TARPON SPRINGS — Developers pitched Meres Crossing as a showcase development and "beautiful entranceway to historic downtown" before the economy soured in 2007 and the project eventually halted.
Now ready to start back up again after years of delays, developers have hit a new snag. They have lost their biggest tenant: Florida Hospital North Pinellas.
"The hospital, for a variety of reasons, has decided not to lease space in the proposed building," wrote Paul Hoover, hospital vice president of business development, in a recent letter to the city.
The decision has left Forge Capital Partners, the developers who took the project over from AG Armstrong, scrambling for a new lead tenant at the once-heralded Meres Crossing/retail project at the southeast corner of Alt. U.S. 19 and Meres Boulevard.
Developers need to lease at least 50 percent of the building to get financing to build the project, which, until recently, was set to be anchored by a medical office building.
Peter Collins, a co-founder of Forge Capital Partners, called the hospital's decision "a blow."
"The hospital was a key part of our plan from the beginning, and we had a commitment from them," Collins said. "We have every intent of moving forward with a development, but now we'll have to shift and focus on finding a different lead tenant."
Why a deal fell through after years of negotiations depends on whom you ask.
Hoover said developers were asking the hospital to lease more space at a higher rent than was originally agreed. The price of construction has increased in recent years and the hospital now has a new operator.
"At the present time, the economic conditions set forth by the developer are not a wise business decision," said Hoover. He added patients would be better served by that money going toward hospital improvements.
Also involved in the hand-wringing are city officials, who sold two pieces of public land beside the hospital to AG Armstrong in 2007 hoping the project would inject new life into downtown and expand the tax base.
A Sweetbay Supermarket was built in 2009 and other small retail outlets followed. Developers recently signed a 10-year lease for a Dunkin' Donuts.
But that falls far short of the original plan to build a 16-acre medical, retail and residential complex with condos and an assisted living facility, City Manager Mark LeCouris said.
"There is supposed to be a long list of amenities," he said. "A lot more than just a Sweetbay."
In 2008, 77 percent of city voters approved two referendums modifying the lease of the city-owned property to the hospital, making land just north of the facility available for the medical arts building and a parking garage. Hospital officials urged residents to vote yes, saying the medical arts building would provide jobs and was essential for recruiting new doctors.
The next phase of the Meres Crossing project will trigger construction of the Meres Extension connecting Alt. U.S. 19 and U.S. 19. As a part of the development agreement, Forge Capital Partners is responsible for building the road, which would ease traffic and open business opportunities near downtown, LeCouris said.
City staff has been concerned about the project for months now, he said, and has made multiple failed attempts to arrange a meeting with Forge Capital Partners and the hospital.
In the meantime, he said, residents pepper him with questions about when and if the project is going to get moving.
About eight months ago, the project had a false start when Forge Capital Partners prepared to build on the site, smoothing out the land and filling in some of the low-grade wetlands.
The project stalled when the hospital balked and the developers couldn't fill the building space, Collins said.
Brittany Alana Davis can be reached at [email protected] or (727) 445-4155. To write a letter to the editor, visit tampabay.com/letters.