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Developer refutes ‘financial problems’ speculation

By Staff | Apr 3, 2010

Austin-based developer Andy Sarwal refutes speculation that his mixed-use project on the site of a former university in the Lone Star State’s capital city is in dire straits, adding that rumors of trouble are unfounded.
Sarwal is the developer behind the proposed swimming center here in Cape Coral.
Sarwal’s Austin development, a 23-acre parcel on the former site of Concordia University, was envisioned as a mix of office, retail, residential and hospitality.
So far, an eight-story building, along with a parking garage, has been constructed, housing one tenant, Texas Monthly Magazine
Speculation as to the project’s viability arose this week after one Cape Coral City Councilmember, Chris Chulakes-Leetz, distributed a CD packet of information he had collected on the project, including court records relating to construction liens.
Sarwal confirms a number of liens were filed against the property, including a $2.5 million lien by Lyda Swinterton Builders Inc., the general contractor for the eight-story building, but said the liens were in the process of being resolved, and have been blown out of proportion.
“If you look early next week, the lien will be reduced to $1 million,” Sarwal said in a telephone interview Friday, adding, “As of today, we resolved any outstanding issues.”
Sarwal also recently sold roughly 10 acres of the project’s undeveloped land to lender Cypress Real Estate Advisors, Inc., the terms of which were undisclosed.
Sarwal retains the eight-story structure, along with part of the land with plans for a 203-room boutique hotel by Hyatt. He also retains the land eyed for a movie theater and condominium community.
In addition to the tenant in the retained building, Sarwal said he’s finalizing the terms with at least four other tenants, including an Aveda Beauty Institute and Gracie Title Company, a title company that’s been operating since 1873.
Sarwal adamantly refutes any claims his eight-story building is in foreclosure or default. Cypress Real Estate Advisors previously stated Sarwal was never in foreclosure on the property, and was up to date on all his principal payments.
“There’s no danger of default or foreclosure … and there never was,” Sarwal said.
Sarwal said he fully expects the Condordia University project to continue moving forward, and that delays were expected because of the economy.
As he finalizes terms with the tenants expected to move into the constructed building, he said the hotel portion is expected to move forward sometime this year.
“There’s a lot of activity on the site,” Sarwal said.
Chulakes-Leetz has been gathering information on Sarwal and his real estate dealings in Austin from various sources, some of whom have been critical of the project.
Chulakes-Leetz said if the city were to move forward with the swim center, he wants to make sure the city, which has been asked to contribute land, infrastructure improvements and cash to the public-private project, can afford it, maintain it, and that it will be successful.
While he admits he’s in favor of a big project, he said, that he would prefer if Sarwal presented himself personally to the current city council, something he has not done.
He said looking into the Austin project’s liens was an effort to check on Sarwal’s experience.
When asked if he had spoken with Sarwal, Chulakes-Leetz said no, he has not spoken with Sarwal, nor made any effort to contact him other than directing City Manager Carl Schwing to do so.
“I made a request he present himself to city council through the city manager,” Chulakes-Leetz said of Sarwal. “And the city manager was able to communicate that.”
The final decision on the swim center is expected to be considered by city council on April 26.
The Concourse at Cape Coral is planned as a multi-phase project anchored by a competitive sports component. Plans include competitive-standard Olympic swimming pools, stadium seating for up to 10,000 spectators, a national swimming hall of fame, a 20-court competitive tennis facility, and various related retail and business amenities, including a hotel. The project carries an estimated annual economic impact of $21,459,496 if only a dozen major events were held at the center yearly. With indirect economic impacts the number climbs to $35,837,356 with $358,783 in additional bed tax revenue and $1,287,568 in additional sales tax funds bumping the total.
Public support for the local project has been varied, with staunch supporters like Cindy McKay — who’s attempting to collect 10,000 signatures in support of the center — to others who simply feel the decision is nothing more than a half-baked idea.
Council’s primary issue has centered around money — where to get it and whether the city should appropriate it.
In addition to its discussions with the Cape, the National Swimming Center Corporation also has had talks with Lee County to possibly move the project on the other side of the river.
Sarwal said Friday he could not disclose information concerning those discussions.
Cape Coral Mayor John Sullivan said he has an issue with the city’s requested contribution — estimated at $28 million at the top end — which he said is different from previous figures that NSCC officials reported at “Capeopoly” last year.
Other than a presentation to city council early last month, Sullivan said he has not had any other conversations with NSCC officials or Andy Sarwal.
“I don’t think I have to sit down and talk to them,” he said. “I want facts, and I want to see where they got their numbers.”
Councilmember Marty McClain, a proponent of the swim project, said he is not alarmed by the information Chulakes-Leetz distributed to council members regarding Sarwal and the status of his Austin development.
McClain, a contractor, said there is nothing uncommon about liens being filed, especially in this economy, as it gives contractors and subcontractors protection. He said he hopes the National Swimming Canter Corporation does not give up on the city, despite some of the negative reaction thus far.
“As I’ve seen in the citizens, I hope they (the NSCC) fully understand they are wanted here,” McClain said. “The people of Cape Coral have embraced this project. I don’t understand why council can’t accept the possibility this might work.”