CLEARWATER — A long-awaited affordable housing project on a city-owned downtown parcel has been canceled, and the site could now be included in negotiations for a land swap with the Church of Scientology.
Blue Sky Communities went under contract with the city in 2019 to build 81 apartments on the former fire station site at 601 Franklin St. It took the developer two years to obtain $17.5 million in tax credits from the state.
By then, the coronavirus pandemic caused construction costs to skyrocket. So as recently as February, Blue Sky CEO Shawn Wilson asked for and received $2 million from the Pinellas County Commission to cover a funding gap. The city also agreed to provide $1.8 million to get the affordable units out of the ground.
In an interview, Wilson cited continuing construction increases as the reason he ended his contract with the city last month, but he said Scientology’s longtime interest in the property also was “in the back of our mind.”
Asked if the church had pressed Blue Sky to abandon its project, Wilson said “I’m not comfortable making any further comment.”
“We know about (Scientology’s) interest and we know a lot of things that are happening in the city, so there was a lot of factors that went into our decision not to pursue the deal anymore but primarily it was just our inability to get a comfort level with construction costs,” Wilson said.
Scientology spokesperson Ben Shaw did not respond to a request for comment. The parcel is bordered to the west by the church’s seven-story, 300,000-square-foot Flag Building and to the south by a vacant lot where Scientology plans to build a 4,000 seat auditorium.
City Manager Jon Jennings said Scientology leader David Miscavige stressed his interest in the fire station property during negotiations for a land swap that began after Jennings took over city administration in November.
The swap is centered on Scientology acquiring a 1.4 acre lot near the waterfront on Pierce Street, which Miscavige has wanted for years. But Jennings said the deal has stalled because the two cannot agree on other properties that could be included and what the city would get in exchange.
“I obviously want maximum value, as does he, so we just haven’t been able to agree on what would be a part of a package that I could then bring to the City Council,” Jennings said.
The city has obtained appraisals on a park the church owns on the northeast corner of Drew Street and North Fort Harrison Avenue and land near the southeast corner of Court Street and S Fort Harrison Avenue that is owned by a limited liability company managed by Scientology parishioners.
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Jennings said he expects Miscavige to bring the city’s Franklin Street fire station into their negotiations “once he finds out or if he knows the property is available.”
When the City Council granted Blue Sky’s affordable housing project the $1.8 million in additional funding in December, Mayor Frank Hibbard was the only no vote.
He said he didn’t see 81 units moving the needle on the affordable housing crisis. He also noted Scientology’s interest in the land and that it could be used as a bargaining chip for the city to acquire more important properties in exchange.
On Tuesday, council member Kathleen Beckman said it was “incredibly disappointing” to lose the Blue Sky project because affordable housing is a top priority of residents. Council member Mark Bunker expressed concern over the possibility that Scientology will benefit over the city’s loss of affordable housing.
In February, a group of limited liability companies tied to Scientology announced it started to renovate three downtown buildings and recruit retail the the empty storefronts. Jennings confirmed the plan was a show of “good faith to the community” from Miscavige as the two negotiate terms for the land swap.
“I am not swayed by the fact that this is going to be good for our relationship with Scientology,” Bunker said. “I don’t trust them and I don’t think anyone should.”
Last year, Tampa’s Southport Financial Services announced its 171-unit mixed income apartments on city-owned land at 306 S Washington Ave. was also on hold due to soaring construction prices, environmental remediation costs and property tax issues.
Jennings said there is no plan to solicit affordable housing again for the Franklin Street site and that he plans to ask the council to reallocate the Blue Sky funding to the Washington Avenue project.