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Up for bid: Drinking or diving?

The owners of Blue Grotto Springs put the diving destination up for sale. But many potential buyers are looking at it for other reasons.

By SCOTT BARANCIK
Published November 18, 2005

Blue Grotto Springs, a 100-foot-deep freshwater cavern near Ocala, has attracted celebrity divers from golfer Tiger Woods to the king of Thailand over the years.

Now up for sale, it has reportedly piqued the interest of about 70 possible bidders. Auction executive William Bone said he expects the winning bid to reach as high as $5-million to $15-million next month.

But most of the potential bidders aren't interested in Blue Grotto for its three-bedroom home, dive shop, 14 acres of land in Levy County or the "huge amount of money" its dive business earns for owner Ed Paradiso, Bone said.

They want the water for drinking, not diving.

Though Bone declined to identify the interested parties, he said they include city and county water officials, companies that sell bottled water and middlemen who recognize a valuable commodity when they taste it. Company promotional materials claim the cavern cycles 3-million gallons of water per day underground.

"I think what you're going to have is probably municipalities bidding against investors that want to sell it to municipalities," said Bone, president of the National Auction Group of Gadsden, Ala. "We thought we were selling a diving facility."

Welcome to Florida, a state swiftly outgrowing its water supply and constantly on the hunt for alternative sources. Seekers include the Tampa Bay area, which is tapping rivers and canals for the life-supporting liquid and looks forward to opening a long-promised desalination plant in Apollo Beach next year.

Tampa Bay Water, which provides wholesale water to utilities serving Hillsborough, Pinellas and Pasco counties, was among those that recently received a glossy, color brochure on the Blue Grotto auction. Spokeswoman Michelle Robinson said the water supply group won't submit a bid because it is working on projects closer by.

Despite Bone's tone of surprise, his company's marketing campaign plays up Blue Grotto's drinking-water potential. An ad in this week's Wall Street Journal features the phrase "pure spring water with bulk water bottling permit."

The property description on National Auction Group's Web site describes Blue Grotto as a "one-of-a-kind investment opportunity" and calls the company's bottling permit "an asset that allows this spring water to be bottled for commercial endeavors."

Bidders who are interested in tapping Blue Grotto's water may face some challenges, however.

Paradiso's bulk-water bottling permit is good for 100,000 gallons per day. Anyone seeking to pump more would need to prove that doing so won't draw down nearby lakes or wetlands, cause saltwater intrusion or siphon water from another permitholder's well, said Michael Molligan a spokesman for the Southwest Florida Water Management District, commonly known as Swiftmud.

The buyer also would need to get local zoning approval, something Paradiso was unable to do. His wife, Judy, said her goal had been to pump Blue Grotto water to a separate property the couple owns, sell the water to bottlers and use the proceeds to turn Blue Grotto into an environmental and wildlife education center.

But the Levy County Commission turned down their controversial rezoning bid, and Paradiso said the "hoops" the couple would have had to jump through for reconsideration were too costly.

Then there's the issue of branding.

The Paradisos claim Blue Grotto is part of a system of springs whose water flows into a giant hole that feeds an underground river. Thus, their marketing materials describe the product as "pure spring water," not unlike the spring water that Zephyrhills Spring Water Co. bottles in Pasco County.

But Molligan of Swiftmud disagreed.

"For our purposes, a spring would be something where water comes out from the aquifer to the surface, and feeds a river or an estuary," he said.

So what is the Blue Grotto, in Molligan's opinion?

"It's a sinkhole."

Fortunately for the Paradisos, Swiftmud isn't the arbiter of whether a bottle of Florida water can carry the label "spring water." That is up to the state's Department of Agriculture and Consumer Services.

Judy Paradiso said the next owner should have no trouble proving that Blue Grotto carries spring water.

"I've had people say (it's a sinkhole) to me before," she said. "Blue Grotto is probably one of the more unique spring systems in the state . . . I'm sure whoever you talked to had not visited it."

Times researcher Cathy Wos contributed to this report. Scott Barancik can be reached at barancik@sptimes.com or 727 893-8751.

[Last modified November 18, 2005, 01:55:59]