Offer is new wrinkle for Centro Ybor

A $4.1-million bid for the debt on the property creates some questions for the city.

By JANET ZINK, Times Staff Writer
Published August 29, 2007

Alan Kahana, owner of the Castle nightclub and other Ybor spots, said that he, Joseph Capitano and Jacob "Booky" Buchman would offer enough to satisfy the current owners of Centro Ybor as well as cover some of the city's debt.
	[Times photo: Chris Zuppa]

ADVERTISEMENT [Times photo: Chris Zuppa] Chicago's M&J Wilkow bought Centro Ybor late last year from a German investment firm for about $13-million, enough to just about cover the $16-million first mortgage on the property.

TAMPA -The tug of war over Centro Ybor heated up Tuesday when the city received a written $4.1-million offer to buy its debt on the property and a group of Ybor City property owners revealed their intention to try to buy the entire complex.

Alan Kahana, who owns the Castle nightclub and other Ybor spots, said he wasn't sure what the offering price would be.

But he did say that he, Joseph Capitano and Jacob "Booky" Buchman would offer enough to satisfy the current owners as well as cover some of the city's debt.

Kahana and Capitano were part of a group that previously tried to buy Centro Ybor, but instead the property was sold by its previous owner to Chicago's M&J Wilkow in December.

Meanwhile, Buchman formalized an offer he made spontaneously at a City Council meeting Thursday. Buchman's proposal caused a frenzy and postponed a vote that would allow the current owners to move forward with their redevelopment plans.

City Attorney David Smith said Mayor Pam Iorio would not take the offer because it contains unacceptable provisions, including a request that the city assign development rights to Buchman.

"They want us to give them rights that belong to the owner of the property," Smith said. "The rights aren't even ours to assign."

Smith questioned the legitimacy of Buchman's proposal.

"It is highly unlikely that they really intend to purchase our second mortgage, since they are really trying to buy the property," he said.

Smith said Buchman's proposal is merely an attempt to give him and his business partners more time to negotiate with Wilkow.

Buchman couldn't be reached for comment, but his attorney, Robert Warchola, said the offer is sincere.

"It's a bona fide, written offer to the city of Tampa," Warchola said. "If the city wants to accept the offer, they can accept it."

Don Bly, a Tampa attorney representing Wilkow, said he received a call from a lawyer for Kahana's group asking if they would sell the entire property.

"They said would you entertain an offer, and I said we would listen to any offer, but we're not doing anything until Thursday," he said.

That's when the City Council is scheduled to vote on the city's deal with Wilkow.

Wilkow bought Centro Ybor late last year from a German investment firm for about $13-million, enough to just about cover the $16-million first mortgage on the property.

The city, though, holds a $9-million second mortgage payable to the U.S. Department of Housing and Urban Development. To help pay that off, the city negotiated a deal with Wilkow for a $100,000 initial payment; $25,000 a year for six years; $35,000 a year for the next six years; and increasing payments for the following 15 years.

Kahana and Capitano say Iorio could have gotten a better deal, and Tampa's interest in the property may be worth more than city officials think.

Centro Ybor opened in 2001 amid hopes that it would jump-start redevelopment in Ybor City. City officials kicked in the HUD loan to make the $50-million project happen.

But Centro has been a money loser, and in 2004 the city stepped in to bail out developers by taking over payments on the HUD loan. That's costing taxpayers about $750,000 a year.

Kahana said if he owned the property, he'd be likely to redevelop the movie theaters with offices, which is what Wilkow has said it will do.

"Wilkow's making the right decisions," Kahana said.

Kahana said he expected to make money on Centro Ybor by turning it into a success, but his interest in the property goes beyond that.

"Speaking for Joe Capitano and myself, we've dedicated our lives to Ybor City," he said. "And that's the linchpin property in Ybor."

[Last modified August 29, 2007, 00:06:34]