New Orleans developer wants more time before closing on vacant lot in downtown Tampa
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Jul 10, 2017

The New Orleans developer selected by the city to develop a publicly owned vacant lot in downtown Tampa needs more time before it can close on the site.

Tampa City Council on Thursday will consider an amendment to the sales agreement between the city and HRI Investments, which was entered into in December 2016, extending the close date until Dec. 29, 2017.

HRI won the bid to develop the vacant-owned lot at 405 E. Kennedy Blvd. in September 2016 with a proposal to build a mixed-use 21-story tower on the site that will include 225 residential units, a 223-room Hyatt Centric Hotel, 7,000 square feet of commercial space and retail space and a 408-car garage.

The environmental inspection period is taking longer than expected, according to the proposed amendment. The sales agreement has already been extended once, from May 17 to July 20.

Bob McDonaugh, the city's chief economic development official, said Monday that HRI isn't able to complete the inspection because a portion of the lot is being used as a staging area for materials in the renovation of old city hall.

A spokeswoman for HRI did not immediately respond to a request for comment Monday.

The lot was previously how to two gas stations, and inspections so far have turned up six underground gas tanks, McDonaugh said.

"They're uncomfortable, which I would be as well, moving forward until a complete assessment of the site can be completed," McDonaugh said. "They have found some petroleum contamination and want to make sure they are not buying a pig in poke."

McDonaugh said those materials are expected to be removed from the site in August, and that it's likely HRI could close well before the extension ends. Once the inspection is complete, the developer will put together an action plan that's subject to approval by the Department of Environmental protection.

Timing is one of the most critical factors in whether a real estate development is successful. The extension does not necessarily mean HRI's plans are in peril, but the additional time could complicate the deal, particularly when it comes to financing.

McDonaugh said he's not concerned that the delay could jeopardize the deal. HRI, he said, has been interested in Tampa for a long time, responding to a request for proposals when the city sought ideas for the old federal courthouse in 2011. That property has since been transformed into Le Meridien Tampa.

"I don't think they'd be pursuing an extension if that were the case," McDonaugh said. "They were here last week and still very much interested."

Ashley Gurbal Kritzer is senior reporter for the Tampa Bay Business Journal.