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Clearwater haggles with developers over missed deadlines

CLEARWATER — For years, multimillionaire philanthropist Kiran Patel has planned to build a massive Clearwater Beach resort just southeast of Pier 60. And for most of this decade, real estate mogul Lee Arnold has talked of building a downtown high-rise near Coachman Park.

With the economy in lousy shape, neither of these things is likely to happen any time soon. And that has triggered a situation in which the City Council is haggling with both developers because of missed deadlines.

In Patel's case, the city is getting him to pay for a spruced-up temporary parking lot on his beachfront property, which is currently a ragged-looking, weed-strewn dirt lot in a prime location.

As for Arnold, the city is granting him more time. Under the terms of a previous contract, the city now has the right to buy back a piece of land that it once sold to Arnold, since nothing has been built on it and five years have passed. But council members voted not to.

• • •

At a City Council meeting Tuesday night, officials expressed disappointment in Patel's lack of progress and sharply questioned him about his plans.

They sought assurances that Patel, who is a novice developer, is still in a partnership with the Related Group, a major Miami-based builder with a long track record in Florida.

"With all due respect, sir, this is not something you know a lot about," said council member Paul Gibson. "You need qualified people who have been there and done this. Without a qualified partner, I have no confidence this project will ever get built."

An unhappy-looking Patel assured council members that the Related Group remains an active partner in the project, seeking financing for its construction and negotiating with hotel chains such as Marriott that might run the resort.

"I am painfully aware of the need to get the right partner," said Patel, a Tampa-based cardiologist, health care entrepreneur and noted philanthropist. "I have learned a lesson the hard way."

Patel and his partners envision the Clearwater Beach Resort & Hotel as a huge, $250-million destination point at the split of S Gulfview Boulevard and Coronado Drive. It was originally going to be 900,000 square feet of mostly condominiums. But since the condo market collapsed, their new plan has shifted to 250 hotel rooms combined with 200 time-share units.

They're asking the city for an extension on their deadline to start construction, pushing it back from 2010 to 2011.

In return, the City Council is requiring Patel to pay about $140,000 to put a temporary parking lot on his vacant land. "Think of it as an extension fee," Gibson said.

Patel agreed to the price, which would pay for grading, striping, landscaping, signs, curbs and an entrance. The city intends to have a 200-space lot ready in time for spring break on the beach.

After initial talks Tuesday night, the two sides are to enter into a formal agreement at the next council meeting in two weeks.

• • •

The other property in question is downtown at the southeast corner of Drew Street and Osceola Avenue, across the street from Clearwater's Main Library.

The small sliver of land is temporarily being used for extra library parking. Once owned by the city, it's part of a full block of properties that have been assembled by Arnold.

In 2005, Arnold announced plans to build a $175-million high-rise called Clearwater Bay Club, with condos, hotel suites, an art museum, a cafe and shops. Earlier, in 2001, he had proposed a 17-story condo-hotel there.

But the project is dormant.

With the passing of a recent deadline, the city gained the right to buy back the corner lot that it sold to Arnold five years ago for $200,000. City staffers advised the council to do so, noting that it would give the city leverage over any development plans at that location.

However, Arnold convinced the council that taking away one piece of his assemblage of properties would make it even harder for anything to be built there once the economy turns around. He said he has invested $600,000 in various engineering and feasibility studies on that block.

"We still have great hopes for a significant hotel complex on it," he said.

Mike Brassfield can be reached at brassfield@sptimes.com or (727) 445-4160.

Clearwater haggles with developers over missed deadlines 11/19/08 [Last modified: Friday, November 21, 2008 8:33pm]
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