PORT ST. LUCIE — City reserves are in danger of shrinking as the clock ticks for the city to hand off Tradition Studios to a new buyer by Oct. 1, said Interim City Manager Jeff Bremer.
Enterprise Florida and the Economic Development Council of St. Lucie County have contacted various industries and given tours of the building, but plans to market the facility globally have stalled since December.
On Thursday, City Council directed Bremer to pick up where the last city manager left off and start the process of finding a brokerage firm with national and international ties.
Aggressively marketing the city-owned building is a must, otherwise the city is in danger of burning its savings, Bremer said. The defunct Digital Domain Media Group’s Tradition Studios is costing the city about $3.5 million annually.
“We have this fiscal year covered with sufficient moneys to cover the debt service ...,” Bremer said. “And while our reserves are sufficient and can probably pay for the next year, it’s not a desirable position for us to be in.”
Unloading some of the studio’s major debt is necessary because even if the city finds a buyer for the $39.9 million vacant facility, the city will still be on the hook for about $1.7 million in annual “legacy costs” or non-construction design fees associated with the studio, Bremer said.
Those payments, which Bremer said are manageable for the city, could last as long as 2031, the length of the debt service on the bonds taken out for the building, totaling about $30.6 million for the city over that period.
“We have to market this and get if off our backs,” Mayor JoAnn Faiella said. “I’d like to know if someone does take a bite, goes in there and changes their mind, I want to know why.”
The 115,000-square-foot studio’s multiple theaters and specialized use “throttles down the use group that would be willing to go in,” answered Bremer. He didn’t discuss whether the price tag was an issue.
“Unless you can find someone that has a need for the studios or the theaters, that’s a rather sizable portion of the building,” he said. “Those tend to be some of the prime issues why they walk away.”
Tradition Studios has garnered lots of interest since officially going on the market in December, but still no serious buyers, Bremer said. He announced at Thursday’s special City Council meeting that representatives with the county’s economic development council were giving a tour that day to an interested party, but couldn’t say who.
Larry Pelton, president of the economic organization, did not return calls seeking comment.
The agency has sent more than 800 letters to information technology industries, pharmaceutical, manufacturing and office sectors to help spread the word about the building, Bremer said.
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