Peary Court buyer may receive $12.5 million taxpayer incentive for purchase

BY PRU SOWERS, KONK LIFE STAFF WRITER

Calling it a “second bite at the apple,” a slim majority of the Key West City Commissioners voted May 3 to recommend that the local land authority give a private developer $12.5 million to purchase Peary Court.

The move, if approved by the Monroe County Land Authority at its May 18 meeting, would empty the fund, which collects approximately $2 million each year in local bed tax monies. In return, the prospective Peary Court buyer, The Cornfield Group, would agree to keep the 157-unit rental housing development as affordable workforce housing in perpetuity.

“It’s forever,” said Jeff Cornfield, one of the family members that own the privately-held commercial real estate investment and management company, about the affordable deed restriction. “Two hundred years from now people are going to look back at Peary Court. It will still be a workforce community, the backbone of the community.”

Commissioners voted 4-3 to recommend that the county land authority hand over its collected affordable housing fund despite the fact voters on March 15 overwhelmingly voted down a proposal for the city to purchase Peary Court for $55 million. The $12.5 million would be used to pay the bulk of what Cornfeld estimated would be a $10 million to $15 million down payment on the property.

Commissioner Jimmy Weekley, who championed the failed proposal to purchase the property for $55 million, called using the land authority money an important opportunity to preserve existing housing for the teachers, bartenders and boat captains that live in Peary Court, saying they “are the people that make this community run.”

“This is a second bite at the apple, Voters [March 15] said they didn’t want us to buy it. They didn’t say we didn’t want affordable housing, we didn’t want an opportunity to preserve affordable housing,” said Weekley.

“I don’t see any end run here,” said Mayor Craig Cates. “We’re not purchasing the property. The citizens said they did not want to purchase the property. They didn’t say they didn’t want any affordable housing in Key West.”

Cornfeld said his family is set to purchase Peary Court for $60 million. The Hollywood, Florida-based real estate firm will contractually promise to keep the monthly rent for the existing 157 units, plus another 48 new units it wants to add to the housing complex, at levels conforming to the city’s workforce, or moderate income, guidelines. That means the current approximately $2,300 a month rent figures will stay roughly the same.

But Commissioner Sam Kaufman pointed out that under the affordable guidelines, a $2,300 monthly rent applies to a family making over $100,000 a year. He pointed out that 265 of the city’s own employees make under $50,000 a year, while another 177 make under $40,000.

“I would be 100 percent behind this if the rents could be lower,” he said. And by depleting the land authority’s entire $12.5 million fund, “that may impact and lessen our ability to build affordable housing for the lower wage earners, the lower wage-earner families. That’s a concern of mine.”

Commissioners Billy Wardlow and Margaret Romero also voted against the resolution. Wardlow complained that the commission was informed of the proposed deal six days earlier. There are a lot of unanswered questions out there, he said.

Romero was also concerned about the speed of the deal.

“I also think we have to listen to the confidence level that our residents have that this has been extremely rushed,” she said.

Manuel Castillo, executive director of the Monroe County Housing Authority, attended the commission meeting to encourage the proposal be approved. The county land authority would work with Castillo’s group to oversee enforcement of the workforce housing deed restriction at Peary Court if the deal goes through. He said that any new affordable housing project would take at least three years of planning before ground could be broken, allowing the land authority fund to replenish to the tune of about $2 million a year. He also said that while the biggest need in Key West is for affordable housing for lower income residents, moderate income projects are needed, as well.

“Otherwise we have to look at our taxpayers to help offset that cost. You have to find a happy mixture,” he said.

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