port Authority (OHPA) over whether or not OHPA has a contractual obligation to pay the City $50K per year in lieu of taxes, otherwise known as the PILOT payment. While the City has produced resolutions dating back to the creation of the deep water port in the late 1980’s memorializing such agreement, OHPA’s position has been that they never formalized such an agreement. OHPA has maintained that an obligation they might have voluntarily taken on expired 20 years after the Development of Regional Impact (DRI) was approved. OHPA has maintained this position through multiple meetings and mediation, leading the City to pursue a legal settlement.
City Commissioner Chip Ross, who is quite familiar with requesting public records, got what he requested from OHPA in the form of ten boxes containing hundreds of documents and correspondence relating to the development of the Port of Fernandina in the 1980s. Ross uncovered a letter signed by OHPA Chair Thomas S. Williams on October 5, 1993 containing the following paragraph:
“We will be submitting to you our check for $43,000 within sixty (60) days of our closing on the Container Corporation of America property as required per your contingency. We expect to close on that property before the end of the calendar year. The payment in the future will begin on July 1, 1994 and will be based on the previous years tonnage but, of course, pursuant to that agreement, will not be less than $50,000 per year. We will continue to make these payments as required under the terms and conditions as set out in the Pre-development Agreement and Development Order, which have been generated in the construction of the port. The Port Authority maintains its position that if it pays taxes in the future the fees wll not be required.”
OHPA officially adopted this agreement by resolution dated February 10, 1994.
City Attorney Tammi Bach reported on the status of litigation with OHPA at the April 6, 2021 FBCC Regular Meeting. She said that documents uncovered by Ross were in fact “the smoking gun” regarding OHPA’s agreement to pay the City $50,000 annually in lieu of taxes in perpetuity. On behalf of the City she will use this material to file an amended complaint with the Court by the end of this week.
Bach said that with this filing she hopes that the question of whether there was a contract between OHPA and the City will be resolved and that the parties can move on to litigate other matters of the case.
Perhaps Commissioner Ross, always called a commissioner who does his homework and gets into the weeds, will now acquire a new sobriquet: the Weedeater.
How much the gun is smoking depends on what the “We will continue to make these payments as required under the terms and conditions as set out in the Pre-development Agreement and Development Order, which have been generated in the construction of the port.” Document calls out. I hope it clarifies the issue in favor of the City and puts this issue to rest. Of course on the other hand the City has never spent the money it collected all these years on the specified purpose of parking or a public performance venue – but that is another issue
This would be news if the City was collecting for all delinquent obligations that would not begin as reparations for the damage done the city by the port. There has never been any redeeming value to the City by the port’s existence.
What damage?
Thanks to Commissioner Ross for holding the Port responsible. This port location was a bad idea at the time of construction, and is becoming worse now that the surrounding neighborhoods are finally enjoying a renaissance. As neighbors of the port for decades, we are hopeful the new management and OHPA can find a way to reduce traffic through the Historic District residential areas.
This was a development agreement and was part of the DRI for the Port to continue to exist and the Port was held hostage by it and had no choice but to agree if they wanted to survive. According to State Law, DRI’s are only good for 20 years. This was not a perpetuity agreement and nowhere in this document does it say that. OHPA, in mediation, attempted to negotiate a formal agreement with the City but because of an all or nothing attitude (greed) by the city, that attempt failed. So now, it is in the hands of the court. OHPA has prevailed in the first round because the court ruled their was no formal contract. The city has appealed.