By BOB MUDGE
VENICE — The on-again, off-again prospect of a hotel on the former Circus Arena site at the Venice Municipal Airport may be on again.
According to a statement from Airport Director Mark Cervasio, a 75-year lease for the 12-acre circus property has been negotiated with Kent Jacoby, a Michigan developer with relatives in Venice, and approved by the Federal Aviation Administration.
Plans for the property include a 130-room hotel; medical offices and possibly an urgent care clinic; and a restaurant with outdoor seating, according to Cervasio.
The project would be called Ringling Brothers Memorial Park.
For more than 50 years the property was the site of the arena, and the winter home of the Ringling Bros. and Barnum & Bailey Circus for more than 30.
The arena fell into a state of disrepair after the last tenant left more than a decade ago and it was torn down in 2016 to make the property more attractive to prospective tenants.
The lease awaits a vote by the Venice City Council, which returns from its summer break Aug. 27.
Jacoby submitted one of two lease proposals for the property in 2017 but the city elected to try to reach an agreement with Venice Realty Group LLC, led by the principals in the Suncoast Air Center at the airport, instead.
Negotiations went on for about a year before VRG pulled out last summer.
Its proposal was based around a 116-room hotel but it wanted a longer term than the FAA was willing to agree to — up to 100 years, including the exercise of a 25-year option, and it had issues with other lease provisions.
FAA approval is needed under the terms of the federal government’s deed of the airport to the city after World War II.
FAA regulations require that any nonaeronautical lease has to generate fair market value for the airport, which is supposed to be self-sufficient.
The city elected to deal with VRG rather than Jacoby, on behalf of JCRE Development LLC, because his proposal included bungalows for short-term leasing and townhouses for longer rentals.
City staff was skeptical the FAA would agree to anything but transient rentals even though Jacoby proposed a shorter lease term — 45 years plus an optional 30-year extension.
The proposal he submitted this year didn’t include a residential component. The amount proposed to be invested is $27 million, down from about $35 million for the previous project.
The proposed lease is based on an appraised value for the property of $3.9 million as of last month. That sets a base rent of $312,000 a year using an approved rental rate of 8%.
But rent wouldn’t be due until construction permits have been issued and would be at a reduced amount, rising in the second and third year until the full rent is assessed at year five.
There’s an adjustment for inflation every five years with reappraisals after 30 and 60 years.
Rent payments would go into the Airport Enterprise Fund. Currently, the only revenue the property is generating is from Tito Gaona’s Trapeze Academy, which will need to relocate.
The fund took a hit when the city got the FAA’s approval to “buy” the land leased to Venice Pier Group, owner of Sharky’s and Fins, out from the agency’s oversight. Revenue from that lease now goes into the city’s general fund.