Developers' Channelside fight with port now is PR blitz
Developers hoping to take over Channelside Bay Plaza aren't taking “no” for an answer, even if it means going to court to get a “yes.”
Officials with Liberty Group and Convergent Capital Partners say they have been treated unfairly and maligned in public by the Tampa Port Authority, which has the ultimate authority over the complex and essentially rejected the developers' request to take over the mostly empty complex.
“These attacks in the media have significantly affected our reputation,” said Punit Shah, a top executive with Liberty Capital, adding that he suspects the port's public statements were made to “hinder this transaction.”
This comes after the board of the Port Authority voted unanimously last week to deny a request by the current Channelside operator, Irish Bank Resolution Corp., to reassign the lease to Liberty-Convergent. Several port board members said they felt “burned” by the current operator and want a more secure deal the next time.
Now, a week after that rejection, the Liberty-Convergent executives are taking their case public, meeting with media outlets across the Tampa area and handing out talking points, notes, résumés and timelines of various meetings with the Port Authority board.
Santosh Govindaraju of Convergent Capital said they are still considering their options. He said they think they have provided more than enough information and commitments to the port to make a deal happen and shown a solid track record of other projects in the region.
One option he offered was for the legal entity beneath the Irish bank that holds the lease to file bankruptcy “and let a federal judge re-write the lease” while Shah and Govindaraju sue for damages and defamation. “We have resources and time on our side,” Govindaraju said.
Asked why they just don't simply move on to other deals, both Govindaraju and Shah said they retain a positive outlook and won't be pushed around.
This comes after lawyers on several sides exchanged pointed letters criticizing one another.
The port's attorneys wrote on May 23 that the Channelside bidders had not submitted the basic documents involved in an application, and they scolded the developers for threatening violence during negotiations. The port stood by a requirement that the bidders put up $8 million in cash in escrow for renovations, lest they do the same thing the previous operator did — take possession and let the site degrade.
The Irish bank's attorneys fired back the next day (though it's unclear whether the two letters passed each other simultaneously) and complained that the port was being obstinate and was breaching protocol by voting down the bank's request to pass the lease on to a new operator with a fair offer. Continuing down that path, they said, would only lead to further litigation.
Charles Klug, the port's chief counsel, said it was within the authority of the port to approve or reject any new party hoping to take over the Channelside lease. He noted that the port already has an eviction proceeding against the Irish bank, in part for letting the property degrade.
The request for $8 million in escrow, he said, came because the bidders asked the port to stop that eviction and waive any rights to enforce rules on the lease, and also to help prevent any new operator from simply taking over and “flipping it to someone else.”
“The board took official action to reject this group after our staff spent weeks and weeks in negotiation and clearly stating what our position was,” Klug said. “It seems to have come as some surprise to some parties that we were pressing our case.”