Land dispute clouds Lemon Avenue development

An outside developer is disputing the ownership of the site of a planned Lemon Avenue building, creating another obstacle for an already contentious downtown project.

As part of a comprehensive effort to redevelop downtown, city officials last year sold a slice of land next to Paul Thorpe Park for $260,000 to a development team that included Mark Kauffman and Joe Hembree, head of commercial brokerage firm Hembree & Associates.

Together, their State Street Partners (SRQ) LLC planned to build a two-story office and retail “liner” building on the 5,400-square-foot site. Designs were drawn, leases were executed and the project appeared to be moving forward. Announced tenants included Sarasota Magazine, Re/Max Platinum Realty and Optional Art Fine Jewelry.

Hembree & Associates owns the adjacent property at 1500 State St., which it bought from the city in 2014 for $688,000. That site, next to the State Street parking garage, is being developed in conjunction with the Lemon Avenue property. Kauffman has spent more than two decades developing or redeveloping commercial projects in downtown Sarasota, including the Hollywood 20/Main Plaza complex.

But earlier this year, in the wake of its $17 million acquisition of the 11-story Northern Trust Building downtown in March, Sarasota-based Githler Development Inc. approached Hembree and Kauffman and claimed that its One Thousand-Boulevard LLC — and not the city — truly owned a portion of the land the duo had bought.

Githler, another prominent real estate firm that once owned Sarasota’s now-Hyatt Regency Hotel, indicated the city failed to replat a portion of the land when converting it to a park.

Citing deeds going back to 1902, Githler claimed the city, which had owned the disputed 0.124-acre tract since the early 1970s, had no right to sell the property.

City Attorney Robert Fournier said, when the city sold the land, it told the buyer there could be title issues. The property was formerly a portion of Lemon Avenue, and became a grassed strip adjacent to the park when the street was rerouted in 2002.

A group of residents opposed the city’s decision to sell the land in 2016, arguing it was functionally part of the adjacent park and would result in a loss of green space.

Fournier said Hembree’s group was confident enough to go through with the deal anyway and begin developing the property. For now, the dispute remains between the developers, but Fournier believes State Street Partners (SRQ) is likely to prevail. He said the city held the title to the land for more than 40 years prior to the sale without any dispute regarding the ownership.

State Street Partners (SRQ) countered Githler’s claims with a six-count lawsuit filed in Sarasota Circuit Court in August. The lawsuit states Florida law provides that any holder of property for three decades or more has “marketable record title” that is “free and clear of all claims.”

Kauffman and Hembree’s partnership further states that because of the potential “cloud” on the title, it’s unable to proceed with its project, court records show.

In September, One Thousand-Boulevard filed a motion to dismiss the complaint. The response maintains the city does not have the authority to convey its interest in the property for private use.

During the dispute, it is unclear what the future holds for the Lemon Avenue property. Representatives for Kauffman and Hembree declined to comment; Githler did not return a pair of telephone calls. Representatives for Sarasota Magazine and Re/Max also declined to comment.

Observer staff Kevin McQuaid and David Conway contributed reporting.