Print

Email story

Comment

Email editor

Low appraisal stalls art museum's move

The city was going to pay $5.7-million for the Pavilion. But negotiations have hit an impasse because an appraiser says the building isn't worth that much.

By JANET ZINK
Published May 20, 2006

TAMPA - A deal intended to secure the future of the Tampa Museum of Art is in jeopardy after preliminary appraisals valued the building chosen to house the museum at less than what the city agreed to pay.

Plans revealed in February called for the city to buy the Pavilion, a distinctive office building on Ashley Drive at Kennedy Boulevard, for $5.7-million to use as a new home for the museum. Museum officials could then raise money to build an additional building on a city-owned parcel to the north.

But negotiations with the building's owner, America's Capital Partners, have stalled following the low appraisal, according to city and museum records.

City Attorney David Smith declined to reveal the amount of the appraisal, or how much lower it is than the purchase price.

The deal was scheduled to go to the City Council for a vote by May 1.

Then the date was postponed until June 1.

Now, the date has been postponed indefinitely, Smith said.

An art museum building committee member raised the issue of the low appraisal at a meeting May 3, according to meeting minutes.

On May 10, Smith sent an e-mail to attorneys for America's Capital Partners asking to discuss the appraisal.

"All activity on this deal is on hold in the interim," he wrote.

The next day, the city's economic development manager, Mark Huey, told staff members that all art museum closing meetings had been canceled until further notice, according to city records.

According to state law, the city has to have two appraisals if a property is valued at more than $500,000. The city can pay more than appraised value, but that requires approval of at least five of seven City Council members.

"I have not been made privy to the results of the city's appraisals. Frankly I don't even know that they have received a formal appraisal yet,'' said Allen de Olazarra, chief executive officer of America's Capital Partners, which owns the Pavilion and the cylindrical building behind it, Rivergate Tower. "However, I am certain that Rivergate Tower is worth more today than when we reached a handshake agreement from the city. If nothing else, the recent sales of comparable buildings in downtown Tampa and our recent transaction with Malio's should easily defend a value well in excess of that which we agreed to with the city."

Legendary Tampa restaurateur Malio Iavarone recently signed a lease to put an upscale steakhouse on the ground floor of Rivergate Tower.

The city hired real estate appraisers Lee Pallardy and John Menard to value the property.

Pallardy declined to comment, saying the information was confidential. Menard said the city asked him to stop his work about a month ago.

"I inspected it. I did research. I just never arrived at a conclusion," he said. "This is a very difficult assignment."

The building, with its vast open interiors surrounded by offices and connection to the adjacent tower, is highly unusual, making it difficult to find comparisons anywhere in the country, let alone the city. Other factors to consider are sales comparisons in the area, how much income the building might generate, its condition, future use of the building and improvements that need to be made to make it work for the museum, Menard said. The city plans to spend $10-million renovating the Pavilion.

"In my mind, it doesn't make sense to me that someone would pay more than appraised value for a piece of property,'' said Brad Salzer, a principal with Southeast Real Estate Partners.

Jim Shimberg, a real estate lawyer with Holland & Knight, sees it differently.

"The community purpose could override the appraisal," he said. "There's a long history here."

The museum saga dates back to 2001 when then-Mayor Dick Greco committed $27-million in community investment tax money to build a facility. The city hired renowned architect Rafael Vinoly, who designed a $76-million building, and a groundbreaking was scheduled for early 2003.

But Mayor Pam Iorio, shortly after taking office in 2003, delayed construction until museum leaders could come up with the money to cover the additional costs.

Museum leaders turned to private donors, and got pledges for more than $30-million to help pay for it, but the project collapsed in March 2005, when the city and major museum donors refused to guarantee construction loans.

A monthslong debate about an alternative plan followed.

Museum officials still wanted to build on a waterfront site, while Iorio wanted to move it off the water to expand green space along the river. She recommended relocating to the old federal courthouse on N Florida Avenue, but halted that plan amid public opposition.

A site selection committee sought a new location and recommended the Pavilion, which seemed to appease both parties.

Museum board chairman Cornelia Corbett said she hasn't been involved in the negotiations between the city and America's Capital Partners, but she hoped Iorio and her staff could reach a deal.

"We said right from the beginning when this whole thing turned around, the mayor and I both said, this is a very viable solution," she said. "It's very important to the museum."

Janet Zink can be reached at 813 226-3401 or jzink@sptimes.com.

[Last modified May 21, 2006, 10:54:55]