Lake City's 'New' Blanche Hotel, Resurrected and Controversial, Celebrates a Grand Opening
Posted February 29, 2020 09:15 pm
Dennille Decker (long blonde hair), Mayor Steve
Witt and Developer Rhett Holmes cut the Blanche
ceremonial grand opening ribbon on Thursday
evening. They are surrounded by City Council
members Melinda Moses, second from right and
former council member George Ward, who approved
the Blanche Project along with Mayor Witt. Also
in the photo are a lot of bankers and finance
people.
LAKE CITY, FL – Thursday evening, 11 years
after the Columbia County Observer
discovered and documented the abysmal state
of disrepair of Lake City's Blanche Hotel,
a veritable death trap that was being ignored by
the City fathers, developer Rhett Holmes and
Mayor Steve Witt cut the grand opening ribbon of
the 'new' Blanche.
Before the ribbon cutting, developer Rhett Holmes, Dennille Decker, the face of the Blanche during construction, and Mayor Steve Witt (right) took a moment for a photo. The smile came easy, as all were glad that the Blanche doors were being officially opened.
The lobby was filled with well wishers and City
and County officials.
Click to enlarge
After years of controversy, turmoil, secrecy, and numerous Blanche/City agreement redesigns, a resolution to enter into a developer agreement with the developers was passed by the City Council on November 13, 2017. It was a split decision, with Mayor Witt and City Council members Melinda Moses and George Ward in favor, and Councilmen Jefferson and Hill against.
The City (read taxpayers) gifted $1,000,000 in cash to the developers and obligated itself to paying rent of $35,417 a month ($425,004 yr) for the next 10 years.
Chamber of Commerce President Mike Williams and
wife Laurie turned the event into date night.
The City also waived approximately $60k for all permit, impact and other fees charged by the City during the planning and construction phases of the Project.
The Developer Agreement was in conflict with itself, with one paragraph waiving "all" fees, and the subsequent one which did not include the "City Fire Assessment."
On February 28, 2018, the City rebated the $12k fire assessment to the developer.
County Court Judge Tom Coleman with LCPD Chief
Gilmore and Asst. Chief Butler.
By January 2020, the City provided additional rebates and expenses to the developer of approximately $275k.
At the present time, no commercial space has been rented in the Blanche, although the 10 apartments have been leased. The developer controls the leases and this developer income does not affect the City rent payments.
The Blanche Project would not have been possible without the New Market Tax Credit (NMTC) program run by the U.S. Treasury Department.
Former City Councilman George Ward, who served
for over two decades, with Tax Collector
candidate Kyle Green (left) and County Commissioner
Candidate Brandon Beil (right).
Over the years, despite numerous public requests by this reporter for the details of the MNTC program, neither City Manager Johnson, nor developer Holms, was giving up any tax credit details and the City Council wasn't exhibiting any curiosity about the program.
A simple explanation of the NMTC program is this: after about 7 years the developer, (this is where it gets tricky because there are a bunch of sub agreements involved) gets back 39% of his investment.
Columbia County Manager Ben Scott and Property
Appraiser Jeff Hampton (right) were all smiles thinking
about the new tax revenue coming into the
County.
One of the last figures thrown around was the Blanche Project cost was $17 million. The final agreement shows the aggregate principal amount financed was $15,300,000. Based on $15.3 mil, this would give the developer a $5.97 mil tax credit or in plain English, a $5.97 mil cash return.
The cool part about this is the $1,000,000 cash gift the City Council gave the developer will return to the developer $390,000. A good deal for the developer; not such a good deal for the City taxpayers.
State Attorney Candidate John Durette and family
ham it up a little bit.
The Friday edition of the local mainstream print media wrote that the City gave the developer "the promise of a $4.25 million unsecured loan over 10 years for rent guarantees." This is not true.
According to the agreement, the City Council will pay the developer $425K a year for the unrented commercial space in the Blanche. Over time, some of the rent money would be returned to the City.
Travis Koon, one of Lake City's top attorneys
and on many days can be found in the Lake City
Court House, enjoys the grand opening.
There is nothing in the agreement which would inspire the developer to go out and rent the space for which the City is paying.
County Property Appraiser Jeff Hampton told the Observer on Friday that there are no comparable mixed use buildings like the Blanche in Lake City or Columbia County and that he will be looking at property in Gainesville for similarly situated properties.
Mr. Hampton said that even if the developer spent $15 mil on Blanche renovation costs, that does not mean that is what the building will be appraised.
Mr. Hampton mentioned that he knows folks will be watching and he plans to do a thorough job.
Using the tax calculator on the Property appraisers website, the Observer calculated that if the Blanche was to be appraised at 4 mil (about 25% of the renovation cost), the tax abatement or refund liability for the City would be about $50,000. This item would have to be budgeted in the City's budget for next year and successive years.
City Manager Joe Helfenberger and former City
Manager Wendell Johnson (right). Mr. Johnson's project
is now Mr. Helfenberger's.
Everyone at the Grand Opening was hoping for the success of the project.
Epilogue
Years ago, City Manager Wendell Johnson told this reporter that the Blanche Project was his signature project of a lifetime.
Thursday night was a good start.
Time will tell how it all flushes out.
