Clearwater, Scientology leaders reach agreement on downtown projects

Clearwater — City Manager Jon Jennings and Church of Scientology leader David Miscavige have reached an informal agreement that could result in extensive revitalization of church-controlled properties in the city’s struggling downtown.

The deal is the result of private discussions over the last three months between the two men and sets the stage for a possible land swap. It also signals some easing of the tensions that erupted in 2017 when the city purchased a piece of waterfront land long coveted by the church.

The first leg of the new partnership began on Wednesday with work to restore three prominent, church-controlled buildings on Cleveland Street to their historical, 1920s facades while renovating and modernizing the interiors, according to Scott Dobbins, principal of Hybridge, a Tampa-based firm serving as development consultant on the endeavor.

Dobbins’ firm is also charged with recruiting national and local restaurants and other businesses to occupy the buildings by this summer.

At the same time, Jennings said he is negotiating the terms of a potential land swap with Scientology, in which the church would receive a 1.4-acre lot on Pierce Street, a parcel that Miscavige has wanted to acquire for years. The Clearwater Marine Aquarium sold the city the lot in April 2017 for $4.25 million, despite a $15 million offer from Miscavige. That triggered a countermeasure from Scientology — a yearslong buying spree where companies tied to the church purchased about 145 properties in and around downtown and have kept most of them vacant.

Jennings declined to identify the church parcels the city could receive in the swap, citing the ongoing negotiations.

“I asked Mr. Miscavige to move forward to show good faith to the community as we continue to work on the idea of the land swap,” said Jennings, who joined the city in November following the 20-year tenure of former City Manager Bill Horne.

“There’s just been a lot of anger and distrust over the last few years, I think on both sides,” he said. “And what I’m trying to do is really do what I think is in the best interest of the city.”

Jennings and Dobbins confirmed that the renovation of the three buildings could be the first phase of a broader activation of properties throughout downtown that are owned by companies managed by Scientology members.

“I really believe this is kind of a new era of cooperation with not only the church but the downtown property owners to revitalize Cleveland Street because Miscavige has also said that once they’re done with these three properties, they are going to continue to move east,” Jennings said.

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The renovations are officially being conducted by Cleveland Street Alliance, a limited liability company that Dobbins created on Wednesday, according to state records.

Scientology spokesperson Ben Shaw declined to answer whether Scientology is the developer behind Cleveland Street Alliance.

Shaw declined to disclose how much the renovations will cost and who is paying for them. Neither Jennings nor Dobbins said they knew who was paying for the renovations or what the project will cost, although Jennings made clear city funds would not be used.

Dobbins said the alliance is made up of the property owners of the three buildings, but those parcels are owned by limited liability companies managed by Scientology members. Two of the managers are real estate agents and one is Moises Agami, a developer who built the Sky View condo on Cleveland Street in 2019.

In Florida, limited liability companies are required to disclose their operators, but not owners, making it impossible to know if the property is actually owned by the church members, Scientology or another party.

Although any land swap will require City Council approval, the renovations of the private property will not. But Shaw said the renovation project represents a partnership between the city and the church, which city consultants recommended in 2014 as a way to revive downtown.

“Mr. Miscavige, the Church and its parishioners are very excited about the commencement of restoration and renovation of the three historic downtown properties,” Shaw said in an email. “We believe this is the first step in a new era of city/church cooperation and partnership in the creation of the finest downtown city in the Tampa Bay region — if not all of Florida.”

Clearwater Mayor Frank Hibbard said he is encouraged by the development considering the city has been asking that empty church-controlled properties be renovated and filled with businesses. But he said it will also require the public to embrace the changes with Scientology’s involvement.

“I do think it’s a positive step,” Hibbard said. “But there is a history that is not going to be remedied overnight, and people are going to have to decide whether they want to come down and support downtown.”

City Council member Mark Bunker, who has spoken out against alleged abuse in Scientology for decades, said he supports Scientology bringing life to the empty storefronts but wants to ensure Miscavige follows through before agreeing to any terms for a land swap.

He said he’s wary because Miscavige has told city leaders since 2017 that he had no control over the properties bought by members’ companies. “Now he can wave his hand and make this happen,” Bunker said.

“If these people put in a good faith effort, I think that’s good,” Bunker said. “I just worry because we should not be partnering with Scientology. They are not a good partner, and we’re giving them legitimacy when we do that.”

The first building underway with renovations is the former People’s Bank building at the northwest corner of Fort Harrison Avenue and Cleveland Street. The two ground floor storefronts have been vacant since December when Grindhouse Cafe and Blackbrick Tavern and Kitchen closed due to a lack of business, according to owner Bill LaGamba.

The 1911-era building will be restored to its original Mediterranean Revival style façade and the interior will be restored to accommodate a large ground floor restaurant with “creative office space” above, according to the project website.

The Telephone Building, a brick structure on the northwest corner of Garden Avenue and Cleveland Street, will undergo a preservation of the brick façade from 1923. The work will return original style windows and overhang, according to the website.

The building has been vacant since a Dunkin’ closed in late 2018. The renovation will include a ground floor restaurant and creative office space on the upper two levels.

The third renovation will be the F.W. Woolworth Co. building at 519 Cleveland St. and will pay homage to the chain that opened there in 1928, according to the project website. One storefront will be suited for a retail business to mirror the architectural style of the old McCrory’s Department store and another storefront will be outfitted for a restaurant. The building will also include spaces for boutique shops and creative offices, according to the website.

In the months before these plans were announced, City Council members publicly expressed concerns about hearing business owners being turned away from renting downtown buildings managed by church members or being offered only month-to-month leases.

James Topicz, owner of The Lucky Anchor bar in the Woolworth building, said his landlord gave him a 14-day eviction notice on Feb. 8, citing asbestos and electrical issues, which he negotiated to 30 days.

Economic redevelopment efforts by religious organizations on a large scale are rare, according to Samuel D. Brunson, a Georgia Reithal Professor of Law at Loyola University Chicago. Although it’s more common for churches to operate ventures like coffee shops or lease office space for uses outside their missions, the only other example of large-scale development by a church in the U.S. is the $1.5 billion mixed-use development in Salt Lake City, backed by the Church of Jesus Christ of Latter-day Saints.

If any funds are coming from a tax exempt religious organization like Scientology, Brunson said IRS rules would allow two avenues. A church operating a business under its name would have to pay taxes on the income unrelated to the religious mission. He said the church could alternatively create a separate corporate entity to lead the development that would pay taxes on the income.

But such ventures are rare because churches generally don’t have the business acumen or funds to pursue such projects, Brunson said.

Scientology, however, has an estimated $3 billion in assets, much of which comes from courses and counseling sessions that members are required to pay for, and donations by members.

“When you run a business, you face the direct risks, the costs of doing business and you have to have someone who knows how to do business,” Brunson said. “That’s a big reason why churches generally don’t. When you’re selecting pastors, when you’re selecting rabbis, you’re not selecting them for business acumen.”