The fight over who controls Channelside Bay Plaza has moved from the auction room to the courtroom, where bidders spent much of Tuesday arguing in court over whether anyone broke the rules in a recent auction of the property.
And for those who can’t get enough Channelside legal action, the judge in the case scheduled all of Thursday for witness examination and cross-examination on the issue.
“If we have to go late, we’ll go late,” said Judge Christopher S. Sontchi told lawyers attending the federal bankruptcy case up in Delaware on Tuesday.
So goes yet another chapter in the long and tangled legal war over the struggling retail and entertainment complex. The key question remains whether the judge in the case might undo a July 2 auction that Tampa Bay Lightning owner Jeff Vinik won with a bid of $7.1 million as part of his vision to remake the entire neighborhood.
Officials with Vinik said they would not comment until the conclusion of the hearing. Attorneys for the Tampa pair of developers contesting the auction also declined to comment.
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Now largely empty except for a few still-surviving tenants, Channelside and the neighborhood around it have seen their fates kicked around several courtrooms across the country.
At a June 30 port hearing, Vinik’s representatives presented a general vision for remaking Channelside, and connecting the area together into a mixed-use hotel, entertainment, shopping and restaurant district, tentatively called “Channelside Live.” The port owns the land underneath the complex, and the governing board unanimously preapproved Vinik’s plan.
However, Vinik isn’t the only one pursuing Channelside.
The Tampa-based partnership of Liberty Group and Convergent Capital claim they had a pre-existing deal with the Irish bank for Channelside, and they’ve been tangling with the port for months over the site. They did not make a bid at the recent Channelside auction, and instead filed paperwork with the court last week claiming they can pay $10 million.
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Tuesday, the court spent much of the day going over procedural intricacies leading up to the July 2 auction. The Irish bank’s lawyer, Van Durrer, had officials on the stand from DJM Real Estate, the company handling much of the auction process.
“It’s a unique project,” Edward Zimmer, general counsel of DJM, told the court, noting that Channelside was designed originally as a waterfront site. Then new security initiated after 9-11 closed off access to the channel. “That is a very big challenge.”
Then, he told the court, there are numerous maintenance problems listed in an engineering report and that the port held a so-called “veto” vote over any changes from one mall operator to another.
Still, he said at least 77 companies signed up to review documents about Channelside.
John Anthony, the attorney for the Liberty/Convergent group challenged Zimmer on a series of points, largely on the intricacies of how DJM publicized the auction, communicated with the bidders and whether the process favored one over another.
“Given all that has gone on over the last couple years,” Zimmer said, “having a bidder pre-approved by the port is a value. And it makes sense to have it.
At one point in the afternoon, Anthony asked Zimmer to hypothetically envision a scenario where the Liberty/Convergent group offered more money and would also later sue the port for damages of $15 million or more. Then noting that DJM would be paid a percentage on commission, he asked if Zimmer would prefer being paid more than Vinik’s bid.
“If you’re asking if I would be happier with a higher commission,” Zimmer said. “The answer would be yes.”
Still, Zimmer said his professional opinion was to support Vinik’s bid for Channelside instead because it presented an easier path to approval by the port, and hence a better chance of closing a deal.