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Lease could be a block buster

The city's plan to own an entire block on the north side of West Bay Drive may have hit a snag.

That's because a pub owner on the block says he has a long-term lease to the property.

Largo officials acknowledge they didn't know anything about it when they negotiated the proposed deal.

City commissioners are scheduled to decide tonight whether Largo should enter into a contract to pay $2.16-million for five parcels between Fifth and Sixth streets from Amber & Onyx Realty Group of Atlantic Beach.

O'Houston's Irish Pub & Restaurant, at 518 West Bay Drive, sits on one of those parcels. And owner Eddie Houston says he's three years into a 15-year "iron-clad" lease.

If Houston is right, the city will probably nix the deal, City Manager Steve Stanton said.

"It would absolutely be a deal-breaker and inconsistent with verbal representations made to us during the negotiations,'' Stanton said.

But officials won't get lease details until they execute a contract with the owner of the properties.

Stanton said the property owner was not required to supply those documents until the parties entered into a contract. But he said the owner did imply that Houston has about two years left on his lease.

Chris Alepa, president of Amber & Onyx Realty Group, could not be reached for comment.

Houston, 45, said he negotiated a long-term lease three years ago because owning the pub was his dream. Since then, he and his wife, Christine, pumped more than $100,000 into their business, he said.

"We sold our cars. I sold my motorcycle .We absolutely gave up everything to make this happen,'' said Houston, who also rents a house on one of the five parcels.

If city leaders authorize the contract, if Houston doesn't have a long-term lease, and if the property owner meets the terms of the agreement, the city could close on the sale on Jan. 31.

The agreement is also contingent on an appraisal concluding that the properties are worth at least $2-million, community development director Mike Staffopoulos said.

In October, the city purchased two other parcels on the block for about $700,000. Strickland's Pura Vida coffee shop sits on one of those parcels.

Officials hope the combined properties would give the city more than an acre to market to a private developer.

"If we're going to make the downtown vibrant, the city of Largo is going to have to be the master developer,'' Stanton said.

In recent months, city officials have talked about changing the image of West Bay Drive's redevelopment district to allow for more homes and multistory mixed-use development.

The district, which encompasses about 300 acres, has mostly one- and two-story buildings and a maximum density of 15 units per acre.

City officials have discussed allowing the construction of buildings up to 10 stories tall. Developers who set aside units for affordable housing also could get permission to build as many as 45 units per acre.

Kristina Elfering, a customer at Strickland's coffee shop, said downtown could lose its character if mom-and-pop shops are booted out.

"I'd really like to see small little businesses stay open,'' she said. "So many cities lose that charm.''

Stanton said Largo ultimately wants local merchants to stay in the district, even if it means relocating.

And there is no immediate plan to evict anyone, he said, because revising the redevelopment plan and increasing densities could take two years or more.

For the short-term, the city would intend to borrow money, probably from a bank, for this purchase.

But ultimately that debt and similar purchases like this in the district would be funded through revenues generated by tax-increment financing, Stanton said. Here's how it works:

Once the redevelopment district is created, officials first add up the assessed value of all the property inside its boundaries. In the future, tax revenues generated by that base value continue to go to the local governments that had previously collected them. But as the assessed value of property in the district grows, the additional property tax revenue generated by the increased value is directed into a redevelopment fund for projects benefiting the district.

The city plans to acquire much of the district's property on the north side of West Bay to make the area appealing to developers. Over the years, the city has spent $690,000 to amass about a dozen properties near the Community Center at 65 Fourth St. NW. Officials are considering combining several of those properties and marketing them, too.

Much of the recent development along West Bay Drive has spurred by city involvement.

In 2002, after several unsuccessful bids, the city sold the former City Hall property to Hyde Park Builders for $1.08-million. The developer built 54 townhomes and the West Bay Village commercial complex.

Two years later, the city sold its old Police Department property for $800,000 to BayStar Hotel Group, which built the Hampton Inn & Suites.

Lorri Helfand can be reached at 445-4155 or lorri@sptimes.com.

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