Panama City commissioners weigh long-term lease for downtown marina amid public-access and financing questions

Commissioner Hughes, Mayor and city staff discussed a proposed long-term ground lease with Capital Marina Partners (CMP) to redevelop the downtown Panama City Marina and the boat ramp, with consultants saying the marina-only finances are tight and commissioners pressing for firm public-access guarantees and a public workshop.

Why it matters: commissioners said the commission previously directed staff to hire PFM for a financial review after CMP proposed a downtown marina lease; the redevelopment would rebuild slips and related upland amenities and could transfer construction and operational risk to a lessee, but commissioners raised questions about financing, length of lease and what uses the lessee could put on the uplands.

PFM consultant Kevin Plenzler told the commission his analysis of CMP project showed a likely internal rate of return "around just under 9%" based on the marina (wet-slip) assumptions, rising to roughly 12% in more favorable scenarios. Plenzler said PFM did not model upland development in its work: "We haven't done an upland analysis. We haven't seen a development program or development plan that would detail what would occur." (Kevin Plenzler, PFM.)

Commissioner Hughes, the lead presenter on the item, summarized options the commission should decide: lease only the wet slips and related ship store/fuel and public promenade; include upland development in the same ground lease to generate more revenue; or limit the public improvements to better boat access. He emphasized public access and ownership: "This is not a giveaway," Hughes said, adding that "Panama City will own forever" whatever is constructed under a ground lease unless it remains encumbered by a loan.

City staff and commissioners gave several specific numbers and facts during the discussion: - There is an existing permit for 50 slips in the west basin that can be built; the city and partners have planned a larger buildout in the east basin as well. - PFM modeled the marina over roughly a 12- to 13-year operating horizon and estimated an IRR of just under 9% for marina-only revenues, depending on rates and occupancy. - Jonathan (city staff) said fully designed boat-ramp plans are complete and estimated construction cost at about $2.2 million; he said the design funding came from sale proceeds of a city-owned property in Millville held in the marina enterprise fund. - Completing the promenade and railing was estimated at about $2.8 million and would require roughly 3,500 linear feet of work, Jonathan said. - Commissioner Hughes suggested extending the lease term to 55 years (vs. 30 years used at St. Andrews) to allow a lessee more time to recoup upland investments if uplands are included.

Consultants and staff outlined the current draft lease provisions discussed in the meeting: the draft mirrors many terms in the St. Andrews Marina lease for wet slips (revenue-share on gross revenues, lessee equity requirements, lessee responsibility for certain upland-exclusive hard surfaces), but the July 2 draft added a broader treatment of uplands and a "right of second use" for CMP that would require the city to offer CMP an opportunity to propose an alternative use before the city allowed third-party upland uses. Staff described the right-of-first-use held by JoePC (the St. Joe entity) and the negotiated process that grants St. Joe an initial opportunity to propose uses before others.

Commissioners' concerns and next steps: multiple commissioners warned that including uplands in a single lease increases complexity and could slow implementation, while others urged keeping CMP engaged by giving them a defined role on uplands and by phasing decisions. A number of commissioners called for public outreach: Hughes and others proposed a publicly advertised workshop to present plans and hear ideas; staff agreed to include downtown marina discussion on an upcoming workshop agenda. Mayor and staff also discussed financing options, including the possibility of conduit private-activity bonds to lower lessee borrowing costs; staff noted any tax-exempt/conduit financing would be evaluated later and that the city would treat such financing as discretionary.

What the commission directed: no formal vote was taken during the workshop. Commissioners asked staff to schedule a public workshop to discuss the marina and to return with refinements to the draft lease and financing options; staff agreed to place a downtown marina follow-up item on the next workshop agenda.

Background: the commission authorized hiring PFM by the end of 2024 to review CMP proposals; PFM delivered a report dated June 27 summarizing marina financials. The city has a preexisting lease framework at St. Andrews Marina that staff has used as a template for revenue share, equity protections and maintenance responsibilities.

Ending: Commissioners left the workshop with agreement to continue negotiations and to hold public engagement before any final lease approval, asking staff to return with clearer financial scenarios and a public outreach schedule.