Thursday, June 21, 2018
Business

Pitch from Channelside's prospective owners impress public

TAMPA — Rick Drury has seen the misery up close. The downturn. The empty storefronts. The foreclosure crisis. And that's just outside his front door.

That's because he's one of the last surviving tenants at Channelside Bay Plaza. The owner of Precinct Pizza came to Wednesday night's town hall meeting to hear how the prospective new owners of the building plan to revitalize a key but long-suffering piece of downtown real estate.

Santosh Govindaraju and Punit Shah pledged to spend millions to turn Channelside into the "living room" — the social hub — of the city.

"We are going to be focused on making Channelside the epicenter of downtown Tampa," Shah said.

Drury — and the crowd of more than 150 people who live and work in the Channel District — liked what they heard.

"If half of what they say comes true I'll be happy," Drury said, "especially after staring at a dark abyss for five years."

Govindaraju and Shah want to say goodbye to the nightclubs and theme restaurants of the complex's past. They want to bring in homegrown restaurants and the top fast-casual chains. They want to bring back the movie theater — with a dining option. They want to turn Channelside into a place folks can bring their kids to during the day and a date to at night.

The two want to have concerts, festivals and outdoor markets. They want to build excitement on the sidewalk to get people to come inside. They want to fix the garage, parking and traffic issues. They want to add office space.

The crowd repeatedly erupted into applause, especially when the entrepreneurs pledged to let dogs in — and keep the drunken nightclub crowd out.

"We live here," said Shah. "This is not our last project here. We need this to be a trophy project for us and for the city of Tampa. This is a labor of love."

And they proposed one of the most radical ideas ever for Channelside: building a hotel on top of the existing structure — not in the parking lot next door, as others have proposed. They want to build 150 rooms, adding two to four stories to the complex.

The public forum was unusual considering so much of Channelside's legal and financial machinations have taken place outside public view, even though the complex is built on public land.

"We are guys not used to being in the limelight," Govindaraju said.

They have no choice now. Their joint venture, Liberty Channelside LLC, signed an agreement to purchase the lease from Irish Bank Resolution Corp. The bank foreclosed on the property in 2010 after the old owner defaulted on a $27 million loan.

But any deal to buy Channelside must be approved by the Tampa Port Authority's governing board, which owns the land underneath the complex. The board will vote May 21.

Channelside's latest saviors came to Wednesday's standing-room-only meeting at the Florida Aquarium ready to impress. Both were immaculately dressed in dark suits and projected confidence, energy and youth. Govindaraju, 39, is the portfolio manager and CEO of Convergent Capital Partners of Tampa, a private equity real estate firm. Shah, 32, is president and COO of the Liberty Group, chief strategist for the family hotel empire.

They seemed to have all the answers for a Channel District crowd whose impatience with Channelside's failings were apparent. The two stressed their longtime roots — Govindaraju, a Gaither High School grad who went to Wall Street; Shah, a Channel District resident for the past decade — and their financial commitment to the complex.

Govindaraju said they expect to lose up to $1 million in the first year. That's why they have asked the Tampa Port Authority for 50 percent off their rent for the first two years. After that, they expect to profit. They've pledged to spend millions to upgrade the complex, but also want the Port Authority to pay for new pedestrian bridges to the parking garage across the street. They also want local law enforcement to help secure the complex. They want local restaurateurs and businesses to consider moving to a new Channelside, while pledging to work with tenants who want to stay.

"You will have the comfort of knowing the owners of this project have a long-term vision," Govindaraju said. "We are committed stakeholders. We have skin in the game."

Channel District resident Lauren Capo, 26, said she was impressed.

"I admire their gusto," she said. "They have their hands full."

Jamal Thalji can be reached at [email protected] or (813) 226-3404.

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