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Vacancies in Scientology-tied real estate linger. Clearwater asks what it can do.

The Council asked the city attorney to research ways to address vacant buildings. But there are few options for empty properties that stay up to code, experts say.

CLEARWATER — An old jewelry store on the corner of Cleveland Street that welcomes visitors to the core of downtown sits empty, unchanged since a company managed by a Church of Scientology secretary bought it nearly four years ago.

The shell of a former Walgreens across the street has stayed vacant for two years, ever since a company managed by two members of Scientology bought it for $4.5 million in cash, twice the appraised value.

Dozens of downtown business owners are watching how the city’s $64 million plan to redevelop the downtown waterfront may impact the retail area. But as the city prepares to break ground on Imagine Clearwater, vacancies linger in surrounding properties purchased gradually over a three-year period by companies tied to Scientology using $103 million, almost all in cash.

Of the 92 properties those companies bought between 2017 and 2019, 35 storefronts and buildings sit empty today. The new owners have 28 vacant lots. Since 2017, at least 15 businesses that got new landlords tied to Scientology moved out and were not replaced.

“People are buying commercial properties and making no effort to put something on it,” council member Hoyt Hamilton said at a recent meeting. “I’m talking about the elephant in the room here, folks. These are questions people want answers to and the questions need to be asked.”

Since 2017, the Church of Scientology and companies run by its members have bought 92 properties around the center of downtown. The church acquired three others in a land swap. [ Tracey McManus ]

Scientology spokesman Ben Shaw this week did not respond to requests for comment and has ignored repeated requests to interview Scientology leader David Miscavige.

Council members last month asked City Attorney Pam Akin to bring them guidance on what the city could do to address property owners who leave their buildings vacant. Akin said Thursday she is still researching.

RELATED: How Scientology doubled its downtown Clearwater footprint in 3 years

Cities can address dilapidated and unsafe buildings through code enforcement liens. But these downtown buildings don’t have glaring code violations. When it comes to properties that up to code but perpetually vacant, cities have few options, said Joan Youngman, a senior fellow at the Lincoln Institute of Land Policy.

Places like Vancouver and Washington D.C. have implemented a special tax on vacant buildings that penalize owners with no tenants. Akin said that’s not possible in Clearwater since cities in Florida don’t have authority to create new taxes.

Youngman said it is important to identify what is causing the vacancies in the first place. Penalties may be counterproductive for landlords with financial hardships or who are victims of the surrounding retail climate. Others are speculative and may sit on properties for other reasons.

“It’s very hard to know to what extent would an additional tax make a difference if there are larger market forces that are causing a landlord to not have the property occupied,” Youngman said. “The situation there sounds as if it’s not at all a financial constraint. So the idea of some sort of additional tax having an influence on behavior feels unlikely.”

Alan Mallach, senior fellow at the Center for Community Progress, said a municipality cannot compel private property owners to occupy their buildings. But in such a unique circumstance, he said it might be possible to craft an ordinance requiring efforts be made to list properties on the market or identify a contact for interested tenants. The premise, he said, is that widespread vacancies cause economic harm to a city and hinder redevelopment.

“It is conceivable but I don’t doubt it would be litigated and I don’t know there has ever been a case explicitly on whether such an ordinance would be legal,” Mallach said. “They would really have to buttress it and be very careful it wasn’t something singling out church-owned properties.”

In addition to the recent purchases by church-connected companies, there are 43 properties that companies and individuals tied to Scientology have owned prior to 2017. Of those, 11 storefronts sit vacant and six lots are undeveloped.

This prominent restaurant space at 635 Cleveland Street, as seen on August 9, 2019, is owned by a company run by a Scientology parishioner, has long sat vacant. [ DOUGLAS R. CLIFFORD | Tampa Bay Times ]

All properties owned by companies and individuals remain on the tax rolls. Of the 60 properties Scientology owns under its name in Pinellas County, most of which are downtown, 73 percent are tax exempt for religious purposes.

City officials have long said they should focus on land they can control. That includes ongoing work to break ground on Imagine Clearwater, the plan to turn the downtown waterfront into a vibrant park with a garden, concert venue, bluff walk and plaza surrounded by mixed use projects.

The city is preparing to put out to bid three city-owned sites bordering the 22-acre waterfront park for developers to build residential, retail and hotel projects. The 100 properties bought by companies tied to Scientology are in the blocks within walking distance of the waterfront and the church’s international spiritual headquarters — the footprint where city officials hope investors will bring businesses as a result of the revived waterfront park.

The former Sage venue at 22 N Ft Harrison Ave, Clearwater. A company managed by a Church of Scientology secretary bought the building in January 2017 but has left it vacant. It is one of nearly 100 downtown retail properties bought by companies tied to Scientology since 2017 - many of which remain vacant. [ DOUGLAS R. CLIFFORD | TIMES | Times ]

Community Redevelopment Agency director Amanda Thompson told the council last month that the greatest barrier to reviving the private market is perception. Amid the vacancies, there are still dozens of businesses operating.

Her two-year work plan includes a strategy that leads with sharing positive stories about downtown.

“Our single most important work is to shift that perception to one that aligns with that vision of live, work, shop, play,” she said.

Thompson notes the individual bright spots within downtown: the success of ClearSky on Cleveland restaurant that opened in 2017, the full capacity Nolen apartment complex, the temporary closing of the 400 and 500 blocks of Cleveland Street to vehicles that has boosted activity to the 20 businesses clustered there.

But she acknowledged that investors need to see more of a pattern of success before they take a chance.

“We have one or two of those success stories and most investors are looking for more examples of that,” Thompson said.

It’s unclear what kind, if any, businesses the new owners are open to bringing into their properties.

The Times last year contacted all of the roughly two dozen members of Scientology involved in the 100 purchases through email, phone, certified letters and door knocks. Only two individuals responded for the Times investigation about the purchases published in October 2019, and they denied their activities were dictated by the church.

Hamilton said most typical real estate investors would appear in Clearwater’s planning department for a building permit for a project “a minimal amount of time” after buying a property. Because most of these new owners have not done that, he proposed the city contact them to find out.

“If all we get is, ‘Well I don’t really know what I want to do with it,’ then I want to ask the question: ‘Then why the hell did you buy it?’”