The Boston Globe said Vinik “reinvented” himself but Tampans have discovered that only applies superficially.
By Jim Bleyer
Water Street Tampa, the highly-touted $3 billion “vision” of local businessman and Tampa Bay Times investor Jeff Vinik, is in deep trouble and may be taken over and/or liquidated by Cascade Investment, the Bill Gates-owned equity firm that provided financing.
Several highly-placed sources within the Tampa Bay business community confirmed that information to Tampa Bay Beat.
One termed Vinik’s situation as “desperate.”
Another asserted Strategic Property Partners, Vinik’s development company, will take an “all or nothing gamble” to save the project.
A third mused that he would never trade places with the beleaguered former hedge fund manager.
All agreed that Millennials, the heart and soul of innovation and high-tech, lack motivation to relocate here. National headlines emanating from Tampa over the past several years make the city uninviting to innovative, progressive companies as well as established ones with conservative pedigrees.
Promised: a Fortune 500 company, a health-oriented grocery store, a bevy of health and medical research companies and organizations. The only firm commitment so far was built on campaign contributions, aka bribery, and involves a move from the University of South Florida campus to downtown.
A wash for the local economy, a loss for Temple Terrace, and, presumably, a gain for Tampa. Zero sum.
Vinik’s project has long lagged behind his original schedule. The size and nature of the project has been ephemeral as specific benchmarks have failed to materialize.
If Water Street Tampa goes down the tubes, a couple of hundred million dollars in public funding will circle the drain as well. Then there is the collateral Vinik put up for the loan. Let’s take an educated guess:
—-The Tampa Bay Lightning, a franchise valued at $390 million by Forbes magazine. A new owner may lead the Stanley Cup parade. Maybe the festivities will include a grand jury instead of a Grand Marshall.
—-Amalie Arena. Best guestimate: $600 million.
—-Share of Tampa Bay Times property that “collateralized” Vinik’s $1.5 million “investment” into the failing news entity. Peanuts. $4 million tops.
—-Vinik’s Sarasota monstrous estate just off St. Armands Circle in Sarasota. Built for approximately $30 million including land, it more resembles a museum or mental ward and probably cannot be liquidated for quite that much.
The first red flag occurred Dec. 21 when the Tampa Bay Storm, Vinik’s arena football franchise announced it was suspending operations despite profitability. Steve Griggs, CEO of Tampa Bay Entertainment Properties concocted this fairy tale for public consumption:
”After deep consideration, evaluation and introspection, we have elected to reallocate the resources dedicated to arena football for other uses within our organization, including the growth of Tampa Bay Entertainment Properties.”
Those entities would only take care of about a third of the $3 billion Cascades Investments loan. It’s quite doubtful if Vinik’s 53 acres, even with infrastructure courtesy of taxpayers, could come close to repaying the rest.
Heading Cascades Investments is Michael Larson who moved to Boston to work for Putnam Investments at the same time Vinik was managing hedge funds. Larson could very well have helped Vinik obtain the loan on the flmsiest collateral and thinnest strategic plan; he would find it difficult to cut his Boston buddy any more slack with Gates’ money.
Public officials like Gov. Rick Scott, whose PAC received $200,000 from Vinik, USF president Judy Genshaft, and Tampa Mayor Bob Buckhorn went all in on an iffy proposition and a less-than-credible principal from the getgo.
With the complicity of the Tampa Bay Times, the public only saw Vinik as the savior of a local hockey franchise with a Midas touch and a grandiose plan for invigorating a moribund downtown.
There was absolutely no due diligence by any mainstream media in Tampa Bay about Vinik, his background, or his now laughable “vision.” The politicos who greased the project with hundreds of millions of dollars won’t get off that easy. Law enforcement entities should investigate every aspect of this “deal.”
Readers of Tampa Bay Beat know better. We reported that Vinik was the target of an SEC investigation, at the center of ethical controversies, and a loser of millions for investors in bis final gasp as a hedge fund manager.
Here, he was responsible for worsening the financially troubled Museum of Science and Industry”s situation by sponsoring the unqualified Molly Demeulenaere as CEO. There were 82 applicants for the position that required “a master’s degree or similar experience.” Vinik’s protegé, a professional ballroom dancer from Sarasota, dropped out of Edison Community College.
Vinik initially wanted to move MOSI, a hemorrhaging mess of an operation, to Water Street Tampa and far from the center of its prime audience: schoolchildren. Except for editorial writers at the influence peddling Times, the ardor has cooled for such an inexplicable, expensive move.
Genshaft also pulled a slick deal that gave the carpetbagging Vinik exclusive rights at the USF Sundome. This while she acceded to relocating the Morisani College of Medicine to Water Street Tampa at an estimated cost of $25 million.
None of the palace intrigue was reported by the Tampa Bay Times who has had a fiduciary relationship with Vinik for at least eight years. Any mention of Vinik in the Times sounded like a flack-generated press release straight from Strategic Property Partners. Ever read a negative review of a concert at Amalie Arena? Me neither.
One can scarcely wait for the Times’ spin on the impending Water Street Tampa disaster, an account that no doubt will result in a Pulitzer Prize for Fiction nomination. I see words like “restructuring,” “more complex,” and “pending” peppering the Poynter coverup.
Faux tough guy Buckhorn, when not fantasizing about gunning down journalists and turning downtown into an armed camp, never met a developer and potential donor he didn’t like. The mayor totally flunked in vetting Vinik if, indeed, he made any effort at all: “A guy like Jeff, with his credibility and committment, can be a catalyst for an amazing amount of change.” Vinik then received more than a hundred million in infrastructure commitments.
Apart from Buckhorn’s orgasm over mowing down members of the fourth estate, the Times never called to task public officials that do their bidding. Genshaft and Buckhorn, along with predator Jack Latvala, were allowed to skate by the Times despite more missteps than Inspector Clouseau.
Finally, there is the name of the project: Water Street Tampa. Nauseatingly prosaic. Blah. Nothing remotely unique, dynamic, innovative. In other words, a label that would barely tempt potential tenants to evaluate a flawed plan.
The whole episode is sad, not for the exploitive Vinik but for the taxpayers who were suckered by a 21st century Harold Hill, a bought-off media entity and a corrupt cabal of public officials.