Monday, November 12, 2018
Real Estate

In second major deal, Water Street Tampa to pay $2.75 million for critically needed parcels of land

TAMPA — One business day after paying $13 million for the site of the ConAgra flour mill, the development company for Water Street Tampa on Monday got the green light to spend another $2.75 million more on land it needs for its finest hotel and tallest office tower.

The Tampa Hillsborough Expressway Authority board voted to sell the land — nine parcels that used to make up the curvy parts of Brorein Street — to Strategic Property Partners (SPP), the real estate venture between Tampa Bay Lightning owner Jeff Vinik and Cascade Investment, the private capital fund of Microsoft founder Bill Gates.

Even more than the purchase of the flour plant, which has long been seen as an industrial anachronism in an area expected to become a lively neighborhood and entertainment hub, the Brorein Street purchase has immediate importance for the $3 billion mixed-used development.

A TRANSFORMATIVE DEAL: Water Street Tampa developers buy ConAgra flour mill for future expansion of their $3 billion project

That’s because SPP’s plans include a new Marriott Edition boutique hotel and a 20-story office building near where Brorein used to split off from Channelside Drive.

"The reason this is critical is two of our projects could not have gone forward until we owned all the property," SPP executive vice president and general counsel Jim Shimberg said after the vote.

Construction is expected to start on both projects in early 2019, and both are projected to open in 2021. The Marriott Edition building will rise 26 stories, with 173 rooms in the hotel and 46 condominiums on its top 15 floors. The office tower, at 1001 Water Street, will open next to the new medical school building already under construction for the University of South Florida Morsani College of Medicine and Heart Institute.

Together, the Brorein parcels cover about .8 of an acre. The sales price was more than the appraised value, authority general counsel Patrick Maguire said.

SPP and the expressway authority reached a sales agreement for the Brorein property in 2016. But they and the city of Tampa agreed not to transfer any part of Brorein Street, which the city owns a small piece of, to SPP until after certain things happened.

One key trigger was the acquisition of property related to the flour mill that will allow Cumberland Street to be extended east, over a set of railroad tracks, to make a new connection with S Meridian Avenue.

That happened Friday. SPP bought the 3-acre flour mill property, which it sees as a future extension of its $3 billion project. At the same time, a four-way agreement clicked into place between SPP, the city, the expressway authority and Ardent Mills, which owns the flour mill.

As part of the agreement, the city has agreed to pay Ardent Mills $2.25 million in exchange for the mill giving up its rights to use the railroad track that crosses over Cumberland.

"Two huge things have happened two days in a row," Shimberg said. "We couldn’t close (with the expressway authority) until the rights to the Cumberland crossing were secured."

Meanwhile, Ardent Mills has agreed to stop using the railroad track as of Nov. 1, 2020 and says it will move its 80,000-square-foot mill operation to a new local home by 2021. Mayor Bob Buckhorn said Friday that new home likely would be at Port Tampa Bay, though the company has not confirmed that.

"Ardent Mills is looking at several sites in Tampa and the surrounding area for our new community mill location," spokeswoman Mary Ann Strombitski said in an email to the Tampa Bay Times. "We are excited to continue to serve the Tampa community from our current facility and our future new facility. We have not selected or finalized a site location yet."

On Tuesday, Port Tampa Bay CEO Paul Anderson said, "yes, we’re talking," but could not discuss details of the negotiations. He did say the process began several years ago with Vinik and then-Lightning CEO Tod Leiweke taking the lead. And he said the port is working to support the larger evolution of that part of downtown Tampa "every way we can."

"We’re close," he said, "and it’s going to be good for everybody."

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Contact Richard Danielson at rdanielson@tampabay.com or (813) 226-3403. Follow @Danielson_Times

     
 
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