Overcast69° FULL FORECASTOvercast69° FULL FORECAST
Make us your home page
Instagram

Channelside Bay Plaza to be renovated by best bidder

TAMPA — The highest bidder might not be the winner in Wednesday's auction for Channelside Bay Plaza.

The "best bid" will win the day, according to the auction rules.

The "best" bidder must also prove they have the money and means to rehabilitate the long-suffering outdoor mall. And it would help to have the blessing of the Tampa Port Authority, which has a say over who can buy it.

Only two bidders have been identified so far, and both could run afoul of those rules: Liberty Channelside LLC has already been rejected once by the port; the port itself wants to buy the mall but wants somebody else to spend the millions it would take to fix it.

There is, however, a potential bidder who has the resources and a plan to fix the mall, someone who is quite familiar with Channelside, someone with whom the Port Authority is already smitten.

His name is Jeff Vinik.

• • •

In 2010, Vinik bought the Tampa Bay Lightning and the lease to their home arena, the Tampa Bay Times Forum, for what is believed to be $110 million. Then, the former hedge fund manager spent millions more buying up land around the Times Forum in the Channel District.

In summer 2012, he set his sights on Channelside to add to his growing downtown empire. But in October 2012, he walked away from the deal when a legal complication was discovered. That was later resolved. But Vinik's name hasn't been linked to Channelside since.

There's no official word that Vinik will bid for Channelside at Wednesday's auction in New York. All the bidders had to sign confidentiality agreements. The Liberty and port bids only came to light through court records and public meetings, respectively.

A spokesman for Vinik declined to comment about his interest in Channelside.

However, Joel Cantor, the developer who built St. Petersburg's sail-shaped Signature Place condo tower, said the real estate rumor mill is buzzing with talk that Vinik will bid on Channelside. Vinik is already a force in downtown real estate, and he would make a formidable bidder as well, Cantor said.

"Oh yeah," Cantor said. "He's a player in the whole downtown."

Vinik certainly appears to have the means to turn Channelside around. Last year, his net worth was estimated to be about $500 million.

He is already poised to remake the Channel District. He and his partners now own 23 empty acres there. In May, they filed plans with the city to build a 400-room hotel on three acres he owns west of the Times Forum.

Were Vinik to make a play for Channelside this week, he would likely have the support of the Port Authority, which owns the land the complex was built on.

• • •

Before Vinik bowed out in 2012, the port board became enamored with his vision for a revived Channelside.

He wanted to turn it into a place for Lightning fans to eat, drink and shop, to hang out before and after games. It would be a local version of L.A. Live, the big development that brought hotels, condos and retail to the Staples Center, home of the Los Angeles Clippers, Lakers and Kings.

Vinik's version was dubbed "Tampa Live."

"I think, overall, it was just his experience and the possibilities of duplicating L.A. Live that made it very attractive," said Lawrence Shipp Jr., a former port board member who saw Vinik's proposals.

It has been 20 months since Vinik walked away from Channelside, yet it is no secret that the port still thinks of him fondly.

It would be ideal, board members believe, if Vinik were able to incorporate Channelside into his future development of the Channel District, especially the 20 acres across the street. That land has long been rumored as a potential site for a downtown baseball stadium. But it would be worth more if Vinik were to build condos, hotels, restaurants and shops there instead.

The Port Authority will hold a meeting Monday at 3 p.m. to hear proposals from potential Channelside bidders. It will give the public the opportunity to find out whether Vinik or any other developers are going to bid on Channelside.

Thomas McGeachy, managing principal of Ciminelli Real Estate Services, said Vinik would be a natural choice to remake the complex.

"Given his major stake downtown," McGeachy said, "I think most people would consider him the first name they would think of as having the wherewithal and financial ability and the vested interest to make something like that successful."

• • •

But Cantor said Vinik might be almost too much of a frontrunner.

There's a growing sense in developer circles, Cantor said, that Vinik is preordained to take over Channelside.

"He's an excellent candidate, but he shouldn't be the only candidate," Cantor said. "It's not really a competitive environment, even though they say it is."

However, it was a bankruptcy judge who ordered the Channelside auction. The Tampa complex is an asset of the Irish Bank Resolution Corp., which is being liquidated under the watch of U.S. Bankruptcy Judge Christopher Sontchi in Delaware.

"The bidding procedures are entirely fair and within the customary standards established by Delaware bankruptcy court," said attorney Van Durrer II, who is representing the IBRC's liquidators.

Those liquidators hired an outside firm, DJM Real Estate, to run an independent auction. DJM's compensation depends on how much it gets for Channelside. And the judge must still approve the winning bid at a July 15 hearing.

Liberty has indicated it will challenge the legality of the auction — assuming they don't win it. Liberty investors Santosh Govindaraju and Punit Shah were ready to pay $7 million for Channelside earlier this year, and their court filings say they have $50 million available to remake the complex.

But they've clashed with the port ever since their failed 2013 attempt to buy Channelside. Among the issues that divided them, the port said it was not satisfied that Liberty had the funds needed to refurbish the complex.

The Port Authority is prepared to bid $5.75 million, and the board has committed to raising that offer if need be. However, the port doesn't want to be responsible for turning Channelside around and certainly doesn't want to spend millions refurbishing it.

The port board said it wants to buy the complex so it can pick the developer who would renovate it. If the port won the auction, then it would be able to sign a deal with Vinik for him to develop Channelside.

The port's bid could also be a tactical move, to make sure that Liberty isn't the only bidder.

• • •

Cantor identified another issue that could scare off potential bidders: the Port Authority itself.

Whether they like or not, Channelside's new owners will need port approval for whatever they plan to do.

The port has rights over Channelside as the land owner and requires the owner of the building to run a "first-class" retail center. But its relationship with Channelside's old owner turned toxic, and a bankruptcy judge admonished the port for the way it scuttled Liberty's attempt to buy the complex last year.

"I've spoken to several big-time developers around the region and they say they would not want to do business with the Port Authority," he said, "because of the way they've conducted themselves in the past."

McGeachy was more concerned that bidders might stay away from the Channelside auction because of the property's long, tangled history of legal, financial and ownership woes.

"You've got the bank, you've got the port, you've got the court," he said. "It's crazy, and it's a shame because downtown is really coming around. It's becoming more of a live, work and play environment.

"Downtown is really going to blossom and it would be nice for the uncertainties to disappear, for someone to take the reins and do something with the property."

Contact Jamal Thalji at thalji@tampabay.com or (813) 226-3404. Follow @jthalji.

Channelside Bay Plaza to be renovated by best bidder 06/27/14 [Last modified: Friday, June 27, 2014 6:30pm]
Photo reprints | Article reprints

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...