Clearwater agreement with bluff developer outlines nearly $26 million in incentives

The City Council is scheduled on Thursday to have its first of two votes on the development agreement for the $400 million hotel, retail and residential project.
A rendering from the plan by Gotham Property Acquisitions and The DeNunzio Group for a hotel in the top center of the frame and two apartment towers to the right, with both projects surrounding the future Coachman Park.
A rendering from the plan by Gotham Property Acquisitions and The DeNunzio Group for a hotel in the top center of the frame and two apartment towers to the right, with both projects surrounding the future Coachman Park. [ The Bluffs development group ]
Published July 20, 2022|Updated July 20, 2022

CLEARWATER — In the five weeks since City Council members chose the developer they want to transform the downtown bluff, City Attorney David Margolis said he’s been working day and night to close the deal.

On Thursday, the council is scheduled to have its first of two votes on that development agreement. Currently, it outlines an array of incentives and requirements that must be met for the city to sell two bluff parcels to Gotham Property Acquisitions and The DeNunzio Group.

For the developer’s $400 million hotel, apartment and retail project, the deal calls for roughly $25.5 million in incentives. That includes $22 million for two underground parking garages to be paid from the city’s parking fund, revenue that comes mostly from customer fees; $1.5 million toward impact fees paid by the Community Redevelopment Agency, a special downtown taxing district; and up to $2 million to split the cost of a pedestrian bridge.

The city required the developer to include underground parking so as not to obstruct views of the Intracoastal Waterway with garages. On Wednesday, Mayor Frank Hibbard said the parking fund is a reasonable source to help pay for it.

“One of the things a lot of people complain about on (South Clearwater Beach) is the canyon effect and the fact they can drive by and walk by and would never know there’s water there — that’s not going to be the case on these sites,” Hibbard said.

However, voters have ultimate say in the bluff development, which would border the city’s $84 million renovation of Coachman Park, now under construction. The sale of a portion of the former Harborview Center site at the corner of Osceola Avenue and Cleveland Street and the old City Hall a half-block south is dependent on the passage of a voter referendum on Nov. 8.

If that referendum passes, the sale would close no later than Dec. 31, 2024, according to the proposed development agreement. The developer has offered $9.3 million for the Harborview site and $15.4 million for the old City Hall.

On Tuesday, the Community Development Board, the city’s local planning body, unanimously recommended approval of the 30-year development agreement, even though several key components were still being negotiated.

The draft agreement calls for 600 underground parking spaces for 600 apartment units on the City Hall site, and 169 spaces for the 158-room hotel on the Harborview site. But terms were still being negotiated for a scenario if the developer builds the minimum of 500 apartments, planning and development director Gina Clayton said.

On Tuesday, Clayton said the city and developer were still working on a provision aimed at preventing the land from being transferred to an unqualified party after the sale.

During a discussion in June, the council had asked for this provision to be included, in part to assuage residents’ fears that the developer would sell the land to the Church of Scientology, downtown’s largest property owner.

In the current draft, the language states that any future sale of the land could only be to someone with at least 10 years of experience in mixed-use projects, that manages at least 1,000 apartment or hotel units, is not a nonprofit, and has other financial qualifications.

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Council member David Allbritton said, although the timeframe for negotiations has been tight, he’s confident in the safeguards for the city.

The agreement also prohibits self-storage or light assembly uses on the sites, prohibits nightclubs outside of the hotel, limits amplified music, outlines sustainability requirements and requires portions of areas between buildings to be dedicated for public use.

“Both sides are asking for more than they think they can get, and I think we will get to a place where both sides are comfortable,” Allbritton said.