Downtown Tampa will be seeing stars, four stars to be exact, in about two years when the Old Federal Courthouse is converted into a luxury hotel.
Tampa City Council on Thursday unanimously approved a lease with for the city-owned building with Tampa Bay Hotel Partners, LLC.
Bob McDonaugh, administrator for Tampa’s Economic and Urban Development, negotiated the 60-year lease. The hotel will rent the property for $1 a year for the first two years as the 106-year-old building is being renovated. But, the rent never goes higher than $15,000 a year.
McDonaugh told council that’s the best deal he could get but it’s worth it.
“Because its owned by the city, right now, it’s not on the tax rolls and does not pay any property taxes,” McDonaugh said adding that the city is paying somewhere between $7,000 and $9,000 a month just to air conditioned the vacant structure.
Also, the developer, DSG out of Memphis, will invest $25 million in private money to convert the courthouse into a luxury hotel. DSG principal Gary Prosterman raved about the historic building’s marble, wood and terrazzo.
“It just screams four-star hotel,” Prosterman said. “That building is so spectacular, the materials are so spectacular, that it warranted being done as a four star hotel.”
Prosterman said his firm won an historic preservation award in 2010 for a similar adaptive reuse project in Philadelphia. His team turned a 100-year-old YMCA into the four-star hotel, Le Meridien.
Work on Tampa’s four-star hotel is expected to begin late this year with the hotel opening projected in May 2014.
The council unanimously approved the lease agreement; however, there was one dissenting voice in the audience.
An attorney representing a firm that was not selected for the project said the city could have earned $10 million if they’d chosen his client’s proposal. He asked council to reconsider the lease. But, McDonaugh told council that the $10 million figure was a percentage based on projected earnings and was not a guarantee.
