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Two partners flee Centro Ybor

The remaining partner, BVT, buys all the shares in the project and says it will hang on until the market catches up to the entertainment complex.

By MARK ALBRIGHT
Published January 4, 2006

TAMPA - The two development partners in the Centro Ybor entertainment complex have given up on the project after four profitless years, selling their interest for a minimal amount at a loss to their silent partner.

Local shopping center developer Sembler Co., which developed BayWalk in St. Petersburg, and Steiner+Associates, an Ohio firm credited as being one of the inventors of the so-called entertainment/lifestyle shopping center with CocoWalk in Miami, each sold their 25 percent interest in the Ybor City project to BVT, a German investment fund that owns many office and apartment buildings around the Southeast. BVT owned half the equity in Centro Ybor, which opened in 2001.

"It was a matter of whether we should spend more money on a project that never really provided any return on our investment," said Craig Sher, president and chief executive officer of Sembler. "We decided it's time to move on."

Nonetheless, the German investment fund that took over the 211,000-square-foot project on New Year's Eve said it is not throwing in the towel. BVT confirmed plans to move the Tampa Bay Brewing Co. there from its location on nearby 15th Street. By having the brew pub add an outdoor beer garden and fill space vacated long ago by the ill-fated Mezzanote restaurant, Centro Ybor will be 90 percent leased.

Centro Ybor, however, lost money for the fourth consecutive year in 2005.

"We think a brew pub will energize the project and our tenants business there," said Kip Marshall, president of BVT Asset Management's U.S. operation in Atlanta. "This project has been a challenge, but we are in it for the long haul."

The brew pub was not targetted just to fill a hole, Marshall said, but to add a proven draw from the neighborhood rather than import something from somewhere else.

Steiner will continue to manage the center, which is anchored by a Muvico theater, GameWorks, the Improv comedy club and some popular restaurants. But it is unclear how long Steiner's deal to manage the property will last.

Envisioned by former Mayor Dick Greco as jump-starting the long-promised rebirth of Tampa's old Latin quarter, Centro Ybor restored the century-old Centro Espanol building, home to a Latin Quarter club that once was a hub of Ybor City's teeming social life. The idea was to add diversions in surrounding blocks such as chain retail, restaurants and a state-of-the-art movie house to what had become a raucous bar and nightclub district. The city kicked in a $9-million federally backed loan and a parking garage to make the $49-million project happen.

Once the novelty wore off, however, the crowds of families and shoppers thinned. For the nearby bars and nightclubs, it remained business as usual. By 2004, the city stepped in to bail out Centro Ybor by taking over overdue payments on the federal loan. That will cost taxpayers about $16.3-million in payments spread over the next decade.

Sher said the project's success hinged on the gentrification of Ybor City, which remains a work in progress.

"Mayor Greco's vision was something like Bourbon Street, but instead the neighborhood turned into an environment driven more by alcohol and a younger crowd."

Observers of Tampa's retailing scene are not sure what the future holds for the project. Ybor has drawn some new apartment complexes and tourist hotels. They see the condo boom that erupted in nearby Channelside eventually spreading closer to Ybor, which would put more affluent residents on the streets.

"I think it's a matter of time before the market catches up to the retail at Ybor Centro," said Patrick Berman, who specializes in retail for Cushman & Wakefield.

Others noted the irony that local pundits five years ago considered Centro Ybor the more likely success over rival Channelside, which is only a mile away. After its original developers sold out for far less than the project cost, the once desolate Channelside entertainment center is filling up while Ybor languishes.

"We've learned that people - particularly young people - go to Ybor to drink, not to shop," said Steven Ekovich, regional vice president for Marcus & Millchap, a real estate investment firm.

Mark Albright can be reached at albright@sptimes.com or 727 893-8252.

[Last modified January 4, 2006, 11:54:37]