Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Clearwater's Prospect Lake project delayed by federal red tape

Ground was supposed to have been broken in April for the Prospect Lake project; now the timetable is July.

Prospect Real Estate Group

Ground was supposed to have been broken in April for the Prospect Lake project; now the timetable is July.

CLEARWATER — In June, city leaders exulted in the promise of finally developing a half-dozen acres of long-vacant land east of downtown.

The land around Prospect Lake, a murky retention pond off Cleveland Street, was formerly occupied by a car dealership. But an Orlando-area developer promises an enticing vision: 247 one- and two-bedroom apartments with an urban, green vibe designed to lure young professionals.

To seal the deal, developer Prospect Real Estate Group offered a sweetener: 15,000 square feet of retail space.

Back then, ground was supposed to be broken this April after the city and Prospect hammered out a development agreement, something originally scheduled to be inked by last fall.

The only worry on the City Council at the time was that the developer wouldn't deliver fast enough.

Vice Mayor Paul Gibson, in particular, was adamant that any agreement must hold Prospect to a set timetable or the developer would face repercussions.

But nearly seven months later, it's not the developer causing the delay. Instead, a tangle of federal obligations on the property has held things up.

The city has been wrangling with the U.S. Department of Housing and Urban Development over an old grant used to acquire part of the property. Since market-rate apartments rather than affordable housing are planned on part of the land, the city needs to pay the federal housing agency back.

HUD wants $271,000. The city is seeking a lower amount. No resolution has been reached.

"But we're glad we have a baseline for discussion," said Geri Lopez, the city's director of economic development and housing.

In December, a Washington, D.C. lobbyist working for the city emailed HUD officials with a warning that the developer was ready to scuttle the deal.

But that was merely a strategic move to hurry things along, Lopez said.

Frank Tetel, Prospect's vice president, confirmed the city's take.

"That's all it was," Tetel said. "Nobody could close on a property (with the HUD money issue), because it would be a title issue."

The Prospect Real Estate Group, based in Longwood, is in fact moving forward and plans to break ground in July, he said.

A minor environmental soil clean-up is also necessary in small areas of parcels along Park Street where auto repair shops were located. Very low levels of petroleum byproducts are present as well in the Park Street right-of-way and old St. Vincent de Paul sites that are part of the development site. That work should be done by March, but a cost hasn't been determined, said Ed Chesney, the city's environmental manager.

City planners say that a delay of a few months won't harm the long-term viability of the $34 million project, but downtown boosters aren't persuaded.

Building living space downtown to draw professionals with money to spend is a revitalization elixir, they say, and Clearwater's struggling downtown core can't afford missteps.

"I'm extremely disappointed. It appears that all deadlines have not been met. I'm disappointed that the HUD situation was not resolved earlier. Prospect Lake is the most important thing we have downtown. Period," said Bill Sturtevant, chairman of the Clearwater Downtown Partnership.

A development agreement should be ready for council approval in early February, Lopez said.

If all goes well, it will be a happy ending for the troubled parcel first acquired by the city in 1999 for $1.2 million.

Mayor George Cretekos was the only council member to vote against the project after a Tampa Bay Times story revealed that a former executive with the company had pleaded guilty to corruption charges.

Prospect Real Estate Group officers hadn't told the city about Richard Zahn's criminal history. They said they figured city officials already knew about his legal troubles and December 2012 resignation, which the company said was well-known in the development community.

Cretekos said he discussed the state of the development with staff late last month.

"The staff didn't give me any reason that we should be concerned," he said.

Charlie Frago can be reached at or (727) 445-4159. You can follow him on Twitter @CharlieFrago. To write a letter to the editor, visit

Clearwater's Prospect Lake project delayed by federal red tape 01/07/14 [Last modified: Tuesday, January 7, 2014 3:44pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Lightning takes defenseman Cal Foote with top pick in draft

    Lightning Strikes

    CHICAGO — Former Avalanche defenseman Adam Foote said his son Cal lived in the locker room.

    Cal Foote, second from left, is welcomed to the Lightning by GM Steve Yzerman, far left.
  2. It's Rays' turn to pound Orioles pitching (w/video)

    The Heater

    ST. PETERSBURG - Ah, the fantastic four.

    The Rays smashed the reeling Orioles 15-5 on Friday, scoring a season-high in runs, to climb four games above .500 for the first time since July 1, 2015.

    Rays third baseman Evan Longoria scores on a triple by Logan Morrison during the first inning against the Orioles.
  3. Lightning picks defenseman Cal Foote


    Cal Foote is the son of former Avs defenseman Adam Foote.
  4. Kids today: They don't work summer jobs the way they used to


    WASHINGTON — It was at Oregon's Timberline Lodge, later known as a setting in the horror movie The Shining, where Patrick Doyle earned his first real paycheck.

    Teens Ben Testa, from left, Hannah Waring and Abby McDonough, and Wegmeyer Farms owner Tyler Wegmeyer walk the strawberry rows at the Hamilton, Va., farm in late May.
  5. Jeb Bush back in the hunt for the Marlins, now opposing Derek Jeter


    Associated Press:

    Former Florida Gov. Jeb Bush has switched sides in pursuit of the Miami Marlins, and he’s trying to beat out former teammate Derek Jeter.