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City approves $1.6 million settlement with developer in Downtown Temple Terrace

 
Published Nov. 20, 2014

TEMPLE TERRACE — Taking a step designed to get the long-stalled Downtown Temple Terrace project moving again, the City Council voted this week to pay $1.6 million to sever the troubled partnership with its developer, Vlass Temple Terrace.

The council voted unanimously on Tuesday to pay Vlass to settle dueling lawsuits, in which each side accused the other of breach of contract. The settlement also lets Vlass off the hook for $159,000 in property taxes.

"This hopefully is the beginning of the jump-start of getting this back on track,'' Mayor Frank Chillura said.

The settlement allows the city to start over with a new developer to build the $150 million office, shopping, residential and cultural community stretching along the east side of 56th Street from Bullard Parkway to the Hillsborough River. Vlass is expected to transfer the property back to the city by Dec. 15.

Council member Grant Rimbey expressed optimism for the plan to hire a director whose sole job is to oversee the Downtown Temple Terrace project and other redevelopment efforts.

"I look forward to our future success,'' he said.

The project was stalled for more than two years as the city and developer disagreed on a number of construction issues. The key dispute concerned the look of the proposed apartment buildings in the northeast corner of the property. The city wanted a "Main Street'' feel, with a promenade of shops on the first floors of apartment buildings. Vlass argued that the concept would not work in a weakened economy.

The city sued and Vlass counter-sued earlier this year, and in August the council appeared prepared to approve paying $2 million to the developer to settle the case and get back 22 acres of undeveloped property. But City Attorney Mark Connolly asked council members to wait because certain points remained unresolved.

Council member David Pogorilich praised the negotiating team of Connolly, Chillura and City Manager Gerald Seeber for re-negotiating and saving the city almost $250,000 from the initial settlement figure.

The city borrowed $24 million to buy and improve the 29-acre site. In 2009, the city turned the property over to Vlass with the stipulation that the company build a Mediterranean-style community that fit the city's redevelopment plan.

Had the two sides parted amicably, the contract called for Vlass to return the undeveloped acreage to the city after the city reimbursed the company for whatever work had been started.

But Vlass argued that the city failed to use "reasonable discretion'' to change plans with changing market conditions in a depressed economy and therefore had forfeited ownership of the remaining 22 acres. Vlass offered to sell the land back to the city for nearly $3.9 million.

Vlass took ownership of the 7-acre middle section of the property after successfully renovating the Winn-Dixie and adjacent stores. Another company, an affiliate of Kite Realty Group, now owns that property.

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Vlass was the third developer to take on Downtown Temple Terrace. The first, Orlando-based Unicorp National Developments, was hired in 2005 and fired in 2006 after failing to meet deadlines. The second, Pinnacle Realty of Tampa and Ram Development of Palm Beach Gardens, backed out of the agreement in 2008 after two years of negotiations with the city.

Contact Philip Morgan at pmorgan@tampabay.com or (813) 226-3435.