Thursday, May 24, 2018
Business

Vinik's vision for Channelside on hold, at least for now

TAMPA — It was a bold new vision for Channelside Bay Plaza — and a desperately needed one.

A new facade and color palette; a new roster of shops and restaurants; an elevated pedestrian walkway; all designed to link the entertainment complex to the Tampa Bay Times Forum.

That's how Tampa Bay Lightning owner Jeff Vinik and his partners planned to revitalize the moribund plaza and turn downtown's waterfront into the attraction the city has long dreamt of.

Then came Monday's shocking announcement: the Vinik group was suspending their efforts to take control of Channelside.

"They had a good proposal," said Mayor Bob Buckhorn. "They were ready to execute it and move forward. I think the city would have embraced it."

If only Ashkenazy Acquisition Corp., the plaza's previous owner, could have embraced a deal with the Irish bank that now controls Channelside. The bank foreclosed on the property in 2010 after the New York real estate firm defaulted on a $27 million loan.

But in that 2010 court agreement, the bank granted Ashkenazy the right of first refusal. Channelside's old operator has 10 days to match any offer for Channelside for the same price plus $375,000.

For the past nine months, the Vinik group has waited for the bank to negotiate some kind of deal to get Ashkenazy to give up that right, freeing up the title. Then Vinik's group, Metis Channelside LLC, could finalize agreements with the Irish bank and the Tampa Port Authority to take over Channelside. But all of that is now on hold for the foreseeable future.

"We've decided to take a step back and suspend our pursuit," said Tod Leiweke, the CEO of Tampa Bay Sports and Entertainment, which owns the Lightning and the lease to the Tampa Bay Times Forum. "There's a significant legal issue that we've just not been able to overcome and in some ways our stepping back helps it get resolved."

The Vinik group hopes that by suspending its plans for Channelside, that will encourage the bank and Ashkenazy to resolve their issues or risk scuttling the deal for good.

The Tampa Port Authority's governing board, which owns the land under Channelside, would have the final say on any deal for the plaza. Buckhorn, who sits on the board, said it was "stupid" for the bank's attorneys to give Ashkenazy the right of first refusal in the first place.

"I don't blame Jeff (Vinik) for stepping away and I'm hopeful that he'll be patient until we can rid this deal of this cancer," Buckhorn said. "I don't think it's over by any stretch of the imagination."

Jaime Austrich, an attorney representing Ashkenazy, said Monday that the firm was still interested in Channelside. Austrich could not say what Ashkenazy's next move was. But the lawyer defended the firm's management of Channelside, saying that's when the complex enjoyed its highest occupancy.

But the port board are no fans of Ashkenazy. Even if the firm successfully matched the Vinik offer, the port board would likely vote to deny Ashkenazy control of Channelside.

What if the Vinik group signed a deal for Channelside, then Ashkenazy failed to match the offer within 10 days? Then the Vinik group would risk becoming a part of whatever litigation might ensue. By holding off on the deal, the group stays out of any future legal drama.

"I think they don't really want to be a part of that," said Hillsborough County Commissioner Sandra Murman, another member of the port board. "I think (Vinik) would rather it get worked out, then come back."

Channelside is a sought-after property in the Tampa Bay area — one that has long under performed. It had a movie theater until recently and restaurants but has struggled to consistently attract crowds since it opened in 2001.

Word that Vinik's plans were on hold came as bad news to some businesses in the struggling complex that hoped new ownership would make dramatic changes to the complex.

"We started the business around the Lightning and, once (Vinik) came in as owner, it was a lot better,'' said J.P. Champagne, manager of Wine Design. "Him withdrawing is very concerning because it's really, really slow down here. Now I have no idea what's going to happen.''

This latest setback for Channelside comes as a surprise because the Port Authority believed it was close to a deal with Metis to take over Channelside. The port board could have voted on the Metis plans and lease terms as soon as its Dec. 18 meeting. Vinik's partners in Metis are Andrew Wright, chief executive officer of the Franklin Street real estate firm, and Anthony Everett, president of Everett Realty Services.

But there were varying degrees of optimism Monday that this setback for Channelside, while significant, is also temporary.

There's another way to force the Irish bank and Ashkenazy to strike a deal — or cut them out altogether. The Port Authority owns the land under Channelside and at one time sued to take it from the bank, then held off to let both sides reach a deal.

But in July, fed up with the delays, the port board voted to go forward with the dormant suit. Court proceedings, though, won't restart until 2013.

Vinik also seems committed to Tampa for the long haul. He paid what is believed to be $110 million for the hockey team and arena lease. He also has an interest in partnerships that own land around the Times Forum, groups that in the past two years have paid $16.3 million for 12 acres across from the arena. Vinik also moved his family and his business to Tampa.

"He's committed to Tampa," Buckhorn said, "and more specifically he's committed to the Channelside area."

Leiweke said that Vinik sees a "bullish" future for Tampa and is dedicated to revitalizing the Channel District. While Vinik's partners are still developing their vision for those 12 recently acquired acres, Leiweke said those plans are not dependent on controlling Channelside.

Port Commissioner Patrick Allman said it makes sense for Vinik and his partners to bide their time and wait for the right moment to take over Channelside.

"I think for them it's a no-brainer," he said. "That group is made up of very civic-minded people, and it enhances the value of their properties if they can make something work down there."

Leiweke said that Vinik and his partners know their designs for Channelside will be hard enough to implement. But without the undisputed title, their task would be impossible.

"Turning around Channelside is not for the faint of heart," Leiweke said. "At the very least one should expect to start with a free and clear title."

Times staff writers Rick Danielson, Drew Harwell, Susan Thurston and Katherine Snow Smith contributed to this report. Jamal Thalji can be reached at [email protected] or (813) 226-3404.

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