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Vlass and Temple Terrace appear headed to divorce court

TEMPLE TERRACE — Having failed to figure out how to stay together or amicably part, it appears that the city of Temple Terrace and the developer of its ambitious downtown project — locked in a contentious, four-year business marriage — are headed to divorce court.

Meanwhile, Temple Terrace's 88-year dream of having a true downtown, a bustling enclave of businesses, restaurants, residences and a cultural center, seems far from coming true.

Vlass Temple Terrace, the developer, sent a letter to Mayor Frank Chillura and the City Council accusing the city of breach of contract on the $160 million Downtown Temple Terrace project and declaring that the city has lost its right to get back the property it gave to Vlass to build the center.

The Dec. 9 letter offered to sell the city the 22 acres of undeveloped property in the 29-acre tract for $3,885,000, and gave the city 60 days to agree to it or Vlass "will pursue its other options.''

In response, the City Council on Tuesday directed city attorney Mark Connolly to write a letter asking the company to give back the 22 acres and to detail its expenses in working on part of the undeveloped property. The project stretches along the east side of 56th Street from Bullard Parkway to the Hillsborough River.

Connolly had written to Vlass in May stating that the company was in violation of the contract by not building the cultural arts center and another building in a timely manner. This week, the council directed Connolly to investigate any other claims the city should bring against Vlass.

Chillura expressed disappointment, saying the project is critical to the city's future and that he, Connolly and City Manager Gerald Seeber — the negotiating team — worked diligently in attempt to make it happen.

"I felt that we had made some good progress,'' he said.

Council member Grant Rimbey said he thought the city "bent over backward trying to compromise, and probably compromise too much for my tastes. So I'm ready to move on. And I wholeheartedly accept the motion'' to have Connolly send the letter.

The undeveloped property Vlass wants to sell to the city is to the north and south of the developed central section, site of the Sweetbay Supermarket and adjacent stores. Under the original agreement, the central section has been completed and therefore Vlass owns it outright. The contract states that the unfinished property is to be returned to the city after the city reimburses Vlass for money it has spent on it.

The project has been stalled for more than two years as the city and Vlass disputed numerous issues. A key disagreement centered on the proposed apartment buildings at the northeast corner of the property. The city wanted retail on the first floor, a plan that Vlass argued would not succeed in the depressed economy.

The Vlass letter, signed by attorney Charlie L. Siemon of the GrayRobinson firm, states that the city violated the contract by failing to use "reasonable discretion'' in the face of a changing economy to approve changes Vlass said were necessary to ensure a successful development.

But in an interview during a break in City Council action, Connolly, noting that the economy was already tanking by June 30, 2009, when the contract was signed, questioned why Vlass agreed at that time to build the mixed-use buildings according to the city's wishes.

Vlass charged that the city's "notorious breach of its obligations … has had a chilling effect on potential co-developers, potential tenants and the local real estate market and community.''

Philip Morgan can be reached at pmorgan@tampabay.com or (813) 226-3435.

Vlass and Temple Terrace appear headed to divorce court 12/18/13 [Last modified: Wednesday, December 18, 2013 2:44pm]

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