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St. Petersburg council is told Soreno must go

Published Oct. 13, 2005

Under fire from preservationists and residents, the Bay Plaza Cos. took its position in the Soreno Hotel controversy to City Council members Wednesday and explained its hard line. The Soreno has to go, council members said they were told in one-on-one, private meetings by Bay Plaza president Robert L. Jackson Jr. And it has to go when Bay Plaza is ready, and not when the City Council or anyone else says.

"I said we would at least like to know that we are not going to be left with a pile of rubble," Vice Mayor Connie Kone said after meeting with Jackson. "And he just said, "Well, we can't guarantee that.' "

Jackson said that the no-strings-attached posture is necessary in order to get financing and tenants for the downtown redevelopment project, according to Kone. "He said as long as there's a question" as to the permissible uses of the Soreno, "he can't get financing and tenants."

Jackson did not return a reporter's calls, and Bay Plaza has been reluctant to explain publicly its reasons for opposing the proposed conditions that would affect the Soreno's demolition. The City Council will consider the conditions after a public hearing July 18.

But a spokesman for Barnett Bank explained generally why a lender would not want strings attached to a project such as the Soreno. Barnett Bank is not involved in the project.

"If there is a piece of property and the ordinance is passed that says this developer _ and this developer only _ can develop it, a bank would be taking a big risk in financing it," said Bob Stickler, a Barnett spokesman in Jacksonville. "Because if the developer for some reason pulls out, and the bank takes it over, what's the bank going to do with it?"

The same would hold true for a proposed ordinance that said Bay Plaza could raze the Soreno only on a certain timetable, and only if it is ready to build a replacement structure. Kone and preservationists from a group called Save Our St. Petersburg, or S.O.S., said they would like such conditions in order to ensure that the Soreno is not replaced by a vacant lot if Bay Plaza doesn't finish the redevelopment project.

"A prudent banker would be extremely reluctant to get into a project like that," Stickler said. If the bank had to take the property back through foreclosure, it would be stuck with a historic structure that could be hard to develop and harder to sell.

Bay Plaza wants to raze the Beach Drive hotel as part of the $200-million waterfront shopping and entertainment district it promised to build. The City Council in 1989 gave it permission to use the Soreno site. So far, Bay Plaza has built one retail-and-parking building in the waterfront district but has no tenants. Bay Plaza officials have said they will build more only if they get financing and tenants.

They nevertheless want the right to raze the Soreno.

Local preservationists had hoped Bay Plaza would convert the closed, 67-year-old hotel into apartments, but Bay Plaza said recently that it could make only a 2 percent return on that kind of investment.

Kone said she asked Jackson to show her why Bay Plaza couldn't get a 10 percent return. "He said that 10 percent isn't enough. You can get 8{ percent from Treasury bonds, so why not put it there?" Kone said Jackson told her that Bay Plaza wanted something closer to a 20 percent return.

Bay Plaza attorneys have reminded the city of its contract that allows Bay Plaza to demolish the Soreno. A historic preservation ordinance affecting the Soreno would violate the contract, Bay Plaza attorneys say.

Kone said she's in an uncomfortable position. "Everybody is saying, "Connie, don't let them tear it down,'

" Kone said. "I would love to designate it (a historic landmark) and stand on my principles. . . . But it's very difficult when there's the legality (of the contract) and the threat of a lawsuit."