Print

Email story

Comment

Letter to the editor

Patel project now all-hotel

Slow sales led to the Clearwater Beach project dropping condominiums.

By MIKE DONILA, Times Staff Writer
Published October 26, 2007

ADVERTISEMENT [Kathleen Flynn | Times] Dr. Kiran Patel is working out an agreement with an experienced developer to create a partnership.

The owners of a long-stalled Clearwater Beach resort and condominium development say they will redesign the project and are looking to a major Miami-based builder for help.

Tampa entrepreneur and philanthropist Dr. Kiran Patel and the Related Group are negotiating a partnership that would change the scope of the $250-million Kiran Grand Resort and Spa.

"The condominiums are out," Patel said Thursday. "It's too fluid a situation with them."

In their place, he said, "we're going more toward a transient-hotel type of development."

The partnership would then begin construction on the high-rise, which the city approved several years ago.

"We hope to have a deal signed in the next few weeks," Eric Fordin, senior project director for the Related Group, wrote in an e-mail to the Times.

Fordin said the South Florida developer would be the general partner and that the project, located just south of the beach roundabout, would become more focused on providing overnight accommodations.

Original plans were for a resort 150 feet tall and 500 feet across with 350 condo-hotel units and 75 condominiums. The new project would consist of a 250-room hotel with 200 timeshares, according to Fordin.

The possible partnership and change in direction is the latest sign of the sharp drop in demand for condominiums on Clearwater Beach.

Developers of another major project, the Indigo Beach Residences & Suites on the site of the former Adam's Mark Hotel, pulled the plug in late April on their $180-million project and refunded deposits to buyers because of slow sales.

But the change could be good news for the beach.

During the past five years, thousands of hotel rooms have been gobbled up to make way for big condo projects. But such developments in the past couple of years have been a mixed bag along the beach as condo sales have slowed to a crawl. More than 800 condominiums remain on the market.

Developers have long blamed the slowdown on the national downturn in the real estate market, coupled with Florida's skyrocketing taxes and insurance rates.

City officials do not see a problem in the changes being discussed for the Kiran Grand.

"We want to see this project done...and as a city our focus is now on overnight accommodations," Mayor Frank Hibbard said. "If another condo doesn't get built on Clearwater Beach, that's probably okay."

Patel bought his property in September 2004 for about $40-million, making it one of the most expensive acquisitions in Pinellas County history and the priciest on Clearwater Beach.

The development, which will include a fitness center, spa and vaulted ceilings, will replace four small hotels and motels where S Gulfview Boulevard splits with Coronado Drive.

The city recently has been leasing part of the almost 3-acre area for parking.

Builders hoped to get the project off the ground more than a year ago, but poor sales thwarted their efforts. Patel's partner, Kirit Shah, said they refunded deposits on the few units that were reserved and added that "I'm hopeful by March or June 2008 we will probably be into ground-breaking."

Patel did clear a major hurdle in April when his bank issued a $3-million letter of intent to the city. The funds were targeted for the city's BeachWalk project. If the payment wasn't made, builders would have been required to start construction by next April, or, if they didn't, scale down their project.

The payment was part of a development agreement between the city and Patel and allowed Patel to build more residences than normally would be allowed.

Patel said he's talked to a number of groups in the past six or so months about partnering with him. A novice developer, he said he didn't believe he needed a partner when the market was hot and banks required a lower threshold of sales before providing the necessary financing.

Now, though, he said he's turning for help to the Related Group, which has built and managed more than 55,000 residential units throughout Florida and is the developer of the Trump Towers in Miami.

"They have the experience and expertise to add to what we have," said Patel, a Tampa-based cardiologist and health care entrepreneur. "This will be a marriage of the real estate we own - that prime location - and their experience."

He said the two sides are still talking but declined to discuss specifics of the possible partnership, saying they're still being hammered out. But, he said, they expect to eventually build a four or five-star resort.

"There will be a transformation of the landscape," Patel said. "We'll come up with a project that's viable."

Related Group officials said they want to get on-board because the city, with its $30-million BeachWalk initiative, appears committed to revitalizing Clearwater Beach.

"It lends itself to ideal development opportunities in the future," Fordin wrote.

Mike Donila can be reached at mdonila@sptimes.com or (727) 445-4160.

Fast facts

The Related Group

- Builds luxury condominiums and other multifamily real estate developments.

- Established in 1979; privately held. Founded by chairman and CEO Jorge M. Perez.

- Says it has built and managed more than 55,000 condominiums and apartments in major markets throughout Florida.

- Claims a development portfolio with projects valued in excess of $10-billion, with reported revenue of more than $1.4-billion for 2006.

- Major projects in Miami, Atlanta, Tampa, Orlando, Argentina, Colombia and Mexico.

- Time magazine named Perez one of the 25 most influential Hispanics in America in 2005.

- On the Web: www.relatedgroup.com.

Sources: the Related Group, Times wires. Compiled by Times researcher Angie Drobnic Holan.

[Last modified October 25, 2007, 22:10:17]