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By SCOTT BARANCIK, Times Staff WriterInstead of buying one pricey lot, the Tampa company agrees to buy 46 acres, use what it needs and sell the rest.
Say you wanted to open a couple of restaurants in Hillsborough County. How would you acquire the land?
You could buy a small, ready-to-build plot from a real estate broker. Costly, but quick.
Or you could piece together 46 acres of scrub from several owners, rezone it to allow various uses, add water, electricity and traffic improvements, sell 90 percent of the property to developers and build your restaurants on the remaining acreage. The adjacent hotels, offices, retail shops and homes would provide a built-in customer base.
Sound good? It's almost precisely the course Outback Steakhouse Inc. is pursuing in Brandon.
Late last month, the Tampa company's board agreed to spend as much as $24-million to buy and fix up 46 acres, located across Interstate 75 from a Wal-Mart and Westfield Brandon mall. The deal is expected to close in December.
Bruce Erhardt, a senior director at Cushman & Wakefield in Tampa, said it's possible Outback will make enough profit on the resale to cover the entire cost of the remaining acreage. "It's a great way to acquire land," he said.
"It's something creative you do when the opportunity presents itself," Outback general counsel Joe Kadow said.
Kadow said he expects Outback will build three restaurants on the property. The company has nine brands: Carrabba's Italian Grill, Bonefish Grill, Cheeseburger in Paradise, Fleming's Prime Steakhouse and Wine Bar, Lee Roy Selmon's, Paul Lee's Chinese Kitchen, Roy's, the forthcoming Blue Coral Seafood and Wine, and its flagship steakhouse chain.
Outback did a similar land deal in the late 1990s along Boy Scout Boulevard in Tampa, where it now has three restaurants: Roy's, Fleming's and Lee Roy Selmon's. But such real estate opportunities don't come often, especially in the increasingly built-up Tampa Bay area.
The Brandon property has been idle for decades. About half is owned by Tampa brokers Will Bissett and Ed McGrath, who bought the land as an investment in the mid 1980s and were not actively marketing it. The two were approached by a broker representing Outback, JoAnn Ferlita of Property Pro, Bissett said.
The other parcels are owned by Florida Crossroads Ltd., whose partners include Tampa developer Mandell "Hinks" Shimberg, who did not return a phone call Thursday.
Kadow declined to comment on who might buy the 40-plus acres from Outback or what the buyers might build.
Patrick Berman, retail brokerage director at Cushman & Wakefield in Tampa, said a proposed deal between a Michigan client of his and Outback fell through this year. The client wanted to build a mixed-use complex on the site, similar to St. Petersburg's BayWalk or Tampa's Old Hyde Park Village, but couldn't come up with the money quickly enough, he said.
Asked what Outback might pay for the land, Berman made an "educated guess" of about $300,000 per acre. "There's nothing negative about this site. You've got tremendous traffic counts here, you've got population growth, you've got retailers," he said.
Zoning revisions obtained by Outback allow for as much as 360,000 square feet in general commercial uses, a movie theater, a big-box retail center, a 5-story parking garage and 150,000 square feet more of office space.
Outback is not the only local company to assemble large parcels of land to retain a small portion at a discount.
"Publix used to just buy the corner lot," Cushman's Erhardt said. "Now they go in and buy, say, 50 acres, zone it, sell 30 acres in back to an apartment developer or someone else and keep the corner. That lowers their basis."
But it's not a strategy for the light of wallet.
"Small businesses, for the most part, don't do it," said Paula Harvey, director of Hillsborough County's planning and zoning division. "Unless they want to go into debt over their head."
Scott Barancik can be reached at barancik@sptimes.com or 727 893-8751.