Winter Park city officials have been unable to come to agreeable leasing terms with the development team that wants to transform the old, unused library building into a co-working office space with a cafeteria and health services.
When the city commission meets on Jan. 11 to vote on a long-term lease deal with Harbert Realty Services, city staff will recommend denial of the arrangement and suggest that other options be explored for the 35,000-square-foot former library that’s been closed for a little more than a year on prime downtown land.
City officials want a higher rent payment each year than what Harbert Realty Services is willing to make. But with Harbert expecting to invest $14.5 million on the redevelopment work alone, it doesn’t want to strike a deal that would see them handing over another $7.3 million in rent to the city over the lifespan of a 20-year lease term.
Harbert, led by Damien Madsen, is offering to pay the city roughly half of that during the lease term: $3.7 million, or an average of $182,230 per year over 20 years.
The city objects to that offer, saying it undervalues the total worth of the asset and doesn’t come close enough to matching conventional ground lease standards.
In a staff report included in agenda materials, city managers say that a traditional long-term ground lease (with no restrictions) is often valued at an annual payment of 7 - 10% of appraised value with agreed-to annual escalations. They say the old library holds a value of $10 million.
“Staff would like to thank Harbert Realty Services for truly investing considerable time and resources into their review of the building and staff’s opinion is in no way a reflection on the character and quality of their work,” the report reads. “Staff has no doubt that Harbert would be an excellent steward of this asset but that financially, the current scenario isn’t advantageous to the city.”
Ultimately though, it’s up to the city commissioners to decide if they want to accept Harbert’s offer or follow the city’s recommendation.
Madsen told GrowthSpotter he’s coming into the Jan 11 commission meeting prepared for both scenarios. In light of the city’s recommendation, he plans to present a different option — one he says would be cheaper to the company and allow more flexibility with design than a renovation project with limited parking space.
“It probably makes more sense to demolish the building and build a new building,” he said, adding that he’ll present renderings to commissioners of what that could look like. “Right now that building sits on the site in a very poor position, the building itself is not configured properly. If you build a new building that’s closer to the property line towards Fairbanks it will make it much more efficient and give us the ability to add more parking. There are so many plusses to it. We’ve done so many concept drawings that show what it would look like if we were to build a new building.”
He added, “If I scrape that building and started from scratch, I could deliver a brand new building for the same amount of money, or less” than the renovation project.
Since before the new Winter Park library opened on Morse Road in December of 2021, city officials have pondered what to do with its now-vacant 43-year-old predecessor.
Hoping to see a new use for the deserted three-story structure located a short walk from Park Avenue, the city put out a request for proposals in April, giving interested parties a month to place bids detailing their vision.
However, the city made it clear they didn’t want to see the building razed; they didn’t want it converted into an apartment building; they didn’t want anything that would draw too much traffic to the area since the parking lot was so small, with only 68 spaces.
The proposal is to convert the top two floors into a co-working space — a place where people can work, network, exchange ideas, hold meetings, etc. A cafeteria providing healthy menu options would move into the bottom floor along with a number of health services.
The extensive scope of work proposed by Harbert involves the installation of a new elevator, a new stairway, and extra windows to let in more natural light. Every inch of flooring would be stripped and replaced. New interior walls will go up. The bathrooms would be completely redone in order to meet ADA compliance. An outdoor gathering spot would be created near the entrance of the cafeteria with tables, chairs, and benches beneath the shade of large trees.
In August, the city commission spoke favorably of the concept and gave the city to go-ahead to negotiate lease terms with the team.
After 90 days of negotiations, the two sides remain at an impasse. Madsen, a lifelong Winter Park resident, says he’s devoted to this project. Whatever is decided for the library, he wants to be involved.
“I do not want to just walk away,” Madsen said. “So I’m open-minded in terms of any alternatives or solutions that they have that they would like to propose, or that we may propose. This is a passion project. I’ve got my heart and soul into this project, and I want to make sure that whatever goes there enhances the city of Winter Park.”
If the commission denies the lease terms proposed by Harbert, they’ll have to decide what to do with the city-owned asset.
They could explore other leasing opportunities for the property or pursue a sale, according to city officials.
The city could have control over the redevelopment of the site by rezoning the land prior to any decision to release the property or indicating what types of development would be desired that have lower parking demand, according to a staff report.
Other options for the city include leaving the building in its current unused state or paying to have it demolished.
Constructed in 1979, the former library sits directly beside the upscale 112-room Alfond Inn, which is in the midst of a makeover. Once complete, the hotel will be expanded with another 71 luxury guest rooms and suites and a new light-filled lobby Café serving coffee, crepes and light bites, transitioning to beer and wine in the evenings.
The old library property is within walking distance of the boutiques and restaurants that line Park Avenue. It’s across the street from an 81-bed student housing facility for Rollins College, with the rest of the campus for the private college stretching to the west.
Editor’s note: An earlier version has been revised to correct details of the final leasing offers presented by the city and developer.