TAMPA HEIGHTS — The company behind the ambitious plans for the Heights — a proposed 48 acres of condos, shops and offices on the eastern bank of the Hillsborough River — is liquidating its assets in bankruptcy court.
The Heights of Tampa LLC, plus two subsidiaries, filed under Chapter 7 of the U.S. bankruptcy code in late July.
One subsidiary, Land Assemble LLC, lists real estate worth nearly $10.7 million as its main asset, but its liabilities exceed $37.1 million. At the time of the filing, the company had less than $65 in its checking account and business income of $11,000 for the year.
The bankruptcy filings come as the Heights of Tampa also faces foreclosure suits filed by Pilot Bank and Fifth Third Bank. The Heights property is north of Interstate 275, south of Palm Avenue and across the river from Blake High School.
Pilot Bank sued in early July, saying it's owed more than $7.2 million.
Fifth Third Bank sued in March 2010. It initially sought more than $12 million, a figure that has since been knocked down to $8.3 million. The litigation continues, so far filling four volumes at the county courthouse.
So, between the foreclosures and the bankruptcies, is this the end of the Heights?
"You just don't know," said Richard Dauval, the trustee in the bankruptcy case.
Unlike Chapter 11 bankruptcy proceedings, when a business files a reorganization plan so it can stay alive and pay creditors over time, Chapter 7 liquidation entails selling the debtor's property and distributing the proceeds to creditors.
As such, a Chapter 7 case often becomes the "organized funeral" for a company, Dauval said.
Still, much will depend on who ends up with the property — the banks that hold mortgages on it, other creditors, a new buyer who emerges during bankruptcy proceedings, or a new owner who gains title through the banks.
It's possible that a new owner could pursue the existing plans for the Heights. Darren Booth is rooting for that idea.
"This project is just going through a very painful process for the initial investors, but I would be hopeful that the vision for the project remains intact," said Booth, who has worked as the Heights' development manager for five years.
Briefing the City Council last week, acting city economic development administrator Bob McDonaugh said problems like those facing the Heights usually don't sound like good news, but this could be different.
"I think that we'll finally be able to sort out all of the issues that exist in that development agreement," McDonaugh said. "We are having active conversations with the existing landowners."
The roots of the Heights go at least to the administration of Mayor Dick Greco, when the city requested redevelopment proposals from national development companies, court records say.
But those efforts came to naught because of the difficulty, cost and time it took to assemble the land and development rights, according to a sworn statement in the Fifth Third foreclosure case from Robert W. Scharar, the chairman of the Heights of Tampa LLC.
Scharar said he had been involved in the Heights since 2003. An early backer was Tampa RV tycoon Donald W. Wallace, who provided $8 million in 2005, according to court records. FishHawk Ranch and Westchase developer Bill Bishop was another initial leader, but later withdrew from the project.
Early on, local officials were dazzled by the lofty plans for the Heights: 1,900 multifamily housing units, 100 boat slips and 260,000 square feet of offices, stores and cafes. Projected population: 4,300.
In 2007, Hillsborough County's Planning Commission gave the project an award for design excellence in urban redevelopment. Then-Mayor Pam Iorio called it crucial to changing the urban landscape and even offered the city's power of eminent domain to buy up scattered properties.
By the end of 2010, Scharar estimated, the Heights of Tampa had invested about $75 million in acquisitions, securing development rights and starting construction.
Today, however, the project features just one new office building that houses three companies and a work-in-progress redevelopment of the historic Tampa trolley barn, the huge brick building with "Tampa Armature Works" painted across the top.
Booth, the Heights' development manager, formed a company, Sunset Grill Tampa, and has a plan to open a wine bar in part of the trolley barn. The barn also is home to Channelside Watersports, which rents kayaks, personal watercraft and pontoon boats for excursions on the river.
Another Heights business, the Heavenly Touch Massage Lounge & Wellness spa, is nearby on Palm Avenue.
Meanwhile, Tampa officials are moving ahead with plans to extend the Riverwalk in Water Works Park, just south of the trolley barn.
The Heights already has built a piece of the promenade, as required by its development agreement with the city.
Now the city plans to go out for bids by the end of the year on a project to extend the Riverwalk north to Seventh Avenue and south to Doyle Carlton Drive. The project, estimated to cost $260,000, will include benches, trash receptacles, a fence and security lighting along the river.
Work is expected to start in the first quarter of 2012, city parks spokeswoman Linda Carlo said.
Booth looks for those improvements to enhance the area in ways that he hopes make redevelopment more attractive.
The hard part, he said, will be persuading the first pioneering businesses to open.
Walking the site last week, Booth pointed out spots for sidewalk cafes and coffee shops. He was confident that with the right ownership and development plan, crowds would come to appreciate the Heights for its sweeping views of the river, cool breezes and cosmopolitan energy.
"No one wants to be the first," he said. But "by the time there's three establishments happening down here, an outsider will say, 'I want to be part of that.' "
Richard Danielson can be reached at email@example.com or (813) 226-3403.