Rooker Properties, LLC, a company based in Atlanta, Georgia, has advised the City of Panama City that the company plans to withdraw its bid for the Federal Courthouse.
As reported on Monday, July 16th, there was a misunderstanding by Rooker as to what ad valorem taxes were controlled by the City's Downtown Community Redevelopment Area (CRA).
The proposed Reimbursement Economic Development Grant Agreement that was provided to the City Commission on Friday, July 13th stated that the CRA would reimburse Rooker for "all ad valorem taxes paid to the CRA during the term of the Lease with respect to the Property.”
When Rooker understood that the Downtown CRA only receives taxes paid to the City and County, Rooker's attorneys on Monday modified the Reimbursement Agreement to read that the CRA would reimburse Rooker for "all ad valorem and non-ad valorem taxes and assessments paid by Rooker during the term of the lease with respect to the Property."
This change would have resulted in the City reimbursing Rooker for all School Board and Downtown Improvement Board (DIB) taxes paid by Rooker, which was estimated to be $95,000 in the first year with annual payments for up to 20 years. Further, the City would have to use money in the General Fund to make this payment annually. In light of this significant change in the Reimbursement Agreement, Interim City Manager Jared Jones canceled the City Commission meeting that was scheduled for Monday morning to consider the agreement.
Since Monday, the City Attorney and attorneys for Rooker have discussed approaches to obtain an ad valorem tax exemption. After consultations with independent tax attorneys, Rooker concluded that it could not structure an arrangement with the City that would be financeable by a bank.
Representatives from Rooker have indicated to the City that they will notify the General Services Administration (GSA) on Thursday, July 19th of their withdrawal. The City is hopeful that the County's bid will be selected.