Appraisals Create Uncertainty for Beach Parking GarageBy Carl Wagenfohr CLEARWATER – The City Council's effort to construct a parking garage on Clearwater Beach was slowed last week when it was revealed that appraisals on their first choice site fell short of the value needed to begin the project. In October, 2008, the Council established the Surf Style property at 309-311 South Gulfview Blvd as its preferred location for what could be a 500-space parking garage. Condominium-style ownership would come in two steps, with only 300 spaces acquired at the completion of construction and the remaining 200 taken over when a limitation in the City's contract with the Hyatt Aqualea expires. That limitation, in place until 2012, prevents the city from constructing or financing more than 300 parking spaces near the Aqualea, which itself will contain 400 public parking spaces. Assistant City Manager Rod Irwin explained during the February 5th Council meeting that appraisals of the completed 500-space garage were in line with the city's total acquisition cost. But the appraised value of the initial 300-spaces fell about $3.3-million short of what the city will have paid for them. That difference is approximately the amount that Surf Style asked the city to finance as a condition of a $3.2-million reduction it proposed last fall in the price of the garage. Viewed as a $3.3-million loan, the city would be in violation of its contract with Aqualea. Irwin related the outcome of his recent communications with Surf Style; "The long and short of it is the partners have met and have indicated that they want to move forward to shift the project and try to absorb the $3.3-million." Irwin said that Surf Style would be going back to its lender to negotiate additional financing to carry the project forward. "There's no guarantee that they will be able to get the financing commitment," Irwin said. That uncertainty shifted the discussion to a property on Coronado Drive formerly owned by Lucca Development. Last fall, that location had been considered by Clearwater Mayor Frank Hibbard as “the superior site east of Coronado,” but it was then unavailable because foreclosure proceedings had been initiated by the property's lender, ISTAR Financial. The foreclosure recently completed, ISTAR reentered the deliberations last week. Describing a recent meeting with representatives of ISTAR, Irwin said, “They are also anxious to move forward with a backup contract or, obviously, a primary contract if that became a reality.” Councilmember George Cretekos was prepared to proceed with ISTAR and abandon the Surf Style/Britts site. "We gave preference to the Britts property because the ISTAR property wasn't available," he said of the Council's October, 2008, deliberations. In ISTAR's favor, he said that it would be further away from the Aqualea, and that the city would own it outright, eliminating the complications of condominium-style ownership and Surf Style partnership. Councilmember Paul Gibson did not agree, reminding his colleagues that the Surf Style location would avoid the large numbers of pedestrians that would cross Coronado Drive from the ISTAR site. Councilmember John Doran, who initiated the garage discussion at last Monday's worksession, was prepared to move forward with either site. After delivering a list of advantages and disadvantages for both locations, he said, "If there are two other votes for anything, I'm the third." Doran's colleagues did not oblige, but the Council did decide to obtain more information on the two alternatives. They authorized two appraisals on the ISTAR property, hoping that real estate market conditions would value it at something less than the $4.5-million that had been discussed last year. The Council also asked Irwin to contact Surf Style's lender and determine their willingness to increase the loan, and to discuss their relationship vs the city in terms of the seniority of the debt that would be required to finance the project. Despite the Council's desire for fast answers, neither the ISTAR appraisal values nor Surf Style financing options are expected to be known before their March 3rd worksession. |