Developer walks away from SMH rights deal

Property Markets Group, a New York- and Miami-based developer with a pair of projects along the Gulf Coast, appears to have shifted on plans to do another residential development in Sarasota.

Last summer, the company behind the Sage Longboat Key project approached Sarasota Memorial Hospital about buying unused development rights from the healthcare provider.

In August, the two struck a deal to sell PMG transferable rights to build 163 residential units that came with the hospital’s $10.7 million purchase of the former Herald-Tribune Media Group property. The hospital bought the three-story building, which containing roughly 72,000 square feet at 1743 Main St., in October 2018. The property now houses 280 hospital employees.

Sarasota zoning rules allow the transfer of residential development rights — amounting to 50 units per acre — to third parties. Hospital officials had concluded that it didn’t plan to exercise its ability to construct residences on the three-acre Main Street property.

The hospital’s development rights would have been particularly valuable in 2020 because 1743 Main St. is located in a federally designated Opportunity Zone, which grants owners tax breaks and other incentives to develop.

Following hospital board approval, PMG Acquisitions LLC was set to close on its $3.91 million purchase on Dec. 14 and use the rights to “redevelop a nearby site that does not have residential development rights,” the hospital noted in documents associated with the sale.

But PMG, a company that had been a joint venture partner on the original phase of The Concession Golf Club and luxury community, in Manatee County, failed to close on the transaction.

In balking, PMG also walked away from a $400,000 deposit, according to a hospital spokeswoman. 

PMG officials did not return telephone calls for comment on the company’s decision.