Distressed real estate specialist Biscayne Atlantic opted not to buy 21 acres of federally-held land at City Center, setting back Port St. Lucie’s long-held desire for a downtown on U.S. 1.
City Manager Russ Blackburn said Monday Biscayne Atlantic officials let him know they decided not to pursue the proposed $750,000 purchase of the City Center land. “They chose not to go forward,” Blackburn said. “They didn’t give a lot of rationales or reasons.”
More than $24 million in back property taxes and special assessments are owed on the City Center parcels, federal records show. The 21-acre site has a market value of $5.5 million, property appraiser records show.
David Garfinkle, of Biscayne Atlantic, and SEC receiver Michael Goldberg both declined to address emailed questions about the City Center deal and why it collapsed. Garfinkle referred questions to the city.
Goldberg emailed, “Unfortunately, I have no comment on these issues.”
However, in a legal filing, Goldberg said “the significant outstanding tax liability remained a detriment to the sale of the City Center parcels.”
Blackburn said the council authorized him to negotiate a deal with Biscayne Atlantic to reduce the back taxes and assessments, but never got the chance.
“They asked our planning staff about different uses for the property but it never got to a point of negotiations or discussions about the SADs (special assessments),” Blackburn said. “We never got to that point.”
The City Center project started in 2001 when the City Council adopted a community redevelopment plan for the former Village Green Shopping Center at U.S. 1 and Walton Road.
Port St. Lucie entered an agreement in 2005 with DeGuardiola Properties, one of the developers of Abacoa in Jupiter, to build a mixed-use downtown at City Center.
Plans called for 1,086 residential units, 252,820 square feet of retail space and 247,000 square feet of office space. The council envisioned a walkable downtown with restaurants, shops and entertainment.
The project stalled after the real estate market crashed in 2008 and DeGuardiola sold the 21 acres in 2013 to US1 Real Estate Development LLC and Lin “Lily” Zhong.
The SEC seized the property in November 2015 after accusing Zhong of exploiting a federal visa program to defraud Chinese investors.
It has been languishing ever since.
Goldberg hired the Avison Young commercial real estate brokerage in July 2017 to market the City Center land.
Avison Young found Biscayne Atlantic, which entered a purchase and sale agreement for the property in August 2018, federal records show.
But Biscayne Atlantic let the 180-day inspection period pass in February without paying a deposit, Blackburn said.
Avison Young is also serving as the city’s broker in the effort to sell the former Vaccine & Gene Therapy Institute Florida building.
A $14.5 million deal for the high-tech laboratory and office building fell through in December because the prospective buyer couldn’t find tenants.
The city may rethink its support for marketing the City Center properties and consider buying them, Blackburn said.
The city may also rethink its objective of having a master developer buy the property and build the long-awaited downtown, Blackburn said.
It may be better to encourage the SEC receiver to market individual parcels to try to make some progress, Blackburn said.
“But at this point we’re still focusing on encouraging the receiver to find a private buyer and to move forward,” Blackburn said.
Mayor Greg Oravec said he’s formulating a new initiative for City Center that he intends to announce during his “State of the City” speech this Monday at 5 p.m. at City Hall.
“I think it’s unfortunate that they went through a long evaluation process and declined to move forward,” Oravec said. “Now it’s going to be up to us to make something happen there. I think its hugely important.”