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Halted Project May Resume

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By CHRISTIAN M. WADE, The Tampa Tribune

Published: January 30, 2008

NEW PORT RICHEY - Developers of the stalled Main Street Landing project have been discussing with city officials plans to resume construction, possibly by late summer.

Gainesville-based developer Ken McGurn said the idea, which is in its infancy, is to complete the commercial portion of the mixed-use complex in phases.

"We're still running the numbers," he said Tuesday. "Our hope is that we can eventually figure out a way to make the numbers work and get buildings one and two completed."

The structures were in the early stages of construction when work was halted more than a year ago. The vacant concrete shell sits behind a chain-link fence on the west bank of the Pithlachascotee River, at the gateway to downtown.

Originally, Main Street Landing called for 55 condos in addition to the commercial space. McGurn said those residential units are off the table.

"Nobody is building residential right now," he said. "The real estate market is flat."

Although McGurn has a contract with the city that doesn't expire until 2009, the city's Community Redevelopment Agency board of directors and the building department would have to approve a revised development plan.

Additionally, the developers would need to put the project out to bid again.

City officials called the talks with McGurn preliminary but encouraging.

"We're committed to do anything possible to assist in getting this project restarted," said Interim City Manager Tom O'Neill. "No one here wants to look at that thing anymore."
McGurn and Peter Altman, a former mayor and county commissioner, broke ground in April 2005 after demolishing several buildings on the property.

The project was heralded as the cornerstone of New Port Richey's redevelopment efforts. Many local business owners were counting on it to breathe life into a sleepy downtown, and city officials were eager to expand the property tax base.

Rising construction costs quickly pushed the price tag beyond $30 million.

So McGurn and Altman approached city council members with an innovative, yet controversial proposal to create a community development district, which would levy an added tax on its future residents to cover infrastructure costs.

The deal called for developers to forgo $1.25 million in city financing in exchange for borrowing $4.3 million in tax-free municipal bonds. Roughly $6.7 million in property tax proceeds would go to the CDD, instead of into city coffers, over 23 years.

The council, sitting as the Community Redevelopment Agency, voted 3-2 against the proposal in June 2006. Two weeks later, the developers shut down the project.

Opponents of the special taxing district called it a bailout for the developers.
McGurn said he's not sure whether he would again seek creation of a CDD to offset construction costs.

"It's certainly a possibility," he said.

If such a deal were sealed in New Port Richey, a recent Florida Supreme Court ruling requires that municipal voters be given their say in a referendum.

The ruling held that if cities want to use tax-increment financing to pay off bond debts incurred for redevelopment projects or taxing districts, voters must approve it first. The high court is considering several challenges to its ruling.
McGurn said public financing is not as important as getting Main Street Landing going again.

"We are absolutely committed to finishing it," he said. "It's just a matter of when."

Reporter Christian M. Wade can be reached at (727) 815-1082 or cwade@tampatrib.com.

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