The piece of dirt called downtown Tampa — which includes the Marriott site and Block 107 — has somewhat landmark status in the arcane annals of government property seizures.
Ron Weaver, a land-use lawyer and an eclectic scholar, is fond of telling the story of Robert Hackley, who acquired much of downtown Tampa in a land grant from Spain, which then owned Florida. Hackley's son established a plantation at the south end of Old Tampa Bay in 1823. What the Hackley clan didn't realize was that Spain was in the process of selling the state to Uncle Sam.
In 1824, while Hackley was in Pensacola buying supplies, the U.S. Army took the property. Hackley heirs sued but lost in 1887 in the U.S. Supreme Court.
Tampa land-use lawyer Ron Weaver got the message on Jan. 26 when he was leaving a Super Bowl breakfast at the tony Marriott Waterside — which, as we'll see, is more aptly known by the name critics favor, the People's Marriott. Weaver discovered a 12-person jury touring a mostly vacant lot just to the north of the Marriott.
"The jurors were watching the people leaving the breakfast, the NFL stars, leaders from the community and the nation," Weaver recalls. "There's a dynamic on those few blocks around the convention center that defies the law of economic gravity. It's a unique niche. Every town has three or four blocks like that, such as the blocks on either side of the Waldorf (in New York City)."
The 12 citizens were trying to figure out the value of 49,141 square feet of vacant land, roughly half what is generally dubbed Block 107. Spying the gold-collared, silk-stockinged crowd leaving the adjacent hotel, the jury got the message they needed.
The jurors' job was to untangle dramatically conflicting claims on the land's worth. The Hillsborough Area Regional Transit Authority, HARTline, had used the governmental power of eminent domain to take the property from private owners last June, with the value to be settled later. "It's like buying a car but not asking the price until eight months after you have it," said HARTline board member Steve Polzin, a University of South Florida transportation expert.
Ostensibly, the land was to be used for a station for the new trolley line due to open in April 2002. But HARTline's motives might not have been so simple or benign.
Lawyers, investors and property owners, in interviews with the Weekly Planet, accuse HARTline of covertly carrying water for the City of Tampa. The city, in turn, was trying to help the Marriott by ensuring a competitive hotel wouldn't be built on Block 107. Public records and trial documents bolster their claims.
Whether that's merely government meddling in the private sector or a new twist on corporate welfare — or perhaps, more ominously, restraint of trade — isn't clear. There is one highly defined image in what happened, however: Taxpayer wallets were looted for a loss of $6-million or more.
HARTline already owned a similar-size lot that could have been used for a trolley stop. In 1985, HARTline paid $7-million for the property adjacent to the south side of the Fort Brooke Parking Garage and just a few feet from Block 107. To facilitate the transit agency's conquest of the south half of Block 107, the city recently, and quietly, offered to buy HARTline's land. Tampa Development Director Fernando Noreiga commented, "We were just trying to help them out."
The cost of the help was a little steep. The city paid HARTline $5-million, a $2-million loss for the transit agency.
Then came the catastrophic court ruling in January against the transit officials who wanted to buy Block 107. The jury sent its message to officials on Jan. 30, when it declared that the price it deemed appropriate for Block 107 was $9.5-million, $4-million more than HARTline had anticipated paying. Despite expressions of shock by HARTline and Tampa officials, there were plenty of signals Block 107 wouldn't be a fire-sale deal. To wit, Cary Gaylord, the attorney for Block 107's owners, said that late in the trial he discovered that the city and HARTline in October 1999 had sought, but didn't win, a three-year, $74-million grant from the state Department of Transportation to reconfigure roads and real estate around the Marriott and adjacent areas. Gaylord believes that as much as $25-million of the grant — more than twice what the property's owners were asking and four times what HARTline was offering — was needed to acquire Block 107.
Seeing the potential for what Block 107 could become — land whose worth, as Weaver says, defies gravity — the jurors ruled that roughly half of Block 107 was worth $8.6-million. That works out to $175 a square foot, which truly is freefall when it comes to Tampa real estate.
(The jury upped the total price to $9.5-million by ruling one of the landowners was entitled to $900,000 in "damages" to other Block 107 parcels he owns. Taxpayers will also foot the bill for both HARTline's and the property owners' legal fees and expenses — millions and millions of dollars as yet not fully totaled.)
To be precise, $175 is a new benchmark for the square foot value for major downtown land parcels. It's more than double what the Marriott paid for its land, which arguably is more valuable because it's on the water. Deals have been talked about, and a few consummated for prices in the $200-plus a foot range, but Block 107 is special. The other stratospheric deals were exceptional, and generally small. Block 107 is big and it's in the heart of downtown.
What was HARTline's motive for its taxpayer-underwritten adventure? What was the city up to? HARTline Executive Director Sharon Dent didn't return calls. The agency's spokesman, Ed Crawford, denied knowledge of the deal's history.
However, although brushed aside by Mayor Dick Greco's aides, the most plausible explanation is that the city was keeping a promise to the Marriott owners to deter a rival hotel from ever being built on Block 107.
Greco "is the consummate dealmaker, and I applaud that," said lawyer Gaylord. "But I have a problem when he treads on the feet of other people."
Testimony from, among others, land-planning consultant Ethel Hammer revealed that Greco was tiptoeing when it came to the Marriott.
In December 1999, for example, the city leased two small parcels it owns in Block 107 to HARTline. That deal was months before the transit agency announced its plans to build a trolley station on the site. Without the city properties, it is virtually impossible for a large hotel to be built on Block 107. The city, in previous hotel proposals, had made its lots available to the prospective developers, and would be hard-pressed not to do so if another hotel was planned. But by transferring the land to HARTline, the city could claim it wasn't involved, and the transportation agency could shrug that it wasn't bound by previous commitments of Tampa officials.
Also, the city threw away the rulebook in granting favors to the hotel. "Virtually every provision of (the city's zoning code for the waterfront district) was waived for the Marriott," Hammer testified.
When the head of the Marriott's development team, Robert Abberger, was asked during testimony if city bureaucrats were helpful, he responded: "Absolutely. Absolutely." (Abberger didn't respond to a request for an interview.)
To meet "open space" requirements, planning consultant Hammer testified, the hotel was allowed to count submerged lands, its interior lobby and its rooftop swimming pool. The Marriott's "view corridor" — a legally mandated requirement that buildings not totally obstruct sight from Florida Avenue to the waterfront — "was just waived in its entirety," Hammer testified.
Even more incredible is that there is little record of the many giveaways to the Marriott. City Council member Bob Buckhorn said he can't recall that the Council was ever advised of the massive number of waivers and favors granted the Marriott.
In short, the hotel developers got what they wanted from Tampa administrators with little scrutiny from the City Council and, considering the lack of press reports, with scant notice by the daily newspapers.
Thus, there's currency to the idea that the Marriott — which was picked by Mayor Dick Greco in a sleight of hand that scuttled his own selection process — had quietly received assurances from the city that there would be no competition on Block 107.
It's clear someone in City Hall liked the Marriott. The scheme to build the hotel cost taxpayers $30-million when other groups vowed they could do the job with almost no public outlay. The taxpayer bequest to the Marriott was described by Hammer as "a fairly nice monetary package that included annual payments from the city to the Marriott for lease space in the lobby." The city and its citizens would have a hard time, of course, claiming rights to occupy the hotel lobby they lease.
The coziness of the government players is further illustrated by the role played by Abberger. He developed the Marriott and testified for HARTline in the trial. His testimony was meant to drive down the price HARTline would have to pay. Yet, the truth is that the Marriott's land on Garrison Channel was cheap because it was virtually unusable, due to government restrictions. The city had to abandon its own rules to make the Marriott site viable for the hotel. Alternatively, Block 107 was eminently suited for construction and would have required a minimal number of city rule waivers.
Nine days after the Block 107 trial, Abberger was rewarded with a seat on HARTline's board of directors.
It's clear that, at the very least, HARTline exercised incredibly bad judgment. The two deals — selling its own land for a huge loss and buying half of Block 107 for a staggering price — constitute a $6-million waste of taxpayer money.
What makes it worse is that all of this happened in anticipation that no one would ever know. Predictably, the downtown boosters who run The Tampa Tribune didn't disclose that, once again, Joe Public had been screwed. The Trib's only report was a short item buried on an inside page, couched in terms of officials moving "forward on the city's new trolley car system."
Block 107 is a fearsome rectangle. Like a swamp devouring the unwary, the land has consumed many dreams. For more than a decade, developers and mayors have cast their hopes for a convention center hotel on the land, only to garner busted dreams.
In the early 1990s, then-Mayor Sandy Freedman pushed a hotel deal on Block 107 that would have richly rewarded some of her closest advisers and friends. The developers would have had little or no risk but would have pocketed millions in fees. The public would have borne almost the full risk. The funding scheme was based on borrowing more than 40 percent more than the hotel would have cost to construct, with the excess being used to buffer any financial shortfalls.
That deal was so unpalatable that even a normally somnolent City Council roused itself and voted down the project in 1994. Greco, although still merely a private citizen, was running what amounted to a shadow government. He used his sway with the Council to help kill Freedman's plan.
When Greco took office in 1995, he asked for proposals for a convention center hotel. Four groups stepped forward. The leading group, under the Marriott flag, planned to build on Block 107. However, after months of delays and broken promises, the group couldn't deliver on financing by a May 27, 1997, deadline.
The mayor had promised to negotiate with the runner-up Hilton group if the Marriott deal collapsed. However, the city ignored the promise and gave the plum to a reconstituted Marriott group, which had secretly purchased the land where the Hilton had been planned.
The Hilton would have had almost no public cost. The Marriott soaked the taxpayers for $30-million — provoking ridicule that it is the People's Marriott. To that $30-million can be added the $6-million-plus that HARTline is spending to make sure the Marriott is competition-free.
Editor John F. Sugg, who last weekend beat his kids at Monopoly by getting hotels on both Boardwalk and Park Place, can be reached at 813-248-8888, ext. 109, or at johnsugg@weeklyplanet.com.
This article appears in Mar 14-20, 2001.