Mall's leases were roundly criticized
By SYDNEY P. FREEDBERG
© St. Petersburg Times,
You should find bargains at International Plaza. Its developers certainly did.
Critics have long complained that the Hillsborough County Aviation Authority leased the land to the mall's developers at bargain-basement prices, short-changing the airport and its customers out of millions of dollars each year.
Last year, Taxpayers for Common Sense, a Washington, D.C., budget watchdog group, gave the Federal Aviation Administration a Golden Fleece Award for accepting what it calls a sweetheart deal.
The mall is the brainchild of Richard Corbett, a Harvard Business School graduate who came to Tampa Bay from New York in 1978 looking for real estate challenges.
In an interview last year, Corbett said that he quickly realized the great potential for the triangular tract of land on the southeastern edge of the airport. In 1979, a Corbett partnership paid more than $4-million to acquire the leases on the tract from home building tycoon Jim Walter, who operated a motel and golf course on the site.
Corbett also began hiring a slew of politically connected advisers and cultivating Tampa's movers and shakers, including George Bean, then the airport's executive director.
In 1982, Bean gave Corbett an idea. He pitched a plan -- which Corbett embraced -- to raze the motel and golf course and turn the land into a trade center, with a new hotel, conference center, offices and shops to encourage international travel.
Corbett called the proposed development International Plaza. The corporate papers originally listed just one officer: Stella Ferguson Thayer, a pillar of the Tampa establishment whom Corbett had hired to be his lawyer.
The International Plaza deal, which breezed through the Aviation Authority board in 1982, called for, among other things, stretching Corbett's lease from 40 to 75 years. That essentially locked out airlines and any other business from bidding on the property.
The deal only got sweeter. In 1985, the aviation board whisked through a new contract guaranteeing generous rent terms, including what would amount to a $1.4-million discount on future rent. It provided just a small rent increase: 5 percent every decade, not nearly enough to keep pace with inflation. And it extended the lease for 23 more years, for a total of 95 years, until 2080.
To help handle the detail work, Corbett hired John Eggert in 1986. Eggert is the son of Stewart C. Eggert, whose law firm had handled much of the airport's legal work at TIA since the 1960s.
Years went by, and the promised trade center complex never came. Aviation board members grew increasingly frustrated.
Each time they asked in private about Corbett, Stu Eggert told them they couldn't cancel the lease without facing a costly lawsuit, according to former Tampa Mayor Sandy Freedman, an airport board member from 1986-1995.
Eventually, Corbett began exploring a new option for the land: a shopping mall.
There was a hitch, however. No private lender would finance such an expensive project because of post-World War II deeds saying the federal portion of the land had to be used for "public airport purposes." A shopping mall hardly seemed like a public purpose.
Bean and Stu Eggert interceded for Corbett, however, and the FAA agreed to amend the deeds to permit a mall.
Then Stella Thayer was appointed to the aviation board in 1993 by then-Gov. Lawton Chiles. Her law firm represented Corbett in 1994, when, 15 years after he acquired the leases to the airport land, he hit the jackpot. He signed a private agreement giving A. Alfred Taubman, the Michigan shopping mall magnate, exclusive rights to build International Plaza.
With virtually no discussion, the aviation board authorized yet another new lease for the mall, and the good deal got even better. (Thayer abstained from the vote.)
As important as the airport tract had become, its exact worth was a mystery. The Aviation Authority hadn't done an appraisal in more than 20 years.
That changed in 1996, when Corbett hired Charles L. Knight, a veteran appraiser and Tampa political insider. Knight concluded that Corbett was paying too much rent, an opinion he based on an appraisal of the 155.95 acres at $2,925,000, or $18,750 an acre.
A week before Knight gave that appraisal, he did an appraisal of 65.7 nearby acres and reported a value of at least $22,675,000, or $345,129 an acre.
Even so, aviation board members took up a request by Corbett, who maintained that he was paying too much rent. Based on the Knight appraisal, they dropped Corbett's minimum rent provision, meaning his rent fell that year from about $800,000 to $200,000.
In September 1998, the aviation board approved new, generous leases for the developers, paving the way for the mall, a hotel and office buildings on the 156 acres.
The owners of the nearby West Shore Plaza, about a mile away, cried foul. They said the International Plaza deal was rife with politics and the airport would be out $500-million over the 80-year life of the leases.
Despite the criticism, the FAA blessed the transaction.
Last year, the St. Petersburg Times hired appraiser William P. Pardue of Orlando to review Knight's appraisal. Pardue concluded that Knight had drastically undervalued the land. Pardue also said that the developers' lease with the airport is "so disadvantageous to the Hillsborough County Aviation Authority as to be characterized as "rotten.' "
As criticism of the mall deal mounted, airport officials renegotiated it in June. The revised agreement will generate an additional $58-million in revenue for the airport through 2080.
Louis Miller, who took over for Bean as the airport's executive director in 1996, said he moved to renegotiate the leases because he didn't want accusations of impropriety and additional federal investigations popping up again and again.
But critics contend the new leases still will shortchange the airport.
"The decision was a good start, but we still believe that airport taxpayers and travelers are being ripped off," said Keith Ashdown, spokesman for Taxpayers for Common Sense.
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