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Channelside bidder Liberty Group heartened by court ruling

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Published:   |   Updated: February 19, 2014 at 06:49 PM

For a time, the Port of Tampa seemed to have a clear path towards retaking control of Channelside Bay Plaza, and political leaders there have hoped developers like the Lightning owner Jeff Vinik would quickly renovate the shopping plaza into a shining neighborhood on the water.

Not so fast, a federal judge said this week. Perhaps other bidders will offer more.

That was hugely thrilling news to Punit Shah, the president and chief operating officer of Liberty Group, which has been through numerous and often contentious negotiations with the Port, trying to put forward his own bid to redevelop the area and add a hotel. The two sides spent much of last year trading allegations of racism and collusion, and talks broke down, leading Channelside to stand mostly empty for even longer.

“It’s a terrible thing that the property has lingered along as a result of the Port and bank issues,” Shah said, looking out his office window from the PNC building, down to Channelside. “We want to close on the deal immediately and start making changes to dramatically improve it.”

Fresh off that ruling, Shah, his lawyer, John Anthony, and his business partners held a news conference Wednesday to give their side of things. And Anthony made a call during that conference to the lawyers for the bank on the other side of the case, trying to make a deal. They weren’t available, so a secretary on the line took a message with the TV cameras rolling.

“We were raised with a promise in America, and we were raised to fight for what we believe in,” said Santosh Govindaraju, portfolio manager with Convergent Capital, which is partnering with Liberty on the proposal. “We were taught to fight for what you believe is right, and that is what we are doing.”What’s unfortunate, they said, is that their Indian lineage has become an issue in the case, and damaged their reputation in the community just two months before the massive Bollywood film festival brings thousands of Indian Americans to Tampa.

All the drama over the mostly empty Channelside stems in large part from a complicated legal tangle over just who owns and controls it.

The Port of Tampa owns the land underneath Channelside and leases it to a mall operator. But that operator went bankrupt, and so did the now-bankrupt Irish bank that held the mortgage on the structure above ground. The Port has veto power over what new tenant would come in to operate Channelside. Liberty Group first offered $5.5 million, but was rejected by the Port commissioners, who have publicly hoped Vinik would come to the rescue and resuscitate the property. The Port made its own deal with the bankrupt bank to take control for $5.75 million last autumn, but needed the blessing of the bankruptcy judge involved. Meanwhile, Liberty went to the bankruptcy court recently and offered $7 million.

“I think we have much ado about nothing in connection with the use of foul language being pressed in negotiating,” said federal bankruptcy judge Christopher S. Sontchi when he made his ruling Tuesday, according to transcripts distributed to reporters at the press conference. “In my experience, this was Mickey Mouse stuff.”

 

As for the port, officials released a statement about the court ruling, saying “Contrary to the allegations by Liberty Channelside, the port never rejected Liberty Channelside on ethnic or religious considerations nor did the judge on Tuesday find any evidence of that.”

The port also said with the judge’s ruling, “nobody won, everyone lost, especially the small business owners of Channelside Bay Plaza and our community ... From the port’s point of view, this is not simply about legal arguments and gamesmanship. It is about real people struggling to run their small business in a difficult situation. We are and will continue to work with the bank and the courts to resolve this situation as soon as possible.”

As for what happens now, the picture remains as murky as ever. The judge said the bank needed to do a better job of soliciting proposals, but he did not outright give the property to Liberty either, suggesting a new bidding process might open all over again.

One thing is for sure: the Liberty Group and Convergent Capital want damages from the Port and the Irish Bank for how they’ve been treated. They’re not saying how much yet, but Anthony said one starting point would be the difference between what the Port offered and what Liberty offered, which could be several million dollars, plus compensation for damages to their reputation, plus legal fees. A preliminary hearing on that issue is set for Feb. 27 in Delaware.

 

 

 

Channelside merchants and visitors themselves wonder when a solution might come that will bring more business to the area.

Midway through a balmy Wednesday afternoon, only a half-dozen visitors strolled though the Channelside court.

Crystal Florio, manages the Qachbal’s Chocolatier, the only shop open on an interior corridor in the Plaza, and has some ideas on what’s needed. “I hope they can find an owner soon.” Florio said. “We need change. We’ve been here eight years and business is a slow as it has ever been.”

Paula Hillman, a vacationer from Wisconsin summed up much of Channelsides woes.

“Why is it so empty?” she asked after strolling along the Riverwalk with her husband Greg before catching a flight home. “We saw the sign for Channelside when we were driving around so we parked and decided to check it out. It is beautiful here.”

rmullins@tampatrib.com (813) 259-7919 Twitter: @DailyDeadline

Tribune reporter Ted Jackovics contributed to this report.

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