Talks stall on State Office Building swap

The state office building sits empty.

The state office building sits empty.

Isaac Babcock

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An earlier version of this story did not clearly identify the company for which Paul Ellis is president. He is president of CNL Commercial Real Estate, not CNL Financial Group, which is its parent company.

Negotiations hit a wall on Oct. 10, when the Winter Park City Commission refused to accept a trade offer with CNL Commercial Real Estate and landowner Progress Point to swap properties with the city.

That impasse leaves the fate of the State Office Building at 941 W. Morse Blvd. in limbo while the Commission waits for city staff to negotiate better terms for the land swap before bringing the proposal back to the Commission.

The Commission voted 5-0 to direct city staff to hash out parts of the trade offer that would swap the State Office Building with one on North Orange Avenue owned by Progress Point, including appraisal values, a construction timeline, and a clause that would prevent CNL and Progress Point from selling the site for a profit rather than developing it.

Talks quickly turned contentious at the Commission meeting, as commissioners disagreed on how strict the city’s deal should be, and reached a brick wall on negotiations with CNL Commercial Real Estate president Paul Ellis on key points of the deal.

Whether the building would be constructed at all had commissioners pushing for a clause that would guarantee construction.

Ellis said that the assurance would be in the money that his company would spend up front, which it would lose if it stopped development.

“What you’re implying is that we’ll spend $200,000 to get a conditional-use permit, and then do nothing,” Ellis said. “We’re not in the business of just throwing away money.”

But Commissioner Carolyn Cooper pointed out that in the past, developers in the city had done just that.

“We have lots of properties in the city of Winter Park where developers have indeed spent a lot of money and come through the process only to not finish what they have committed to do,” Cooper said.

Commissioner Tom McMacken said he didn’t want to see another stalled project in the city.

“I don’t want to see another green construction fence in our city because that really sends the wrong message,” McMacken said. “That’s like boarding up shops along Park Avenue.”

A gap between appraisal values had the Commission disagreeing with Ellis about whether the project was worth a direct swap, with some quoting a gap in values as wide as $1.8 million.

“I don’t think there’s anybody who believes these properties are worth the same amount of money,” Mayor Ken Bradley said.

Ellis said that the difference in appraisals was made up for by their own appraisals averaged together with the city’s plus money that Progress Point would put into the project. He said that the project would be a boon to the city.

“There’s an opportunity to create jobs with this proposal,” Ellis said. “One of the things we’ve heard is Winter Park wanted to send a message that it’s open for business. We’ve created a proposal that does exactly that.”

The proposal will be brought back to the Commission on Oct. 24 after city staff attempts to renegotiate terms.