Clearwater condo projects follow trend of slashing prices to sell units

CLEARWATER

In a glossy, glitzy booklet touting the Station Square condominiums, under the heading of "Feed Your Soul," the "resort lifestyle" is said to be nothing short of a dream. Expansive, elegant, granite-countered condos. Vistas of the beaches and a heated pool and spa. The downtown tower is said to hold "ideal havens in which to unwind." "Florida-style living," it says, "at a surprisingly affordable price."

To promote Station Square's upcoming auction, scheduled for Saturday at a Sand Key resort, brokers circulated the booklets announcing 25 condos up for grabs. Million-dollar penthouses out to bid for a quarter of the price. A one-bedroom condo chopped to the cost of $50,000.

On one page, three chic women in sundresses toast their own fortune.

What a life! What a deal!

What a crock.

The downtown condo landscape remains a disaster zone. Towers on the market for years remain hollow and struggling to survive.

The $50 million Station Square tower, on a sparse stretch of Cleveland Street, has sold a quarter of its open condos. Only seven are listed as primary homes. The upcoming auction may mean a way to stay afloat.

Developers suggest the market is resurgent, and there are reasons to believe that's true. Struggling condos in Tampa and St. Petersburg have seen sparks of renewed interest. Budget-conscious buyers once priced out of the market are now finding ways to move in.

But a look at downtown Clearwater's luxury projects — the auction block for Station Square, the dark windows of Water's Edge at night, the unfinished concrete hulk of The Strand ­— show the local condo market has a long way to go.

The dream, it seems, is easier said than sold.

In 2005, developers announced plans for downtown's tallest building: a $100 million condo tower on waterfront land once owned by Calvary Baptist Church. City leaders praised the Water's Edge plan as the cornerstone of a new downtown.

Further inland along Cleveland Street, other developers bit by the condo bug were busy at work. A proposal for Station Square was approved in 2004, targeted toward urban professionals. An office building called Clearwater Centre, later marketed as The Strand, was stripped for condos and a $45 million makeover.

"We've never had this much development occurring at once," commercial developer Alan Bomstein told the Times in 2007. "With the synergy out there now, you can't say it's just one fool building one building. No, it's unlikely we have three or four fools out there with the way the work is progressing."

Then two not-so-little things happened: 1) beach-bound visitors were rerouted onto the new Memorial Causeway Bridge, bypassing downtown, and 2) the housing market plummeted, making many question the value of luxuries like in-tower steam rooms.

This hit especially hard at Water's Edge. In early 2008, the tower held down payments for three-fourths of its condos. Cue disaster: Lawyers voided the contracts after finding they didn't comply with federal law, allowing buyers to recoup their deposits and walk away ­— which they did, en masse. In the six months after the tower's ribbon cutting, only 10 condos sold.

The developer filed for bankruptcy, handing over the $100 million project to Wachovia Bank, which bid $30 million. A California asset management firm run by Maxwell Drever, noted for recovering projects from the bottom of the barrel, closed on the tower last summer.

One of the firm's first moves: chopping prices for condos — including penthouses once selling for $1.7 million — in half.

• • •

In 2008, Ulker and Guneri Mutlu, a retired Turkish couple sick of traffic on Clearwater Beach, paid about $850,000 for a three-bedroom condo on the 10th floor of Water's Edge.

They were among the first to move in. The tower's 25 floors were mostly empty. "We were kind of lonely," said Ulker Mutlu, 75.

Now nearly half of its units have sold, though only 20 are listed in property records as primary homes. Developers have no plans for an auction, calling prices low enough as they are.

The trick to selling condos, apparently, is selling them cheap. Signature Place, downtown St. Petersburg's 36-story curving-sail condo tower, sold out after years of choppy sales and a crowded ballroom auction last March, where 50 lofts sold with deep discounts. At the Towers of Channelside in downtown Tampa, more than 100 condos have sold since prices were slashed last year by 45 percent.

Price cuts have helped Water's Edge draw in a wider swath of prospective buyers. Sunny Pandya, a 26-year-old aerospace engineer, and his wife, Hetal, a 30-year-old nuclear medicine technician, had considered moving out of Clearwater while looking for a home last year. First-time homeowners, the Pandyas figured Water's Edge was far out of their price range.

But after the prices plummeted, the Pandyas found an eighth-floor condo they wanted for just under $300,000. The couple has lived there since January.

The price cuts haven't pleased everyone. In the three years since the Mutlus moved in, their condo's value dropped by about $300,000.

"Obviously, we were the unlucky ones," Ulker Mutlu said. "But it's a beautiful building."

• • •

An online "virtual tour" of The Strand portrays a hip and picturesque Cleveland Street, lined with palms and sidewalk cafes. Inside sits a posh billiards room, a gym and aqua-tiled kitchens. "As a resident of The Strand," its website states, "you'll find yourself immersed in a world of striking beauty, inspiration and luxury."

One small fact seems excluded from the hype: The condos don't exist.

The Strand, as it stands, is a barren concrete skeleton. The site's sagging chain-link fence, the rebar, the nearby Cleveland Street — where surfacing crews have torn up the asphalt, leaving rubble and dirt — are far removed from the dreamscapes of tropical paradise.

After an energetic launch, Strand developers stalled the project and waited for the market to wake. The Strand's sales manager, Janeen Pearson, said crews are actively pouring columns and laying water lines, though progress is tough to see.

The plan — penthouses and storefronts, porcelain and marble, cabanas and saunas, a yoga room and art gallery — remains just as luxurious as ever. Once scheduled to open in 2008, the tower's now set for late 2012.

Pearson says the last few months have brought sparks of buyer curiosity, and a dozen condos are reserved with $10,000 deposits. (Requests to speak with prospective buyers yielded no response.) But selling spots in a bare-bones building, she said, has proved a bit tough. A few years back, "it was so easy to sell off paper."

The tower's emptiness, Pearson added, can be spun into a plus. Buyers years out from retirement, she said, are eagerly anticipating what the building will look like at completion. What stands now doesn't make a difference, when there's the dream of something new.

"It turns into something exciting for them," Pearson said. "People are seeing that it has become real."

Contact Drew Harwell at dharwell@sptimes.com or (727) 445-4170.

Clearwater condo projects follow trend of slashing prices to sell units 03/12/11 [Last modified: Saturday, March 12, 2011 2:25pm]

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