Monday, July 4, 2011

Review of the Main Harbor leases

Since so many people like to enjoy the Rez on Independence Day, I thought it would be a good time to post the leases Mr. John Burwell has for the Main Harbor area. The leases are between the Pearl River Valley Water Supply District and Main Harbor Development, LLC. John Burwell owns MHD. Some observations about the leases (They are posted below).

1. "Lessor, in order to secure the fullest utilization of the Ross Barnett Reservoir in the fulfillment of public purposes for which it was created and at the same time provide adequate access to the public.."

Hmm.... so does that apply to the development only or does it mean Mr. Burwell can't bank people from fishing on the banks or using the boat ramps as he currently does?

2. The term of the lease began on December 16, 2005 and expires on June 30, 2064. Each "year" starts on July 1 and ends on June 30.

3. Easement areas described as Bulkhead Areas 1 and 2 as well as the Detention Pond have "been calculated based on a formula allocating 75% of the use of the areas as public and 25% of the use of the areas as private."

4. Mr. Burwell has to develop the property. "Lessee, in fulfillment of its herein accepted obligations to the public, shall commence development of the leased premises in accordance within the time periods specified in the Master Lease."

5. MHD must carry a general public liability insurance policy with limits of two and three million dollars.

6. If MHD defaults on payment of rents, taxes, or other costs, District can repossess the land after five days (#11 on p.3). The District can also terminate the lease and retake possession if MHD enters bankruptcy or receivership.

7. Mr. Burwell must make the following annual payments for Lots 2,3,4:
Year 1-4: 0
Year 5-7: $96,400
Year 8-12: $106,040
Year 13-17: $116,644
Year 18-22: $128,308
Year 23-27: $141,139
Year 28-32: $155,253
Year 33-37: $170,778
Year 38-42: $187,856
Year 43-47: $206,642
Year 48-52: $227,306
Year 53-57: $250,037
Year 58-60: $275,041

MHD must also pay $751,579 for the pond detention area, $558,186 for Bulkhead Area 1 (Harborwalk), and $148,909 for Bulkhead Area 2 (Boat Docks) during the term of the lease.

The second lease follows the same pattern except for monetary terms. However, there are some differences.

1. MHD agreed to construct and operate "an architecturally compatible urban neighborhood (translation: mixed use)with a combination of marina facilities, retail shopping, dining, and residential living as well as professional office spaces, boutique hotel, and other facilities available to the public in accordance with the exhibits attached (in Exhibit B).

2. MHD must pay $62,700 each year in the first four years. (#2 on p.2). Payments are due on July 1 of each year. MHD "shall commence development of the leased premises in accordance with the time periods specified in Exhibit B but can develop them in specified phases. The lease does allow the District to grant in writing "an extension of time" for this project if "public demand does not reach the anticipated level at the time stated" or "when a delay in providing the facilities and service is beyond the control of the lessee." (#4 on p.'s 2,3)

3. Exhibit B is the Invitation for proposals. Section 2 states the purpose of the invitation and is worth reading. The invitation states the District wants a mixed-used development with a hotel, professional office space, restaurants, public walkways, residential housing, a parking garage, and other features. It cites Santana Row in San Jose, California as a model.

4. Section (e) of the invitation allows for development in phases. It states the Main Harbor area (Tracts H&F) must be leased initially as "part of the first phase of development".

Here is an interesting clause: "Commencing with the sixth lease year, at least 20% of the property included in this proposal which remains unleased as of the last day of the fifth lease year must be leased each year in order for the lessee to continue its right to lease the remaining property."

5. The invitation required a $10,000 bid deposit for each proposal. The lease required the lessee to pay the District $1 million upon assignment of the option. The option price to the lessee of Main Harbor leases was $10 million. Such payments were to be made in addition to other payments for rent, taxes, and expenses. MHD was to pay $62,700 a year for the first four years for annual rent of tracts F&H but the annual rent payment after the fifth year is determined by a formula using cost per square foot, number of square feet, and other criteria.
















10 comments:

Anonymous said...

The "Coming Soon: Hotel Valencia" sign is starting to fade somewhat.

Moreover, the Harbor Walk HQ, ( I mean their doublewide) is also showing
starting to exhibit signs of age.

Shadowfax said...

So, what are you suggesting Kingfish?

Is my reservation for the Valencia Penthouse New Years Eve 2025 in question?

Shadowfax said...

And another thing....anyone who starts a sentence with the word *moreover* can't remain anonymous for long. I see a Valencia Concierge position in your future.

Anonymous said...

Shadowfax, so is that a family name, or is that a synonym for anonymous?

Reed said...

I'm just hoping it gets built so I can take a water taxi from Pelahatchie Bay!

This has been a fiasco since conception. At the very least, the PRVWSD should make him clean up all the vehicles and other junk in the old Boat Works parking lot. It's an eyesore and highly visible to anyone who takes the road. I mean, it's not like Burwell's doing anything else, say building a hotel or something.

Anonymous said...

lease legalese gives me an Exedrine #2. Can anyone explain what the "pond detention area" is? Where are the "lots"? Which piers are in which lots? What parcels must MHD add? Thanks

Anonymous said...

I'm just hoping it gets built so I can take a water taxi from Pelahatchie Bay!

You'll see your water taxi when a yellow cab takes a wrong turn into the Rez.......

Anonymous said...

Anon - the water taxi study was conducted by Pickering Engineering in June 2008 - It was funded with Federal Intermodal Transport Dollars - The heavy lifting was done by a Seattle, Washington company that actually said it would be awesome - The $1,000,000 initial monies ($200,000 expended) were procured by Trent Lott - The boats will be owned by the State and more than likely operated by a leasing private operator.It remains to be seen how many boats (49 passenger) will be needed. So tell Anon we won't need Yellow Cabs. I think you will verify all this with PRV and it will not be mentioned again. Have a nice weekend.

Anonymous said...

Shadowfax must be a graduate of theDonner K "Pay me to teach you to work for me for free " class.

MOREOVER, there is no crime at Harbor Walk .

Anonymous said...

Harbor flop?

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