City deeds land to South Florida Museum to help expansion efforts

In efforts to aid the South Florida Museum’s expansion efforts, the city of Bradenton is giving the museum’s newly created nonprofit, South Florida Museum Real Estate Inc., the 2.5 acres on which it sits for $10.

But the deal comes with a key condition, and won’t be final until that condition is met.

As part of its $12 million expansion effort, the museum is seeking to offset costs with new-market tax credits through the U.S. Department of Treasury. The program offers select projects to investors to purchase the credits for tax write-offs and investment.

But before it can pursue those federal tax credits, the museum has to show it controls the property. The warranty deed to the new nonprofit meets the land-control requirement. The value of the land itself is unclear without an appraisal, but the current appraisal of the land and buildings is $7.8 million.

“Some of the concerns initially were, what happens if the museum someday doesn’t exist anymore and we just can’t be giving away property,” said Economic Development Director Carl Callahan. “Taking that into account, the warranty deed has a reversion clause that if for some reason the museum is not performing the intent for use, it will come back to the city.”

The deed also restricts the use the property to its current use for a museum, planetarium and aquarium available for public use. In essence, the city can take the land back should the museum fail to get the tax credits, if it ever changes its current use or if it closes.

Callahan also said the deed documents will be held in escrow until the museum is approved for the tax credits.

“So this is not effective until the tax transaction is complete,” Callahan said.

Museum CEO Brynne Anne Besio appeared confident that the tax application would be successful.

“This is a big deal for us to move forward with the project,” Besio said. “The partnership between us and the city is meaningful. We are adding assets to the city and have every confidence that the tax credits will close by the end of the year. From there, we will be breaking ground and building a facility the city and the community can really be proud of, with new classrooms and an early learning center that is a desperate need in our community.”

This story was originally published November 1, 2017 at 1:14 PM with the headline "City deeds land to South Florida Museum to help expansion efforts."