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Contract to sell complex expired

But the buyer contends the contract still is enforceable and he will go to court if necessary.

By AARON SHAROCKMAN
Published January 24, 2007

ST. PETERSBURG - An attorney for the St. Petersburg Housing Authority now says the contract to sell a 486-unit public housing complex to a developer expired earlier this month.

The contract to sell Graham-Rogall, signed in June 2004, lapsed Jan. 2 before the property changed hands, said Housing Authority attorney Arthur Tepper.

The technicality could afford Housing Authority officials an opportunity to back out of the controversial sale, Tepper said.

Board members will meet next month to discuss what to do with the property. Besides blocking the sale, the board could decide to extend the previous contract or craft a new deal that would preserve subsidized housing on the site, Tepper said.

But the buyer said he believes the contract is still enforceable. Guy Burns, a partner in a Tampa firm hoping to redevelop the site into condominiums, said he would take the matter to court if need be.

"We feel very comfortable on the legal issues," Burns said. "We intend to enforce this contract."

The potential showdown adds another wrinkle to an already chaotic deal, and likely could reignite a debate over if the public housing complex - the largest in Pinellas County - should be sold to a private developer.

Housing Authority officials say they cannot afford to update the 36-year-old facility near Tropicana Field. With the nearly $12-million from the sale, officials say they will reinvest in new housing projects in and around the city.

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The contract apparently expired as the two sides were working on an amendment detailing how to relocate Graham-Rogall's 318 residents.

A provision in the contract placed a Dec. 1 deadline to close on the nearly 4-acre property, Tepper said. The developer, KEGB, could extend that deadline once for 30 days.

"When we called it to their attention, it was like, 'Oops,' " Tepper said. "In essence, this thing has been tabled."

KEGB, which bought out the Graham-Rogall contract last year from a St. Petersburg company, is still negotiating the potential sale.

At issue, Burns said, is an unrecorded agreement the Housing Authority made to keep some of Graham-Rogall's units for subsidized housing through 2017.

The agreement did not show up as part of a public records request regarding Graham-Rogall, Burns said, nor did anyone at the Housing Authority speak of the agreement.

Housing Authority officials one day "just found it," Burns said.

"For some reason, I don't know if it's political, now people are having second thoughts," Burns said. "They listed this property as a condo conversion. They knew full well what was going to happen.

"We don't wish to profit on the backs of poor people. This was a deal made by the Housing Authority almost a decade ago."

KEGB wants to renovate the 486 Graham-Rogall units into about 300 for-sale condominiums. The company has agreed to put up $1-million of the sales price to aid the Housing Authority's relocation efforts.

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The bungled contract is the latest in a string of problems associated with the sale of the Graham-Rogall.

Housing Authority officials first decided to sell the public housing complex in 2004, with the intention that residents would not be forced to leave, some board members have said.

But the proposed sale stalled for two years after a prospective buyer alleged in court that the bid process was flawed. By the time that case was settled, the developer's plans had changed.

Out was for-rent housing. In were condominiums.

The prospects seemed unthinkable, originally.

The new developers "can do whatever they want to do with the buildings," Housing Authority executive director Darrell Irions told the Times in 2004. "But they would be hard-pressed to do anything different just because of the public outcry that would follow."

Irions has since defended the new all-condo arrangement.

The Housing Authority, meanwhile, has yet to indicate where it plans to spend the money it would make off a sale. One potential location evaporated this month after the Housing Authority failed to follow U.S. Housing and Urban Development rules, a spokesperson with that agency said.

At a City Council meeting last week, Irions addressed council concerns over the proposed sale and relocation of Graham-Rogall residents. But he did not mention that the contract to sell Graham-Rogall may have expired.

Through a spokesperson, Irions said there was "no particular reason" he did not discuss the contract dispute.

"It is not uncommon for sales contracts on these types of property to expire while negotiations are continuing," Housing Authority spokesman Tim Shepherd wrote in an e-mail.

A meeting date to discuss the contract and potential sale has not yet been set.

[Last modified January 24, 2007, 06:01:36]