Tuesday, January 23, 2018
Business

Tampa Port Authority board still eager to buy Channelside

TAMPA — The Tampa Port Authority board still wants to buy Channelside — and they're willing to up their offer.

"If it requires a little more capital to get the deal done, to satisfy the judge, I would be open to it," said Mayor Bob Buckhorn, who sits on the board.

Last month a federal bankruptcy judge scuttled the port's first attempt to buy the 234,520-square-foot outdoor mall for $5.75 million. But a majority of the board told the Tampa Bay Times they still support their original plan: The public agency should buy Channelside from the Irish bank that foreclosed on the property and then pick a private developer to turn the downtown icon around.

"That's the right answer," said port board member Patrick Allman. "This is a community asset and our charge is to do what's best for the community."

Channelside's complex and dysfunctional ownership structure — the bank owns the mortgage on the building, the port owns the land — has left the complex bereft of tenants and customers. Both entities must approve a buyer, an issue that has separated them for years.

Some board members said that they're willing to pay more, perhaps $7 million or higher, to get the Irish bank out of town and put Channelside's destiny in Tampa hands once and for all.

"We're just trying to get the bank out of there," said board member Carl Lindell Jr. "That's the only reason we're trying to buy it."

The bankruptcy judge dismissed the port's $5.75 million deal on Feb. 18, citing a competing $7 million offer as evidence that the bank was leaving money on the table that could go to creditors. The competing offer came from Liberty Channelside LLC, which tried and failed to buy the complex last summer. So Liberty sued to end the port's deal, and it prevailed.

The Delaware judge decided that the Irish Bank Resolution Corp. had not done its legal homework in shaping the deal, and that the port wasn't paying enough money to buy the asset. But the judge opened the door for both parties to bring a better deal back to him.

Allman said that's happening right now. He said the port's attorneys are working with the IBRC on a purchase agreement that is more legally sound and robust. Whether the port will have to pay more money is unknown.

An attorney for the IBRC told the judge Thursday that the bank is also developing a process to accept new bids for Channelside. The bank, though, has been taking bids for years. The problem is that the port and IBRC have never been able to agree on a bidder.

During Thursday's hearing, attorneys for all three sides — the port, bank and Liberty — bickered over the cost and legality of obtaining records from the port, and also traded barbs.

"Frankly, we believe this litigation may well be an attempt to choke this shopping center to death," said the port's attorney, David Hendrix, according to the court transcript.

"It is not the intent of Liberty to choke the project for a number of obvious reasons," said Liberty attorney John Anthony. "We want to acquire the project."

Liberty not only still wants to buy Channelside, but it also asked the judge to consider putting the complex up for auction. Liberty also asked the court to rule that the Tampa Port Authority does not have the power to veto the sale of Channelside or the legal ability to buy the mortgage.

The federal judge has yet to rule on those issues. The court is overseeing the Channelside property because the IBRC sought bankruptcy protection for its American assets.

Last year the board voted to empower chairman Stephen Swindal to negotiate on the port's behalf with the Irish bank to buy Channelside.

Allman said the chairman still has that power.

"It's up to Steve Swindal," Allman said. "Steve was given carte blanche by the board."

The port's management team did not comment on the board's remarks Friday, except to say that it "continues to keep all of its options open to find the best solution for the community." Liberty officials declined to comment.

The port also filed a motion asking the judge to dismiss Liberty's lawsuit blocking Channelside's sale.

The judge will hear arguments on that issue on April  1.

Jamal Thalji can be reached at (813) 226-3404.

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