TAMPA — More than 160 waterfront acres, once one of Tampa Bay’s hottest untapped development sites, is now the latest casualty in the housing crash.

Just two and a half years ago, a Fort Lauderdale developer bought the land on West Shore Boulevard a half-mile north of Gandy Boulevard for $125 million, or nearly $772,000 an acre. It was too much, too late for the Westshore Beach Club, which had ambitious plans for 90 canal-front homes, 188 townhouses and 971 condominiums.

Now the site of the sagging, vacant 624-unit Georgetown Apartments is expected to go to the highest bidder Dec. 3 in a foreclosure auction. There, lender LaSalle Bank and its new owner Bank of America (NYSE: BAC) will try to recoup some of the $90 million still owed on the troubled asset.

Big price tag

Through a group of limited partnerships, Motta Group bought property in the South Tampa neighborhood where WCI Communities Inc. (OTC PK: WCIMQ) had already planned to build the Westshore Yacht Club and EcoGroup Inc. wanted to build New Port Tampa Bay. If all three projects had been built as planned, the area would have been flooded with more than 3,100 homes, an amount real estate professionals speculated as impossible to absorb even when the market was blossoming.

“We’re not Palm Beach, and we’re not Miami Beach. It was just too many big numbers,” said Bill Eshenbaugh, president of the Eshenbaugh Land Co. “The best thing that happened to the [Georgetown] developer is that they didn’t go vertical. Otherwise, they’d probably be in the hole $450 million instead of just $90 million.”

Numbers that confounded

As the housing market peaked in early 2005, land was moving at a quick pace, especially if it fronted water. Some deals were agreed upon and closed within 30 days.

Yet when Motta Group paid $125 million for the Georgetown site, even Eshenbaugh — who has spent 15 years in this market — didn’t know how to react.

“It was a number that stunned us,” he said. “I didn’t know how you could make that work.”

Grubb & Ellis | Commercial Florida broker Don Lombardi represented a developer offering $90 million for the site at the time, but the offer fell far short of Motta Group’s generous bid. “I threw up my hands when I heard that price,” Lombardi said.

Today even $90 million is too optimistic of an expectation. Lombardi contends the bank would be lucky to recoup 30 cents on the dollar.

Another longtime broker said the land is one of the most prime properties in the region, but in the present depressed market, $60 million is the most it’s likely to go for, especially since speculative loans are nearly impossible to obtain.

“How many players are walking around today with the millions of dollars in their pockets that it takes to buy this property?” Eshenbaugh said. “Not many.”

It’s unclear what Motta Group invested in the site or if all the equity came from private equity funds. Leslie Snavely, VP of marketing, said the company had “nothing new” to add, when asked for an update on the project.

Further attempts for comment on the foreclosure sale went without response. In 2005, president, James Motta, had readily talked to news reporters after announcing the project.

Much work still left to do

As WCI constructed townhomes at Westshore Yacht Club, EcoGroup built underground infrastructure and foundations at its project. A year ago, brokers working in the hot Gandy corridor told the Tampa Bay Business Journal Motta Group’s timing might be good if the market conditions improved by the time site work and permitting were complete, but that was before the current financial crisis.

Motta Group, however, was still navigating governmental red tape as late as August, and the developer still had far to go before it could break ground.

City officials had approved only the conceptual site plan before LaSalle filed for foreclosure in late September, said Susan Johnson, Tampa’s subdivision review coordinator. The following month an “agreed final judgment” was recorded, effectively giving the property to LaSalle.

Even if Motta Group did have preliminary plans drawn up and filed infrastructure drawings, the developer still would have only been able to build model homes. How Motta Group would have piped in utilities to the homes was just one of many pre-construction issues it would have had to resolve, a process that typically takes months.

Adding to the problem, the credit crunch means construction loans are no longer readily available.

The $97.3 million LaSalle loan that paid for the land in 2005 was obtained by limited partnerships set up through Walton Street Capital, the Chicago private equity firm that agreed to a judgment of foreclosure in favor of LaSalle in October.

mhinman@bizjournals.com | 813.342.2477