Tampa Bay Lightning owner Jeff Vinik prevailed at an auction Wednesday for control of the Channelside Bay Plaza, giving a big boost to his plans for remaking the overall neighborhood around the Forum where his hockey team plays.
Vinik’s winning bid was $7.1 million for a lease on the property, according to attorneys managing the auction today. Though legal challenges remain, Wednesday’s victory opens a new chapter for the long-struggling retail and entertainment complex adjacent to the cruise ship terminal downtown.
Besides the $7.1 million, Vinik also pledged a $10 million letter of credit to help fix immediate maintenance problems on the existing Channelside structure, according to Van Durrer, an attorney for the Irish bank that’s auctioning off the property. In parallel, Port Tampa Bay made a successful bid of $3.5 million for a mortgage backing the complex, Durrer confirmed, further bonding the port and Vinik together in their plans to remake the site. The auction only lasted seven minutes, not counting instructions by the lawyers involved, partly because the port and Vinik were the only bidders making offers, and they did not bid against each other.
Durrer plans to submit the auction results later today to a federal bankruptcy court that’s overseeing the disposal of billions of dollars in assets held by an Irish bank that also held a mortgage on Channelside.
The move thrilled some Channelside tenants, including Robert Fisher, general manager of the Hooters restaurant that’s been a long-time operator in the facility.
“We’re excited. It’s what we’ve all been hoping and waiting from Mr. Vinik,” Fisher said. “He has such a great vision for downtown Tampa and the Channelside area and the Riverwalk, so we’re excited with what he’s going to be bringing to the table.”
Vinik’s bid beat out the Tampa-based pair of Punit Shah of Liberty Group and Santosh Govindaraju of Convergent Capital Partners, who remain locked in a legal battle with Port Tampa Bay because they claim they already had a deal to take over Channelside.
The Liberty and Convergent groups had lawyers present at the auction Wednesday in New York, but they did not bid on any assets, according to a transcript of the proceedings, and they instead made note of their presence and their intent to “stand on the record” of their previous objections. After the auction, the group issued a statement calling the auction “confusing, ineffective, and fundamentally unfair,” and promised to keep pressing their case at court. They noted the $7.1 million price was “only $100,000 more than Liberty was prepared to close on last May.”
By contrast, just this Monday, Vinik’s representatives showed the port his general hopes to remake Channelside. Very preliminary architectural drawings suggest much of the existing structure will either come down or be dramatically remade into a “Channelside Live” complex with back-lit glass walls, futuristic bridges, massive sunshade sails above an open-air plaza, and potentially a band shell style entertainment center. The genre leans more toward the style of a modernized Universal City Walk or Downtown Disney.
The plan also calls for connecting the overall neighborhood into a more cohesive entertainment district that surrounds the Forum where Vinik’s team plays — with design nods to the “L.A. Live” area around the Staples Center. Vinik already plans a major hotel on the site here.
Port officials on Monday praised Vinik’s community involvement and unanimously voted to give “pre-approval” to Vinik, should he prevail at auction.
Vinik’s budget for Channelside isn’t yet disclosed, but his representatives told the port that they already are committed to more than $8 million in maintenance fixes on the site, and they pointed to Vinik’s massive renovation of the publicly owned Forum, where he spent tens of millions of dollars to modernize the site.
“Port Tampa Bay is pleased that the future appears bright for Channelside Bay Plaza,” port officials said in a written statement, and will work with Vinik’s group “to make the complex into the first-class attraction that the people of Tampa Bay deserve and assuring that it becomes the gem of downtown Tampa.”
This auction might not be the final say on who controls Channelside, as the property remains tangled in a complex bankruptcy case.
Last year, Shah of Liberty Group and Govindaraju of Convergent Capital claimed they had a deal with the Irish bank to take over the property, but the port rejected that move.
A federal bankruptcy court in Delaware then called for a new auction that ran on Wednesday, and the same three players emerged as potential bidders: Jeff Vinik, Port Tampa Bay and Liberty Channelside. Vinik’s initial dollar amount bid was disclosed because it was the highest, $7.1 million for the lease on the property, making it the beginning level of the auction.
That set the stage for today’s auction, which took place in the New York offices of Skadden, Arps, Slate, Meagher & Flom.
Next, lawyers managing the auction will present the results to a federal bankruptcy judge in Delaware on July 15. Filings in the case suggest the judge could approve the auction results, or hear challenges.
Fisher of Hooters had a thought on that.
“Personally, my hope,” he said, “is that maybe in the interest of good will for the city and the residents and the tenants that they don’t put up too much of a stink and just let Mr. Vinik move forward with his vision.”