Pineapple Square reveals likely tenants, asks city to chip in

Developer wants Sarasota to chip in $16 million in land, funds
By KEVIN MCQUAID
kevin.mcquaid@heraldtribune.com

SARASOTA -- Pineapple Square would transform downtown with restaurants like Morton's Steak House and retailers like Brooks Bros. and Cole Haan, plans filed by the project's developer shows.

Isaac Group Holdings LLC's submission Tuesday marks the Sarasota government's first formal look at details and numbers associated with the development, which would add 275 residences, 30 to 40 stores and restaurants and 1,067 parking spaces.

In addition to Morton's and retailers like Brooks Bros., Isaac has received "very strong interest from a whole host of national retailers" and eateries, such as Ann Taylor, P.F. Chang's and Lillie Rubin.

"We wanted people to get a sense and a caliber for the retailers we're talking to," said John Simon, Isaac Group's chief executive. "We wouldn't have named them if we weren't highly confident we could land them."

But the estimated $200 million project continues to face tall obstacles, including the developer's desire for a multimillion-dollar contribution by the city.

Specifically, Isaac is asking the city to give up a one-acre, city-owned tract on State Street, vacate a portion of State between Lemon and Pineapple avenues, and contribute an estimated $7.6 million to construct public parking.

In all, the city's contribution would be roughly $16 million, based on appraisals and construction costs. That figure would be nearly twice the amount that Sarasota provided the developer of the Whole Foods Market Centre and One Hundred Central condo tower.

In its submission to the city, Isaac officials recommended leasing the State Street lot, now used as surface parking for 137 vehicles, through 2087. Previously, Isaac had sought to either buy the lot or have it donated by the city.

In September, a city appraiser determined the property was valued at $8 million. Isaac contends that restrictions on the site and what can be built there make it almost worthless for development.

But in lieu of lease payments, Simon is recommending that the city instead accept 175 Isaac-donated parking spaces, valued by Simon at $4.36 million, in a new garage that would anchor Pineapple Square.

In addition to those spaces, the city would operate, maintain and own 350 spaces in the same garage at Lemon Avenue and State Street, now the site of a First United Methodist Church parking lot.

City planners said they remain "optimistic" and "hopeful" that terms can be reached with Isaac, which owns a half-dozen buildings around Main Street and Lemon Avenue.

"The key for us will be to get our hands around what a fair lease price for our land is," said Karin Murphy, a Sarasota redevelopment specialist.

"We're ultimately going to need a policy decision from the commission," she added. "They'll have to determine if we've now gone beyond the simple real estate transaction which the commission thought this would be."

Murphy expects to contact a city consultant and appraiser within the next 10 days to review Isaac's submission. The Isaac proposal also might have to be reviewed by the city's Community Redevelopment Area Advisory Board.

Isaac also is seeking city permission to construct a 13-story building that would become Pineapple Square's centerpiece.

If approved, it would become one of only two structures that could be built in the downtown core, under a settlement to a challenge to the city's Downtown Master Plan 2020.

Additionally, Isaac is asking the city to provide about a half-dozen spaces in a city-owned lot at First Street and Lemon Avenue. The parking would support the 7,000-square-foot Morton's restaurant planned for that corner.

Leases with both Morton's and Chang's, which would occupy the former Ovo Cafe building at Lemon Avenue and State Street, would be signed as a "pre-condition" to leasing the city lot.

In exchange for the city's contributions and approvals, Isaac estimates Pineapple Square will generate about $9 million in annual property taxes by 2016 and add $2.4 million to Sarasota's affordable housing and transportation trust funds.

Isaac expects to begin construction on its 1.2 million-square-foot project, being designed by Hoyt Architects and JPRA Architects, in January. It would be completed in 2010.

Murphy said the commission is tentatively scheduled to consider Isaac's plan Jan. 17.

Simon said he hopes that the commission considers Pineapple Square's overall benefits to the city.

"I think this will be a great thing for the city," Simon said. "But the timing is such that we can't afford to wait another six months or five months or even three months to get started on this."