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Condo owners in Tampa's the Slade At Channelside battle to keep it from going all rental

When construction of the Slade began around 2006, many paid more than $200,000 for their condos because of the amenities and Channelside’s promising future. Slade Owner LLC now owns more than 80 percent of the units and is converting them to rentals.
When construction of the Slade began around 2006, many paid more than $200,000 for their condos because of the amenities and Channelside’s promising future. Slade Owner LLC now owns more than 80 percent of the units and is converting them to rentals.
Published Jan. 1, 2017

TAMPA — Built in what could become one of Tampa Bay's most dynamic neighborhoods, the Slade At Channelside condominiums boast an eclectic mix of unit owners.

There's Brandon McArthur, a baseball scout for the Los Angeles Angels. And Anthony Arzola, a medical devices salesman. And Damon Mathis, a colonel in the U.S. Army.

They and many others bought in the Slade — paying more than $200,000 for their units — because they liked its sleek look, its wide range of amenities and its location in a prime area poised for massive redevelopment.

But they are fighting what could be a losing battle to keep their homes.

A St. Petersburg-based company, Slade Owner LLC, has acquired more than 85 percent of the units and wants to make the Slade rental only. It already is leasing out the units it owns and needs to acquire only a few more to achieve its goal.

To that end, the holdouts charge, Slade Owner is trying to bully them into selling. They say the company arbitrarily reassigned long-held parking spots and has slapped them with assessments, demanding quick payment in full. And they say it has threatened them with the possibility of more assessments unless they accept what they call "ridiculously'' low offers to sell.

Arzola, who once lived with roommates to save money for a place of his own, recalls being "so excited'' to buy a Slade condo in 2013.

"I thought I had made a great decision,'' he said. "Then come to find out just two years after living there that an investment company can just come in and try to kick me out of my home to make a quick profit was a shocker.''

It's a shock felt by thousands of other Florida condo owners as investors, eager to capitalize on the strong demand for rentals, take advantage of a 2007 state law that made it easier to convert condominiums to apartments. And due to a recent state appeals court ruling, owners who don't want to sell might not be helped by a 2015 law that was supposed to give them some protections.

Florida lawmakers are likely to readdress the issue when they meet next year.

"In the wake of recent court decisions that are allowing these bulk owners to circumvent the will of the Legislature with the 2015 law to protect homeowners, we're going to take an early look to make sure that property rights are adequately protected in the state of Florida,'' said Rep. Chris Sprowls, a Pinellas County Republican who introduced the law.

Until 2007, major repairs or termination of a condo association required the approval of 100 percent of the unit owners. But as foreclosures and two active hurricane seasons left many units damaged and vacant, the Legislature decided that was too high a threshold.

In 2007, it amended the law so that 80 percent of owners could terminate an association if no more than 10 percent of owners were opposed. That meant one or two recalcitrant owners couldn't block the will of the majority. But as thousands of Floridians lost their homes and the demand for rentals soared, investors realized that the new law could help them convert condos to apartments.

The foreclosure crisis made the Slade condos ideal candidates to become the Slade Apartments, as they already are being called.

Mathis was stationed in Tampa when construction began around 2006 during the peak of the boom. He liquidated his retirement account and put $46,000 down on a unit then priced at nearly $480,000.

"I wasn't buying for what Channelside looked like in 2006,'' he said, "but what I thought it was going to look like in 2020.''

Then Mathis was transferred to Atlanta and the market collapsed. In 2009 he made a desperate call to the Slade's real estate agent.

"I was about to say, 'you guys can keep the $46,000, I'm about a minute away from going bankrupt, my house in Gibsonton is underwater, my stocks have crashed,' '' he recalled. "She goes, 'Damon, we're so glad to hear from you, we're repricing the condos.' So I ended up buying for $236,000 (a condo) with two bedrooms, a den and two parking spaces.''

Many other buyers, though, backed out and left the developer stuck with unsold units. In 2011, a South Florida company bought more than 200 units at a foreclosure auction, rented them out, then sold them last year to Slade Owner LLC for $40 million, records show.

Slade Owner has continued to buy individually owned units, including two in November. It easily meets the 80 percent ownership requirement, but Martin and others who don't want to sell still make up more than 10 percent of the ownership — enough to block termination of the condominium association, though just barely.

Mathis, now stationed at the Pentagon, said he was offered $248,000 but wants to make the Slade his permanent home when he retires in July.

After paying closing costs and real estate commissions — sellers must use and pay Slade Owner's designated agent — "I would have ended up with $5,000 or $10,000 over what I paid, but that's not the point,'' Mathis said. "Not only is this an idiotic offer but I want to live here. My condo looks right over the Amalie Arena and my niece is counting on me moving so she can live with us and go to college here.''

Arzola, who sells medical devices, was offered $245,000. He paid $226,000 for his unit but said he has spent thousands of dollars on upgrades including hardwood floors, ceiling fans, shelving and tile on his balcony.

Moreover, he doesn't think the offer reflects the growing popularity of the Channelside district, close to downtown Tampa and in the planning stages of a $3 billion redevelopment by a partnership that includes Tampa Bay Lighting owner Jeff Vinik. Eventually, the area could be home to an office tower, luxury hotel, dozens of stores and restaurants and the University of South Florida's College of Medicine and Heart Institute.

"What they're offering doesn't allow us to move to a comparable apartment in the area,'' Arzola said. "My choice would be to never move because I moved here for a reason. I like the atmosphere, I like living in Channelside and I foresee it in the future being one of the most attractive places to live not only in Tampa but in Florida.''

Arzola and other dissident owners said the company that now owns most of the units also is using special assessments as a tactic to get them to sell. Arzola's assessment came to $2,300, payable in full in 30 days.

"It was tough,'' he said. "Most assessments, they give you a year to pay them off.''

McArthur, a star baseball player at the University of Florida who now scouts for the Angels, said he and another owner, Pittsburgh Pirates catcher Francisco Cervelli, were in the lobby one day when a representative of Slade Owner issued a warning.

"He basically threatened us the whole time,'' McArthur recalled, "He said, 'you will be getting assessments, this place will be turning into an apartment complex, if you don't sell your place right now I've heard rumors that they really will try to low-ball you.' "

Gregory Williams of Cardinal Point Real Estate, which is negotiating sales on behalf of Slade Owner, said the company has fully complied with state law. Prices being offered "significantly exceed'' the average square foot price paid by buyers before Slade Owner acquired its units last year, he said.

"It should be noted,'' Williams added, "that only approximately 3 percent of the residential units are reflected as homesteaded or owner-occupied. The vast majority of remaining individual unit owners are investors and acquired their units on a speculative basis in 2010, 2011 and 2012 when the Slade was distressed.''

But McArthur, Arzola and Martin note that they aren't investors and that they bought their units before or after that time period, when prices were higher.

In response to the unintended effects of the 2007 law, the Legislature passed another law last year that increased protections for condo owners facing the forced sale of their units. Among them: Homesteaded owners who bought from the developer must be reimbursed for the price they originally paid, while owners who bought later must be paid the fair market value of their units

In a case involving a South Florida condominium, though, Florida's 3rd District Court of Appeal issued a ruling in November that could embolden some bulk owners to ignore the new law's protections for owners who don't want to sell. That worries the Slade holdouts, who have hired an attorney and plan to keep on fighting.

"I have been saving most of my working career and lived with roommates until I finally saved enough money to buy my first home at the Slade,'' said Arzola, 35. "I have a beautiful condo facing the saltwater pool with a great view of downtown Tampa. I don't want to be anywhere but here.''

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8215. Follow @susanskate.

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