Remember Grand Bohemian plans? Prime St. Pete site still empty

In 2008, the New York Times "Breaking Ground'' column highlighted a luxury project set to get under way in downtown St. Petersburg.

Construction on the 28-story Grand Bohemian Hotel & Residences "is to begin this fall and be completed in 2010,'' the story said.

Four years later, there are no residences, no hotel and no signs of activity on one of the most desirable pieces of vacant land in the booming downtown. A proposed sale last year fell through, and the future remains unclear even as a South Florida developer pushes ahead with plans for a 13-story hotel and 41-story condo tower on a nearby block.

The Kessler Enterprise, the Orlando company that owns the Grand Bohemian site on First Avenue N at Second Street, did not return calls for comment Thursday. The city's economic development director, Dave Goodwin, said Kessler indicated a few months ago that it was looking for a buyer even though the 50,000-square-foot tract wasn't being actively marketed.

"They did let me know it's available and if I hear of anybody wanting vacant land, I'll send them their way,'' Goodwin said, calling it a "really great'' property.

It has also been a star-crossed property.

In 2004, when downtown St. Petersburg was on the verge of trendiness, the city sold the site to Kessler for $3.3 million. Richard Kessler, who as a young wunderkind had helped found the Days Inn chain before moving into the boutique hotel business, touted the Grand Bohemian as "the first true luxury hotel in Tampa-St. Petersburg'' with amenities like an art gallery and full-service spa.

But the company couldn't pay the full price up front and had to give the city a $1.5 million IOU to seal the deal. As the economy slumped, Kessler modified plans and repeatedly put off construction.

Last year, the City Council agreed to a plan allowing Kessler to sell the property to an Atlanta developer that city officials said intended to build a high-rise tower of about 300 upscale apartments.

That deal fell through and the property, which shares half a block with Duke Energy's St. Petersburg headquarters, continues to sit vacant, neatly mowed and fenced.

Meanwhile, developer Bill Edwards bought and quickly flipped the so-called Tropicana Block between Central Avenue and First Avenue N to the Kolter Group of West Palm Beach. It is expected to start construction by year's end on a 174-room hotel, parking garages and a 253-unit condo tower with stores and restaurants.

Even with that enormous project just a block away, the Grand Bohemian site should be attractive to developers.

"I think it's a great site,'' said Derek Keys, a St. Petersburg commercial Realtor. "You look where it is — catty-corner from Starbucks and the (Sundial),'' Edward's refurbished retail, restaurant and movie complex.

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Kessler has repaid the $1.5 million owed to the city but still has mortgages totaling about $6.8 million on the Grand Bohemian site. However, the property likely would sell for more than that based on the $17.25 million Edwards got for the Tropicana block, which is less than twice the size but closer to the waterfront.

Goodwin, the economic development director, said he would like to see the Grand Bohemian site developed, both for the property taxes it would generate and for the pizzazz it would bring to downtown.

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.