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Let the Bidding Begin
The possibility of redeveloping a parking lot on Palm Avenue in Sarasota attracts big-name developers with visions of multimillion projects.
By Sean Roth
Real Estate Editor
The City of Sarasota's Request for Proposa for redevelopment of a parking lot on Palm and Cocoanut avenues is certainly attracting attention. The city now has eight proposals from potential developers to build a large-scale, mixed-use development on prime downtown property. The news looks good. The potential developers are almost all big names with ambitious multimillion goals for the relatively small site.
At issue is the best way to redevelop 2.25 acres at 88 Cocoanut Ave. and 1289 N. Palm Ave. Hettema Saba and Walch LLC appraised the value of the property, which is owned by the city, at $4.1 million. The hitch is the city's Community Redevelopment Agency needs the developer to create 300 public parking spaces while keeping the project below a 10-story ceiling.
Five city officials are scheduled to evaluate the eight proposed developments on Jan. 6. Here are the plans:
Plaza Verdi
Potential developer: Ersa Grae Corp. (Houston), Kraft Construction Co. Inc. (Naples) and The ADP Group Inc. (Sarasota)
Principals: Ali Ebrahimi, Fred Pezeshkan and Bruce Franklin
Design: The ADP Group and Walker Parking Consultants (garage designer)
Engineer: (tentative) MEP - Wadsworth, O'Neil Engineering
Structural: (tentative) Jenkins and Charland
Construction manger and general contractor: Kraft Construction Co. Inc.
Legal team: Williams, Parker, Harrison Dietz & Getzen
Other land involved: Yes, phase two includes the existing Sarasota Opera House and Golden Apple Dinner Theater buildings.
Total parking spaces: 820
Public spaces: 300
Residential urban flats, townhomes and condominium units: : 111
Hotel units: 96
Opera/theater space: 41,000 square feet
Project: The developer of the Plaza at Five Points has submitted a plan to develop a 96-room condominium/hotel, a 10-floor mixed-use building an 840-space garage an indoor/outdoor pedestrian galleria and new facilities for the two nearby arts programs.
The developers put forth two possible phases; in order to propose an 180-foot building, that includes property outside of the city's RFP. In the first phase, the developer would construct 630 parking spaces, the condominium/hotel, a 10-floor mixed-use building and, if allowed by the city, replacement space for the Golden Apple Theater and the Opera facility.
The second phase includes construction of a galleria that would link the Pineapple Avenue property to Five Points Park, demolition of the existing two arts buildings and construction of an 180-foot tall building. The 180-foot tower would hold 12 two-story townhouses - each about 1,350 square feet - 12,900-square-foot urban flats and 28 condominiums units, from 900 to 2,600 square feet.
The total gross square footage of the entire project will be about 1 million square feet.
Single-access to the garage would be on Cocoanut Avenue to preserve the pedestrian feel of Palm Avenue.
The developers argue in their RFP that the project's second phase would create a greater tax base for the city. It estimates phase two would generate about $60 to $65 million in taxable value.
The developers write, "Without the ability to spread the approximately $6 million of acquisition replacement cost over a much bigger project, no one could reasonably afford to buy out the interests of the Sarasota Opera Association or the Golden Apple Dinner Theater, keep both in the downtown and create a win-win-win for the City of Sarasota."
Financing: The developer is asking the city for tax increment financing (TIF) funds for the difference between the appraised value of the land $4.1 million and the cost to build the public parking. "Additionally, we would seek allocation of TIF funds for public improvements such as Palm Avenue landscaping/hardscaping, the Five Points Park/Plaza Street and intersection improvements and potentially other costs such as various City fees to the extent that these have previously been provided for other City public/private partnerships." It also requests a waiver of temporary parking fees.
Unnamed plan
Potential developer: Arcadia Land Co. (a Delaware company with offices in Wayne, Pa.).
Principals: Robert Davis, Christopher Leinberger and W. Joseph Duckworth
Design: Siebert Architects PA (Sarasota) and Design Group
General contractor: W.G. Mills
Broker sales and marketing: Michael Saunders & Co. and Coldwell Banker
Approvals coordinator: Pam Truitt of Truitt Consulting Inc.
Cost: $75 million (Provided the Pavilion Tower is developed)
Other land involved: Yes, the Sarasota Opera House Pavilion.
Total parking spaces: 800
Public spaces: 300
Residential units: 196
Retail space: 38,000
Project: Davis, developer of the Seaside Community Development Corp. the town founder of Seaside, has joined forces with Duckworth, the major shareholder and former president and CEO of residential builder Realen Homes, and Leinberger, managing director and co-owner of the real estate advisory firm Robert Charles Lesser and Co., to develop 196 condominiums or apartments in four buildings and an 800-space parking structure. In the first phase, the developer plans to build the parking structure, a 10-floor, 72-unit Palm Avenue tower building with 22,500-square-feet of ground floor retail and a four floor, 42-unit apartment complex Courtyard Tower with meeting and gym space.
In the second phase, Arcadia Land will build two additional 10-floor buildings: the 45-unit Cocoanut Avenue Tower and the 37-unit Pavilion Tower. Both towers will feature ground floor retail or restaurant property and the Pavilion is designed to have 30,000 square feet of office/meeting space.
The proposal also says that 10 condominium units would be priced for less than $100,000, with one parking space each. The remaining condominiums, which would each have two parking spaces, will range in price from $300,000 to $1 million and in size from 1,400 to 2,700 square feet.
The developer estimates the 800 parking spaces would cost about $14,000 per space for a total of $11.2 million.
The proposal also contained Arcadia Land's terms for the Sarasota Opera to sell its pavilion. Arcadia offered to pay 12.5% of the gross sales price (less closing costs and brokerage commissions if any) of all residential units for about $3.25 million. Arcadia would allow the Opera 30,000 square feet for finished office space in the new Pavilion building. During the construction of the opera space, the opera would have the option of leasing temporary space from the developer. In addition, the opera would also be given the first right-of-refusal to purchase the affordable apartments.
Financing: The Arcadia Land proposal suggests the city authorize a bond with a 12-year term secured by full faith and credit of the city and bearing a 4% interest. "Arcadia will offer neither full nor partial guarantees of this issue nor any contribution to credit enhancement." It suggests that debt service would be made from incremental property tax revenues based upon the enhanced assessed value of the Palm. The total TIF contribution is an estimated $4 million. Arcadia Land is also asking the city to donate the land for the development.
Further the developer writes, "We anticipate a new cash flow (pre-tax) over a five-year project life in excess of 10% of revenue - whether or not the Opera is included." But it says that such returns are variable.
The parking garage maintenance and upkeep would be left to the home owners' association.
Viale di Palme
Potential developer: Parkway Harbor LLC (Alpharetta, Ga.-based Trammell Crow Residential and JEBCO Ventures Inc.)
Principals: Jim Bridge (JEBCO Ventures Inc.), J. Michael McGwier (executive managing director of Trammell Crow) and Alan Kolar (senior managing director for Trammell Crow)
Design: Brent Parker partner in the Parker Walter Group Inc. in Sarasota
Marketing: Michael Saunders & Co.
Legal team: Icard, Merrill, Cullis, Timm, Furen & Ginsburg PA
Other land involved: No.
Total parking spaces: 555
Public spaces: 300
Residential units: 90
Retail space: 30,000
Project: The two real estate developers plans to build a 90-unit apartment/townhome development along with 30,000 square feet of retail space. The proposal also calls for a 555-space parking garage.
Financing: The proposal states, "No municipal contributions in the way of tax increment funds are contemplated at this time by the respondent." The developer asks that the parking maintenance for the garage be split between the developer and the city. The parking arrangements are still being negotiated between the city, the opera and the developer.
Unnamed plan
Potential developer: TBF LLC
Principals: Rocco Santomenno, president of Gold Ring Investments Inc., an investment adviser in Fair Lawn, N.J. and Florida, and Wanda Di Paolo
Design: Ralph Permahos and Darryll McLain, of BMK Architects in Sarasota
Planning and Engineering: Millard Yoder, vice president of WilsonMiller
General contractor: Richard Dykman, president of Boran, Craig, Barber and Engel (BCBE)
Legal team: Richard Martin (also an investor)
Cost: $33 million
Other land involved: No.
Total parking spaces: 704
Public spaces: 300
Residential units: 146
Retail space: 30,000
Project: Santomenno and Di Paolo propose to develop an 146-unit apartment complex, 30,000 square feet of retail space and a 704-space parking structure. About 108 of the units would be one-bedroom, about 720 square feet and rent for about $1,250 per month. The other 28 would be 1,080-square-foot, two-bedroom units, which would rent for about $1,750 per month.
Proposal also states the developers needs six to nine months to finalize the architectural drawings.
According to their history statement, the developers, Santomenno and Di Paolo, appear to be the most inexperienced of the eight potential developers. With two small rental properties in Paterson, N.J., the principals have been involved in only one large-scale real estate venture. Santomenno formed the equity partnership, Di Paola Realty, and purchased a 60,000-square-foot site in Houston with 34 units and a 4,000 residence. The structure was gutted, rehabbed and rented. Di Paola, formerly an elementary school teacher, was general partner for Di Paola Realty and oversaw daily operations for all three projects.
Financing: The proposal suggests that the city not require impact and permitting fees on the development. In addition, the developers are asking for a 40-year tax abatement for the entire parcel. The proposal says that Santomenno, an investment adviser, will pledge $3 million to the property. The developer will operate the entire parking facility and will charge the city a monthly fee of $2.50 per space per day. In addition, the developer writes, "It is anticipated that the use of tax exempt financing will be enacted based on an 80/20 split of housing units -80% of the units will be at market and 20% will be at or below the average mean income for Sarasota."
La Scala
Potential developer: Buffalo, N.Y.-based Benderson Development Co. and Sarasota Commercial Management Inc.
Principals: Nathan Benderson, Randall Benderson, Edward Vogler II Wayne Ruben and Dr. Mark Kauffman
Design: The Haskell Co.
Civil engineer/surveyor: WilsonMiller
General contractor:
Legal team:
Other land involved: Yes, the Golden Apple Theater property.
Total parking spaces: 701
Residential units:
Retail space: 24,000
Project: Benderson Development and Kauffman plan to build a large free-standing, seven-story, 216,000-square-foot parking garage along with a 119-room full-service hotel with lobby lounge and restaurant space. The proposal expects the developer to build about 24,000 square feet of restaurant, retail and support space. The proposal also calls for a 10-story, 99-unit condominium building. Eighteen units will be one-bedroom, about 1,200 square feet; 63 two-bedroom units will be about 1,800 square feet; and the final 18 will offer three bedrooms with about 2,400 square feet of space. The proposals say because of the lack of major amenities, the condominium units "will be available at costs lower than those currently provided in downtown Sarasota."
The plan also features construction of a 12,250-square-foot Dinner Theater/Banquet Area with an adjacent lounge of about 1,575-square-feet and interior open-air courtyard of about 5,100-square feet. "The design permits joint use of several areas facilitating pre-function gatherings, special presentations, banquets and festivals."
Financing: The city will continue to own the property occupied by the parking structure. The balance of the site about 1.42 acres would be sold to Benderson together with a parking easement for the non-public portion of the parking structure. The Sarasota Opera Association would be entitled to 60 parking spaces in Benderson's easement. Benderson would lease the parking structure for $1 per day plus the cost of debt service and all actual costs of operation maintenance and repair.
Financing: Benderson is asking the city to act as a conduit for tax free private activity bonds to be utilized to finance the parking structure. Bond repayment would be secured by parking revenue, a pledge of TIF funds obtained solely from private uses constructed by Benderson, revenue commitments and credit enhancements provided by Benderson.
Unnamed plan
Potential developer: Opus South Corp. of Tampa
Team: Jerry Shaw, senior vice president of real estate; George Smith, real estate manager; William West, director of architecture; and Howard Zoromsky, senior vice president of construction.
Other land involved: No.
Total parking spaces: 680
Public spaces: 300
Residential units: 160
Retail space: 12,000
Project: Opus South's plan calls for construction of an about 215,000-square-foot, 10-story building with about 12,000 square feet of retail space and a 680-space parking garage. The 10-story building will hold about 160 residential units at an average size of 1,000 square feet.
Financing: The city would retain ownership of the parking structure and public plaza. The proposals states that within 60 days Opus would begin the investigative period for designing documents and submitting drawings for buildings permit approval.
Palm Avenue Galleria
Potential developer: Palm Galleria Associates LLC (Lindell Investments Inc. of Tampa and PatrinelyGroup LLC, a subsidiary of Crimson Capital Ltd.)
Principals: Ron Weisser and Dean Patrinely
Development consultant: Larry Pearce of Realco Florida
Design: Solomon E.T.C. of San Francisco and Sarasota's Cardinal, Carlson & Partners Inc.
Civil engineer: Dufresne-Henry Inc., Sarasota
Other land involved: Yes. The plan includes land owned by Golden Apple Dinner Theater and Sarasota Opera House.
Total parking spaces: 680
Public spaces: 360
Residential units: 153
Retail space: 32,625
Project: Palm Galleria Associates plans to build two 10-story mixed-use buildings, a five-story commercial office building, a six-level 680-car parking garage and a 400-foot long covered galleria. The proposal lays out five condominium types that range in size from 880 to 2,000 square feet and in price from $308,000 to $7000,000. The Palm Ave. Galleria will also feature eight 1,600-square-foot loft apartments and 32,625 square feet of retail space. The developer plans to use the existing buildings for the two arts organizations and to create space for the opera and the theater in the new facilities.
The proposal states, "By swapping land (Opera Pavilion Building) for space (upper levels of Galleria) for the Opera the team was able to provide the room necessary for the Sarasota Opera House stage expansion and create an elegant corridor through the site in the form of a galleria."
The proposal says the Lindell/Patrinely team is working on more than $100 million of residential and commercial projects in Tampa.
Financing: The developer states, "At this early stage Palm Galleria Associates does not see the requirement for any financial contribution by the City." The developer proposes an "open book" of dialogue for financing the project.
The Palm
Potential developer: Sarasota Main Street LLC (a partnership of Boca Raton-based Southcoast Partners Inc. and LB Jax Development LLC of Jacksonville)
Principals: Bill Morris (Southcoast Partners), and Chris Brown and Michael Langton (LB Jax Development)
Design: Tichenor Group Architects and Cohen, Freedman, Encinosa Architects (Miami-based)
Landscape architect: David W. Johnston Landscape Architects
Civil engineer: AM Engineering Inc. of Sarasota
General contractor: Kraft Construction Co.
Legal team: Norton, Hammersley Lopez & Skokos PA
Cost: $70 million
Other land involved: No.
Total parking spaces: 701
Public spaces: 340
Residential units: 240
Retail space: 19,850 square feet
Project: The developers, who are building the 17-story condominium at 1350 Main St. in Sarasota, propose to build 240 condominiums in two 10-story buildings along with about 19,850 square feet of retail space on the ground floor. In addition, Sarasota Main Street LLC plans to build a five-story 701-space parking garage.
"These new residential units will be smaller and more affordable to the average home buyer than what is currently available in the downtown market." They suggest it will be similar to the 1350 Main project. The average sales price would be $200,000.
Financing: The development team will manage the garage and charge fees for garage parking. Any profits from the garage will be split 50/50 with the city after expenses are met. The developer also asks the city to make the 340 public parking spaces tax exempt. "We will construct the 340 public parking spaces at no cost to the city other than the donation of the land.
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