Sundial owners call lawsuit a ‘ploy’ to redevelop theater
Paradise Ventures CEO Mike Connor is not backing down from a lawsuit that claims ongoing construction at the Sundial in downtown St. Petersburg violates a 25-year-old agreement.
Connor and Andrew Wright, CEO of Tampa-based Franklin Street and Ally Capital Group, bought the open-air retail center at 153 2nd Ave. N. in February 2022. The joint venture announced plans for a reimagined courtyard a year later.
New York-based Florida 2005 Theaters LLC, the entity that owns the AMC Sundial 12 movie theater, is now suing to stop construction. The April 16 lawsuit alleges that operating agreements prohibit Paradise from building a ground-floor bar or restaurant without consent.
“Within months of buying the portfolio, they listed this particular property with a residential commercial broker that specializes in vertical development,” Connor told the Catalyst. “I don’t think they have the City of St. Petersburg’s best interest at heart.”
Construction on the Sundial’s courtyard began in February. Forbici Modern Italian, which has a location in Tampa’s trendy Hyde Park area, will anchor the reimagined space stakeholders believe will increase foot traffic by supporting community gatherings.
An adjacent, covered bar is a project and lawsuit focal point. Connor said it is simply a shaded structure, and the ownership group does not have a liquor license.
“We’re spending millions of dollars on these improvements – you’ve got to plan for the future,” he added. “It might be a bar later, but it’s not a bar now.”
The lawsuit included Sundial construction photos. Screengrab, Pinellas County Circuit Court documents.
A Sundial condominium tower?
Florida 2005 Theaters is an ownership entity created by the Carlyle Group investment firm. The limited liability company rents the space to AMC.
Connor, a St. Pete resident, believes the suit is “100 percent a ploy” by Carlyle. He said the firm, which manages $682 billion in assets, wants to build a vertical development.
Carlyle recently listed the AMC theater site with local realtor Joe Esposito, the realtor’s assistant confirmed Friday (Esposito was unavailable for comment).
Esposito’s LoopNet profile states that he specializes in off-market commercial real estate and investment sales.
A Brevitas Marketplace listing notes that someone could create a rooftop bar or restaurant and combine it with ground-floor retail and mezzanine space.
“So, you’re going to tell me it’s not reasonable to put a restaurant on the ground floor, yet you’re trying to put a restaurant in the same building as the theater,” Connor said.
“This (the lawsuit) is completely an issue to deal with releasing them from a restriction we have on the property that says it needs to be a theater and retail development.”
Connor called the Sundial’s location – less than a quarter mile from bustling Beach Drive – the city’s “best piece” of retail real estate. Commercial broker Jon Reno La Budde helped facilitate the sale between Paradise and local businessman Bill Edwards.
“We like having the theater there – I don’t want to see the theater go away,” Connor explained. “So, why would I release the restriction?”
The theater’s ownership group is marketing first-floor and rooftop space for redevelopment. Screengrab.
The lawsuit
Development firm Sembler originally owned what was then known as BayWalk and gave Muvico, which controlled the theater, “reasonable approval rights” for ground-floor establishments. Florida 2005 Theaters succeeded Muvico, and the operating agreements remained intact.
Connor said he provided the entity with courtyard plans as a good-faith effort about seven months ago. Florida 2005 Theaters began sending letters stating their disapproval of a ground-floor bar in early February.
“An open-air bar may have a detrimental impact on sales at the AMC Sundial and will not be conducive to the family-friendly environment that is critical for movie theater patrons,” a representative wrote. “In over 20 years of ownership at this location, it has been the experience of Florida 2005 Theaters that establishments generating a high percentage of revenue from alcohol sales have a detrimental impact on the surrounding tenants.”
The company also expressed concern over construction impeding access to ticketing booths and queuing lines. The Sundial owners stated their intent to avoid interrupting those services while noting the concept is a “vestige of theater operations … that no longer exist today.”
The ownership group also responded that the operating agreement does not prohibit bars and restaurants, as evidenced by previous establishments. A subsequent letter from Florida 2005 Theaters’ attorneys notes that the language explicitly prohibits ground-floor bars and canopies in the courtyard.
Another letter dated March 7 stated that the theater was “suffering direct damages” due to “more significant construction than we were led to believe.” Florida 2005 Theaters now seeks an injunctive order to halt construction, a declaratory judgment to disallow first-floor bars, restaurants and canopies, and compensation for damages and attorney’s fees.
“I welcome going to court,” Connor stressed. “I welcome clearing this issue of them, in effect, trying to blackmail us into releasing an agreement that I don’t want to release.”
Another view of the new Sundial courtyard. Image: Paradise Ventures.
Forbici
Jeff Gigante is the co-founder of Next Level Brands, which owns Forbici. He called St. Pete his hometown and called the lawsuit “legal posturing for reasons other than the good of the community.”
Gigante noted previous restaurants have operated on the ground floor, and he signed the lease in July 2023. He “doesn’t think it’s coincidental” the lawsuit emerged after construction commenced.
“I’m saddened by it,” Gigante said. “But I am very confident that in the end, the City of St. Petersburg will weigh in and want this for the town, and we will prevail. It’s just going to take time and money away.”
Gigante noted that the rise of streaming services has affected movie ticket sales. Like Conner, he believes the theater will benefit from having a restaurant with a loyal following as a neighbor.
“You have to activate that courtyard,” Gigante explained. “The sundial (sculpture), as beautiful as it was, prohibited people from gathering in that lower area. Now you have this big structure where you could have live music, show sporting events and have communal seating so people can eat from all the restaurants in that area.”
Connor said the litigation will not affect construction, and the courtyard should open in August or September. If the ownership groups resolve the case in 60 to 90 days, a “best-case scenario” for Gigante, he said Forbici could open by the end of April 2025.
Forbici Modern Italian has garnered a loyal following in South Tampa. Photo: Facebook.
Jay
April 22, 2024at7:07 pm
The city leaders lost sight of what downtown St. Pete should be let alone look like. I stopped going over a year ago, too many people, not enough parking and what was St. Pete has been paved over thanks to the greedy developers – That’s the real shame.
Hugh Hazeltine
April 20, 2024at3:55 pm
I miss having the upscale deli there.
Brian
April 20, 2024at1:41 pm
Right , it looks like the rendering shows the shade structure is actually a bar but it seems the owner is stating its not maybe for purposes of defending this lawsuit, is this a judge who will deal with this or the city ?, Forbici says won’t open til July 2025 at earliest, my guess is they complete the courtyard renovations by September as per plan but forbici really not a done deal yet, too far out
David B.
April 20, 2024at7:44 am
This all seems really sad and pointless. They definitely need to have a bar in the new space, as the artist’s rendering shows. It would really be a missed opportunity if that wasn’t part of the new space. I hope the city leaders help people get their act together on this.