BayWalk complex posts 'For Sale' sign
No asking price is listed for the popular center that helped revive downtown St. Petersburg.
By PAUL SWIDER and MARK ALBRIGHT, Times Staff Writers
Published November 2, 2007
ST. PETERSBURG - BayWalk, the popular entertainment and retail complex that helped spark a downtown renaissance, is on the market.
"We're in the business of developing, investing and selling assets," said Craig Sher, CEO of Sembler, which developed the $40-million complex in 2000.
Included in the package deal are the rights to 36,000 square feet of retail space in the garage complex on First Avenue N between First and Second streets.
Baywalk's 150,000 square feet, including the 80,000-square-foot movie theater owned by Muvico, is one block north. Sher would not reveal an asking price.
The complex of restaurants, bars and retail stores that attracts 3-million to 4-million visitors a year was an early step in the remaking of downtown. Before BayWalk opened in 2000, downtown emptied at dusk and the closest movie theater was miles away. Today the area around BayWalk is often a congested hub of commercial activity.
Sher said that BayWalk and the Mid Core garage nearby are almost completely leased and operating profitably, but that in examining the company's portfolio, executives decided the assets could fetch attractive prices to fund other projects.
He said Sembler has been steadily growing its assets and now manages about 60 properties in the United States and Puerto Rico.
"We're proud of our BayWalk legacy," Sher said, adding that other factors also contributed to reviving downtown. "It's still a central meeting place and public forum. It hasn't been without its issues, but that's a measure of its success."
Antiwar activists staged protests there two years ago, stirring debates over rights of free speech on private property. BayWalk is also a magnet for teenagers, whose sometimes unruly behavior has disturbed some visitors.
"The good news is there's lots of teenagers down there," Sher said. "The bad news is there's lots of teenagers down there."
Mayor Rick Baker said BayWalk made much of the rest of downtown's redevelopment possible by encouraging residents to "go downtown for no reason."
"You generally didn't go downtown unless there was something you had to do," he said. "Now people say, 'Let's go downtown and just see what's going on.'"
When BayWalk opened, Sembler also partnered in building the $50-million Centro Ybor, a similarly designed project in Tampa's Ybor City. Failing to achieve the success of BayWalk there, the company sold its interests last year. Tampa's Channelside also opened in the same period but, like Centro Ybor, it sold, half-empty, at distress sale prices.
Developers like Sembler specialize in building retail space and later selling the space to institutional investors looking for predictable returns from fully leased, stabilized properties.
Local real estate experts doubt Sembler will have trouble finding interested buyers. Despite the recession in the residential real estate market, retail and most types of commercial property remain hot.
The BayWalk land was originally part of a larger, more complicated $200-million deal to redevelop downtown. The Bay Plaza venture aimed to create a core retail center amid eight blocks of development. BayWalk now sits on what was originally to be one of Bay Plaza's parking garages. But the Bay Plaza deal proved too complex. When it collapsed in 1995, Sembler and partners stepped in.
"We didn't think we were going to make a lot of money on this," said Fred Bullard, who bought some of the Bay Plaza land when its developer, Kansas City-based J.C. Nichols, quit the deal. "We did it because we thought it would be good for the city."
The city had consolidated property to make the Bay Plaza deal happen and gave the land to Sembler in exchange for a $1.45-million mortgage, said city attorney John Wolfe. The conditions of the mortgage would require repayment only if Sembler made a windfall on any subsequent sale. That condition was an incentive for development. The city does not expect to be repaid.
"It was designed against them making a tremendous profit," Wolfe said. "I told the City Council at the time that we'd never see that money. But that's what redevelopment projects do. That's why you give an incentive. And it worked."
The city also promised to build the $12-million Mid Core garage and grant Sembler a 20-year lease to manage the retail space on the ground floor. The city had already sunk about $25-million into the Bay Plaza assemblage and related amenities, and there were many skeptics when BayWalk was proposed.
"Plenty of people point fingers when something doesn't work, but what is failure?" asked Baker, who was chairman of the St. Petersburg Area Chamber of Commerce when the BayWalk deal came together. "In city building, sometimes you look stupid for 10 years and then you look brilliant."
When it opened in 2000, BayWalk was among the first of a new style of urban entertainment-lifestyle shopping centers to open in Florida. Typically such projects put casual restaurants, flashy megaplex movie theaters, a few upscale apparel chains and tourist gift shops under one roof in a comfortable pedestrian-oriented atmosphere.
"It's become the town center," Baker said.
Sembler Co. was adeveloper of Centro Ybor, which has been a money-loser almost since its 2000 opening. Sembler walked away in 2004, and the city of Tampa took over payments of a federal loan. Remaining owner BVT sold to M&J Wilkow of Chicago last year. Plans are to turn some movie theaters into offices.
Channelside, the 4.5-acre complex next to the Tampa cruise ship port, opened in 2001 after delays. Many of the storefronts remained empty for years until the residential area around the complex took off. In 2005, New York City real estate dealmaker Ben Ashkenazy bought it. The Tampa Port Authority owns the land.
Aug. 30, 1999: The city of St. Petersburg and BayWalk developers reach an agreement to build a new retail and entertainment complex downtown.
Nov. 17, 2000: BayWalk opens.
Sept. 13, 2003: 12 people are injured and six people are taken to the hospital when at least 500 people chase $2 bills being thrown in the air by "Money Man."
Jan. 7, 2005: Sixty police officers swarm the courtyard to break up a brawl between dozens of teens and adults. Seven adults and seven juveniles are arrested.
July 15, 2005: Officials erect barricades to control sidewalk traffic. Antiwar demonstrators who have been holding forth for more than two years claim they are being pushed out.
Aug. 6, 2005: Police arrest six antiwar protesters, three of them juveniles, the first is a 13-year-old on a charge of obstructing a city sidewalk.
Aug. 27, 2005: Barricades are removed and instead officers are deployed to help pedestrian flow.
Feb. 23, 2007: A music speaker falls 20 feet from the second floor balcony onto the head of 3-year-old Josiah Wineberger. Live entertainment is temporarily canceled at the complex. The boy is still recovering.