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'Heartbreaker' of a deal

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  • | 10:00 a.m. June 3, 2016
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  • Tampa Bay-Lakeland
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Bob Zegota was scouting for sites for a charter school client four years ago when he came upon the former Bob Wilson Dodge dealership, in Tampa.

The 11945 N. Florida Ave. property had been the site of one of the region's most enduring car dealerships, a third-generation business that had flourished for more than 30 years.

But when last decade's recession took hold — shortly after Bob Wilson had completed an $8 million showroom under pressure from Dodge parent Chrysler — the dealer filed for bankruptcy protection from creditors and went dark.

Zegota, the broker of commercial real estate firm A to Z Commercial Real Estate, in Tampa, thought the dealership could be converted. But when he made initial inquiries, he quickly ran into a sizable obstacle: The attorney for Chrysler and the attorney for the lender weren't talking.

“It was an absolute disaster,” says Zegota, 67. “They hated each other. I mean, hated. I can't even tell you the level of belligerence between them. So I became on ombudsman, of sorts, for these two lawyers. Then the real fun started.”

The emotional discord was a problem because the two sides needed to work together to foreclose on the site, which contained a 162,000-square-foot showroom and office building and parking for more than 370 vehicles.

Over a series of conversations about the 7.6-acre property, Zegota befriended Jonathan Deily, the managing partner at Deily & Glastetter LLP, the Albany, N.Y., law firm representing Chrysler.

Incrementally, one thing led to another. He persuaded the lawyers to make the $12 million in debt Wilson had racked up on the property non-recourse -- meaning he wouldn't be personally liable for the loans plus delinquency fees.

In early 2013, the same year Zegota formed A to Z after stints with brokerages Grubb & Ellis and a Cushman & Wakefield predecessor, the attorneys put away their verbal swords long enough to give Zegota the listing to sell the property. Detente ensued, but even the simplest of decisions often took weeks of back and forth negotiating, cajoling, arguing.

Zegota brought the dealership to market for $2.95 million -- a fraction of what Wilson had put into it a few years earlier.

As the months dragged on, TD Bank stepped in and bought Chrysler's real estate portfolio. When a New York investment firm subsequently acquired the Bob Wilson site from TD, it wanted to strip Zegota of his listing and bring in a national brokerage firm to sell the property.

Deily, who did not return telephone calls for this article, balked. So did the West Palm Beach firm that was working as the asset manager.

“No one knew the property better than me, and they recognized that,” Zegota says.

He knew the property all right. He knew the structural cracks in the parking lot, the underground fuel tanks that would have to be removed, and the $60,000 in code enforcement liens the county had slapped on the property while it was empty.

Police, who were called to the former dealership roughly two dozen times beginning in 2013, knew it, too. They regularly booted vagrants, drunks, thieves who stripped copper wiring out and the gangs who were selling drugs from inside the building.

Together, the squatters and their ilk caused about $2 million in damage to the building.

Things got so dicey that the cops advised Zegota to carry a gun when he visited the property.

Zegota holstered up a .38, persuaded the county to dismiss many of the code liens and focused on selling.

Initially, prospects looked good that 11945 N. Florida Ave. would result in a quick turnaround. Zegota in 2013 landed a buyer after just two weeks of marketing the property. But once the site went under contract of sale, issues arose. The buyer tied up the site for nine months kicking the proverbial tires before walking away.

Zegota then convinced a local Kia dealer that the property was still a good place to sell cars. But when the dealer realized he'd have to pay another Kia franchisee more than $8 million to share the Tampa territory, he bolted.

A third buyer, a pair of brothers from Pakistan, happened to show up for a site visit with Zegota just as police were hauling an intoxicated and uncooperative man away from the property, their guns drawn.

Though they said the arrest didn't deter them, Zegota received a contract termination letter the next day, saying the property wasn't what they were looking for “right now.”

By the time 2015 rolled around, Zegota was spending roughly 20 hours each week dealing with the North Florida Avenue site. And because he was working on commission only, as most commercial real estate agents do, he wasn't making any money from his efforts.

“Complex deals, if you know the road you're going to have to go down, you might just leave them alone,” says Bill Eshenbaugh, founder of Tampa-based brokerage Eshenbaugh Land Co., who started the Florida Gulfcoast Commercial Association of Realtors in the early 1990s with Zegota and who came up the idea of the group's annual “Heartbreaker” award, for deals that don't gel despite “persistence and professionalism.”

“But you don't know that at the time. Once you're in, you're invested. If you walk away, you lose 100% of what you have in. If you keep at it, who knows? You might salvage something.”

Zegota decided to try to salvage something. The former dealership became a personal challenge — just as the $30 million sale of the Hillsborough County Center that Zegota had worked on in 1992 had been to him.

Zegota got involved with that purchase, from the Mack Co. of New Jersey, as a personal favor to then-County Administrator Frederick B. Carl, the last elected justice to the Florida Supreme Court. Today, the building at 601 E. Kennedy Blvd. bears Carl's name.

In all, Zegota had the former dealership under contract seven times. A Chevrolet dealer showed interest. So did dealers from other major brands; even electric car maker Tesla considered it.

“Every major dealer in the Tampa area either provided us with a letter of intent or had the property under contract to buy it,” Zegota says. “I knew it was a situation where the law of diminishing returns applied, but I was already so far in at that point I couldn't get out.”

Seven deals were cobbled together, and seven times they fell apart.

Reluctantly, Zegota recommended the damaged building be demolished, and oversaw its dismantling. He sold off equipment where he could, too, like car lifts that had been used for repairs.

Last summer, just when it seemed the nightmare that had become his listing would never end, a Miami used car dealer named Off Lease Only showed up.

Begun in 1992 in Long Island, N.Y., by Eileen and Mark Fischer, who used money from their wedding to buy and resell a pair of cars whose leases had expired, Off Lease expanded to Miami.

From there, the business grew to Palm Beach, Orlando and Fort Lauderdale. Off Lease began dealing in higher-end models, as well, brands like Aston Martin, Porsche, Mercedes-Benz, Bentley, BMW and Rolls Royce, according to its website.

Tampa was on its radar for expansion.

This time, a deal stuck.

Zegota closed on the sale last November — more than three years after the marketing campaign began — for $2.75 million. He sent Deily a box of expensive cigars.

Off Lease is scheduled to open in Tampa, in a newly built showroom, sometime next year, according to the company's website. The Fischers did not return telephone calls for comment.

For all his work, Zegota was paid a 4% fee for property management and a 3% commission, which he had to split with another broker. The total came to a little more than $151,000, before taxes.

“If I stop to figure out what that worked out to over three years, it ain't that great,” Zegota says. “So I don't think about it. Had I known how long it was going to take, yeah, I probably would have walked away from it. But I just took one day at a time, focused on solving one problem at a time.

“And now I'm known as a guy who can solve just about anything as a result.”

In April, he was presented with FGCAR's Pinnacle Award for “Deal of the Year — Heart-breaker.”

Zegota was already on to his next deal, though: The sale of a Ruskin fish farm. He'd been working to sell that property for 12 years.

“Thirty-five years in this business, and my last two deals have proven to be the hardest of any of them,” he says.

- K.L. McQuaid


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