Bay Plaza is not going to be able to meet its contractual obligations with the city to begin work on the next phase of its downtown development project by June. It also is looking as though the fall groundbreaking for a stadium hotel will not come to pass. In the face of its inability to continue with the project now, Bay Plaza has asked for an extension on its performance deadlines. The city should use this opportunity to review and renegotiate its arrangement with Bay Plaza.
It is reasonable for the City Council to give serious consideration to a request to extend performance deadlines. Some of the reasons Bay Plaza finds itself in a bind are beyond its control. But some of the reasons for this bind are within Bay Plaza's control. Bay Plaza has been a poor business partner, showing limited responsiveness to community interests. Its rush to tear down the Soreno without having another use for the land in mind, and its failure to work effectively with local merchants has acted to undermine the trust that is necessary for a successful project.
Our agreement with Bay Plaza is now several years old. With Bay Plaza now bringing up the issue of a contract renegotiation, the council should use this as a chance to reassess its relationship with our master developer. A superficial review of the situation does not give cause for much joy.
In light of our experience, prudent fiscal management requires that the council consider the distinct possibility in its renegotiations that Bay Plaza might quietly pack up its bags and leave town. What are reasonable modifications the city should look for if Bay Plaza brings up the idea of contract renegotiation due to their failure to perform? Let me suggest several.
First, the city should consider reducing the area over which Bay Plaza has exclusive development control. It might be limited to the space where Bay Plaza actually owns property. Granting Bay Plaza a monopoly might have been necessary when we started, but years of relative non-performance don't justify a continuing exclusive agreement.
Second, the city has a strong interest in protecting control over the development of the land the Soreno occupies. In the event Bay Plaza does withdraw from this project, the city should have rights of first refusal on acquiring the Soreno land. It is prime waterfront, and it would be unfortunate to see another Bayfront Tower spring up on it.
Third, the city should pace its spending obligations to those of Bay Plaza. In other words, if Bay Plaza has a delay in fulfilling its development obligations, it makes sense that the city also phase back its spending obligations.
Fourth, in a related area, the city should announce that it will put out to open bid contracts for managing The Pier, Bayfront and Dome. Bay Plaza currently has these contracts..
We find a gamut of reactions to Bay Plaza in St. Petersburg. One extreme says "Throw the rascals out, they've done more harm than good." The other extreme says "They can do no wrong _ we must accommodate them however they want." A middle ground says "Downtown development is important for the long-term health of the city and Bay Plaza can have a role in it. But in light of our experience, now more than half a decade long, we need to reassess our over-reliance an a single developer. Prudent management demands we hedge our bets and be sure the interests of the city and its citizens are not subordinated to the interest of a developer."
In any contract renegotiations, the council serves our collective interest if it looks for a middle ground.
Tom Oberhofer teaches in the Department of Economics at Eckerd College. My View columnists, invited to contribute for a year on a regular basis, write their own views on subjects they choose, which are not necessarily the opinions of this newspaper.