Latest offer turned down because of insufficient financing details and failure to provide other information county staff sought
A Sarasota County commissioner this week expressed frustration that “a phenomenal piece of property” in downtown Sarasota that the county owns and has been trying for years to sell still has not found a buyer.
“Why?” Commissioner Charles Hines asked during the board’s regular meeting on Oct. 10, referring to the parcel at 20 N. Washington Blvd., just to the north of the historic Sarasota County Courthouse. “Are we putting too many restrictions on it? That conversation needs to be had.”
Hines’ comments came in the context of a board discussion regarding another piece of property — this one in Venice — that also has been on the county’s list of land it does not need and therefore wants to sell. “We must aggressively look at our surplus property,” Hines said. Staff should be coming to the board at least once a quarter, he added, to seek direction on perhaps two or three parcels at a time.
On Sept. 26, at staff’s recommendation, the commissioners voted unanimously to terminate the latest Invitation to Negotiate (ITN) process staff had used to try to sell the North Washington Boulevard site.
The only response staff had received involved a proposed 4-star Starwood Hotel project that the development team indicated it could complete in September 2020. However, citing insufficient financial information and details related to other projects involving the same team, staff had recommended the commission decline the $2.5-million offer for the property at 20 N. Washington Blvd.
A Sept. 26 memo from Jeff Lowdermilk, director of the county’s General Services Department, and Lin Kurant, manager of the county’s Real Estate Services Division, also outlined the saga of the county’s efforts to find a viable buyer for the downtown parcel.
On July 10, 2013, the commission declared the property surplus. An Invitation to Negotiate (ITN) was published on July 18 on the county’s Procurement Department webpage, as well as on the county’s Real Estate Services webpage, the memo pointed out. As a result, staff received two proposals.
As The Sarasota News Leader reported in October 2013, developer Rod Connelly proposed a 9- or 10-story, 150-room hotel with a 6,000-square-foot conference center on the site. Developer Wayne Ruben’s WMR Consulting wanted to build a 10,000-square-foot headquarters for a national financial institution and 2,500 square feet of adjacent commercial space. The board voted to direct staff to negotiate with Connelly and his firm, SHD Partners LLC.
“What we need in my opinion is another hotel that can keep downtown going in its revitalization,” Commissioner Hines told his colleagues at the time.
“This property is not on the tax rolls right now,” then-Commissioner Joe Barbetta pointed out. “It needs to get on the tax rolls.”
On Feb. 12, 2014, the commissioners voted 3-2 to approve an agreement with SHD Partners for a Kimpton Hotel on the property. However, the deal involved SHD constructing 86 parking spaces two blocks east of the site to replace the surface lot. Part of the deal entailed the county’s paying SHD up to $494,798 for the new parking spaces.
Then-Commissioners Nora Patterson and Christine Robinson cast the “No” votes.
Staff ended up terminating the deal with SHD on May 1, 2015, the Sept. 26 staff memo noted, because “SHD failed to meet the terms and conditions” of the agreement.
A second ITN was published on county webpages on July 10, 2015, with the response period set to close on Oct. 21, 2015, the memo continued. Two proposals came in, but neither was accepted, the memo added, so that ITN was terminated as well.
“A third ITN was published on the County’s Real Estate Services webpage on March 28, 2017,” the memo said. Its response period closed on July 25. The solitary proposal submitted, the memo added, was from one of the respondents to the 2015 ITN.
The Sept. 26 memo explained, “The [most recent] ITN required interested responders to provide information in the following categories: Proposed Purchase Price, Financial Plan, Development Plan and Project Approach, Development Team, Demonstrated Development Experience, Timeline and Economic Impact Analysis.” The memo noted that the respondent “did not provide definitive documentation outlining financial means for purchasing the land and developing the project. After an initial review of the proposal, staff contacted the respondent and requested additional information regarding financing and clarification of a reference made [to] a prior project in Lakeland, Florida.”
The respondent did provide “some explanation” about the Lakeland project and potential investor financing, the memo continued, but the respondent was unable to give staff specific details about “how the project would be funded.”
Thus, the memo said, staff recommended terminating the latest ITN and trying again, in the spring of 2018, to solicit offers. Staff will keep a sign posted on the property to denote its availability, the memo added, and the county webpage devoted to surplus property will make it clear that inquiries are being accepted.
Although staff has received a few calls since the latest bid period ended, the memo pointed out, and those callers were encouraged to submit letters of interest, none had been received by Sept. 26.
The latest ITN
The ITN issued in March explained that the county acquired the 41,595-square-foot parcel at 20 N. Washington Blvd. in 1978. Since then, the site has been used for public parking; the 86 spaces were set aside for people planning to conduct county-related business, the ITN noted, as the historic courthouse is right across the street.
The property has 233 feet of frontage on Main Street, the ITN added.
On July 19, Dr. Hisham N. Ashkouri, representing HAAD/Cold Spring Green LLC of Tampa, wrote that his team would offer the county $2.5 million, based on real estate and market analysis. However, he continued, the team was “open to higher price.”
Further, the team would purchase the property at 2051 Main St. for temporary parking to replace the surface lot, at an estimated cost of $2 million, he noted; afterward, the Main Street site could be developed.
The total pledged for acquisition of both parcels and development of the hotel project was $65 million, he wrote.
Among others, the team would include his firm, Hisham Ashkouri Architects/Developers of Boston and New York City; Walter Butcher, a Tampa investor; Ronnette Riley of New York City, who designs hotel interiors; the Wantman Group of West Palm Beach, a civil and environmental engineering firm; Rosenwasser/Grossman Consulting engineers of New York City, which handles structural engineering; and KAST Construction of West Palm Beach, which would serve as the general contractor and manager of the project.
Butcher would provide 100% equity financing, the materials pointed out.
In a follow-up letter, responding to county questions, Ashkouri wrote that Butcher “is a private investor and does not advertise his investment activities or [list] them on the Internet. His funding sources are privately held. If you do any search on him on the [Internet], you would not find any website for such funding activities.”
The document accompanying Ashkouri’s first letter said the team proposed an 8-story building “with a mezzanine floor with hotel, retail, conferencing, and recreational activities …” The plan would include a parking garage with about 150 spaces. “We have presented this project to the Starwood Hotel Group of Georgia/Connecticut with management by Chesapeake Hospitality of Maryland,” the document added.
The design of the 4-star hotel included an 8-story atrium, the document said. The building would be made of glass and structural steel. The document likened the design to that of the Crystal Palace in London.
The hotel would occupy the top two or three floors, the document noted, while the first two floors “would be allocated for retail, public amenities and recreation.” The middle levels would be used for conference space and commercial offices, as well as for the heating and air conditioning equipment and electrical systems.
“In our vision,” the document said, “the design quality in this project should create a new architectural vocabulary defining the 21st Century Image of Sarasota.”
The project was estimated to earn approximately $7,857,400 per year, the document said, “allowing the development team to pay-off its entire cost within a period of less than 25 years with net profit of $95 million within the first 20 years.”