TAMPA - A pair of Tampa-based hotel and resort developers are now in the lead to take over Channelside Bay Plaza, and have now filed formal paperwork with the Tampa Port Authority in hopes of taking control of the long-struggling restaurant and retail site.
If approved by political leaders and financial institutions involved, Liberty Group and Convergent Capital Partners would together begin a dramatic re-organization of the government-backed complex, with renovations possibly starting this autumn.
“Channelside fits with our general strategy of acquiring property with great locations, that need significant capital and thoughtful strategy to bring back to life,” said Santosh Govindaraju, portfolio manager for Convergent Capital. “We're looking to make significant changes there to the sense of arrival for residents, visitors, fans at the Forum, the Florida Aquarium and so on.”
Many details of the deal are still in development, or confidential, he said, including the overall budget for renovating the property, but they have secured capital for the deal and late Friday filed application paperwork to assume the lease on the property, which Port officials spent part of the weekend reviewing.
And similar to a residential “short sale,” Govindaraju said his partnership now has a signed agreement with the bank that holds the mortgage on the property, and that deal precludes any other party from acquiring those rights. If approved by the Port of Tampa to become the new mall operators at the Port's monthly meeting in May, Govindaraju said they could close on the deal in June and start construction by autumn.
Port officials were not able to be reached over the weekend for comment.
The next step would be a round of meetings with Port officials, local residents, the City of Tampa, architects, cruise ship operators and the Department of Homeland Security, which has authority over the waterfront area.
Such a deal would add to a growing list of high-profile projects around Tampa for both Liberty and Convergent.
They already purchased and renovated the Emerald Greens golf course and town house community in Carrollwood. They also teamed up to purchase the former Mercantile Bank building in downtown Tampa where construction crews recently started work to transform the building into a boutique Aloft hotel.
To be sure, their bid for Channelside does not mean a full green light for taking over quite yet. A tangled web of legal issues surrounds the property.
Channelside opened to huge fanfare in 2001, but is in court-ordered receivership after previous managers defaulted on the mortgage. The Irish-based bank that held that mortgage subsequently failed and was taken over by the Irish government. That leaves potential suitors to essentially bid on the mortgage to take it off the hands of the Irish taxpayers. Even if that were to occur, the Port owns the land underneath Channelside and has final authority to approve or reject a new operator.
The Port recently moved forward with eviction proceedings on the bank that, if successful, would give them total control of the site.
Tampa Bay Lightning owner Jeff Vinik had been interested in taking over Channelside and renovating the surrounding area to create a neighborhood that linked Channelside to the north and the Forum to the south where his hockey team plays.
Vinik last year gained favor among the political leaders of the Port of Tampa, some of whom envisioned him as a savior for the struggling complex that some have dreamed as an anchor to a future baseball stadium nearby.
Vinik eventually put his bid on hold as legal complications over the Channelside property emerged. Officials with the Lightning have said he remains hopeful over Channelside's progress, but had no intention of re-introducing his plans.
Meanwhile, the Channelside remains in receivership amid a court case, managed by a caretaker mall management company, and tenants continue to leave. The overall complex lost its movie theater operator, and the property is more than 60 percent vacant.
However, one major legal hurdle is now gone, Govindaraju said. The Ashkenazy Acquisition Corp. that once managed the site had asserted a right of first refusal to re-take control of Channelside, but Govindaraju said the bank involved had settled that issue, thus clearing the way for a new operator.