|By Toni Whitt, The Bradenton Herald,
Fla.McClatchy-Tribune Regional News
April 12, 2011--BRADENTON -- Developers who had hoped to turn the Â‘Pink Palace' property from a public eyesore into a Hampton Inn and Suites Hotel at the heart of downtown said that the Downtown Development Authority's offer of a $1 million facade grant, streetscaping and tax abatements was not enough to make the project feasible. "It's surprising and disappointing, and I am not sure where we go from here," said Brian R. Long, development director for Widewaters Group Inc. "We will have to evaluate our options.
"Maybe we can sit on the property and see what happens."
Widewaters had asked the DDA for $3.8 million in grants to redevelop the historic Manatee River Hotel. The developer planned to spend about $17 million on the project and said that the public money was vital to making the project work. "It's not feasible without more support than that," Long said.
The DDA hired a consultant to work with developers on a public-private partnership but after reviewing the Community Redevelopment Area's long-term budget Tuesday, determined that it did not have that amount to invest in the project. The DDA agreed to have its vice chairman, Greg Green, call the developer to offer a $1 million "super facade" grant for exterior improvements to the hotel; $350,000 in street improvements; and up to $500,000 in tax abatements.
"An historic renovation would require significantly more," Long said Tuesday afternoon. Long said that if that is the offer, the developer would have several options, including razing the building and selling the property; leaving it as is and putting it up for sale; or leaving it as is and seeing what other options they have.
Green worked over the weekend to pull together revenue projections, current obligations, debt and future obligations for the board. In gathering the numbers, he discovered that the CRA owes Manatee County a portion of its tax increment financing revenues to help pay for the parking garage for the county's Judicial Center. That deal was struck when the CRA's term was extended to 2038. Factoring in a $5 million loan for the Riverwalk project and another $3 million loan for the Pink Palace, the CRA would have to make up a deficit by 2015 and would remain in a deficit situation through 2017 if property tax revenues remained flat, Green told the DDA.
The deficit in 2016 and 2017 would have exceeded $600,000 each year. In other years there would be little or no money for other smaller grants for downtown projects.
While the DDA might have some refinancing options to "smooth out" the budget, Green said, "that's a big hump right in the middle." In addition, any money the DDA borrows must be repaid by 2038 when the CRA expires. But it wasn't just the cash that concerned DDA board members.
Several members said they were unhappy with a non-disclosure agreement on the property's sale price between Regions Bank and the developers. They also were not happy with a proposed agreement that did not allow the DDA to verify the costs of the renovation after the work was completed and that the developers did not want to agree to a partial repayment deal if they sold the property in the first five years, although developers would consider repayment in the first four years. DDA member Jason Bartz said the developer's deal didn't seem like a partnership at all. "They just want a big chunk of money," Bartz said.
That amount of money would not generate enough revenues to pay for itself in the long term, Green said. DDA members agreed that they would be comfortable offering a $1 million facade grant and would not need to examine renovation costs or even know the purchase price with such a grant. Even as the DDA agreed to what they would offer developers, Green warned: "You have to be prepared for them to say that it won't work."
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Copyright (c) 2011, The Bradenton Herald, Fla.
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