Loading
Moyer's Moment
commercial development by Mark Gordon | Managing Editor
REVIEW SUMMARY
Business. Lions Gate Development, Sarasota
Who. Gary Moyer
Key. A developer with a mixed history of success and failure, mostly in strip malls, has targeted downtown Sarasota for his latest project.
Gary Moyer, who spent the early and most successful part of his development career in strip malls, is back. The cornerstone project of his second act could prove to be either his signature performance or his worst flop.
Sarasota developer Gary Moyer has billion dollar plans for two blocks of property he controls just north of downtown Sarasota, including building an 800-seat Broadway-style theater and potentially bringing in a Waldorf-Astoria hotel.
"It's not just the size," says Moyer, reflecting on the six acres across the street from the former Sarasota Quay site, which is also primed for a billion-dollar redevelopment. "It's the significance."
The project is indeed sizable and significant for Sarasota; it's also an audacious bet for Moyer. It would dwarf anything Moyer has ever done in a 30-year development career - a career that reached its peak of success in the mid-1980s; crashed into personal bankruptcy and a spate of conflicts with banks and partners in the mid-1990s; and in the past two years, as he staged a comeback, triggered lawsuits from two of the Gulf Coast's top development companies, Schroeder-Manatee Ranch and the Sembler Co.
Can Moyer deliver?
"I wouldn't be doing this unless it was something I could accomplish," Moyer says. "That would be pretty stupid on my part. I've never started a project and not finished it, and that certainly will be the same with [this one]."
Says Robert Browning, a Sarasota attorney and former developer who worked for and with Moyer in the mid-1980s: "A project of this magnitude is very hard to pull off, but I think Gary is a very talented guy."
• • •
Moyer, 55, says the problems of his past are over. In 2005, more than $120,000 in federal tax liens going back as far as 1984, court records show, were officially satisfied - although Moyer says the debts were forgiven years earlier as part of the bankruptcy proceedings.
And as far as Moyer's concerned, his bankruptcy is akin to a developer's rite of passage. The business is notoriously cyclical. It happens.
His current partners take the same view. Allen Ostroff, a one-time New York hotel manager who now runs a hotel development consulting firm, says he's more concerned with the Moyer of today then the one of the past.
"Gary's had issues before. So what?" asks Ostroff. "Anyone with any involvement in real estate has a high risk of this kind of thing happening to him."
Moyer, a native of Toledo, Ohio, attended two colleges in his home state, never graduating. In 1983, after working for developers and on some projects of his own in Ohio in the late 1970s and early 1980s, he moved to Sarasota to run his own firm. Moyer tends to put all his free time into his work, according to people who have worked with him, but he does read non-fiction and biographies and will shoot a round of golf if given the chance.
Income sources
The talent some of Moyer's colleagues and past associates speak of was placed on self-imposed hiatus for more than 10 years beginning in 1994, when Moyer says he got out of the "development game" after his personal bankruptcy filing. In 1996, after a two-year period where he did virtually nothing professionally, Moyer, then 44, began trading stocks and bonds out of his Sarasota home.
Moyer's startup money for investing came from what he called a "modest sum" he borrowed from his parents. He declined to elaborate on how much the loan was for, saying only it was less than six figures. Moyer learned investing, he says, through reading books and going to seminars.
"I made some money," says Moyer, "enough to pay the bills. I didn't get wealthy on it."
Moyer's other source of income, as well as occasional work, during his post-bankruptcy days came courtesy of his first wife, Heidi Huebscher, an entrepreneur who founded and ran two regional furniture chains in the 1980s and 1990s. The couple met in 1984 when Huebscher leased space from one of Moyer's Sarasota shopping centers to open a futon store.
When Huebscher and Moyer married in March 1994 - just over a month before Moyer's personal bankruptcy filing - Huebscher was in the beginning stages of her second furniture business. That Sarasota-based venture, The Leather Collection, ultimately grew to 13 stores in seven states with $13 million in annual revenue, Huebscher says.
Moyer says he had little to do with his wife's furniture businesses, save for working on a few real estate-related deals and contracts. The marriage began to crumble in 2003, Huebscher says, and by June 2005, the two divorced.
A big moneymaker
Moyer's personal and professional fortunes began to change for the better after the divorce was finalized. And the impetus for the beginning of the comeback was longtime Sarasota commercial Realtor Karen Cook.
Formerly with Michael Saunders & Co., Cook met Moyer in 1983 when she worked as a sales associate for Moyer's development firm. In 2005, when Cook was working on projects in Lakewood Ranch, she introduced Moyer to Stanley Appel, an 83-year-old developer who had spent most of his career in hotels. Appel was putting together a $20 million, 65,000-square-foot shopping plaza in Lakewood Ranch, and he needed an experienced retail developer.
Cook suggested Moyer.
Appel and Moyer clicked. So did Moyer and Cook; they married in 2006.
Appel says he went into partnership with Moyer knowing the details of Moyer's past financial troubles. Cook spoke highly of Moyer, Appel says, and Cook had a "sterling reputation" with Michael Saunders, so that was good enough for him.
At first, Moyer didn't bring any money to the deal. Says Moyer: "I was to supply my talent and experience to bring the project to completion."
But the project turned into a big opportunity for Moyer when, about a year into it, Appel became too ill to work. Appel ultimately transferred most of his holdings in the project to Moyer.
"I needed someone with energy and drive," says Appel.
Their deal included Moyer paying Appel $1.5 million over several months in 2006 to buy out Appel's portion of the project, called the San Marco Plaza at Lakewood Ranch.
The source of Moyer's money to buy out Appel stems from when the pair sold two outparcels in the shopping center to two banks for about $3.1 million. Moyer's equity in those deals came from signing on to the deal and working on the development end of the project. He didn't earn a salary for his role.
Appel, now 85, healthy and back in the development business, says he has no qualms about the change of fortunes in the project, noting that Moyer "fell into it." Indeed, Appel says he plans to talk to Moyer about teaming up again on a mixed-use project near the Puget Sound in Washington State.
Lawsuits and 'spats'
Other developers and executives involved with Moyer on the San Marco project weren't as satisfied.
Schroeder-Manatee Ranch, the developers of Lakewood Ranch, and The Sembler Co., a St. Petersburg-based construction firm, filed lawsuits against the Moyer-Appel partnership in the latter half of 2005 regarding the San Marco project.
SMR officials, in a suit filed in Manatee County Circuit Court soon after the August 2005 San Marco groundbreaking, alleged Moyer and Appel missed several deadlines to purchase contracts and in doing so forfeited the right to buy additional land for a second phase of the project. That land, which SMR planned to sell to Moyer for about $2.6 million, was to be used for an IMAX theater.
Moyer's team countersued, alleging SMR was trying to wreck the deal because it wanted the land back for its own use.
Two months later, Moyer and the San Marco development group were sued again, this time by The Sembler Co., which was planning to build a bank in the San Marco project. In this suit, the construction firm alleged fraud, saying it wasn't told it might lose its rights to the land if Moyer and Appel fell too far behind in the project.
The lawsuits were ultimately settled, with the Sembler one being resolved in less then a week. The IMAX theater was never built.
Moyer says "spats" like the SMR and Sembler lawsuits come up regularly in nearly any big project with lots of entities. Sembler executives, SMR President Rex Jensen and other SMR executives declined to comment on the lawsuits.
Appel says Moyer's ability to persevere through the San Marco turbulence is evidence the developer may be able to complete the Proscenium. But Appel also says Moyer's confidence and tenaciousness might not be enough on a project so complex.
"Gary probably reaches a little and can be too optimistic," Appel says, "but so is every developer. If he can do it, more power to him."
'A gathering place'
The Proscenium project is being put together through Lion's Gate Development, a firm founded by Moyer and Cook earlier this year. The project covers two blocks of downtown property bounded by Tamiami Trail to the west, Cocoanut Avenue to the East, Boulevard of the Arts to the north and Fourth Street to the south. The project's name, Proscenium, means a large archway near the front of a stage through which an audience can view a play.
Moyer expects to submit formal plans for the project to the city within the next few months. The plans are expected to include 360,000 square feet of upscale office, restaurant and retail space, 2,000 parking spaces and 175 condos, with 50 of those to be built in an urban-loft style. Says Moyer: "The whole point of this project is to develop a gathering place."
The centerpieces of the gathering place, Moyer says, will be a theater and the hotel, which he projects will have 225 rooms and 35,000 square feet of meeting room space.
The theater, expected to cost $30 million to build, is the product of a lunch meeting between Moyer and Robert Nederlander Jr., a senior executive with New York-based Nederlander Worldwide Entertainment, a Broadway production company seeking to grow its regional theater base. Moyer says he met Nederlander through Sarasota commercial real estate executive Ian Black, who knew Nederlander was looking for a theater site in Sarasota and was aware Moyer was looking for a theater component for his project.
Nederlander says Sarasota had been a target for the company for several years, both for its baby boomer-heavy demographics and longtime support of the arts. "It's a perfect market for what we're looking to do," Nederlander says.
Nederlander declined to say whether he was aware of Moyer's past financial problems before signing on to the project. But the Broadway executive remains committed to the project, and to Moyer.
"We think Gary is a great partner," Nederlander says. "We are confident he will finish the project and it will turn out to be a great theater."
There is less certainty on the Waldorf-Astoria, at least from the hotel's perspective. Waldorf-Astoria spokeswoman Jeanne Datz Rice says although the company is interested in Moyer's project, it's also looking at other Florida projects and cities.
Datz Rice says she wasn't aware of any problems in Moyer's past, but the hotel chain, which is owned by Hilton Hotels, always does due diligence before signing on with any developer. "Until something is signed," Datz Rice says, "there's nothing to talk about."
Relentless pursuit
For most of 2006 and the early parts of this year, the talk between Moyer and his partners has revolved around the complicated process of securing the land for the Proscenium project. The most pertinent part of the process, Moyer says, is making sure there is enough equity to back the deals. Moyer says he learned that lesson from his 1994 personal bankruptcy. (See related story).
And this time, the stakes are especially high: The six acres Moyer and his partners have under contract are expected to cost $74 million.
Moyer, Cook and their attorney negotiated the price for the six acres with a consortium of 22 individual owners, two corporations and two LLCs, all backed by 18 separate lawyers.
Those landowners, after an initial period of squabbling, had come together to realize the best use of the land - and the best way to maximize their profits in a sale - would be to sell to a developer who could deliver a premium upscale project to the city, says Bob Anderson, a Sarasota-based ReMax Realtor who owns one acre of the property and has served as a spokesman for all the owners.
Moyer failed in his first efforts to buy the land, Anderson says, as the developer initially didn't understand the "product or the pricing."
Moyer remained persistent, though. "To Gary's credit, he never stopped knocking on our door," says Anderson. "Gary has been relentless in his pursuit of the property."
Earlier this summer, Moyer's development group closed on the first sale of future Proscenium property. The $6.7 million deal, one of the biggest Sarasota land deals of 2007, was for a ¾-acre parcel at Cocoanut Avenue and Boulevard of the Arts previously owned by Sarasota developer Wayne Moorehead. It was financed through Cadence Bank.
Shopping spree
The money for the Moorehead deal, as well as another $10.3 million already committed to being spent on the project, has been split into thirds. One third is from Moyer and Cook, while the other portions are coming from the developer's partners - Zeb Portanova, a policy director for former U.S. Rep. Katherine Harris, and Allen Ostorff, a former New York hotel manager and current developer and entrepreneur.
Moyer says most of his and Cook's third of the total investment, $5.7 million, is from earnings he and Cook made in the San Marco project. Some funds also came from what Moyer calls a "significant profit" he earned from recently selling an outparcel in another Lakewood Ranch project he's developing, Gateway to the Ranch.
The remaining $11.3 million comes from Portanova and Ostroff. (See related story on partners.)
But the project still needs significant financing. Moyer calls that process a "shopping spree" of seeking one big partner who will then dole out smaller parts to other lenders and banks. There's no difference, says Moyer, between getting financing for a big project like the Proscenium and a smaller one, such as the San Marco Plaza.
Moyer says an all-out search for banks and lenders will likely begin by the fall. The developers have been approached by potential lenders, says Moyer, but haven't made any decisions yet.
"You can never get financing for a bad project," says Moyer, "but you can always get it for a good one."
Competitive opportunity
Gary Moyer sees opportunity, not competition, among all the hubbub of downtown Sarasota development.
There is a pair of mixed-use projects in the works - Pineapple Square and Sarasota Bayside - less than a mile from the two blocks just north of downtown where Moyer is planning to build a project consisting of a luxury hotel, a theater, high-end shops, offices, restaurants and condos.
"The challenge is end-users," says Moyer. "If you have the right mix of those, then [the project] sells itself."
Moyer says the other projects aren't really competing with his as, combined, the Bayside and Pineapple Square plans include almost 1,000 condos, with about 70% of those coming from Bayside. In comparison, Moyer's project, the Proscenium, is planned at 175 condos, including 50 lofts.
Plus, says Moyer, the other projects don't have a hotel and beach club component, such as the one Moyer is planning to bring to the Proscenium by buying the Coquina on the Beach site on Lido Key.
Nonetheless, all three projects have some similarities: They are within blocks of each other; are combinations of condos, stores, restaurants and a potential luxury hotel in Bayside; and are all striving to out-luxury the other in search of the best end-users and customer base.
Both Pineapple Square and Bayside have already survived the bulk of the permitting and city authorization maze. And the marketing machines for both properties are already in full force.
Pineapple Square signs, for example, are scattered throughout its downtown properties and the developers recently opened a Main Street sales office. Condos are being sold and construction work has begun on many of the retail components.
A few blocks away, crews have spent the past few months demolishing the remaining buildings in the Quay. Work is expected to be completed by September.
What's more, a mix of deep-pocketed and longtime urban planners and developers back those two projects. At Pineapple Square the list includes brothers William and Charles Isaac, both of whom have had long careers in development and finance. William Isaac was chairman of the Federal Deposit Insurance Corp. from 1978 to 1985, for example. And John Simon, chief executive of the development company set up for Pineapple Square, has worked on more than 20 urban renewal projects with the Taubman Co.
The Bayside project comes courtesy of Irish American Properties, a Dublin, Ireland-based development firm run by Patrick Kelly, who has developed more than $1 billion worth of property in his native country, amassing a personal fortune of more than $100 million in the process.
A HISTORY
Significant risks turn into life lessons
Gary Moyer chooses persistence when seeking the perfect word to describe his 30-year development career that has experienced high and low points.
Moyer was born in Toledo, Ohio. His parents divorced while he was a young boy, and he lived mostly with his mom while growing up. He attended the University of Toledo and Ohio State University for two years each, although he didn't graduate from either school.
When he was in his early 20s in the mid 1970s, Moyer had lunch with Dean Bailey, who at the time was one of the leading commercial developers in northwestern Ohio.
The lunch turned out to be a preview of the rest of his life; Moyer was forever hooked on commercial real estate after that lunch. He became Bailey's protege and later his partner in a variety of projects, from shopping malls to build-to-suit projects to multifamily home developments.
But as the high interest rates of the Jimmy Carter-era began to erode the market, Moyer decided to move to Florida. "If you wanted a future in real estate development," says Moyer, "you didn't want to stay in Toledo, Ohio, that's for sure."
In 1983, Moyer moved to Sarasota and formed his own company, Chevron Development, to work on shopping centers and other projects in Florida. The company's best days quickly followed, including 1986, when it developed more than 177,000 square feet of retail space.
Some of Moyer's early projects include the Colonnade Shopping Center in Sarasota, a plaza in Gainesville anchored by a La Quinta Inn and the Fountain Court in Bradenton, which is made up of a Wal-Mart and several other retailers.
Things were going so well, says Moyer, that he, like several other developers, took "significant risks."
Those risks turned sour with the late 1980s market slump fueled by the savings and loan fiasco. It led to the collapse of Chevron, which, by 1994, forced Moyer to file for personal bankruptcy. After that, Moyer dropped out of the development business for more than 10 years.
Humbling as the bankruptcy experience was, Moyer says it wasn't without its lessons. In an e-mail sent to the Review regarding the bankruptcy filing, Moyer writes it "taught me to pay very close attention to changes in the marketplace, the importance of timing and the importance of having solid equity in projects."
Lion's Gate's Partners
In both age and background, Zeb Portanova, 28, is a sharp contrast from Gary Moyer and Allen Ostroff, his partners in the Proscenium project.
Portanova's first job after graduating from the University of Florida in 2001 was as a full-time volunteer for Katherine Harris. Portanova parlayed that job into paid positions after Harris was elected to Congress, ultimately becoming her policy director and helping open the Washington office.
But after focusing on affordable housing issues while earning a master's in public policy from the Kennedy School of Government at Harvard University, Portanova says his passion turned from politics to real estate.
Originally from Phoenix, Portanova moved from Washington back to Sarasota in 2005. In 2006, he took a yearlong non-paying job coordinating land development projects for the Habitat for Humanity in Sarasota.
Portanova says he also began looking to make some local real estate investments, using money he says he earned from "making good choices and decisions" in the market. He declined to elaborate, saying how he obtained his third of the $17 million already committed to the Proscenium project is a private matter.
Portanova is also guarded about details of his family, saying that his parents owned an energy company in Phoenix while growing up and his mom currently lives part of the year in Boca Grande. Portanova pursued the job with Harris' staff initially through family friends who knew Harris.
Portanova's initial meeting and investment in Moyer was with the latter's San Marco Plaza at Lakewood Ranch project, where Portanova bought eight properties for about $4 million through an LLC he formed last year. Portanova stayed in touch with Moyer after his initial investment, learning about the Proscenium project as it moved along.
"This will be the most impressive thing Sarasota has ever seen," Portanova says.
Allen Ostroff, a New York City-based hotel entrepreneur in his mid 60s, balances Zeb Portanova's youth in the Proscenium project partnership. Ostroff's past jobs include operations manager for the New York Waldorf-Astoria and general manager of the New York Hilton. He now runs Hotel Dynamics, a hospitality and real estate consulting business he founded in 1998.
Ostroff met Moyer through Stanley Appel, a fellow hotel developer. The trio of developers initially talked about adding a hotel to the San Marco project, but that didn't work out.
Moyer then called Ostroff last year to recruit him for the Proscenium.
Portanova and Ostroff say they were excited about the project almost immediately. Ostroff says he especially relishes the notion he could be behind a project that brings a Waldorf-Astoria to Sarasota, 43 years after starting his career at one in New York City.
The Proscenium
The Proscenium
The Proscenium project, as currently planned, includes the following elements:
• The Hotel at the Proscenium - Developers have been speaking with the Waldorf-Astoria, but the hotel chain hasn't publicly confirmed it will be part of the project. Regardless of brand, the hotel is expected to have 225 rooms, 50 branded condos and 35,000 square feet of conference, ballroom and exhibition space;
• The Residences at the Proscenium - Planners are projecting 125 luxury condos and 50 loft-style residences;
• The Shoppes at the Proscenium - Project calls for 130,000 square feet of retail, restaurant and entertainment space, as well as 2,000 parking spaces;
• The Performing Arts at the Proscenium - Nederlander Worldwide Entertainment, a Broadway production company seeking to grow its regional theater base, has signed on the project to build a $30 million, 800-seat theater. The plan is to build the theater in the style of a Proscenium, which means a large archway near the front of a stage through which an audience can view a play;
• The Offices at the Proscenium - Developers are planning to build 230,000 square feet of office space;
• Beach Amenities on Lido Key - In a separate development from the downtown part of the project, developers are planning to provide 59 hotel rooms, a restaurant, a pool and a wedding pavilion.
Source: Lions Gate Development, www.theproscenium.com
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
