Fernandina Commission to Vote on $2.1 Million Downtown Land Purchase for Possible City Hall

The city is seeking to buy the former Marlin & Barrel building/warehouse.

By Mike Lednovich/Editor

The Fernandina Beach City Commission next Tuesday will vote to purchase a downtown warehouse property on South Second Street for $2.1 million — a site city officials say could potentially serve as the future home of City Hall.

Under Resolution 2026-47, commissioners are being asked to approve the acquisition of a parcel totaling about 0.39 acres at 115 South Second Street currently owned by New England Flag Banner Inc.

The property includes an 18,088-square-foot warehouse built in 1925 that city officials say is in “a significant state of structural deterioration.”

City Manager Sarah Campbell negotiated the purchase price after the property was listed for sale at $2.2 million. The city’s offer of $2.1 million was accepted by the owner, according to commission agenda documents.

The commission is scheduled to vote on the acquisition as part of its ongoing discussion about the long-term location of City Hall.

The parcel is located in the city’s downtown corridor near the railroad tracks and the Amelia River waterfront and adjacent to parcels already owned by the city.

If the commission approves the purchase agreement, the city will close on the property by early May under the terms of the contract.

City staff also anticipate demolishing the existing warehouse after purchase, pending approval from the Historic District Council.

Demolition of the building is estimated to cost about $85,000, with another $40,000 in closing costs, bringing the total project authorization to approximately $2.225 million.

Funding for the acquisition would come largely from the city’s General Government Impact Fee Fund, which is designated for expansion of municipal facilities and cannot be used for unrelated purposes. The remaining amount would come from the city’s general fund contingency account.

The city owns the property outlined in red and purchasing the parcel in green it could build a new city hall campus.

The South Second Street property has been on-and-off the commercial real estate market for several years, most recently with an asking price of about $2.2 million, according to city documents and listing records.

The site was marketed as a redevelopment opportunity given its proximity to downtown and the waterfront district. The large warehouse structure and surrounding land were considered suitable for commercial redevelopment or adaptive reuse.

After evaluating the listing and appraised value of the property, the city made a purchase offer of $2.1 million, which the seller accepted.

Before being listed for sale, the warehouse building housed Marlin & Barrel Distillery, a craft rum distillery and tasting room that operated on the site for several years.

The distillery was known for producing small-batch rum products and hosting tastings and events inside the historic industrial warehouse near the downtown rail corridor. After the distillery relocated its operations, the property returned to the market and remained vacant.

City officials say the deteriorating condition of the structure means demolition will likely be necessary if the city acquires the site.

The potential purchase comes as Fernandina Beach officials continue exploring options for relocating City Hall from its current location at 204 Ash Street, a building city leaders say no longer adequately meets long-term municipal space needs.

At a recent commission strategic session, officials discussed identifying property that could support future government operations.

According to city documents, the acquisition would increase the city’s inventory of land available for future municipal facilities.

A 2021 consultant study found the city’s historic City Hall building is significantly undersized and would require millions of dollars in upgrades to remain functional. The City Hall Needs and Site Assessment prepared by Silling Architects concluded the building contains about 6,000 square feet of usable space, far below the roughly 24,000 square feet needed to house the departments that historically operated in City Hall. The report also outlined a range of renovation scenarios, with consultant estimates placing the cost of modernizing the existing structure at roughly $4 million to $8 million, depending on the scope of improvements.

The assessment identified extensive work needed to bring the building up to modern standards, including repairs to the roof, stucco exterior and windows, replacement of aging electrical and HVAC systems, installation of fire sprinklers and firewalls, and reconfiguration of stairways and doors to meet safety codes. The report noted that if the building did not carry historic significance, replacing it might be a practical option. However, because of its historic status, the study focused on renovation and modernization alternatives as city officials continue to debate the long-term future of Fernandina Beach’s City Hall.

No final decision has been made on whether the South Second Street site would ultimately house a new City Hall, but commissioners have indicated they want to secure potential sites before redevelopment opportunities disappear in the downtown area.

If approved, the purchase agreement would require the city to provide a $21,000 earnest money deposit with the remaining balance due at closing.

If approved, the closing is expected to occur within 50 days of the agreement’s effective date, no later than May 6, unless extended for inspections or title review.