Friday, February 23, 2018
News Roundup

Prospect Lake project is a go despite mayor's reservations

CLEARWATER — The city will allow an Orlando-area company to build apartments and stores on a city-owned property downtown, despite recent revelations in the Tampa Bay Times that its ex-owner was snagged in a federal corruption investigation.

Prospect Real Estate Group never notified the city during the selection process about Richard Zahn's scheme to bribe public officials in South Carolina.

That bothered Mayor George Cretekos, who spoke up at a City Council work session Tuesday attended by Prospect Real Estate Group staff.

"I don't like surprises. We've gotten a lot of surprises in the last couple of weeks. It makes me extremely uncomfortable," Cretekos said.

Cretekos cast the only vote against the company's $34 million proposal to build 247 high-end apartments and 15,000 square feet of retail space on nearly 6 acres overlooking Prospect Lake on the eastern edge of downtown.

The other four council members voted for the project, but directed city staff to negotiate a tough development agreement, including penalties if the firm falls behind schedule or abandons the project.

"If they don't hold up their end of the log, I want some pain associated with it," said Vice Mayor Paul Gibson.

The council approved the project while sitting as the Community Redevelopment Agency. City planners hope to negotiate a development agreement with Prospect within the next two to three months.

Richard Zahn severed ties with the Prospect group in December. His wife, Michele, stepped down last week. Richard Zahn pleaded guilty in February to federal charges of conspiracy to bribe former South Carolina State University officials in connection with the sale of some land he owned privately.

Zahn could face up to five years in prison, but he said he has worked out a plea agreement with federal prosecutors for three years of probation that wouldn't restrict his business activities. Zahn contends that he has no plans to return to his former company.

Some downtown boosters have worried that Prospect's plans for retail on the downtown land aren't viable. The company has asked for city assistance in developing and marketing the site along Cleveland Street.

Bill Sturtevant, chairman of the Clearwater Downtown Partnership, said the most important thing is to get something going in the blighted area.

"We've all been troubled over what we've heard over the last several weeks. However, at this time I think it's most important that we figure out some way — search our souls — and figure out a way to move a development forward," he said.

Council members said Prospect's plans were excellent and the company has a good track record in urban redevelopment in Tampa and Orlando. The company's development team attended the council meeting and promised they would have the money and expertise to get it done.

The city needs more housing for high-tech workers and Prospect can deliver, said council member Jay Polglaze.

Charlie Frago can be reached at [email protected] or (727) 445-4159. You can follow him on Twitter @CharlieFrago. To write a letter to the editor, go to tampabay.com/letters.

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