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Prime property a key issue in Vero electric sale to FPL

STORY BY EILEEN KELLEY, (Week of January 31, 2013)

A prime piece of city-owned property at the southwest corner of the intersection of Indian River Boulevard and 17th Street is emerging as a key issue in the sale of Vero Beach Electric to Florida Power and Light. In FPL’s proposed offer to buy the utility, the power company wants the property for a substation.

But a growing number of people say there are better places for a substation, and the city shouldn’t be planning to deed over that property to FPL as part of the deal.

Critics wonder why the city would want a substation there when it’s trying to move the electric utility – and perhaps ultimately the adjacent sewage plant – off the Indian River Lagoon.

When Hurricane Frances damaged the old Post Office Annex at the intersection in 2004, developers took notice. 

Beyond the rubble, beyond the massive white containment drums and concrete buildings that blocked views of the Indian River Lagoon across the street where the city’s electric and  water/sewage utilities  currently stand, stood a piece of land with outstanding potential.

Louis Schlitt, a long-time developer with family ties to Vero that date back 95 years, implored the city to make better use of the site. For starters, he said, they could sell it to him. 

The 4.6 acres at the southwest corner of the intersection was appraised at $4 million in 2006 though some in the city insisted its value would increase five times that amount in just a few years when some pieces of land fetched $27 per square foot.

The way Schlitt – who  developed and owns several tracks of land and currently pays $300,000  in real estate taxes for his properties in the area – sees it, Vero Beach has been sitting on a gold mine. Instead of putting the property on the tax rolls, the city has let the property sit idle.

Both Schlitt and others proposed plans to either buy or lease the property.

One such plan in 2008  was for Hawksbill Village. Schematics show  a collection of four buildings that would serve as a high-end, open-air lifestyle center at the site. Such plans were praised by the city’s architectural review committee and the drawings went up on real estate listings.

The economy and housing market then collapsed.

Critics of turning over that property to FPL say there are other, cheaper parcels nearby that could be used rather than the corner of a major intersection.

“We cannot afford to allow the city to take an easy way out and continue to destroy the surrounding property values with a substation at the most valuable site in the city, with the potential of the biggest development ever – assuming proper planning of the remaining land left when the power plant and sewer plant are gone,” wrote Schlitt, who was out of town last week. 

“It seems the city would be smart to have the plans to encourage the maximum use of this property along with their existing land. The city needs a comprehensive plan to make the land available for sale and allow developers to own and build the future of this valuable property.”

 Schlitt doesn’t plan to sit back and watch the issue unfold.

He said he has petitioned FPL not to take the land and to find something else.  He went a step further and pointed out properties within two blocks of the potential site that would serve the utility’s needs and have less of an impact on the surrounding properties near the bridge.

 As it stands now, Schlitt said real estate in the two blocks that surround the parcel make up 450,000 square feet of space and pay about $900,000 in city taxes.

 “(This is) the best land still owned by the city and now they want to downgrade the area with a substation in the middle of Citrus Financial Center, Bridgewater office condos, and the 17th Street Office Plaza?” Schlitt wrote.

He’s calling for a powerful development committee to work with the city’s planning department.

“Millions are at stake here, and now the biggest hurdle is to maximize the opportunities for the most valuable land in the city. This will be the biggest most important decision facing the city councils ahead.

“We need a powerful development committee to work with the city planning department to make sure the mistakes the city have made will not be allowed to end  this opportunity in a political disaster. We plan to help the city with a better option for the location of a sub-station to avoid mistake number one,” Schlitt wrote.

Before Schlitt can appeal to the city planning department, he will likely have to get to the City Council and there is likely to be a line of people wanting to weigh in on deeding to FPL part of what could potentially be Vero Beach’s signature corner.

A group charged with sorting how Vero Beach can survive without the millions of dollars in revenue the city utility funnels into its budget also believes that turning over the valuable city property to FPL may not be in the taxpayers’ best interest.

By a 4 to 1 vote recently, the city finance commission recommended exploring other options for a FPL substation.

The finance commission will meet again Thursday to discuss the matter and other aspects of the purchase and sale agreement so that it can make recommendations to the city council Feb. 12. 

The city council is expected to vote on the purchase and sale agreement Feb. 19.  The referendum on the sale is set for March 12.

 The current substation sits on a 1.5-acre plot on the electric utility property. 

City Manager Jim O’Connor told the finance commission no other options were explored for relocating it after sale of Vero Electric, and that the 17th Street and Indian River Boulevard site was logical as it was city-owned property and FPL wanted to make any deal involving land for the substation a simple one.

Finance commission members suggested considered other sites such as the 3.1-acre parcel between 18th and 17th street that once was a planned community of townhomes. That property at 465-469 18th Street, known as Wave Victoria Village, has been cited numerous times by city code enforcers because of trash, overgrown grass and signs that vagrants have been squatting there.

That land is currently no longer on the market though in 2006, the county assessed it at $1.3 million.  It  currently is assessed at $307,880. 

O’Connor cautioned that it may not be in the best interests of the city to buy property for the sake of transferring it to FPL, considering it already owns the land at 17th and Indian River Boulevard.

O’Connor said the land-swap part of the massive power and sales agreement might be able to be modified, but the deal that he and the transactional attorneys have been creating called for the city to provide land for the substation.