YOUR VIEW: Lack of Transparency is Concerning in Westin Hotel ‘Convention Center’ Controversy
By Sandra Sullivan, Brevard County Commission Candidate for District 4 // January 7, 2022
YOUR OPINION • YOUR VIEW
What is needed is an independent study of whether Brevard needs a real convention center and the location where it would be best suited is one for the Tourism Development Council to involve all tourism stakeholders, not the County Commission involvement at this time.
While the development of the luxury Westin hotel is great news for Cocoa Beach (replacing the International Palms Resort), why is there a lack of transparency with Brevard County with the proposal to pay $80 million to build a convention center and parking garage for this hotel?
The lack of transparency is concerning with one of fiscal responsibility to taxpayers. America is the land of opportunity as a free-market economy depends on capitalism to thrive.
By not doing an independent study for a convention center involving all tourism stakeholders, this deal is picking and choosing winners. Our country is based on the free market, not a deal to benefit a particular developer.
Has the developer leveraged lobbyists to push through a deal without following appropriate due process and adequate transparency for the government?
With increasing inflation, fiscal responsibility and transparency are all the more important in today’s economy and the future impact of rising inflation giving the future financial impact on this project to taxpayers for many years to come.
While a convention center in the right location can bring in more tourism dollars for Brevard’s tourism industry, but I suggest this is a sour deal for taxpayers and Brevard County.
This matter is one of the fiscal responsibilities of taxpayers.
The proposal includes Westin to retain tourism bed tax generated to pay the incurred debt service thus taking Brevard’s dedicated monies away from the cultural arts, zoo, aquarium, beach nourishment, stadium, Indian River Lagoon, and other tourism promotions for Brevard County to benefit a single developer.
It is also asking the taxpayers to fund a potential loss leader product with long-term ramifications to costing taxpayers directly in a downturn economy.
This is a bad deal for Brevard County by taking monies away from other county stakeholders, having the county incur all the financial risks on loss leader product, not have control with management of the product, and only sharing the profits (if any) with a 50/50 split.
Brevard County is in an economic boom, one of the fastest-growing counties in the country, hardly a need for financial incentives or tax abatements at this time. Not only that, but those incentives are typically for attracting new business to Brevard, not an existing business.
Driftwood is a business already owning hotels in Brevard, including this site for three years. And if indeed there is a need for a county convention center then that is a study that should be done by the Tourist Development Council in such a way that it does not benefit just one hotel entity.
This is not a deal benefiting Brevard County; this is an ATM withdrawal from someone else’s bank account to finance their banquet hall with additional parking.
What is conveyed as a “Convention Center” in this deal is not a convention center, but a business center not any different than those in any number of other hotels.
Onsite business centers are normal fixtures within the hospitality industry. This is not a deal benefiting Brevard County; this is an ATM withdrawal from someone else’s bank account to finance their banquet hall with additional parking. It is unfair to the other hotel entities in Brevard to pay for one hotel’s business center.
This proposed “convention center” is 62,000 square feet under roof; by contrast, the Broward Convention center is 1.2 million square feet and Orlando is 7 million square feet.
A business center is not even comparable to a real convention center. How many convention centers in Brevard are already about 50,000 square feet? Convention size compatibility with hotel rates for Westin’s $300/night average daily rate (ADR) is another concern.
Hotels typically discount convention space for large groups – and this is outside of the control of Brevard County as they will not be managing the space.
What is needed is an independent study of whether Brevard needs a real convention center and the location where it would be best suited is one for the Tourism Development Council to involve all tourism stakeholders, not the County Commission involvement at this time.
I am a candidate running for Brevard County Commissioner for District 4 to ensure that fiscal responsibility and transparency in Brevard County are to be the normal processes followed. I have been a concerned citizen attending Brevard County Commission meetings for the past three years in advocating for various issues and knowing the issues.
I am known for my research and analysis and do a lot of records requests – and am best known as the lady that lives on the dump whose research led to the military FUDS eligibility in response to the cancer concerns beachside in 32937.
The Westin proposal is the epitome of why I am running for the Brevard County Commissioner District 4 seat in 2022.
I am concerned with the lack of transparency involving issues pushed by lobbyists. I think lobbyist communication, meetings and materials should be public information. I stepped up to run because I am concerned my opponent, a campaign manager for politicians, will be even a worse backscratching deal maker than what we have now in District 4.
In being involved in issues and speaking at most Brevard County Commissioner meetings for the past three years, I see a pattern of transparency and in voting with regard to the issues involving lobbyists.
Are we getting what is best for Brevard or best for the lobbyists and their clients?
Here are two very recent examples that involve the same lobbyist as the Westin Convention Proposal. In these examples, Commissioner Smith, Zonka and Pritchett voted yes while Commission Tobia and Lober were nays:
1) Redistricting to balance growth with variance over 3% (at 8.78% variance is supposed to have a state-approved reason);
2) Brightline Bond – lost leverage to create fiscal responsibility to taxpayers to hold Brightline responsible for the road crossing maintenance; we don’t even have a station in Brevard.
I was at the April 20th commission meeting regarding the Driftwood agenda item and could not discern from what was said that this was a proposal for a county-funded $80 million convention center/parking garage investment proposal.
From my perspective, this should have been handled first with a public presentation and very least the outline referenced was required to be attached online – which it isn’t! There was a lack of transparency.
County Commissioner Meeting 4/20/2021 Commissioner Comments Summary
According to the Brevard County Commission meeting of April 20, 2021 the agenda item is vague in the description which doesn’t promote transparency, “PLACEHOLDER re: Discussion Driftwood Escrow District 2.”
This agenda item began with Commissioner Lober stating, “Commissioner Lober reported that he was approached by Driftwood Capital; it proposes to deposit $75,000 with the County to have it use that money to pay for a legal, financial, and economic evaluation of a project dealing with the Westin property that will replace International Palms Resort in Cocoa Beach.”
The word “project” does not convey to the public that the $75,000 is for a study for a county-funded convention center.
Another red flag is that a document ONLY received by commissioners before the 9 a.m. commission meeting was even allowed to go to a vote without doing due diligence.
Commissioner Tobia said he assumed the rest of the board received this 19-page document when it arrived today because that is when he received it; he suggested that while he is not necessarily against this project, he may be; and he mentioned that he has not had enough time to thoroughly review this document.
He also said he inquired what is the Tourist Development Council’s stance on this; he noted he is not certain if the TDC has looked at this agreement and he desires some answers from staff; and that he had no opportunity to ask staff some of these questions.
This is not the way for any county to conduct business. Ample time is required to review and evaluate any outline that impacts the financial resources of a County by staff and if necessary, independent expert consultants.
And, the vote should have been delayed until the county had in hand a copy of the Economic Impact and Market Study by CH Johnson & Company (proposal analysis) as funded by Driftwood which is what Driftwood wanted to give the county $75,000 to do a proposal analysis.
The hotel was purchased three years ago, what is wrong with waiting until this document was available?
Comments suggested that some of the commissioners had not been given presentations by the lobbyist. Commissioner Smith said he was briefed on this a couple of weeks ago.
He stated he recognized why time is of the essence for the developer; he explained that he was not going to tell Commissioner Tobia what he was told because he is not certain if it is supposed to be made known to the public; he will leave that up to the developer; he reiterated that he understood why time is of the essence and why the developer rushed to give this to the Board.
Another red flag from my perspective is shortening the Request for Proposal (RFP) time without a reason and especially when Brevard County did not yet have a copy of Driftwood’s Johnson Proposal Study.
Frank Abbate, Brevard County Manager, requested, in light of the terms that are in the agreement, that the Board approves the advertisement of a Request for Proposal (RFP) to obtain the economic analysis consultant and reduce the solicitation time from 21 to seven days. This limits free-market responses, with no reason given.
Most concerning is the lack of transparency regarding the 19-page Driftwood outline for Brevard County to pay $80 million to build a convention center and parking garage for the Westin Hotel in Cocoa Beach is not attached in the County Commission meeting documents.
Also, did the investment company, Driftwood, circumvent the process of first sending their proposal to the Tourism Development Council as requested by the TDC board?
Instead, Driftwood and their lobbyist went to the Brevard Commissioners with an outline to fund an analysis of their proposal study, prematurely to having the Johnson Proposal available.
The Proposal Study is also not available under Brevard County’s Request for Proposal documents though it was required for the RFP. And is the RFP vendor selected for the County is communicating with Driftwood directly, as if this is the case is even more concerning.
Given the lack of public transparency, it raises the question of whether backroom deals are being promoted without fairness and proper analysis as to what is right for Brevard’s tourism stakeholders?
Finding the RFP was not an easy task from a transparency perspective because the bid was vaguely worded as, “Economic Analysis Consultant Services” for the contract, dated April 22, 2021.
From the County Purchase page, I viewed the VendorLink Bid Solicitations link.
The RFP still shows “Under Evaluation” despite being awarded to PFM Consulting LLC:
As a systems analyst, it is absolute that you always want to define specifications for working prior to writing Requests for Proposal (RFP). Change orders add to the cost after the selection of the vendor when no longer in negotiating position. The shortening of the RFP to seven days and the lack of information for writing the RFP have ramifications for fiscal responsibility.
The Johnson document is also missing from the Request for Proposal documents – another lack of transparency. You can listen to the audio of this meeting here.
Following the Commission vote to proceed on May 10, 2021, Request For Proposal meeting, Katherine Wall, Assistant To County Manager, said they still did not have the Driftwood proposal (Johnson Report) as of this meeting and talked about having to draft the RFP without having enough information – and referenced that the RFP would change once the Driftwood proposal arrived.
This lack of RFP specificity is likely the reason for the wide range of quotes from $65,000 to $160,000 from the three vendor responses.
The RFP proposed 63/20 non-profit is not even a structure that exists in Florida. It was communicated also whether the intent was for the county to hire their own construction manager to make sure we what the county gets.
They also talked about what happens if the revenue falls short of the projected $4 million to $4.5 million revenue for the convention center and parking projected at $2 million. They talked that a market analysis was needed to compare.
How does the hotel charging $300 night ADR impact the convention; as government groups typically cap at $120/night. How many convention centers fit into 50,000 square feet?
There was a discussion on property taxes and the issue of the property being leased. Who issues bonds? The voting members also indicated we want impact study – don’t want the liability.
As a voting member of the RFP committee, Peter Cranis, Brevard County Director of Tourism indicated that convention centers are financial loss leaders and the income may not be sufficient to offset debt service, and asked how would the difference will be made up?
When the economy heads south, Mr. Cranis stated that the first thing to go is Tourism Development Council dollars, putting taxpayers at risk for the continued financing.
So the question arises, what will a convention cost the taxpayers of Brevard County, not just now, but for decades?
In the Request for Proposal (RFP) documentation, it said the developer land would be leased to Brevard County to build the “convention center” and parking garage on, but there may be legal issues with leasing the land.
Brevard County would not be operating the County Convention Center. According to the RFP, the developer will run the Convention Center, which inevitably means they could give them discounts for large groups staying at the hotel as was discussed in the RFP May 10, 2021 meeting.
From the RFP document: The Corporation will enter into a Qualified Management Agreement (QMA) with the Developer for the term of the land lease for the management of the Facilities. The QMA will have a fixed management fee consistent with market rates, to include operating costs of the Facilities and an incentive fee equal to 50 percent of the surplus funds on deposit each year. The Corporation will have the right to replace the QMA for non-performance.
This is not a good deal for Brevard County.
According to the Request For Proposal document the purpose of the study is, “To facilitate the County’s legal, financial and economic evaluation of the Project and proposed Structure” and “Developer has commissioned CH Johnson & Company to provide a comprehensive Economic Impact and Market Study, a copy of which will be supplied to the County upon finalization.”
The bottom line is: what is stated in the RFP is not a good deal for Brevard County and the process of considering a convention center needs to move appropriately back to the Tourism Development Council. What I am hearing is the matter seems to be negotiated with changes for the PFM Consulting Study.
My recommendation moving forward is that Brevard County spends no more than the $75,000 on RFP P22117 with PFM Consulting LLC ensuring only county staff, not Driftwood, is communicating to the vendor. Irrespective of the results, that the matter is referred back to the Tourism Development Council and no action is taken on this PFM study.
Instead, the TDC should evaluate whether to address the idea of a Convention Center with merit and technical study from a county-wide perspective to determine if a county-run convention center is even feasible for Brevard. And as part of this feasibility study, what would be the best size or location? Out in Viera, at the Port, at the beach, or in Melbourne?
If they proceed with a convention study, the TCD can facilitate involving all stakeholders’ input in an independent study – and the TDC then can present its findings to the Brevard County Commission.
ABOUT THE AUTHOR: Sandra Sullivan of Satellite Beach is running for the Brevard County Commission in District 4, which includes Rockledge, Melbourne, Viera, Palm Shores, Satellite Beach and Indian Harbour Beach.
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