Two lease agreements involving the city have been put on hold after Mobile City Council members learned the company on the other end of the leases almost doubled its investment on a no-bid purchase of city-owned property only months after the sale was finalized.
The council voted on Wednesday to delay a decision on agreements with the owners of the Gulf Coast Ducks to sublease a section of a building on 650 St. Anthony Street the city had previously owned and to allow the tour company a non-exclusive right to use a city-owned dock. Councilors are hopeful the city will renegotiate the terms of those agreements.
As part of the sublease agreement, the city would pay $360 per month to reserve space for two city floats in the building it sold to Gulf Coast Ducks ownership for $255,000 earlier this year. The company turned around and sold it to another owner in June for $500,000. When the city sold the property to the company, it entered into a lease for space for the floats.
The building and nearly a city block of property were sold to Gulf Coast Ducks ownership based upon a “right of first refusal” clause that had been included in the lease the company had with the city when it was using the warehouse to store duck boats. The city set a price for the property based upon a 4-year-old appraisal. The company made $245,000 on the resale just a few months after buying the city property.
The Ducks are also ready to enter into an agreement to use a city-owned dock for $500 per month. Council President Levon Manzie said he would like the city to reconsider that amount.
“Maybe what we ought to do is go up $500 on the boat ramp,” he said.
At issue for councilors is assurances from administration officials that the space at 650 St. Anthony Street was not needed for municipal use.
“How did we declare the structure no longer needed, if we needed it?” Councilwoman Bess Rich asked.
Councilman Joel Daves argued that the boat ramp has nothing to do with the sublease of the space. He also defended the city’s decision on the building’s sale.
“We sold a building the city needed a small part of,” he said. “We didn’t need the whole building. We made the best decision we could at the time.”
The council is slated to discuss an ordinance pertaining to future land sales at a committee meeting at 2 p.m. Tuesday, Nov. 5.
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