Pink Palace Deal May Be Dead

The developer that was hoping to use a package of public funds to transform the dilapidated "Pink Palace" hotel said the latest counter offer from Bradenton's Downtown Development Authority is "just not feasible" for the project to continue.

Brian R. Long, director of development for Widewaters Group, said Tuesday he was "surprised and disappointed" at the DDA's offer, which included $1 million up front as a sort of "super facade" grant, plus about $300,000 in street improvements and $500,000 in tax abatements.

Widewaters Group was initially seeking more than $6 million in subsidies and tax breaks to renovate the in downtown Bradenton into a modern hotel. That figure was negotiated down to the $3 million to $4 million range, but DDA board members said Tuesday they were unwilling to spend that amount.

"My sense is it's going to be a different deal if it's not at that $3.5 (million) level," DDA vice chairman Greg Green said earlier Tuesday. "They're probably have to go back to their drawing board to figure out what they're going to do differently."

The drawing board now includes letting the boarded-up building sit there at 309 10th St. W. to see if other interested parties come along, or perhaps tearing it down, Long said.

"Neither of those are good options," Long said.

In reviewing the Community Redevelopment Area's long-term budget forecast and factoring in the $6 million already committed to the , the DDA found it couldn't afford the roughly $3.8 million that Widewaters Group had sought. If it were to finance both projects, the DDA would be operating at a deficit from 2014-16, Green said.

The city hoped to use money from the 2017 expiration of an interlocal agreement with Manatee County that would keep more than $1 million a year in tax increment funding in the DDA's coffers. But a closer look at the budget found the DDA will still owe the county more than $2 million for its parking garage, including four payments of $600,000 in the years 2021-24.

Board members said they were worried they'd be tying their hands by committing the $3.8 million Widewaters Group had been seeking.

There had also been a few sticking points in the negotiations with the developer, Green said. Widewaters Group cannot reveal the amount it paid for the property because of a non-disclosure agreement it signed with Regions Bank when it purchased the note from foreclosure last year.

Further, the DDA had asked for a five-year lookback at the company's projected $12 million construction costs, as well as a "claw-back" clause in the agreement that would make the company pay back the city if it were to sell off the property within five years for a large profit.

All three requests had been met with resistance, Green said.

"If they're asking for public money, I have an issue with them (not answering one of those three requests)," board member Cork Miller said. "That's a major issue with me."

Board member Jason Bartz took it a step further.

"The position they're asking the city to put themselves in, we should have a purchase price and have a lookback on the end cost," Bartz said. "That's a good partnership."

Green said although the return on investment would have been relatively small — only about a $1.9 million benefit to the city over the lifetime of the building, according to its consultant's estimates — there were other factors at play regarding the historic hotel.

"That's a big part of Bradenton's history, and if it can be saved, we should," Green said.

Now that seems to be in jeopardy.