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Former Channelside owner has right to match offer by Lightning owner Jeff Vinik

A bid is expected soon for the struggling 233,000-square-foot Channelside Bay Plaza, which recently lost three main tenants, including its movie theater anchor.

CAROLINA HIDALGO | Times

A bid is expected soon for the struggling 233,000-square-foot Channelside Bay Plaza, which recently lost three main tenants, including its movie theater anchor.

TAMPA — Efforts to secure a new owner to revitalize Channelside Bay Plaza could face a challenge from an unexpected party.

The former owner who defaulted on the center's $27 million bank loan has the right to match any proposal to purchase the property, according to terms of a court agreement that turned over Channelside to a receiver.

The 2010 order gives the Ashkenazy Acquisition Corp. 10 days after a proposal is submitted to exercise its right to buy back the center. It would have to match the offer, plus pay an extra $375,000.

A group led by Tampa Bay Lightning owner Jeff Vinik has been in negotiations for months to take over and revamp the struggling center, which recently lost three major tenants, including its movie theater anchor. The Tampa Port Authority, which owns the land under the center and serves as the landlord, has identified Vinik and his partners as the frontrunner, but no deal has been reached.

Charles Klug, interim port director, said Thursday that port officials have been working closely with Vinik's group on details of the proposal and that an agreement could be struck in the next week or two. The Ashkenazy group's right of refusal may have caused some delays and complications, he said, but it hasn't been insurmountable. Also written in the receivership settlement is a clause that gives the port authority board the right to refuse any buyer, including Ashkenazy, the New York real estate firm that bought the 233,000-square-foot complex in 2006.

"Based on the history that he has, it's not likely the port board would approve it, but that's a decision that the board would have to make," Klug said.

The first right of refusal clause was negotiated between Ashkenazy and the Anglo Irish Bank, which took back the property after Ashkenazy fell behind on payments. The Port Authority agreed in 2010 to waive the $438,175 owed in rent, late charges and other fees.

Vinik officials have refused to comment about the proposal and would not elaborate on how the right of first refusal clause has affected negotiations. Bill Wickett, a Lightning spokesman speaking on behalf of Vinik, said they remained committed to the project.

"Understanding that deals of this magnitude take time and patience because of any number of points that may need to be addressed, we're happy to work methodically and diligently to find the right solutions for Channelside," he said in a written statement.

Giving a delinquent owner the option to buy back a property isn't unusual in complicated commercial real estate transactions involving a lot of money, experts say. It can give defaulted owners a chance to regain their financial strength and reinvest in the property, said Darryl C. Wilson, a professor at Stetson University College of Law who specializes in real estate. It also could help lenders avoid costly and lengthy court battles.

"Right of first refusal clauses are very common," he said. "They are giving the people who originally had it and lost it one last chance to make a bid on it. Whatever happened was unforeseen, and they may want the chance to recover from that situation. They still care."

However, original owners seldom get the property back, he said. Without knowing the specifics of the Channelside case, he expects the former owner would have to prove its financial ability to retake the center.

Port Commissioner Steve Swindal said he was not familiar with the right of first refusal clause in the receivership settlement. But if it interferes with Vinik's plans to takeover Channelside, then he'll favor going to court to remove the Ashkenazy group from the equation.

"We've had this thorn in our side for such a long period of time," he said. "It's time to bring it to a head, and that's what the court system is for."

Emails sent to Ashkenazy Acquisition Corp. were not returned. Its portfolio includes several malls and notable properties nationwide, including Boston's Faneuil Hall and several addresses on New York City's tony Madison Avenue.

Times staff writer Jamal Thalji contributed to this report.

Former Channelside owner has right to match offer by Lightning owner Jeff Vinik 09/27/12 [Last modified: Friday, September 28, 2012 9:09am]
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