Monday, December 13, 2004


St. Augustine project could transform city

Commission to vote today on San Sebastian development

The Times-Union

ST. AUGUSTINE -- The San Sebastian development project promises to transform St. Augustine, despite a decade of colossal setbacks that included a depressed market after the terrorist attacks and a multimillion-dollar cleanup necessitated by the toxic by-products of a 19th-century gas plant.

If the project is approved when the City Commission meets today, 14 acres along the San Sebastian River off King Street downtown will house an 85-room hotel with 106 condominium units, 18 lofts, a 65-slip marina, a 10,000-foot spa and 25,000 feet of retail space. It will include a riverwalk with some parking.

The project has already received initial approval from the commission. If finalized, work will begin in 2005 and conclude in 2007.

"We consider the development a landmark and something that we would be proud of and recognize throughout our careers as unique," said Matthew Merritt, a partner in the developing business, San Sebastian Harbor Properties, LLC.

Before the harbor partners bought the land for $3.6 million in May, the project stalled numerous times. Most recently, Vestcor Corp. pulled out of a proposal to develop in 2002, citing a depressed market after 9/11. The company had discussed buying the property from the city for $3.7 million and developing a $50 million project.

The city had started buying pieces of the San Sebastian property in the 1980s, eventually making five purchases from five owners, said Tim Burchfield, chief administrative officer for the city.

Discussions about development in the 1990s were complicated by the discovery of coal tar, a by-product of Atlanta Gas Co., which operated from 1885 to the 1950s. A cleanup organized by the city and the U.S. Environmental Protection Agency was fast-tracked and completed in 2002 for about $7 million.

Atlanta Gas paid for most of it. The manufactured gas plant, which closed about 50 years ago, had produced toxic hydrocarbons as far as 29 feet below the surface of the land.

In 2002, Suzanne Sitherwood, vice president of Atlanta Gas, said 85,000 tons of contaminated soil were removed. The company also removed 22 million gallons of water.

"The work took 55,000 man hours, and the crews created a hole 30 feet deep and 100 feet wide," Sitherwood said at the time.

Harbor partners became involved in January 2003. Merritt came to St. Augustine looking for investment properties and was told about the San Sebastian land. His partner, who worked for Shell Oil with large, mixed-use projects, will bring the expertise, Merritt said.

"My partner and I looked at it and looked at it and decided on a large, mixed-use project with a marina," Merritt said. "Seeing the residential district was on the upswing, the Casa Monica was redeveloped, all the new retail shops, it kind of put everybody on notice. Once you put all those pieces together, it made a lot of sense. We have a lot of confidence in the St. Augustine market."

The project is expected to be worth $60 million, which would inject $400,000 a year into city coffers, Burchfield said. It should revitalize areas of downtown near the project, such as the historic neighborhood of Lincolnville.

"People on Riberia Street and in Lincolnville have been waiting on this for a long time," Burchfield said.

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