An empty, publicly owned lot on prime real estate in downtown Sarasota is in play — again. An ambitious developer hopes to succeed where so many others have failed.
Charles Githler is a disciple of economists such as Friedrich Hayek and Ayn Rand, utilizing their free-market, limited government concepts as the backbone of building a global $22 million financial media and tradeshow business.
So what's he doing trying to build a conference center, hotel and parking garage in downtown Sarasota, a $110 million project that will require a little more than $40 million in public financing and approvals from two governments and countless other agencies and bureaucrats?
The endeavor is a potential minefield of problems and lingering questions, from the pace of the economic recovery to the site's dejecting history of failed redevelopment efforts to fighting off competitors in both government and private business circles.
Even Githler himself, an optimist's optimist, concedes the project is a super-sized risk of his time and money. On the latter, he's prepared to invest up to $70 million of his own money in the development. That includes exercising his local franchise rights on opening an Embassy Suites brand in the Sarasota-Bradenton market.
“It is not clear that the risk-reward will be particularly compelling,” says Githler. “But we want to see it through because we can't think of anything more generational to Sarasota's economy.”
Specifically, the Githler development proposals consists of three components: A conference center with about 50,000 square feet of meeting and exhibit space, as well as banquet seating for up to 1,800 people; an 11-story, 280-room Embassy Suites hotel, with an additional 30,000 square feet of meeting space; and a 365,000-square-foot, six-story parking garage/retail building with up to 1,000 public parking spots and 24,000 square feet of retail space.
The proposal, known as a public-private partnership because it combines public funds with private investment, could be brought before city commissioners within the next few weeks — step one of a lengthy approval process.
Sarasota County commissioners will also have a say in the project, as the county's bed tax would be used to fund a portion of the development.
“We think a conference center and a major hotel would really enlighten that area,” says Andy Dorr, a senior vice president for Githler Development, Inc. “We want to return the vibrancy to downtown Palm Avenue.”
A futile history
Palm, which crosses Main Street about a half a mile from the Sarasota bayfront, is already considered by many to be one of the most vibrant blocks in the city. It's home to several high-end art galleries, a few tony restaurants and several high-rise luxury condo buildings.
But the site Githler is eyeing is on the north side of Palm, adjacent to the Sarasota Opera House, on the corner of Palm and Cocoanut avenues, maybe the worst-looking parcel on the street. It's 2.25 acres of vacant city-owned property that has traded vibrancy for vitriol over the past two decades, as it has gone through a bevy of unsuccessful developments, including proposals from some of the region's all-star developers, such as the Benderson Co., Bob Roskamp and the Leiter Group.
None of the efforts have ultimately succeeded, despite some initial approvals by city officials. Ian Black, a Sarasota commercial real estate broker and board member of the city's Downtown Partnership, says there is plenty of blame to go around for the site's past failures, but the crux is opinion overload.
“There is a lot of difficulty in putting together a public-private partnership in this community,” says Black. “Everyone has an opinion in this community.”
Another local developer is more blunt, calling the turtle-like development process of the Palm Avenue site one of the city's “biggest running jokes.”
The site's history of aborted and failed projects is only one of the challenges facing Githler. The city is pursuing just building a parking garage on the famed street at the recommendation of their chief planner, and at least four other entities have shown interest in submitting a development proposal to the city for the site.
The list of possible competitors includes Chris Brown, a local developer who built the 1350 Main condo project, just down the street; Apopka-based Finfrock, a construction company specializing in parking garage construction; and
Naples-based Kraft Construction, which was recently bought by Rooney Holdings, a construction conglomerate with offices in Naples and Tulsa, Okla. Kraft is considering a proposal for the site that could include a park.
Brown and Finfrock officials didn't return phone calls seeking comment.
The city's chief planner, Steve Stancel, recommended the parking garage earlier this year.
“After reviewing the city's master plan, our thought was that the city's primary objective for the site should be parking,” says Stancel. “I think the city was trying to do much with previous go-arounds.”
And there is another potential competitive factor facing Githler: Mark Famiglio, a local developer and entrepreneur, has previously expressed interest in bringing a conference center to Sarasota. Only his plan would potentially put the center in a different location, a few blocks north of the Palm Avenue site.
A trophy project
But Githler and Dorr are forging ahead, using the conference center as their lynchpin in the battle for winning the Palm Avenue job. To that end, the team is banking on their extensive data and research that shows just how integral a waterfront conference center is to the future viability of Sarasota.
For instance, the developers project a conference center on Palm could bring in up to 80 events a year, a combination of national, regional and state events. Githler and Dorr further project that if that many events book in the center, it could be worth up to $4.6 million a year in bed, local and state taxes.
To be sure, the Sarasota-Bradenton market already has several conference center-like locations, including the 120,000-square-foot Sarasota Bradenton International Convention Center, near the Sarasota Bradenton International Airport. But the Githler team says that center and other places for meetings and events around town, such as the Robarts Arena on Fruitville Road, aren't enough to carry Sarasota through the next 20 years. (See related story).
“You have to lead by your strengths,” says Dorr, “and our strengths are being by the water.”
Dorr has worked on a multitude of projects over the past 25 years, beginning with several public-private initiatives in California. On the Gulf Coast, his projects include leading renovations and expansions of parking garages at Sarasota Memorial Hospital and the H. Lee Moffitt Cancer Center in Tampa.
Githler, meanwhile, comes by his conference center knowledge from his three decades in the convention and meetings business as founder of Sarasota-based Intershow. The company, with more than $20 million in 2008 revenues, has become one of the largest and most respected investor education tradeshow outlets in the industry.
But Githler Development, which Charles Githler founded in 1995, has become more than a side show to Intershow. Projects the company has worked on include the Plaza at Five Points, a mixed-use project in downtown Sarasota and the Savoy on Palm, a downtown condo building. He's also currently undertaking a redevelopment effort at the Whitaker Yacht Club in Sarasota.
Githler has worked on the hotel side of the conference center business, too. He has owned several local hotel properties, including the downtown Hyatt, which he bought with some partners in 1994 and sold in 2007.
If Githler's conference center proposal is accepted by the city, it is only the beginning of what could be a long ride. For starters, Githler says he is taking two leaps of faith: One is that a deal could be worked out with financing partners to fund his share of the project, and the second, closely related, is that the economy doesn't take a drastic turn for the worse, causing a prolonged recession.
Still, a downtown conference center represents a potential trophy for both the city and Githler.
“A lot of other communities have already decided to do this that didn't have to do it half as bad as Sarasota needs to do it,” says Githler.
BY THE NUMBERS
Sarasota-based Githler Development is proposing to build a combination conference center/hotel/parking garage and retail center on Palm Avenue in downtown Sarasota. The project, to be called the Downtown Bayfront Center, is considered a public-private partnership because it utilizes public funds and private investment.
Here's a breakdown of the project proposal:
• Up to $40 million in Sarasota city and county funds, including a portion of the county's bed tax;
• An 80,000-square-foot conference center, using space from the center and an adjacent Embassy Suites hotel;
• A six-story parking garage with 800-1,000 public spaces.
• About $70 million in private investments, with the largest portion of that going to build the hotel;
• A 24,000-square-foot retail center, including space for a restaurant, on the ground floor of the parking garage;
• An 11-story, 280-room Embassy Suites hotel; Charles Githler, the lead developer in the project, holds the franchise rights to open an Embassy Suites in the Sarasota/Bradenton market.
Total annual new tax revenues
Estimated new bed tax revenue: $1.825 million;
Estimated new local sales tax revenue: 1.364 million;
Estimated new sales tax revenue: $4.321 million;
Estimated new property tax revenue: $705,000;
Total estimated annual new tax revenues: $8.216 million
Source: Githler Development, Sarasota
The Parsons Project
Oscar Parsons wonders why there is all this hoopla over a proposed conference center for downtown Sarasota.
After all, Parsons runs a 120,000-square-foot convention center just five miles away, the Sarasota Bradenton International Convention Center. “This is a full-fledged, up-and-running convention center,” says Parsons. “Why in the world would you want to build another one?”
Parsons, 86, adds that it would be “stupid” to build one downtown anyway, as traffic issues would make it inaccessible. Not only that, but Parsons says that a vertical conference center and parking lot structure, as is being proposed by Sarasota-based developer Charles Githler for a 2.25-acre vacant lot on Palm Avenue in downtown Sarasota, presents an elevator backlog nightmare.
Those issues notwithstanding, Parsons concedes he's still fighting through a litany of challenges in turning his convention center into a thriving enterprise. He says he's only doing about 18% of what he needs to be doing to break even, a situation exacerbated by the economic swoon.
Parsons has invested about $10 million into the center, a former Sam's Club he bought in 2002. He hopes a Holiday Inn going up next door, will provide a boost in interest and bookings.
Parsons also says he's spoken with officials from Manatee and Sarasota counties about selling the convention center, offering to pass up cash for $12.8 million in county bonds. He says both counties turned him down.