Recession killing downtown plans

In yet another sign that wanting the recession to end doesn't necessarily make it so, plans have fallen through for a pair of 30-story condos or apartments on a Channel District waterfront site.

For downtown Tampa, the end of the project adds to the half-dozen planned condominium and apartment projects that failed to materialize since the housing market soured in the past three years.

"I think it had nothing to do with Channelside, nothing to do with Tampa," said Stan Lifsey, a principal with Lifsey Real Estate and Holdings Inc. of Tampa. "The climate of the overall economy is the driving force behind the loss of this development."

The fact the deal didn't happen shows that despite signs the recession could come to a close by year's end, expectations of a recovery do not equate to a boom. Financing for new development remains tight, even for respected investors.

Some condominium units that once sold for $400,000 are now being sold for half that, people are renting apartments rather than buying homes or condos, and speculators who helped drive prices skyward and fueled a local building boom have long retreated from view.

The Channel District condos were to have been built by Clearwater developer Byrd Corp. on 3.5 acres owned by the Port of Tampa. Instead, for now, the site will remain a valet parking lot.

Thus, no construction and trickle-down jobs, no increase in the tax base, no influx of nearby residents to make downtown more vibrant.

That's through no fault of Byrd Corp., the Port of Tampa, or long-term prospects for downtown development, interviews with public and private sector officials familiar with the project indicate.

The Tampa Port Authority agreed to terminate Downtown Channelside LLC's contract option to purchase the site on Channelside Drive at the Beneficial Bridge leading to Harbour Island for about $10.6 million, port director Richard Wainio said Tuesday.

Downtown Channelside LLC will be out nearly $4 million. That includes $3 million in project changes, including one in 2006 to replace the two 30-story condo plan with a five-story, 250-unit apartment; $513,249 to be released from its purchase option with the port; and $300,000 spent on environmental mitigation.

"It is a wonderful site on the water with a great view of Harbour Island, downtown and the channel," Lifsey said.

Patrick Berman, senior director at Cushman & Wakefield in Tampa, agreed with Lifsey that the economy is to blame.

"The Byrds are very experienced developers with a very strong reputation, not like some guy doing his first development," Berman said.

Berman said the project's demise was not surprising given market conditions, in particular the reluctance of bankers to lend money to developers. "Because there is no financing out there, you have investors who offer all cash for one-quarter of what's asked, a huge discounted price, or end users like a Walgreens that are highly valued."

The Byrd Group did not return a call for comment. In a May 29 e-mail to Tampa port attorney Charles Klug, Brooks Byrd warned that "with today's historic market downturn, depreciated real estate values and the withdrawal of Zom USA from our partnership, we have reached a point from where we can no longer move forward."

The Tampa Downtown Partnership, which promotes and oversees downtown business and development, has followed the project's financial problems, which the developer candidly aired in port authority meetings. Nonetheless, partnership officials remain optimistic about the future of the Channel District and downtown Tampa in general.

The Partnership reported that 98,080 people live within three miles of downtown. Sixteen condo projects with 2,809 units, 1,439 of which have been leased, are available in the Channel District, with 2,237 current residents.

"You can look all over the country and find projects being halted," said Paul Ayres, director of marketing and business development for the partnership.