Wednesday, September 19, 2018
Real Estate

Lawsuit over 25-story St. Pete tower involves option to buy land for $720,00 and contract to resell it for $1.8 million

ST. PETERSBURG — The developer of a proposed 25-story mixed-use tower in downtown St. Petersburg is suing the companies that own and lease a parcel of land where the tower would go.

The dispute, which has put the project on indefinite hold, centers around an option to buy the parcel for $720,000 and a separate contract to resell it for $1.8 million.

The tower is planned for two parcels near the Sundial shopping and entertainment center. The parcel at issue is owned by Heritage Hotel Associates but leased to Robinson Sports, doing business as the Fit2Run shoe store.

Heritage and Robinson are named as defendants in the suit, filed this week in Pinellas County Circuit Court by Ping Pong Partners, the tower’s developer.

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In 2012, the suit says, Heritage and Robinson entered into a lease agreement that gave Robinson the right, on 90 days notice, to buy the Fit2Run property for $720,000 before the end of the fifth full lease year.

The fifth full year expired July 31.

In April, Robinson contracted to sell the parcel to Ping Pong Partners for $1.8 million. In May, Robinson notified Heritage that it wanted to exercise its option to buy the property for $720,000.

According to the lawsuit, Heritage has refused to honor Robinson’s purchase option. Robinson, in turn, has refused to assign the option to Ping Pong Partners, as they agreed it would if Robinson was unable to convey title to the property at 256 2nd St. N.

Palmetto-based Robinson did not return a call for comment. Heritage is affiliated with Tampa-based BayStar Hotel Group, which owns the Hotel Indigo next to the shoe store.

George Glover, Baystar’s CEO, said Thursday he had not read the suit and had no comment.

In July, Ping Pong Partners applied to the city for streamlined approval of the $40-million tower. BayStar/Heritage filed an objection. Because it, as owner of the Fit2Run property, had not authorized Ping Pong Partners to submit the application, city officials said the project could not move forward.

Since 2012, when Heritage agreed to the lease-purchase option for $720,000, prices for land in booming downtown St. Petersburg have soared. In its lawsuit, Ping Pong Partners suggests that Heritage doesn’t want to honor the option because it could get much more for the parcel than what it agreed to six years ago.

According to the suit, Heritage has received offers for the Hotel Indigo that would be nearly twice the amount needed to pay off the mortgage on the hotel and the Fit2Run property. However, the suit says, Heritage "has requested its lender to not release the (Fit2Run) property as collateral in an attempt to prevent Robinson and/or plaintiff from exercising the purchase option."

"Under information and belief," the suit continues, "Heritage is taking such action to either demand a higher price for the hotel or stall Robinson and plaintiff in hopes of defeating the purchase option."

Ping Pong Partners, which says it has had to delay closing on the Fit2Run parcel six times, is asking a judge to render a judgment allowing it gain title to the property.

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

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