A Bay Plaza executive said Tuesday the company would consider pulling out of its plans to redevelop downtown St. Petersburg if business for the company does not improve. Lee Fowler, a vice president and spokesman with J.
C. Nichols Co., also said layoffs at the St. Petersburg operation are possible. Asked if the company plans layoffs, he said, "Just don't know."
He also said two Bay Plaza employees left and have not been replaced. He said he could not identify the employees, but that both had worked for the company less than 90 days.
Nichols owns the Bay Plaza Cos., which has a 10-year contract with the city of St. Petersburg to turn downtown into a waterfront retail and entertainment district. So far, one building, a Mediterranean-revival parking garage with retail space, has been built. But Bay Plaza has found no tenants and said the recession has hurt the project.
"Bay Plaza will ultimately have to stand on its own merits," Fowler said. "It is a subsidiary" of Nichols, "and the purpose of a subsidiary is to make a profit for its parent."
Bay Plaza is not making a profit for Nichols, and Fowler said that Nichols is monitoring the recession. If Bay Plaza loses money when the recession ends, Nichols may get rid of it. "Yes, yes, it is possible," said Fowler. "We are there as a business."
Asked about a contract that binds Bay Plaza to do business with the city, Fowler said: "There are arrangements that are in the redevelopment agreement for winding down of one party or the other. There are disillusioned arrangements."
Council member Paul Yingst said he was surprised to hear Bay Plaza officials mention the possibility of leaving the project.
Council member Edward L. Cole Jr. said he wouldn't be surprised if Bay Plaza didn't move forward with the planned retail district.
"It's been one of my concerns," Cole said. "I can't see anything that's going to drive this."
Mayor David Fischer said he was neither surprised nor concerned by Fowler's comments.
St. Petersburg's contract with Bay Plaza protects the city, and "in this kind of recession, corporations are re-evaluating all of their commitments," he said.
City Attorney Michael Davis said Bay Plaza could get out of its redevelopment contract in two ways.
The company could assign the contract to another developer, but only with the city's approval. Or it could intentionally breach the contract, triggering provisions that would give the city the right to terminate the agreement.
But Davis said a more likely scenario would be for Bay Plaza to request extensions.
_ Staff writers Alicia Caldwell and Thomas C. Tobin contributed to this report.