Key West grants two months of hurricane rent relief to Bight tenants

BY PRU SOWERS

KONK LIFE STAFF WRITER

Hoping to help more than 160 Key West businesses that rent city-owned property, city commissioners voted to grant them a break on their October rent that will cost the city approximately $600,000.

Not having to pay rent that month will help tenants overcome the loss of business that took place after Hurricane Irma. The tenants also be allowed to defer their November rent bill but will have to pay that back to the city within 12 months.

Tenants include businesses renting city-owned boat berths in the Key West Bight and the City Marina at Garrison Bight, which includes both commercial and upland tenants who, according to the city port director, “almost all” rely on tourism as their primary source of revenue. That includes charter fishing boats, dive boat operators, commercial fishermen and two large land-based restaurants, the Conch Republic Seafood Company and The Waterfront Brewery. Both of those restaurants pay approximately $50,000 a month in rent to the city, according to Key West Port and Marina Services Director Doug Bradshaw, while the lowest rent for city-owned property on the water is a few thousand dollars. He outlined the monthly rent totals, which include approximately $266,000 at the Key West Bight, $330,000 at Garrison Bight and $27,000 at the upland city marina.

“So overall, you’re well over $600,000 for a month of abatement for city revenues,” he told city commissioners at their Nov. 8 meeting, adding that most of the tenants had already withheld paying October and November rent to the city to see if the resolution would pass.

In addition to evacuating days before Hurricane Irma hit on Sept. 10, the marine-based businesses had to close for several weeks to repair damage left by the Category 4 storm. And while the early Fall is normally a slow season for tourism, visitors have not returned as quickly as hoped.

“At no fault to anyone, we’ve all been subject to force majeure… an act of God,” said George Bellenger, co-owner of Key West Eco Tours, which ferries visitors out to the waters surrounding Key West. “No one wants to be out of business.”

“I’m suffering. There’s no business,” Lee Starling, a local commercial lobsterman, told commissioners. “Anything you could do to help the tenants would be greatly appreciated.”

The original resolution offered to grant two months of rent deferment to the tenants, giving them 24 hours to repay what they owe. But the Key West Bight Management Board voted for the one-month abatement, one-month deferral proposal. Mayor Craig Cates, who berths his recreational boat at the privately-owned Key West Yacht Club, said he had “strong feelings” about wanting to help the city’s tenants.

“I know it’s a lot of money for the city to abate a whole month… But you’ve got people working every day that don’t have the reserves the city has,” he said, adding, “Then we’ll struggle with cutting back the rest of the year on our budget to make it work.”

City Manager Jim Scholl said the only way to cut $600,000 out of the city’s 2017-18 fiscal year budget so quickly would be a hiring freeze. When a city worker leaves, a replacement will not be hired, he said, urging commissioners to grant rent deferments, not an abatement.

“Obviously, we’ve also incurred significant losses and costs and things. And it will be very challenging this year working through the budget execution and everything else and realizing it’s been tough on everyone but it’s also been tough on the city,” Scholl said.

The vote to grant the two-month rent assistance was 5-2, with Commissioners Billy Wardlow and Margaret Romero voting against. Wardlow wanted to grant the tenants a two-month rent deferment, with two years to pay it back. Romero worried the city was setting a bad precedent by only helping its 160 tenants, not all city residents.

“But are we being fair to all the taxpayers if we are going to take care of one segment and that’s our tenants,” she said, adding that any tenant suffering business losses as a result of Irma can apply to the Small Business Administration for a low-interest loan to carry them through their storm recovery.

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