The Saga of City Marketplace by PG Councilman Larry Friedman
The old Publix shopping center, built in the early 60’s, was a deteriorating relic and in need of considerable updating when I first came on City Council in 2000. It had been owned by an old gentleman from Louisiana and, when he passed away, a trust controlled by his family. The likelihood of their infusing some cash and updating/restoring the shopping center was quite bleak. Finding a developer to buy and invest in this important site was a high priority within our City government, but it just wasn’t happening.
Hard to believe, but from February, 2003 to February, 2005, I was not on Council -- but I continued to attend meetings. In mid-2003, a local developer negotiated a deal to buy the entire center from the trust, and somehow got the City to participate. In what was likely the dumbest thing the City Council ever did, and over the objections of dozens of citizens and me, this developer bought the property for $3.9 million, with the City agreeing to pay $2 million for the right-of-way for the recently completed W. Retta Avenue extension through the middle of the property and a 50 foot right-of-way along Marion Ave.! That’s right, the developer bought virtually all of the property for a net of $1.9 million!
As part of the deal, the developer and the City entered into a PUD (private use development) agreement for the southern portion of the property, since it was vacant as a result of Publix and the large pharmacy moving elsewhere. The PUD detailed just what would/could be built on the site. It called for a mixed-use development, with retail space, commercial office space, condos and a parking building in the center – it was to be called City Marketplace. Ironically, the agreement was signed on August 13, 2003, one year to the day before Hurricane Charley, and a mere two days after councilmembers received the final draft.
For the next year, the developer dickered about the design of the southern half of the property and the requisite parking, leading many to conclude that it did not bode well that this guy ever got involved. Then Hurricane Charley hit, effectively wiping out the entire center. Rather than attempt to salvage any of the northern half or outparcels, our new owner/developer razed all remaining structures. According to many of the tenants, he did not abide by the leases and offered the tenants nothing, resulting in a number of real and threatened law suits, the biggest of which was with the Beall’s Outlet.
For the next 2-3 years (during which time I returned to Council), the developer used the pending litigation as the reason for not proceeding with the promised development. As property values were soaring during this time, he apparently used this property to leverage other loans for other projects. While I don’t know for sure, I have always assumed that he probably wound up effectively owing $10 million or more for this property that had cost him a net of $1.9 million.
Concurrent with this litigation (circa 2006), the developer did come to the City with a revised plan that now included the entire parcel. Far different and more grandiose than the original PUD design, this plan called for a 70 foot hotel as the central focal point, surrounded by mixed-use buildings and ample open space. I participated in these discussions, and insisted that the variance to allow the hotel height expire after one year, if no construction began. Needless to say, the litigation continued, nothing substantive happened, the variance expired and the plan faded away.
After all litigation was resolved, the developer came back to City staff and Council with two more design plans in the 2007-2008 time frame (I’m doing this from memory, so some of the dates could be off a bit). The first was in conjunction with a new “partner”, a large builder from South Florida who actually had the wherewithal to do something. However, the proposals called for buildings of 100-150 feet in height; they were literally booed out of the room during a presentation to the citizenry at the PGI Civic Association. Not surprisingly, this new partnership quickly faded away.
The next proposal was far more practical, but again proposed design features that were expressly forbidden by our existing agreements. While it likely had the potential for some revision and ultimate acceptance, we were now in the economic downtown, which next served as the reason for continuing inaction.
By the time of the latter two proposals, it had become clear to me (and many others) that the developer cared nothing about the City or its citizens, partnering with the City, the existing agreement commitments, etc., and that the best thing would be for him to sell. Hopefully, a new buyer would afford a greater likelihood of real development. I’m aware of several parties meeting with him to discuss buying the property. I am fairly confident that he likely turned down $10 million or more from at least one of these groups.
This brings us to the last couple of years. The economic climate has precluded both the possibility of development and the sale of the property for anything close to the leveraged amount of the developer’s outstanding loans. It is my understanding that the bank has either discussed or initiated foreclosure proceedings on this property. I’ve been told that offers were solicited within the past year and two responses were received. One was truly lowball from a local group and one was for around $4 million from a large development company in New Jersey. Apparently the latter offer would have been acceptable, but this group unfortunately ultimately decided to pass.
Well, as they say, I’ve already told you more than I know. I might be off on a fact or date or two, but this is a reasonable account of what has transpired. While it is near tragic for our City when one thinks of what might evolve for this property, apathy and greed have combined against us. I would suspect that the future holds the eventual sale of this property by the bank, hopefully to a group that truly cares about a meaningful investment and partnering with our City. This, coupled with an improving economic climate, would one day allow us to fulfill our vision for downtown. Frankly and pragmatically, it probably won’t happen for at least 3-5 years.
All information deemed reliable but not guaranteed. The above are the views and opinions of Councilman Larry Friedman and I include them here only for full disclosure concerning this property. I have no personal knowledge or opinion of the facts and views expressed by Councilman Friedman and cannot attest to their accuracy or inaccuracy. Councilman Friedman submitted this letter over the internet as an email attachment. As always a buyer must apply due diligence concerning any transaction. Whatever the facts and opinions this parcel of land is very important to the future development of downtown Punta Gorda.