Lawsuits complicate construction plans at St. Pete’s Sundial

The new owners of the Sundial shopping plaza in downtown St. Petersburg are tussling with the owner of the AMC Sundial 12 movie theater in the courts.

Sundial’s owners claim that the theater’s owners are using “obstructionism” and “thinly veiled delay tactics” to slow the new owner’s renovation plans for the shopping center, filings show.

Last month, the owner of the movie theater, Florida 2005 Theaters LLC, sued the mall operator in Pinellas County Sixth Judicial Court for what it claimed was a violation of its existing easement agreement. Florida 2005 is linked to Carlyle Group, a New York-based investment firm.

The agreement was first forged between the theater’s former owners, Muvico Entertainment LLC, and Sundial’s former owner, STP Redevelopment. It required most restaurants to be on the second floor of the complex and barred significant changes to Sundial’s common areas without Muvico’s consent. In court records, the current owner said it is “successor in interest to Muvico” and that Sundial owners are still subject to the easement.

In January, the theater owners learned that Sundial’s renovation plans included space for an open-air bar or restaurant, which sparked months of discussions between the companies. Ally Capital Group, a Tampa-based real estate investment firm, is partnering with Paradise Ventures, a St. Petersburg-based firm, on the renovations.

The theater owners feared the restaurant would detract from AMC’s family environment and would affect movie sales. They also complained about a walkway to the theater entrance that was blocked off amid construction, court records show.

“In over 20 years of ownership at this location, it has been the experience of Florida 2005 Theaters that establishments generating a high percentage of revenue from alcohol sales have a detrimental impact on the surrounding tenants,” an attorney for the theater wrote to Michael Connor, president and CEO of Paradise Ventures.

In an interview, Connor said the theater owners are trying to push Sundial owners to change their easement agreement, following disagreements about the future of the space.

“It started before we purchased the property,” Connor said.

Connor claimed that before his group purchased the center in 2022, theater owners had hopes to modify the existing easement and turn AMC into residential space.

“They wanted to modify that to allow residential development, and I didn’t want to do that,” he said. “I’ve historically been a retail developer my entire career ... and literally, ever since then, it’s been an adversarial relationship where they’ve tried to tell us what we can and can’t do with the property.”

The lawsuit, he believes, was filed in “totally, 100% bad faith, to try to coerce us into signing a document that modifies the (easement) in a way I’m not going to sign.”

Renovation for Sundial, located on the 100 block of Second Avenue North, includes multimillion-dollar improvements to revitalize the “once upscale retail destination into a modern mixed-use urban destination,” according a news release from 2023, when the plans were announced. The developers declined to say at the time just how much the renovation will cost. But the plans for the center include significant upgrades to the courtyard with a large outdoor bar and communal green space.

“I live in St. Pete,” Connor said. “I’m at Sundial all the time. This is not just some asset that I don’t care about. I love this piece of real estate, and that’s why we’re spending $3 million on the courtyard.”

Paradise Ventures and Ally Capital Group purchased Sundial from local businessperson Bill Edwards for $27.5 million in 2022. Edwards had owned the 85,357-square-foot shopping center since 2011, and made significant upgrades. The shopping complex was originally built in 2000 and was called BayWalk.

The theater owners claim that Sundial owners would not acknowledge that the theater’s permission was required for the changes. The company has now asked the court to order restaurant construction to halt, and sought other damages.

The attorney listed for Florida 2005 Theaters did not respond to requests for comment.

In a countersuit filed this week, Sundial owners rebut several of the theater owners’ claims. Among them, Sundial owners say that the restaurant planned for the courtyard is not a new space at all, but a vacant space formerly occupied by Locale Market. Sundial owners secured a new tenant for the space, Forbici Modern Italian.

At the time of Locale Market’s closure, the countersuit claims, it was understood that the space would be filled by another food vendor. The easement also includes a line stating permission for such changes should not be “unreasonably withheld or delayed,” court documents said.

Sundial owners also claim they gave theater owners notice of the plan a full year before their lawsuit claims.

“Without valid justification and despite dialogue spanning the course of over a year, Florida 2005 has violated the (easement agreement) by unreasonably withholding approval and consent of PV’s plans for the Forbici Restaurant,” the countersuit states.

In court filings, Sundial owners said adding Forbici Modern Italian to the space would be mutually beneficial, and that the disagreement has now cost them revenue, rent and business relationships.

Connor said the lawsuits should not have any effect on Sundial patrons. Construction is expected to finish in the next two-and-a-half months, he said, so renovations would be complete before the case reaches a courtroom.

“They’ve acted in bad faith for two years. All they want to do is use a reasonable approval right to coerce us to allow them to sell to a residential developer. Enough is enough, right?” Connor said. “I’m not going to try to play nice anymore.”