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Development plans hailed, but sewer plant likely to stay

STORY BY LISA ZAHNER, (Week of June 27, 2013)
Photo of sewer plant.

An ambitious commercial development plan for a prime corner of Indian River Drive and 17th Street sponsored by a cadre of respected island builders and investors would seem to be just the motivation Vero needs to get its sewer plant off the lagoon, but the city has no plans to do that anytime soon.

The proposal, which is set to go to the Vero Beach Utilities Commission on July 23, has tossed three political hot potatoes – the power plant, the sewer plant and the future of Vero’s prime riverfront property – into the mix at a critical juncture in the sale of the electric utility to Florida Power and Light.

Developers say that, should the city agree to move an electric substation further back from the river when the power plant is dismantled, they are willing to build a high-end retail, restaurant and office plaza on the site of the “old postal annex” regardless of whether the sewer plant stays or goes.

But could hopes of economic development push city officials to finally commit to getting the sewer plant off the river?

“We have not been told anything specific.  We have only been told that they would like to.  People have said they envision the beautiful waterfront without the plant there,” said John Huryn, principal of Huryn Construction, one of the proposed partners involved in the proposal.

In 2010, GAI Consultants told city officials the sewer plant had 12 or 13 good years left, possibly more if well maintained. The sewer plant will be even more of an eyesore when its sister, the power plant, is torn down.  But up until now, any talk of moving it or getting rid of it altogether has, in fact, been just talk.

“If it does happen, our site would be a beautiful amenity to it,” Huryn said. “Whatever happens on that site, we’re going to still go forward with what we’re doing. We think that it’s better without the substation there and our goal is to go forward no matter what the city does with that (sewer plant) site.”

The job of the substation in question is to boost electric current as it crosses the lagoon to provide power to barrier island customers.

The FPL sale agreement states the substation would be moved from its current location in front of the power plant to clear the riverfront on the north side of 17th Street. 

But the parcel the city owns that it has proposed deeding to Florida Power & Light for relocation of the substation is what’s called the old postal annex on the southwest corner of 17th Street and Indian River Boulevard. The site has sat empty since the building itself was torn down after suffering heavy damage in the 2004 hurricanes. 

That’s the site being eyed by the Huryn-Justice development group, which joined with local investors, is offering to swap a nearby parcel of land with the city to get the substation further away from the riverfront.

The new proposed substation location would be on the north side of 17th Street about three blocks west at the outskirts of the Rockridge neighborhood, where an abandoned townhouse development now sits.

The Huryn-Justice group sees roughly $1 million in net annual benefit to the city if the land swap takes place. 

The players behind the proposal – custom homebuilder Huryn, Windsor Vice President Mark Justice and developer Louis Schlitt – bring vast experience constructing quality residential, commercial and industrial projects on the barrier island and throughout Vero Beach.

No doubt whatever the Huryn-Justice-Schlitt team envisions for the site would be top notch, but barring some major change, it would still have a sewer plant blocking any million-dollar river views. 

Vero Beach Water and Sewer Director Rob Bolton said he was asked several weeks ago to unlock the gate so the developers could walk the old postal annex property, but said he “had no discussions with them about the wastewater treatment plant.”

Hopes that the plant would be decommissioned all but died in the summer of 2012 when the Town of Indian River Shores signed a new water-sewer franchise agreement with the City of Vero Beach.

Had the Shores signed on with Indian River County, county officials would have had leverage to push the City of Vero Beach into consolidating water and sewer utilities. Without regionalization of systems, there is no economic motivation for Vero to take down the plant or move it to land at the Vero Beach Municipal Airport.

City Council member Pilar Turner said she’s optimistic about the land swap and that she looks forward to seeing a thriving commercial center built on the old postal annex site.

“I was delighted to have the developers come forward to give the city an option to put the substation somewhere else,” she said. “We have very little commercial property left to generate revenue for the city. I would love it.”

Would the plan be acceptable to FPL? Turner said FPL officials are “still cranking through numbers and things but they’ve been quite cooperative. I’ve made it clear to them how important this is for the city.”

With regard to the fate of the sewer plant, “it certainly didn’t enter into my consideration of the swap,” Turner said.

“Obviously from an aesthetic standpoint down the road, I certainly have been a proponent for removing the wastewater plant. When you get the power plant removed and you start building this lovely facility, you’ll have people saying ‘Why are we here in the middle of a sewer plant?’ I think the lagoon issue, too, will put pressure on it,” she said.

But Turner doesn’t see the need to wait until 2022, or the need to move the sewer plant to the airport. “I think we should have our wastewater be treated by the county. It’s the best thing for the customers,” she said.

Bolton said that although Turner mentioned in a statement of goals this spring that she wanted to see the sewer plant off the river, and Councilman Dick Winger has also stated that he wants the sewer plant gone, the city staff has been given no direction to come up with a plan, budget or timeline to move the plant.

Estimates to move the plant have varied wildly over the years as costs of construction, labor and interest rates have varied.

Some published estimates have been as high as $58 million, but Bolton said the latest cost projection he worked up was $25 million, including about $1 million for decommissioning the old plant and cleaning up the site.

Bolton said the best opportunity to borrow that much money might be in 2021 when the city pays off a bond that costs about $1.5 million per year in debt service.

“They could choose to roll that over into debt service on the $25 million to move the wastewater plant,” Bolton said.

With time to construct a new plant at the airport, redirect the effluent and dismantle the old plant, that would mean the site would not be cleared until late 2022 – at the earliest.

If the FPL sale progresses without a hitch from here on out, the power plant could be dismantled and substation moved in 2019 or 2020. If the Florida Municipal Power Agency or state and federal regulators stall the deal, the power plant site would most likely not be cleared until 2021 or 2022.

The developers involved all have long-standing ties to the community, so it’s not surprising that they would take a chance on something that might not come to fruition for a decade. 

“I think it’s the same as the power plant; it has to come down,” said Schlitt. “Nobody has liked that sewer plant being there, it has a very troublesome history.”

Schlitt owns the property west of the power plant, southwest of the sewer plant and directly west of the old postal annex.

“Everybody I talk to at the city wants to take the sewer plant down and hopefully there will be enough pressure to do that, but the first thing is to get the substation onto a better location giving FPL more land so they can mask it in a way that it won’t be an eyesore.”

With regard to speculation over what may be brewing about the future of the sewer plant and the parcel it sits on, Vero Beach Utilities Commission Chairman CPA Scott Stradley said that no concrete or even preliminary plans to dismantle the sewer plant or to move it off the river have come through his committee.

Through streamlining of staff, privatizing of laboratory services and expanding reuse water capacity, the city’s water-sewer utility has made itself more profitable. Those profits help pump nearly $1.6 million direct and administrative transfers into the city’s general fund each year to pay for city hall operations and other city services.