From pie in sky to castles on the sand
By CHRISTINA HEADRICK
© St. Petersburg Times, published December 13, 2000
CLEARWATER -- When Clearwater attorney Tim Johnson first made his pitch for a Connecticut developer's beach project, he might as well have asked for the moon, some city officials said.
A few weeks later, Johnson is definitely back to earth.
Gone is Johnson's request for the city to condemn some private property to make way for a sweeping multimillion-dollar redevelopment of the beach along East Shore Drive.
Gone are the demands for David Mack to be the city's exclusive developer for a major resort hotel, cutting out other competing developers on the beach.
And gone is a request to have the city pay about $90-million over 30 years to lease a massive parking garage it wouldn't ever own.
There's a somewhat cheaper garage financing scheme now, and Mack's proposal is clearly focused on developing several hundred condominiums, as well as a smaller hotel and a new shopping plaza, all on land that he has contracts to buy.
The metamorphosis is an example of how much three developers are changing their proposals for the beach. And now there's a chance that all of them might complete projects there -- as opposed to just one of them.
Local hotelier Tony Markopoulos said he is looking forward to unveiling renderings of his project for the commission . He said he has redesigned and shrunk the size of his proposed hotel to address some city concerns.
Meanwhile, Clearwater attorney Bill Kimpton, who has put together a deal with Tampa developer Jae Heinberg to create a 250-room Marriott resort next door to Markopoulos' property, also says he is retooling his project.
Kimpton said he would consider allowing the cash-strapped city to avoid writing big checks to pay for the hotel's garage or street beautification nearby -- as previously proposed.
"We think it can be sliced any way they want it," Kimpton said.
Mayor Brian Aungst said he's optimistic that all of the plans are evolving in the right direction, and "there's a possibility we can work with all three of them."
Other commissioners are similarly upbeat -- although they have lots of unanswered questions.
"I hope all the plans will be able to work in symbiosis," Commissioner Bob Clark said. "I think that's a real possibility now."
Commissioners also will consider whether they want to endorse the city's overall plan for the beach, which includes projects like beautifying Gulfview Boulevard and expanding Coronado Drive -- and possibly imposing an assessment on beach residents to help pay for it.
Because the city has limited resources for beach redevelopment, City Planning Director Ralph Stone said, the developers are competing with one another for two things.
First, all the developers are vying for credits to build up to 400 more hotel rooms than currently allowed on the beach -- an incentive the city is considering to boost redevelopment.
Kimpton wants to build about 182 more hotel units than he is currently allowed, while Markopoulos wants about 243 more units and Mack wants as many as 200.
The other thing they're vying for is city funding.
The city has only $5.5-million officially budgeted now for beach projects like beautification, less than half of what the city needs for a major beach face-lift.
Kimpton and Mack also both have suggested the city could finance parking garages in their projects -- but the city may not be able to subsidize garages in both, Stone said.
Here's a look at the beach proposals in more detail:
A massive beach resort
Markopoulos, the owner of Clearwater Beach Days Inn and several adjacent old motels, has hired a design firm known for destination resorts, such as Atlantis in the Bahamas, to propose a 460-room resort on the Gulf of Mexico.
The $100-million resort would require streets around it to be reconfigured so it could sit where Gulfview Boulevard is now, giving guests direct beach access, according to plans released last week. Markopoulos also owns a parcel facing Clearwater Harbor, so a pedestrian overpass would be built over Coronado Drive to connect his properties.
A major plus for the city: His resort would have a 900-space garage with 400 spaces for the public built at no cost to Clearwater.
David Little, Markopoulos' real estate agent, who is also involved with the Clearwater Beach Chamber of Commerce, said he thinks Markopoulos' strength is that he owns the largest tract of property poised for a new resort. Also, Little said, Markopoulos is not asking the city for financial commitments.
But Markopoulos needs the city to give him a credit to build more hotel rooms than he is now allowed to build.
City commissioners' major problem with Markopoulos' proposal is its size. They have tried unsuccessfully to persuade Markopoulos to make his building more compact.
"It's 15 stories high and 500 feet long," said Stone, the city's top planner. "The rooms are single-loaded, on one side of a hallway, facing the gulf. It's clearly not consistent with some of our proposed design guidelines."
Another issue is that Markopoulos has yet to provide confirmation of his financing, reportedly from a Chicago-based investment company, and also show commitments from nationally known hotel chains to brand his resort. Commissioner Ed Hart said he wants more information.
Condos, garages and more
An even larger project, valued at several hundred million dollars, has been proposed by Mack, the Connecticut-based developer who owns a shopping center in Island Estates.
Mack's proposal involves two 700-space public parking garages: one to be built on the southern part of the beach and another in the north near Pelican Walk plaza.
The city would finance the garages by paying $6 per space for five years in rent -- about $7.6-million annually for each garage. Then the city would have to pay as much as $16-million after the first five years to buy each of the garages.
The developers would use the city's money from the garages to offset the risks that they are taking to buy as much as 19 acres of beach land for a host of projects, Johnson said.
But the garage proposal is a sticking point for some city officials.
"I don't think those numbers work for me," said Commissioner Clark.
Mack's proposal also calls for a two-story retail arcade with another private garage, a 140- to 160-room bayside hotel and two condominium complexes: one with 110 units and another with 400 where the Yacht Basin Apartments now sit. The developer has a pending contract to buy the apartments.
To squeeze all that development on land he is buying, Mack would have to transfer at least 100 credits to build more condominium units than are now allowed on his properties. He also is seeking credits from the city to build 200 more hotel rooms than are allowed on the land.
But unlike the other developers, Mack can scrap his requests for hotel room units, Johnson said. The extra hotel units are no sure thing, Johnson noted, since they require county approval. If the county doesn't bless the idea, the other two hotel deals are likely dead.
Yet, some city officials are concerned that Johnson is trying to squeeze too much development on the beach's bayfront.
Although Aungst says he could support beach high rises on the bay "if tastefully done," both Hart and Clark said they would have major concerns with more than 400 condo units on that area of the beach.
Overall, the commissioners said, they still want a bit more information on what Mack is proposing.
The Times obtained electronic records showing that Mack filed for Chapter 7 bankruptcy in 1994 as a result of problems with projects financed by banks which failed after a recession in the New England real estate market. The FDIC took over some of the banks and creditors demanded payments on outstanding loans, forcing Mack to seek bankruptcy protection, Mack said.
Mack says he lost a real estate portfolio valued at more than $500-million, but has since rebuilt himself with projects valued at $150-million. He insists that he still has good relationships with institutional investors, including a Connecticut company called Greenfield Partners, which will finance his proposed beach projects.
The city still has to scrutinize the background of any developer it does business with, said interim City Manager Bill Horne. Horne knew nothing about Mack's past financial problems Friday, although the city has been negotiating with the developer's team for weeks.
A Marriott resort, garage
Kimpton, the attorney who thought up the idea, said the deal is changing very rapidly as his development team negotiates with the city
He has suggested that the city might want to pay as much as $10.7-million to buy 600 spaces for the public in a 1,000-car parking garage hidden within the hotel project.
But Kimpton and his partners say now that they're willing to consider other options -- like building some or all of the "public" spaces with their own financing or scaling down the size of their project's garage.
The Marriott's developers may even help finance more than $4.6-million in proposed nearby street beautification work for the city, perhaps out of property taxes or parking garage revenues to be generated by their project.
Major concerns raised so far about the Marriott project are that the developers' proposed agreement with the city doesn't impose a timetable to create the resort they promise, said Aungst.
Also, Stone said, the city is examining whether it could afford to pay as much as requested for the proposed public spaces in the garage.
Another issue raised by Kimpton's rivals is whether the roughly 1.6-acre chunk of land he has for his resort is large enough to accommodate it.
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