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Settlement approved, Vinik takes control of Channelside

After years of acrimonious lawsuits, the Channelside legal fight came to a quick resolution Monday, as the judge controlling the case approved a settlement that gives Tampa Bay Lightning owner Jeff Vinik effective control of the property.

Vinik, officials with Port Tampa Bay and executives with the Liberty Group/Convergent Capital pair of developers all agreed over the weekend to a new legal settlement of their issues, just hours before a judge was scheduled to rule on the matter Monday. The deal now gives a green light to Vinik’s long-term hopes and dreams to remake the entire neighborhood into a gleaming mixed-use entertainment and shopping district around the Forum.

“We’re dancing a jig over here,” said Rick Drury, owner of Precinct Pizza in the Channelside Bay Plaza complex. “We’re still holding our breath a bit until Jeff gets the keys ... But he has the wealth to do things, not just say things, and everything he’s done so far with the Lightning and the Forum — if he does half of that for us, we’ll be ecstatic.”

Monday’s deal didn’t come easily. According to court paperwork, the deal includes a number of payouts:

♦  Port Tampa Bay will pay $1.9 million to purchase the mortgage on the complex.

♦  Vinik will pay $7.1 million for the lease on the property. But he will pay more elsewhere. Though financial terms are not spelled out directly in the papers, Vinik was also “able to negotiate a settlement of pending litigation relating to the Lease Assets,” and he obtained “rights to certain plans” that Liberty had for the site. Obtaining that lease was largely the goal of the Liberty/Convergent pair of developers who sued in bankruptcy court, claiming they had a pre-existing deal with the Irish bank that held the lease on the property.

♦  All sides of the dispute agree to pay their own attorney’s fees.

The parties involved issued a joint statement:

“We are happy with this agreement as it now creates a path for the turnaround of a very important community asset” said Jim Shimberg, an executive of CBP Development, the company Vinik has leading the project. “We appreciate the efforts of Liberty Channelside, Port Tampa Bay and IBRC in helping resolve this matter.”

“Port Tampa Bay worked hard in the best interest of the tenants and the entire community, and was able to reach the best solution to a very complex problem,” said Paul Anderson, Port Tampa Bay president and chief operating officer. “This is the first step in a process and we look forward to a new beginning with CBP Development at Channelside Bay Plaza.”

“We are pleased this issue is resolved and are confident in Mr. Vinik’s plans to redevelop the Channelside retail center,” said Santosh Govindaraju, a principal of Liberty Channelside LLC.

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As for what happens next, Vinik’s representatives have been especially quiet about their specific plans for Channelside, but there have been some hints of where they intend to take the center.

During a June 30 meeting before the port’s governing board, Lightning Chief Executive Officer Tod Leiweke described their general hopes to make better connections around the neighborhood spanning from Florida Avenue to the cruise ship terminal.

That presentation included watercolor artistic renderings of the area it called “Channelside Live” with glass-walled bridges between parking garages, and back-lit, window-like facades of buildings, altogether giving the area the feel of an entertainment district in the vein of Downtown Disney or Universal City Walk.

Jac Sperling, a long-time sports industry operative and principal for Vinik in the Channelside project, told the port that he looked forward to working with the port to formulate more specifics.

Vinik has already acquired dozens of parcels of land around the Forum, and has plans for a major hotel adjacent to the main parking garage for the Forum.

Adding another factor to the mix, the port is presently working through a new master plan for the whole area, with one possibility being moving the actual cruise ticketing area north to make more space around the Channelside area.

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The whole Channelside complex has been struggling for years amid both the sluggish economy and layers of legal wrangling between the port and various management companies that came to operate the mall. Measured by sheer square footage, the site is mostly empty, primarily because all but one restaurant on the top level has left, as did the movie theater operator. Still, a few tough-skinned retailers remain, including Surf Down Under, Hooters, Splitsville and Precinct Pizza.

Eventually, the bank that held the mortgage on the property itself filed bankruptcy in Delaware, helping drag Channelside’s fate into that courtroom.

Early this year, the judge in the case ordered an auction, and on July 2, Vinik initially prevailed with a $7.1 million bid on the lease (plus a $10 million letter of credit for maintenance) and Port Tampa Bay initially prevailed with a bid of $3.5 million on the mortgage. However, the Liberty/Convergent pair contested the whole process as a pre-arranged collusion between the port and Vinik to shut them out.

Last Thursday, the judge in the case said he had problems with everyone’s behavior in the matter and told every side to expect a ruling midday today. After reviewing the proposed deal during a Monday teleconference, U.S. Bankruptcy Judge Christopher Sontchi approved the deal.

“I’m not a resident of Florida,” the judge said, “but I’m sensitive to the ongoing difficulties and problems with the Channelside bay mall ... and the desire for the citizens of Tampa to move that project forward.”

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