Sticks of Fire: a Tampa blog

So last week Ellen Gedalius reported in the Trib that the City has come to an agreement with M&J Wilkow who bought the struggling Complex last year. I posted on it back in November 2006 when Wilkow first bought the property and more recently we talked about the positive attitude some of the current business owners have about the new owners. Now the City has approved a plan where the new owners actually agree to help pay the mortgage we are currently paying on the place (well kinda). This addresses one question I had raised in a previous post,

Although I can’t be sure, I read this mean that the loan is not secured against the property (since they would have to pay it off when the complex is sold), but instead secured against city bonds.

In fact it seems that the debt is a mortgage we cosigned and which is going to be resubborned to the new owners (but we still have to pay for it).

Taxpayers long have been on the hook to subsidize Centro Ybor. In 1997, the city guaranteed a $9 million loan from the U.S. Department of Housing and Urban Development to help finance the center. The debt is in the form of a second mortgage on the property.

First of all great job to Ellen and the Trib for making that clear. Calling it a mortgage makes it very clear how silly this deal was for the city. Think about it, would you guarantee a mortgage for somebody to build a nice house next to yours in the hope it will make your home more valuable? I didn’t think so.

The whole story has gotten more than a little wacky with a t-shirt wearing millionaire offering to buy the debt outright. Alana Kahana and Joseph Capitano, themselves big real estate owners in the Ybor area both individually and in the name of Cherokee Associates, offering to buy both the debt by itself and the complex as a whole. Both efforts, according to city attorney David Smith, are designed to get the current owners to sell the property at a discount. Although the offers themselves may be spurious the city seems to be reviewing them to see if they are serious. Of course they seem to hate having to do it. Most of their concerns seems to be with the way the offers were made public.

“This is not the way we do business - coming before council after we’ve done a lot of work over many months,” [chief of staff] Darrell Smith said. “We realize it’s a very complex arrangement. We don’t like to do business with anyone standing up at council and trying to make a deal. This is not the courthouse steps. This is not an auction”
…Mayor Pam Iorio could not be reached for comment late Thursday, but Smith said “she was unhappy with the way it makes the city look, and she’s right. This circus like atmosphere is very embarrassing to the city.”

Maybe it does look bad and maybe these guys all have their own agendas but who really cares? The City is a poor business owner and here we have two groups of locals with proven business experience willing to let the city off the hook that Dick Greco put us on. They can also do it a whole lot faster than the current owners have offered to. Remember M&J Wilkow? They promised to pay a whole $100,000 upfront and $25,000 over the next six years towards the second mortgage that we pay $770,000 a year on right now. That means that they will pay a total of $250,000 on debt that the city will spend $4.6 million on during the same period. That math is bad for us all.

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