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Villas condominium developer Paul Morris fails to pay $250,000 due Tuesday and defaults on the 99-year site lease.
By BRYAN GILMER, Times Staff Writer
© St. Petersburg Times
published November 13, 2002
ST. PETERSBURG -- The fate of a proposed high-rise condominium development along St. Petersburg's downtown waterfront has become even murkier.
Morris Development Group LLC, the developer of the ambitious Villas condominium project, failed to make a $250,000 payment due Tuesday and defaulted on the 99-year lease for the building site, the family that owns the land said.
The Hamilton family, which owns the prime property in the 400 block of Beach Drive near the landmark Renaissance Vinoy Resort, expects to begin talking to other developers today. Family members said Tuesday night that they also have not ruled out continuing with Morris if it finds financing or even attempting the project on their own.
The Hamilton family remains committed to building what Morris Development founder Paul K. Morris proposed: two 20-story condominiums above retail space bigger than the nearby BayWalk. The $76-million project would feature 220 condos, more than the combined number in the nearby Vinoy Place, Florencia and Cloisters condominiums.
"Dr. Hamilton made a promise to the city of St. Petersburg and to our friends who supported us that this project would be done and that the city would be proud of it," said Bob Churuti, the son-in-law of retired plastic surgeon John M. Hamilton.
Morris said Tuesday night that he has not given up. He said he is still working to get financing and intends to make the lease payment.
"Financing is being done," Morris said. "They know that; you know that and everybody else knows that."
"It's on the lender's time frame," he said. "As soon as I get financing we will proceed with the Villas project."
Morris, 54, moved to St. Petersburg after he declared bankruptcy in California in 1999. He hired a local architect to design the Villas and negotiated the long-term lease for the site with the Hamiltons.
In September, Morris told the St. Petersburg Times he had financing for the project but would not name the lender. But the Hamilton family made clear Tuesday that Morris has neither long-term financing nor the money to pay them to lease the land.
Morris has no documented experience developing large projects such as the Villas. The St. Petersburg Times reported in September that he has worked as a set dresser and an independent artist.
The Hamiltons left open the possibility that Morris could still develop the Villas if he makes the missed lease payment.
"We continue to be hopeful that he will be able to make the payment," Churuti said. "And there is some indication from permanent financing people that he will be able to. But if we do not adhere to our deadline, there is no point in having a deadline."
Since stories about Morris and the Villas were published, many developers have contacted the family about taking over the project, Churuti said.
"We must have had 15 or 20 top developers calling us to say, 'If Paul at any time fails, I'll step into his shoes,"' Churuti said.
The family is prepared to move quickly, encouraged that 118 people have paid refundable $5,000 deposits to reserve the right to buy one of the condominiums.
"I don't think we would spend a month from now deciding," Churuti said.
If no suitable replacement developer can be found, the family will finance and develop the project on its own, Churuti said. The project received the needed city approvals at the urging of the Hamiltons and their longtime friends.
The project is emotionally important to the Hamiltons, who plan to buy at least three condos in the Villas.
John M. Hamilton's medical office was in the same block that the Villas would occupy. Over four decades, he purchased all of the lots in the block. In recent years, other members of his family have operated their own businesses there.
Now, all those businesses have closed or moved. A construction fence covered with children's artwork surrounds the empty buildings within view of the Vinoy.
Morris' idea for the Villas appealed to Hamilton because it would be a major part of downtown for decades to come. And the land lease arrangement would provide long-term income to his heirs.
"There are only four blocks of Beach Drive, and we want this to be the most elegant one," John Hamilton said Tuesday, adding that any substitute developer still will have to lease the land from the family, not purchase it. "I thought it would be something that the children could have."
Morris made the first $250,000 lease payment to the family earlier this year. He received a loan for the same amount by mortgaging his right to lease the property to a partnership with local investors called Channelside Partners L.C.
It was unclear late Tuesday what effect the default might have on the mortgage.
"Until I consult with my legal team, I'm not sure which way I'm handling this issue," said Belleair Beach businessman Dennis Campbell, the lead partner in Channelside.
Restaurateur Dan Harvey of Harvey's 4th Street Grill is also a partner in Channelside.
Churuti said the mortgage is between Morris Development and Channelside. He said the Hamilton family may wind up negotiating directly with Channelside but that the mortgage won't prevent the family from talking with other developers.