Back in November, Clearwater voters passed a referendum allowing the city to sell two bluff parcels to developer. Approximately 600 apartments and a hotel bordering the $84 million renovation of the downtown waterfront was promised by developers. If you need a refresher on the project, check out our blog here. The project was framed as a once-in-a-generation chance for Clearwater to give its downtown a revamp, something it has lacked in compared to St. Petersburg and Tampa.

Less than two weeks before the deadline to purchase the land, developers The DeNunzio Group and Gotham Organization are asking to scale back the apartment project, hinting that other aspects of the project will be in jeopardy if denied. Developers are seeking to eliminate a second residential tower, and scale back the total number of units to just 400 in one building. Developers are also proposing a new payment schedule to the City as well. Instead of paying $15.4 million by the December 24, 2024 deadline developers would like to reduce the price to $7.6 million paid no later then 5 years after closing, or for the city to convey the property and retain a zero-interest mortgage for developers to pay the $15.4 million in a lump sum 10 years after closing.

DeNunzio and Gotham were chosen out of three bidders for the project, but the team and to wait to begin due diligence on the sites until the referendum passed in November. With drastic changes to the economy, obtaining funding for the project is now more difficult. Interest rates have shot from 1.5% to 5% , increasing borrowing costs, Insurance in Florida has also skyrocketed - pushing annual estimates to operate the development from $500,000 to $900,000. It was previously estimated the cost to build each unit would be $583,000 but that has now jumped to $649,000 per unit.

Gotham and DeNunzio still want to develop the bluff parcels but it will require compromise with the city to do so. Matthew Picket of Gotham told the Tampa Bay Times, that they don't want to set themselves or the city up for failure. Knowing what is financially feasible and what is not, they will lay out terms for the city and if an agreement can be made they feel confident in moving forward. Proposed changes will be discussed at the City Council meeting this Thursday (April 20th), and if the council agrees to Gotham's request, changes will require votes at two future public hearings. A final site plan is expected for submission for City Review by May 1st.  If the city is unable to make changes to the apartment project it is unknown if the Hotel project will move forward.