The effort to turn around Channelside Bay Plaza in Tampa was daunting enough before this week's news that its Irish owners have moved the property under the protection of an out-of-state federal bankruptcy court. This is bad news for the Tampa Port Authority, which owns the land under Channelside; bad news for the Channel District, which needs an active retail and entertainment center; and bad news for taxpayers, who have primed that part of downtown for new shops and residents and who have a vested stake in seeing that area succeed.
The Tampa Bay Times' Jamal Thalji reported that the Irish Bank Resolution Corp. filed for federal bankruptcy protection Monday in a move to secure its U.S. holdings from creditors. By adding a new legal layer to the Channelside drama, which will begin next month in a Delaware court, the bank has complicated and likely slowed the process of selling the retail center, renovating it and bringing Channelside under much-needed local control.
Channelside's situation has gone from bad to worse. In the past year, two purchase agreements have collapsed, the center has lost more shops and customers, and the complex has lost valuable time in a recovering economy by failing to repair its brand. The center's two-headed governing structure is a major problem: While the bank owns the buildings, the port owns the land, and both sides must agree on any new operator. That leaves the port and the public as players in the Irish bank's liquidation proceedings.
It's become increasingly clear that the port needs to move the bank out of the picture. Ideally, the port would secure outright ownership of the property and hire a retail operator, or act as go-between to connect the bank with a credible buyer. This month, the port authority board authorized chairman Stephen Swindal to negotiate directly with the bank and any potential buyer. Swindal has the business sense to break the logjam. But the port is suing the bank over the conditions at Channelside, which has caused a breakdown in communication between the two sides. The environment to make a deal could not be worse, even though the bleeding at Channelside is unsustainable.
The port should keep pushing for a breakthrough. It needs an accurate value for Channelside and a plan for incorporating the complex into the port's broader business operation. The board should have a public discussion over a vision for Channelside, and it needs to show a greater sense of urgency in resolving the impasse with the bank. Having Swindal as the point person is a start. But the port must work quickly to establish a new direction for this coveted public property.