A 2018 architectural rendering of the planned 53 story Riverwalk Tower in beautiful downtown Tampa, Florida. The fate of the five-year old project was dealt a setback today when Feldman Equities exited the project.

As reported today by Tracey McManus of the Tampa Bay Times, long-time Scientologist and Tampa developer Larry Feldman of Feldman Equities announced that his firm was exiting the Riverwalk Place project. Feldman Equities had invested five years of time and an unknown sum of capital before taking the decision to exit the project. We note that Feldman Equities has purged its website of years of articles related to Riverwalk Place. These articles have been deindexed and are not available on the Wayback Machine.

Feldman Equities is a long-established and reputable company in Tampa. From the firm’s website:

Feldman Equities and its joint venture partners own or manage over four million square feet of Florida office space. Over the preceding three decades, Feldman Equities has developed or acquired over eleven million square feet of office and retail properties with an aggregate value in excess of $3 billion. The company is marshaled by its president and CEO, Larry Feldman.

With the withdrawal of Feldman Equities from Riverwalk, Two Roads Development is left as the sole project developer. GPB Capital remains as an equity participant in Riverwalk.

Riverwalk Place was a bright and shiny project in 2018. With an estimated completion cost of $350 million, there was optimism due to the roaring economy, the experience of the partners, and a promised significant investment from GPB Capital Holdings. A July 2018 article in Business Observer informed readers that GPB Capital Holdings had committed to fund the launch of the 53 story condo project in Tampa:

Feldman says GPB Capital could provide all of the necessary equity to launch the project, which would amount to between $70 million and $105 million, based on traditional commercial real estate lending standards. It’s expected that Feldman, Two Roads, Tower Realty Partners and others may contribute equity to Riverwalk Place, as well.

In this same article, Larry Feldman praised his partners at GPB Capital Holdings. Feldman did so without disclosing that he was a Scientologist as were GPB’s CEO David Gentile and then Managing Director Manuel Vianna. Feldman:

We’ve known the principals of GPB for some time, many years actually,” says Feldman CEO Larry Feldman, who also is from New York originally. “They came into the project initially as a bridge lender, and then a partial equity partner, and over time, their involvement has expanded from a relatively modest investment to a greater role.”

GPB Capital’s involvement came to light in April, when Feldman and Two Roads unveiled a long-awaited Gensler design for the $350 million tower. Two Roads joined the project officially as its residential developer a month earlier.

The dollar amount of GPB Capital’s equity position in the Riverwalk project is presently unknown. What we do know from Richard Danielson of the Tampa Bay Times is that Feldman Equities paid $12.05 million for project site in 2015.

McManus asked Feldman Equities if its exit from Riverwalk Place had anything to do with GPB Capital Holdings legal problems. As her article in the TBT noted:

Feldman’s departure comes as GPB faces multiple lawsuits from investors and a former employee. The allegations include a claim that GPB operates as a Ponzi scheme. In addition, the FBI and the U.S. Securities and Exchange Commission have launched investigations.

Feldman Equities Vice President Mack Feldman declined to say whether GPB Capital’s legal issues had anything to do with Feldman’s decision to withdraw from the project.

Two obvious questions arise from Feldman Equities’ departure of what looked like an ideal scene:

1. Did Feldman Equities depart Riverwalk owing to an abundance of caution over GPB Capital’s legal situation? Feldman Equities has significant assets and would not want those potentially exposed given the increasing number of class action lawsuits against GPB Capital. CEO Larry Feldman seemed to deny this in its press release and cited differences with Two Roads:

“We wish the Two Roads team the best on their future endeavor on the site. This is a great piece of land and its potential is limitless… Nonetheless, honest business disagreements sometimes mean it is best for partners to split off and pursue their own projects. This is one of those times.”

2. Feldman Equities had five years of work and what we imagine to be considerable capital invested in the Riverwalk project. Did GPB Capital buy out Feldman’s share of the project or did Two Roads? Or did another equity partner buy into Riverwalk? The property is valuable and was already approved for development of a condo tower.

GPB Capital Holdings stopped raising new capital in August 2018 after failing to provide the SEC with its restated 2015 and 2016 financials. The firm said it needed to focus on these financials before taking in any new investor money. However, David Gentile’s firm has yet to provide these financials and has instead offered an endless series of excuses as to why it cannot produce the documents.

GPB Capital Holdings last claimed the financials could not go forward as the firm and its outside auditor had to assess the impact arising from the February 2019 arrest of its CCO Michael Cohn on obstruction of justice charges. Moreover, the firm’s own internal audit committee had resigned in late November 2019 during the Thanksgiving Day weekend here in the US. The situation at GPB Capital Holdings has devolved into a Kafkaesque nightmare for investors. The flood of lawsuits against GPB Capital Holdings and its broker-dealers shows the outrage of investors.

GPB Capital’s apparent inability to deliver on the $70-$105 million to launch construction of Riverwalk appears to have driven the partners elsewhere in search of cash infusion in mid-2019. As Business Observer reported on January 19, 2019, the Riverwalk Place partners turned elsewhere for capital:

Developers of the $350 million Riverwalk Place condo tower in downtown Tampa have secured $24.5 million in construction financing from Mosaic Real Estate Credit LLC.

Riverwalk Place’s website noted that this $24.5 loan from Mosaic was secured against $80 million in presales:

July 2019: Riverwalk Place stopped taking presale reservations. The project had originally been conceived of a mix use development of office space and residential condos. Larry Feldman changed the planned 53 story tower to an all-condo design. The Tampa Bay Times reported on the change:

The developers of Riverwalk Place have stopped taking reservations for condos in the 50-plus story tower planned for the downtown riverfront.

A statement Friday attributed only to “Riverwalk Place” indicated the halt was temporary and did not stem from any major problems with the project.

“Now that the tower will be all residential, the designers are updating floorplans,” the statement said. “Once complete, buyers can reserve those updated plans. We continue to market the project, and potential buyers have always been welcome to visit the sales center to learn all they wish.”

In November [2018], it was revealed that the tower would be totally residential except for restaurants on the ground floor. “A developer’s job is to fill demand,” Feldman said at the time, “and the demand tells us people want condos.”

September 2019: The CapTrust building was demolished to make place for the Riverwalk Tower. We assume some of the proceeds from the Mosaic construction were use to pay for the demolition. Richard Danielson of the Tampa Bay Times wrote:

Demolition of the old CapTrust building at W Whiting Street and S Ashley Drive began Wednesday. The project will clear the space, once touted as the future home of Trump Tower Tampa, for a condominium tower of more than 50 stories called Riverwalk Place. No explosives are to be used during demolition, which is expected to take several weeks and require some traffic detours, as well as the closing of the Riverwalk next to the job site during the work. Developers with Feldman Equities of Tampa and Two Roads Development of West Palm Beach have not said when they plan to start construction on Riverwalk Place.

It seems strange that developers would demolish a large building without having a definite date for starting new construction. Generally, developers proceed quickly due to the costs of paying interest on construction loans. Was there a period of flux during which time GPB Capital Holdings was working on a plan to invest in Riverwalk? Is this why Feldman Equities remained in the project until March 2020? What made Larry Feldman exit the project after five years of hard work? Perhaps Feldman Equities couldn’t continue on with Riverwalk Place absent the lack of capital it had counted on from GPB Capital Holdings.

Where Two Roads Development goes with its Riverwalk Place project remains to be seen. The financial crisis created by the global coronavirus pandemic has shaken markets and investors to the core.

Update from the Tampa Bay Times. See Richard Danielson’s latest piece on Riverwalk place.

Below: GPB Capital Holdings lists Riverwalk Tower on its website as an “acquired property.” This is quite different from being an “equity participant.” We’re researching the ownership of the Riverwalk property.

Scientologist Herb Zerden’s AGR Group — another company we’ll cover in a future article — is also listed in the “Special Situations” page of GPB’s website: