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Lake County Developments

Eustis Commission rejects redevelopment proposal for Waterman hospital site

The redevelopment site is just a block from the city's lakefront.

The former Florida Waterman Hospital revitalization project was delayed yet again after a 3-2 decision Thursday night by the Eustis City Commission to ask staff for a re-write of the Request for Proposals for the 5-acre property.

The setback is only the latest for the $65.7 million redevelopment project to convert the site into a commercial hub with new apartments, a food hall, commercial space and a hotel. The commission had delayed a vote on approval of the project in August after asking a team made up of Orlando’s Atrium Management Company and PRN Real Estate and Investments, the sole bidder on an RFP issued in September 2020, to “workshop” the project with commissioners and city staff.

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The resolution then under consideration by the commission deemed the site a “blighted area,” and that new development would be “a proper public use” to help the city stimulate development and increase property taxes while creating jobs.

After the commission stalled final approval in August, Eustis Interim City Manager and Economic Development Director Tom Carrino said the workshop “was less about specific concerns and more about having time to engage the development team, ask questions and better understand the project.”

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GrowthSpotter previously reported that the proposed four-phase development would include a mixed-use 75-unit apartment building with a minimum of 6,000 square feet of commercial space and an 8,000-square-foot food hall, with an estimated cost of $14 million The city’s redevelopment authority agreed to give the land for phase one, valued at $1 million, to Waterman, LLC, an entity formed by Atrium, a property management firm which focuses on single-family and multi-family properties.

The city commissioners, who also act as the Community Redevelopment Agency, rejected the development agreement last September when a motion to approve the contract died for lack of a second. Negotiations continued into October and November with proposed modifications.

Eustis officials have been trying to find a buyer for the Waterman site since 2016, when this photo was taken of Mayor Michael Holland, former City Manager Ron Neibert, and Economic Development Director Tom Carrino.

One issue was whether the developer had the capacity to fund the project. The Atrium team also said it needed CRA assistance to “close the market gap between projected revenues and project costs.”

The city had also expressed interest in moving up the timeline for the development of the hotel, and the Atrium team agreed to a provision to allow the city to conduct a hotel market study at any time, and if the study showed the market could support a hotel the city could compel the developer to move forward with hotel construction or relinquish the land to another hotel developer.

Other concerns included the purchase price, design of the project and parking. Developer Adam Wonus agreed to pay $500,000 for Parcel 1 but reduced the price of the subsequent phases by that same amount, according to the memo. He also agreed to consider swapping the locations for the proposed food hall and apartment building in phase 1 and adding fee-simple brownstones or condo units in the second phase.

Staff asked the commission for guidance on just what to do with the RFP, and the commission narrowly agreed that it should be re-written.

“I do believe that they have a plan, but I feel like we were not involved in it,” said Vice Mayor Emily Lee. “I get excited about the possibilities of what we can do. I would like to hear other ideas and proposals.”

Mayor Michael Holland said city residents have expressed their own concerns about the project and asked that the commission “pump the brakes.”

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“The property has been vacant for 15 years,” he said. “This is the heart of downtown. We need other ideas just to know we have made the best selection.”

But Commissioner Karen Leheup-Smith, who voted against re-opening the RFP process along with Commissioner Willie Hawkins, said the situation has become embarrassing.

“I think we’ve embarrassed them and us enough,” she said. “We run hot and cold, and they’ve fulfilled everything we’ve asked of them, so I would move forward.”

Adam Wonus, of Atrium, did not respond to requests for comment.

Have a tip about Central Florida development? Contact me at Newsroom@GrowthSpotter.com or (407) 420-6261. Follow GrowthSpotter on FacebookTwitter and LinkedIn.


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