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Liberty challenges Lightning owner Jeff Vinik's winning Channelside bid

Liberty Channelside LLC has accused the top players in last week’s auction of colluding to hand Channelside Bay Plaza over to the winning bidder, Lightning owner Jeff Vinik.

Times (2013)

Liberty Channelside LLC has accused the top players in last week’s auction of colluding to hand Channelside Bay Plaza over to the winning bidder, Lightning owner Jeff Vinik.

TAMPA — Liberty Channelside LLC continued its court battle for Channelside Bay Plaza on Tuesday, accusing the top players in last week's auction of colluding to hand the plaza over to the winning bidder, Tampa Bay Lightning owner Jeff Vinik.

Liberty is trying to scuttle Vinik's winning bid while also proposing a new deal to the judge overseeing the Channelside auction: Liberty offered $10 million for the fading downtown Tampa mall.

Liberty will present its case to U.S. Bankruptcy Judge Christopher Sontchi on Tuesday. The judge is handling the liquidation of Channelside's owner, the Irish Bank Resolution Corp., and still has to approve Vinik's winning bid.

Even before the auction started, Liberty indicated that it would challenge the result. Liberty attended the auction in New York but didn't make a bid. It made the $10 million offer in Tuesday's court filing.

Instead, Liberty stood by while Vinik's new company, CBP Development LLC, won with an opening bid of $7.1 million.

The Lightning owner's bid was declared the "highest and best" bid by the auctioneer. He won the bidding and demonstrated the ability to turn Channelside around. He presented a $10 million letter of credit to the IBRC's liquidators to guarantee that he would rehabilitate Channelside.

Vinik seemed to be the frontrunner entering the auction. Days beforehand, he won the endorsement of Tampa Port Authority, which owns the Channelside land and asserts the right to approve any sale of the building above it.

But those are the parties — the Vinik group, IBRC's liquidators, and the Tampa Port Authority — that Liberty accused of "apparent collusion" that has "tainted the integrity of the auction process." In short, Liberty said the auction was rigged to favor Vinik.

Liberty attorneys complained that their actions "chilled the market for all potential bidders."

The IBRC's liquidators filed court documents on Tuesday asking the judge to keep Liberty from interfering with the auction. They said Liberty's arguments were "another waste of judicial resources and an abuse of the bankruptcy process."

A spokesman for Vinik declined to comment.

The Tampa Port Authority did not address Liberty's allegations.

"We look forward to working with the bankruptcy court and the IBRC and now the Vinik group, CBP Development LLC, in finding the best resolution for what's in the best interest of the community," said port spokesman Ed Miyagishima.

Liberty's attorneys told the court that they found digital evidence that the Vinik ownership group traded "at least" five drafts of contracts with the IBRC's liquidators before the auction.

Liberty also accused the Tampa Port Authority, which was the only other bidder in last week's auction, of scaring off any other suitors who might have competed with Vinik.

Two days before last week's auction, the board voted to spend up to $15 million to buy the Channelside mortgage. But the board only ended up submitting a bid of $3.5 million, and that was just for the Channelside loan. Vinik's winning bid was for the Channelside building.

Liberty argued that the board's endorsement of Vinik and its auction ceiling of $15 million were meant to keep other bidders from joining in.

"The obvious intent of this approval was to prevent Liberty, the only other qualified bidder, from winning the Auction in any form, effectively chilling all potential competition for Vinik and Port," the motion said. "The motivation for Liberty, or any other non-Vinik or Port bidder to bid beyond $10,000,000, $11,000,000, or even a dollar more than $7,100,000 was eliminated."

Liberty also said that the Tampa Port Authority had a report prepared assessing Channelside's deficiencies that inflated the actual repair costs to around $7.6 million, scaring off prospective buyers.

The report contains "items that are not items truly in need of immediate repair," according to Liberty, and that Channelside's "safety risk are heavily inflated in both magnitude and cost."

Vinik has been eyeing Channelside since 2012. He already owns the Lightning, the lease to the Tampa Bay Times Forum and 23 acres, all in the same Channel District neighborhood. Acquiring Channelside would help shore up his downtown Tampa empire.

Contact Jamal Thalji at [email protected] or (813) 226-3404. Follow @jthalji.

Liberty challenges Lightning owner Jeff Vinik's winning Channelside bid 07/08/14 [Last modified: Tuesday, July 8, 2014 11:06pm]
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