Streamline Boats kicked out of the Port of Pensacola after missing construction deadline

Pensacola has canceled Streamline Boats of Northwest Florida's lease at the Port of Pensacola after the company failed to complete construction at the port by March 15.

Pensacola Mayor D.C. Reeves said the city notified the company that its lease was terminated.

"We notified them that we'd be terminating that and at this point, Warehouse 10 has no tenant," Reeves said during his weekly press conference Tuesday.

The Pensacola City Council approved a 10-year lease for the company in 2020 to build a sports fishing boat factory at the port that was touted to bring between 25 to 35 jobs.

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Streamline Boats of Northwest Florida was a partnership between Hialeah-based Streamline Performance Boats and investors at South Palafox Group in Pensacola.

The lease with the city required the company to finish construction at the port and obtain a certificate of occupancy by March 15.

The Hialeah-based company faced trouble last year when it was evicted from its building in South Florida, and the Pensacola investors ousted the Hialeah founders of the company. At the same time, the principals of South Palafox Group became involved in dueling lawsuits over control of the investment company.

Updated Google Street View images from February show that Streamline Boats no longer occupies its Hialeah factory that city officials toured in 2020.

Streamline Boats' website went offline earlier this year, and none of its social media accounts have posted anything since May.

Pensacola sent a letter to Streamline Boats on Feb. 27 notifying the company it was in default on its lease with the city.

"It is futile to expect that you can achieve compliance by completing construction within a few weeks," Assistant City Attorney Heather Lindsay wrote in the Feb. 27 letter. "Because you cannot reasonably expect to have a certificate of occupancy or a temporary certificate of occupancy issued to you by March 15, 2023, you are unable to perform as agreed."

The letter required the company to surrender the property to the city within 30 days.

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Bart Houston, Streamline Boats' attorney, responded to the letter on March 14 saying the company has faced "substantial obstacles" in completing construction.

"Streamline, however, has every intention to complete development of the premises and anticipates that it will need an additional eight months to complete the project," Houston wrote.

Houston said the company had invested a "significant amount of capital" into the project and said if the company was given additional time it would begin making lease payments.

The company was not required to make any lease payments on the building until construction was complete.

"Streamline is hopeful that this issue can be amicably resolved without the need for litigation," Houston wrote.

Lindsay responded to the letter on Thursday, denying the request for an extension.

Lindsay further added the obstacles to construction that the company had referenced were related to delays caused by Hurricane Sally that were addressed in an amended lease in March 2021.

Lindsay's letter noted that the company had not responded to her requests to update which individuals at Streamline Boats to contact, so she continued to address the letter to Osniel Sanchez, one of the original Hileah partners, and Arthur Fletcher, former attorney for South Palafox Group, as they are named company representatives in the lease. Sanchez was removed from all public business listings with the company last year, and Fletcher is one of the defendants in a lawsuit over the control of South Palafox Group.

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Lindsay also addressed Houston's reference to litigation and asked for clarification on any tenant rights the city is not respecting. The lease allows for a 60-day grace period, but Lindsay said that would be a "futile gesture" based on the lack of progress on the building.

Reeves said while there was "complexity" to the situation, the city works to put checks and balances in leases to ensure projects move forward.

"This was one of them that was in this lease that allowed us to say, well, we don't want to wait around forever to see that progress, to see economic development on the port," Reeves said.

Reeves said the city would move forward with marketing the warehouse and find a tenant who can finish the improvements to the building and grow the port.

"I'm looking forward to what the future is at the port," Reeves said. "There's a lot of exciting things between pickleball and American Magic."

This article originally appeared on Pensacola News Journal: Streamline Boats, Port of Pensacola boat manufacturer, evicted