Friday, February 23, 2018
Politics

Promising Rays stadium site in Tampa embroiled in lawsuit

TAMPA — As the Tampa Bay Rays broaden their search for stadium sites, the 23 acres under the Tampa Park Apartments have emerged as a promising possibility.

The site is the right size. It's close to downtown and Ybor City with a nice view of the Tampa skyline. It's a short walk from three parking garages. It would be eligible for community redevelopment tax revenues. And Mayor Bob Buckhorn likes it.

But behind the scenes, the complex's nonprofit owner is embroiled in a 2-year-old lawsuit it filed against the U.S. Department of Housing and Urban Development. And HUD officials wonder whether the case has its roots in the property's potential value to the Rays.

At dispute is a particular pot of money, how much is in it and who owes what to whom. The government has speculated that the complex is trying to get out of a long-standing debt because of a desire to sell its land for a stadium.

"Much has been publicized in recent years" about the idea of Tampa Park being acquired "for the purpose of tearing it down and building a new baseball stadium on the property," HUD attorneys wrote in a motion filed last September in U.S. District Court in Tampa.

"HUD suspects that this is why (Tampa Park's owner) would now rather argue that no amount must be repaid, and that HUD currently has no interest in the project," they added.

An attorney for Tampa Park's nonprofit owner said he has "no idea" what the government intended by that statement and declined to comment on the case, its prospects for settlement or its potential to affect the stadium search.

"We certainly want the issues resolved in the courthouse rather than in the court of public opinion," said F. Malcolm Cunningham Jr. of West Palm Beach.

In its pleadings, Tampa Park describes years of effort spent trying to live up to its obligations and repay a debt, only to be blocked from using money that was supposed to be set aside by a government that lost track of the dollars.

For decades, the complex paid into an escrow account that was set up along with one of two loans taken out to build the apartments in 1968. In addition, the complex and HUD signed another note in 1996 that has become an issue in the case.

Tampa Park's administrators say the escrow account should contain no less than $1.9 million — more than enough to cover the loan's balance. But they say HUD has kept poor records and cannot say how much is in the account, what it has spent from the account or how much the apartment complex owes.

It is a matter of "grave concern," said a sworn statement from Florida Sentinel Bulletin newspaper publisher S. Kay Andrews, president of the nonprofit corporation that owns Tampa Park's 372 apartments and a neighboring shopping plaza. The corporation's officers include representatives of the nonprofit Lily White Security Benefit Association and Local No. 1402 of the International Longshoremen's Union.

HUD has countersued, saying it fulfilled all legal obligations. It puts the amount in escrow at under $464,000. It also says Tampa Park Apartments owes nearly $2.2 million as a result of the 1996 note and has demanded a lien against one part of the property to secure its interest.

The case could be headed to trial in May. Meanwhile, Rays principal owner Stuart Sternberg said last week the team will work to narrow its list of stadium sites over the next six to nine months.

So could the court case or a lien complicate what already is shaping up to be a challenging process to find, assemble and pay for a baseball site?

Not necessarily, said Tampa lawyer Ron Weaver, an expert in real estate and development law.

He said a deal still could go forward if the two sides can come together on an amount of money that would cover the interest being secured by the lien. The lien then could be converted into another escrow account, a strong financial guarantee or a performance or payment bond. Once certain conditions were met or after an agreed-upon period of time, the government could be paid that amount automatically.

"There are four or five ways to skin the cat," Weaver said.

And having a problem with a site is not unusual, either. Weaver recalled that before Tropicana Field was built, the city of St. Petersburg had to spend more than $6 million removing toxic soil left by an old coal gasification plant.

"These stadiums have a way of having fascinating starting points, being such large, crucial assemblages," he said.

Hillsborough County Commissioner Ken Hagan said he talked with Andrews about the lawsuit, though not in detail, a year or more ago. Based on that, he did not expect the case would cause problems if the Rays gravitate toward the Tampa Park property.

"The general feeling was that would be resolved in advance of any potential stadium discussions regarding that property," Hagan said. "The important thing is that the contractual obligation is met, and every indication that I've received from (Andrews) is that not only does she intend on doing that, but she wants to ensure that, in the event that a sale took place, her residents are taken care of with housing."

Tampa Park is home to about 1,200 residents, about 35 percent of them senior citizens, some in their 90s. Many are poor. Many are black.

That, Buckhorn has acknowledged, could create political problems if residents are moved out to make way for a new ballpark. (Something similar happened in St. Petersburg's Gas Plant neighborhood before the construction of Tropicana Field.)

But Buckhorn says local officials have lots of recent experience moving residents from soon-to-be-demolished public housing in areas like College Hill and Central Park Village and into newer homes in more stable neighborhoods.

Before anything like that could happen, Tampa Park's owners would have to give residents plenty of notice.

That's because tenants in 206 of the 372 apartments get federal Section 8 housing subsidies under two agreements with HUD.

The agreements are scheduled to expire Sept. 30, 2017. If the owner wants to opt out of the Section 8 program then, it must give renters one year's notice, with a follow-up confirmation at least 120 days before the expiration date.

That, officials say, is designed to give HUD time to help residents who have to move.

Buckhorn has estimated it could take 12 to 18 months to find a site and line up stadium financing — a politically charged task that could involve multiple sources of public and private funding.

"This, I imagine, is going to be one of several locations that are going to be considered," Hagan said. "Unfortunately, as time has gone by, other potential sites have been taken off the table, so we don't have the luxury of taking our time on determining a suitable location."

Times staff writer Patty Ryan contributed to this report. Contact Richard Danielson at [email protected] or (813) 226-3403. Follow @Danielson_Times

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