Wednesday, February 21, 2018
Business

Entrepreneur pays Clearwater $1 million to retain beach hotel development rights

CLEARWATER — Once again, Dr. Kiran Patel is putting his money where his mouth is.

The Tampa-based cardiologist, health care entrepreneur and philanthropist paid the city of Clearwater a whopping $1 million on Tuesday to keep the right to build a large resort on nearly 3 acres of Clearwater Beach property that he owns.

The million-dollar move buys Patel more time to line up financing for the $250 million beach resort that he has been hoping to build for nine years, ever since he paid $40 million for a prime piece of property just south of Pier 60. It was one of the priciest land purchases in Pinellas County history.

That property, located at the split of S Gulfview Boulevard and Coronado Drive, has been bare ever since the nine-story Spyglass Resort with its well-known hot air balloon mural was dynamited in 2008. Two other hotels on the parcel, the Days Inn and the Beach Towers, were also demolished to make way for Patel's mega-resort.

Today the property functions as a roughly paved beach parking lot with 200 spaces. Clearwater Vice Mayor Paul Gibson calls it the state's most expensive parking lot.

Why did Patel have to pay $1 million by Tuesday? He agreed to do this the last time he asked Clearwater to extend his construction deadline. He has repeatedly asked the city for extensions as he has struggled to secure financing for the project.

In early 2012, the City Council begrudgingly extended Patel's deadline one more time. In return, Patel agreed to pay the city up to $3 million if construction doesn't begin within three years. He is to pay $1 million a year into an escrow account that the city gets to keep if construction doesn't start by February 2015.

"Dr. Patel remains committed to the hotel," his attorney Paul Raymond said in an email to city officials Tuesday after the $1 million payment was made. Patel hasn't returned calls from the Tampa Bay Times.

Mayor George Cretekos and City Manager Bill Horne met with Patel about the project in December. He told them he was still working on getting financing and that he was talking to the Wyndham hotel group about managing the resort. He previously had been talking to Marriott.

Although the city has long been frustrated at the lack of progress on the resort, Horne views the $1 million payment as a positive sign.

"I remain optimistic," Horne said. "He's still complying with the development agreement as he marches forward to a date when he pulls permits and starts construction."

Cretekos believes that if Patel doesn't break ground by 2015, he'll be out of chances.

"I would have a very hard time granting another extension," the mayor said Wednesday. "As long as the parking lot is still there, I'm getting mighty used to seeing that open space.

"With the economy improving, this is a prime location. But if Dr. Patel can't put this together, then maybe he ought to figure out some other plan."

A cardiologist turned entrepreneur, Patel created WellCare HMO and built it into a $1-billion-a-year business before selling it. He currently owns two other managed-care health plans. He and his wife, Dr. Pallavi Patel, are generous benefactors who have donated millions of dollars to Tampa Bay area charities. They recently broke ground on an opulent 63,000-square-foot mansion with a 12-car garage in Carrollwood in Hillsborough County.

Patel bought the Clearwater Beach property in 2004. Other developers said the investment was risky. "Maybe I overpaid," he acknowledged later that year.

He originally planned to build a 900,000-square-foot resort with 15-story towers of condos. When the condo market collapsed, the plan shifted to a mix of hotel rooms and time-share units. At this point, the plan has switched entirely to hotel rooms, and the resort has shrunk to 715,000 square feet.

Mike Brassfield can be reached at [email protected] or (727) 445-4151. To write a letter to the editor, go to tampabay.com/letters.

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