|By Michael Sasso, Tampa Tribune,
Fla.McClatchy-Tribune Regional News
Jan. 06, 2012--TAMPA -- It's been touted as a potential high school, university law school, immigration department office and art museum.
Now, Tampa Mayor Bob Buckhorn says he's found a use for the old federal courthouse at 611 N. Florida Ave. that finally will stick: luxury hotel.
On Thursday, Buckhorn announced that he selected a Memphis, Tenn.-based hotel developer to turn the 107-year-old downtown structure into a luxury boutique hotel.
Development Services Group and its team of architects, contractors and lawyers beat out four other developers for the opportunity.
The project still has some huge hurdles, such as arranging $22 million in financing and proving there's a demand for boutique hotel rooms.
However, Buckhorn sees it as a way to transform the northern part of downtown.
"I think it's going to create additional development opportunities around it," he said. "I think you'll see more bars and restaurants spring up."
The city has been evaluating hotel proposals for the old courthouse, which it owns, since November. It would lease the property to a developer over several decades, instead of selling it outright.
Development Services Group proposes 110 rooms, a restaurant and a bar across the old courthouse's four floors. The plan would preserve the building's high ceilings, marble-lined corridors and unique architecture, done in the Beaux-Arts style.
Construction is expected to take at least 16 months and the hotel could employ about 100 people when it opens.
Buckhorn said he chose Development Services Group because of its experience with historic buildings and a business plan that doesn't rely heavily on city taxpayers.
The company redeveloped an old YMCA building in downtown Philadelphia into a luxury hotel under the international Le Meridien brand, operated by Starwood Hotels. It is considering the Le Meridien brand for the old courthouse, too, said company Chief Executive Officer Gary Prosterman.
Development Services Group isn't seeking any direct cash contribution from the city, Buckhorn said, but it is counting on tax subsidies to lessen its cost.
For example, it hopes to win about $6.4 million in state and federal tax credits. It could then sell those tax credits to investors to raise money up front for its construction costs.
In addition, the city would lease the property to Development Services Group at a low rate, $1 a year for the first two years and $10,000 to $25,000 a year in later years.
Buckhorn said it costs the city about $100,000 a year just to maintain the old courthouse as a vacant building. That's more than any subsidies the city might give to the project's developer.
"If we did nothing, it would cost us more," Buckhorn said.
Prosterman cautioned that there's a lot of work to do before work could begin on the hotel.
This includes the mechanics of leasing the property from the city, lining up tax credits and loans to come up with the $22 million cost of renovation, and conducting a feasibility study.
Prosterman said he's confident any study would show demand for a hotel in northern downtown.
He would likely compete for customers there with the owner of the Floridan Hotel, the historic downtown hotel now in the last stages of renovation.
Development Services Group lined up several influential local real estate companies to win its bid. Members of its team include The Beck Group, a construction firm that does business with local governments and the University of South Florida; Ferrell Redevelopment of Tampa; and Kobi Karp Architects of Miami.
Land-use lawyer Ron Weaver is providing legal counsel.
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