Clearwater referendum seeks $400M mixed-use development, sans Scientology

Image via city of Clearwater.

Downtown Clearwater has it all — close access to one of the nation’s best beaches, pristine views of the waterfront, palm tree-lined roads to the north picturesque enough for any movie shoot or commercial cameo — yet the town remains sleepy, with vacant buildings and a dearth of nightlife or entertainment.

The city, and a team of developers, hope to change that.

This November, Clearwater voters will decide whether to give their blessing to a referendum seeking the go-ahead at the ballot box on the sale of downtown property that will pave the way for a new hotel, hundreds of apartments, restaurants, entertainment and more.

It seems an obvious answer to a question that has plagued the city for years, an opportunity to breathe life into the little downtown that, so far, just couldn’t.

Yet the issue also faces challenges as old as time, including nearly $26 million in government incentives and the sale of public land not to the highest bidder, but hand-selected developers with a vision, and a bottom line.

What’s on the ballot?

Voters will be asked the following question:

“Shall the Clearwater City Charter be amended to allow the City, instead of selling the vacant City Hall and a portion of the former Harborview sites to the highest bidder at a public auction, to sell the properties to Gotham Property Acquisitions and The DeNunzio Group; who will create approximately 600 apartments and 158-key hotel, retail, entertainment, restaurants and cultural uses available to all Clearwater residents, as further described and limited by City Ordinance 9597-22?”

The ordinance voters are asked to approve includes a list of requirements for the two parcels, including apartments, a full-service hotel, retail, dining, event space, and amenities open to the general public.

Specifically, the ordinance seeks to “ensure that the buyer of the unoccupied City Hall site and vacant site of the former Harborview Center develops the property in a way that provides long-term housing, jobs, and amenities for Clearwater residents.

If approved, it would authorize the city to “negotiate, enter into purchase and development agreements with Gotham Property Acquisitions, LLC, The DeNunzio Group, LLC, or their affiliated entities.”

At the former Harborview site, developers would have to include, at a minimum, dining and retail amenities accessible to Clearwater residents and visitors. Apartments would be required at the Old City Hall site. The ordinance also calls for “thoughtful and measurable sustainability provisions for environmental stewardship” at both sites and a long-term prohibition on self-storage facilities.

Development details

The former Harborview Center site is located at the corner of Osceola Avenue and Cleveland Street. The Old City Hall site is a half-block south. The two waterfront parcels border Coachman Park, which is currently amid an $84 million renovation, and offer pristine views of the Intracoastal.

The deal, which Clearwater City Council approved in early August to send to voters, includes $23.5 million in incentives, $22 million of which would be used for two underground parking garages that would eliminate concerns about blocking views of the waterfront, according to comment from Mayor Frank Hibbard to the Tampa Bay Times.

The city would also provide $1.5 million toward impact fees.

The City also proposes contributing $2 million to help fund a pedestrian bridge on city-owned land that would contribute that could further serve the development and the area.

The developer would pay $9.3 million for the former Harborview site and $15.4 million for the Old City Hall site.

The agreement calls for 600 apartments and a 158-key hotel, with 600 parking spaces for the apartments and 169 spaces for the hotel. The number of apartments can be changed but must be at least 500.

In addition to residential units, hotel space, dining and retail, the plan would also include a conference center, event space and a rooftop bar.

Why it’s a big deal

The short answer: Scientology.

Since 2017, limited liability companies tied to the Church of Scientology have scooped up at least 100 properties on or near the downtown waterfront and approximately 60 others in residential areas north of downtown, according to extensive reporting from the Tampa Bay Times.

Most of those properties remain vacant. An interactive map created by the Times shows how pervasive the land grabs have been, with parcels highlighted encompassing a shocking amount of downtown or near-downtown land.

Interactive graphics show that 22 of the first 33 buildings along Cleveland Street to the waterfront now have ties to Scientology.

The result is something not too far off from a ghost town.

According to the Times, developers hope the proposed development would boost activity in downtown Clearwater and serve as its own destination, despite the prevalence of property owned by those with ties to Scientology.

Will voters buy in?

It remains to be seen whether the Church of Scientology will insert itself into this referendum. What is clear is they have the money to influence the outcome if they do.

While property owners have been mum when asked about their purchases, and many have denied the purchases had anything to do with their church, the surge in property acquisitions shows purchasers spent more than $100 million in just three years.

Access to that kind of buying power cannot be overlooked and could fund a campaign to thwart the city and developers’ plans.

It wouldn’t be the first time the Church of Scientology took issue with the city. Before the surge in property purchases by those with ties to Scientology, the Clearwater City Council agreed to purchase land from the Clearwater Marine Aquarium for just $4.25 million. The Church wanted the land and had offered $15 million for it. Since then, tensions have risen and the Church has stopped communicating with the city, according to the Times.

Who are the developers?

Dustin DeNunzio is a local who grew up in Clearwater. He partnered with a friend, Matthew Picket, a vice president for the New York-based Gotham Organization, to form The DeNunzio Group and Gotham Property Acquisitions partnership working on the deal.

Gotham Organization has developed some 35,000 apartment units, retail centers, hospitals, schools and office buildings in New York City before turning toward other cities for new business.

The DeNunzio Group has typically focused its Florida projects in St. Pete and Clearwater beach. Its project list includes, among others, the Fairfield Inn & Suites in Clearwater Beach, the Holiday Isle Hampton Inn on Madeira Beach and a proposed mixed-use development in downtown St. Pete.