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The developer is considering taking the project to another site in the district.

After offering $650,000 for a city-owned parking lot in Ybor City, a prominent hotel developer now is looking to build somewhere else in the historic district.

In December, City Hall put out a call for development proposals for a third of a block it owns at E Seventh Avenue and Nick Nuccio Parkway. It got two responses.

The best, officials say, came from the Liberty Group, a Tampa-based hotel investment, development and management company with $300 million in assets. It proposed an $11.3 million hotel with 70 guest rooms and suites, interior lap pool, ground-floor lounge and rooftop bar.

Recently, however, Liberty president Punit Shah told the city he was considering taking his project to a bigger site elsewhere in Ybor.

Tampa economic opportunity administrator Bob McDonaugh, who briefed the City Council on Thursday, said he doesn't know where the second site is. And city officials won't have any hard feelings if the sale falls through.

"If he's unable to come to some type of arrangement with the other property owner, perhaps we would re-engage," McDonaugh said. "But the whole idea ... was to induce someone to investigate constructing a hotel in Ybor City. If it's on the city's land or somebody else's land, I'm okay either way. The end result is getting more rooms in Ybor City."

Shah, who could not be reached Thursday, is a partner in a $14 million project to turn downtown's old Mercantile Bank building into an Aloft boutique hotel. He also is a partner in a group seeking the lease for the Channelside Bay Plaza retail complex.

The city does not plan to go to the second bidder, a partnership between South Florida developers Neal Margo and Arnold Gitten, which offered less than half of the appraised value of the land. City officials also do not plan to seek new bids for its land.

Meanwhile, a second project for an apartment complex on city-owned land half a mile away is still in the works, McDonaugh said.

A partnership between the Intown/Framework Group and Forge Capital Partners, both based in Tampa, has agreed to pay $660,000, the appraised value of the city's land south of Interstate 4 between N 16th and 17th streets. The developers propose a $27 million project with 220 units and a brick-and-tall-window design inspired by Ybor City's cigar factories.

Richard Danielson can be reached at (813) 226-3403, or @Danielson_Times on Twitter.