Sundial owner Bill Edwards sues Armature Works developer over halted food hall
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Oct 20, 2020

St. Petersburg business magnate Bill Edwards has sued one of Tampa's most prominent developers, alleging that the team has abandoned a project to build a market hall within the Sundial property in an attempt to "strong arm" Edwards into selling it at a deep discount.

Edwards' Loan Ranger Acquisitions LLC on Monday filed a suit against St. Pete Market LLC, an entity controlled by Armature Works president Frank Scalfaro, and BE-1 Concepts, a restaurant company controlled by Tampa developer Chas Bruck. Bruck is a co-founder of SoHo Capital, which owns the mixed-use Heights district anchored by Armature Works.

Bruck declined comment Tuesday.

In November 2019, Edwards and Bruck announced a deal in which the team behind Tampa's Armature Works and restaurant company BE-1 Concepts would redevelop a 28,500-square-foot portion of the Sundial to make way for a market hall similar to Armature Works' Heights Public Market.

Sundial is a mixed-use, open-air, lifestyle property in the heart of downtown St. Petersburg. Previously known as BayWalk, its restoration was a passion project for Edwards, who paid $5.2 million for the property in 2011 and poured tens of millions of dollars into renovations.

To prepare for the redevelopment, Edwards closed down Locale Market, restaurant FarmTable Cucina and several other retailers.

Their lease deal, according to Edwards' lawsuit, included an option for the Armature Works team to purchase Sundial for $32 million. Edwards alleges that the Armature Works team is attempting to "strong arm" him into selling the property for less than the option price. To do so, the suit alleges, the Armature Works team has delayed obtaining its building permits, which pushes back the date at which it would have to start paying rent. The food hall portion of Sundial "remains a desolate construction zone," according to Edwards' lawsuit. His portion of the construction work, he says, wrapped up May 12.

“The tenant in this case is closely related to the success story that we call 'Armature Works,'" Tampa attorney John Anthony, who represents Edwards, said in a statement. "As the complaint in this case makes clear, Bill Edwards had every reason to believe that the tenant would have the same motivation and results at the Sundial that has been experienced at Armature Works.

"But with one third of a premier venue dormant, Mr. Edwards has an obligation to himself and the top shelf commercial tenants at Sundial, as well as their employees and customers, to deal with this situation.”

The lawsuit also alleges that the Armature Works team has removed $6.5 million worth of items associated with the businesses previously in that space and utilized those items — furniture, fixtures and equipment — at its other businesses, including Armature Works.

The future food hall space is 30 percent of Sundial's overall square footage, and the property is without an anchor tenant after closing down FarmTable Cucina and Locale Market to make way for the Armature Works-type development.

"The landlord is aware that while the tenant desires to acquire the entire Sundial property, it does not currently possess the financial wherewithal to exercise the purchase option at the option price," Edwards' lawsuit alleges. "Because of this fact, the tenant has taken it upon itself to fabricate a 'discount' scenario, where the tenant will continue to not perform under the lease, causing the landlord to either default under its own financial obligations or sell the Sundial to the tenant at a price substantially less than the option price."

In a statement, Edwards called the situation a "tragedy."

“From my days as a young man fighting in Vietnam, I have always had a sense of community and have tried to do the right thing. Making money has not been a zero sum game; I have operated on the premise that 'a rising tide lifts all ships,'" Edwards said in a statement. "Al Lang Stadium, the Mahaffey Theater and the Sundial are great examples of my business philosophy in action for the community.

"The mall that I purchased was blighted. The Sundial today is a focal point for our community; it has given me great pride and happiness, and a sense of accomplishment. So I see it as a tragedy that one third of the Sundial is and remains vacant for reasons that have been beyond my control. And I am going to do my best to correct the situation.”

On Aug. 18, Edwards' team informed the Armature Works developers that they had defaulted on the lease. Their response, according to Edwards' lawsuit, came on Aug. 20 and said that the novel coronavirus pandemic was to blame for the delay.

The pandemic has caused financial duress for restaurant owners and developers across the U.S., as state-ordered dining room shutdowns to slow the virus' spread caused sales to steeply decline. But Edwards' lawsuit contends that the pandemic is unrelated to the construction delay and calls that response "perplexing."

"One would think that a tenant would continue to utilize the time to complete the necessary build-out required so as to be ready to open once the phenomenon had lessened and businesses were allowed to fully operate," the lawsuit says.