Sundial owners counter ‘blatantly incorrect’ lawsuit

A legal battle is heating up in downtown St. Petersburg, and the future of the Sundial shopping plaza hangs in the balance.

Paradise Ventures CEO Mike Connor and Andrew Wright, CEO of Tampa-based Franklin Street and Ally Capital Group, have countersued the AMC Sundial 12 movie theater’s ownership group. Their attorneys filed the response Wednesday.

New York-based Florida 2005 Theaters, an entity created by the Carlyle Group investment firm, owns the theater. The lawsuit accuses the limited liability company (LLC) of employing “thinly veiled delay tactics” to stall a $3 million project.

The counterclaim also states that Florida 2005 breached an operating and easement agreement (OEA) by unreasonably refusing to approve plans for a new courtyard and Forbici Modern Italian restaurant. Paradise Ventures seeks a court-ordered respite from the loss of “intangible benefits … that are incapable of precise calculation, and for which monetary damages alone are inadequate.”

“They (Florida 2005) would like to change the OEA to allow residential uses,” Connor told the Catalyst. “I’m, for sure, not doing it with these guys because they’ve acted in bad faith since day one. They’re untrustworthy.”

Mike Connor, CEO of Paradise Ventures.

Connor and Wright acquired the open-air retail center at 153 2^nd Ave. N. in February 2022. They announced plans for a reimagined courtyard, anchored by Forbici, a year later.

A provided document shows that Florida 2005 sought to change the OEA before Paradise Ventures closed on the property. The joint venture bought the aging Sundial – less than a quarter mile from bustling Beach Drive – for $30 million from local businessman Bill Edwards.

“I’ve always been a retail developer, and this is going to be a retail center,” Connor said. “I don’t want them to change the use, and I certainly don’t want to do it without having some control over what goes there.

“And by the way, they have an agreement with the city that doesn’t allow residential, either.”

The city development agreement also stipulates that the theater must provide 20 screens and 3,200 seats. Connor noted that Florida 2005 has defaulted on that mandate.

The theater’s owners fired the first salvo in the legal battle. Muvico initially operated the theater, and Florida 2005 inherited its “reasonable approval rights” for ground-floor establishments.

Its lawsuit, filed April 16, alleges that courtyard construction violates the OEA. The company also believes that construction, set to conclude in August, and a ground-floor bar would negatively impact theater operations.

Project renderings showed a covered courtyard bar as part of a community gathering space. However, Connor previously said it was simply a shaded structure that could one day become a bar.

He also noted that Forbici is a locally owned, family-friendly restaurant that “kills it” in Tampa’s trendy Hyde Park neighborhood. The countersuit claims the courtyard and anchor tenant would increase foot traffic and benefit the AMC.

Stakeholders believe the covered structure and gathering space would increase foot traffic for the Sundial’s tenants.

Florida 2005 seeks an injunctive order to halt construction, a declaratory judgment to allow first-floor bars, restaurants and canopies, and compensation for damages and attorneys fees. Paradise Ventures wants a judge to approve the plans, disallow any residential uses, and award attorney fees and “all further appropriate relief.”

The Sundial’s owners have also subpoenaed Berkadia. Connor said he has “nothing against” the local real estate brokerage.

“It’s just a fact that these guys (Florida 2005) hired a high-rise residential broker … to sell the property,” he added. “It’s not even zoned residential.”

A Brevitas Marketplace listing highlights that a buyer could create a rooftop bar or restaurant and combine it with ground-floor retail and mezzanine space. Connor said Florida 2005 “is only trying to lease” vacant viewing areas – violating the original development agreement – to restaurants and bars.

“So, how can you tell me I can’t put in a restaurant or bar when that’s exactly what they’re trying to do in the vacant portion of the theater?” he said. “I look forward to getting in front of a judge and someone seeing how blatantly incorrect they’ve acted. Not just towards us, but towards their own tenant, as well as the City of St. Petersburg.”

Connor believes that Florida 2005 would not delay construction if impeding the theater’s access was an issue. However, he also noted that the project will still open in August. “Besides having to deal with us, they better start thinking about what they’re going to do with the city.”