Sunday, May 27, 2018
Business

Tampa Port Authority votes to enter auction to buy Channelside

TAMPA — The Tampa Port Authority voted Tuesday to enter the Channelside Bay Plaza auction and try to buy the failing downtown icon once again.

The port's governing board also signaled that it is willing to pay more than the $5.75 million that it offered for the complex last year.

It's the latest move in the port's nine-month quest to take control of downtown Tampa's outdoor mall. The complex's uncertain ownership has left it nearly empty and struggling to attract businesses and customers.

Reviving Channelside is considered key to developing the downtown Channel District. But the port wants to buy Channelside so that it can pick the developer who will do the job.

Last year the port voted to buy the mortgage on the foreclosed Channelside building for $5.75 million. But a former Channelside suitor sued to kill the port's deal and won. That rival, Liberty Channelside LLC, also told the judge it was willing to pay $7 million for the complex.

In February, a judge dismissed the port's $5.75 million offer and told the Irish bank that owns the building to get a better offer. That's why Channelside is now up for auction.

The auction is set to be held July 2, but the process has been shrouded in secrecy. Bidders must sign confidentiality agreements, which port officials said Tuesday prevented them from saying too much about their bid.

The only two bidders to be revealed publicly are Liberty's real estate investors and the Tampa Port Authority.

"I can't talk about strategy," said port chairman Stephen Swindal.

The board voted Tuesday to set the port's opening bid at $5.75 million — the same price that failed to sway the judge four months ago. But then Hillsborough County Commissioner Sandra Murman, who has a seat on the port board, made a motion authorizing Swindal to take whatever action is needed to acquire Channelside. The board passed it unanimously.

"We just want to give him the authority to do what's necessary," she said.

That includes the power to bid more than $5.75 million, but she said Swindal wouldn't be able to raise the port's bid without emergency approval from the board.

"If they see that it's going to take a higher bid," Murman said, "we could convene quickly down here to approve something."

Murman, though, could not say how much more the Tampa Port Authority, a public agency, might have to bid for Channelside, or how much more it should bid.

Will $5.75 million be enough for the port to win the auction?

"We'll see," said the port's top attorney, Charles Klug.

Port officials believe they have some advantages over other bidders in the auction. The port owns the land beneath Channelside and has long asserted veto power over anyone who wants to buy the complex. Liberty, however, is challenging the port's veto power in court.

Liberty's attorneys have also filed documents in court indicating that they intend to challenge the rules of the auction itself.

Channelside is a distressed asset of the Irish Bank Resolution Corp., which took over the Irish bank that foreclosed on the property in 2010. When the IBRC sought bankruptcy protection for its U.S. assets in August 2013, that put Channelside under the jurisdiction of a bankruptcy judge in Delaware. The IBRC, the Tampa Port Authority and Liberty have been in court fighting for control of Channelside ever since.

The "special liquidators" selling off the IBRC's distressed assets said in court filings last week that they could ask a judge to approve the terms of the auction this week. They also asserted that they have "received multiple binding and irrevocable bids" for Channelside.

But almost as important as the July 2 auction is the July 15 court hearing that will follow. That's when the judge will consider the winning bid, the auction's losers can challenge the winner, and when Liberty plans to argue against the validity of the auction itself.

Jamal Thalji can be reached at [email protected] or (813) 226-3404. Follow him on Twitter @jthalji.

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