The hospital's 1,100 employees will be moving in summer 2003 to a new $129-million, 204-bed, 500,000-sf, twin-tower campus facing busy US 441 in Tavares, the county seat in Lake County, a hive of commercial activity.

While the hospital plans its relocation, Downtown Eustis merchants, investors and developers are frustrated by what they say are the sluggish efforts of Waterman's directors on deciding the fate of the old five-story structure. Redevelopers want to start planning projects now, before the building is vacant.

"Redevelopment doesn't happen overnight," a local contractor working with the Eustis Business and Professional Association tells GlobeSt.com. "Merchants and investors have to figure out what is the highest and best use for that five-acre property."

Daniel DiVenanzo, a local developer and president of the association, couldn't be reached at GlobeSt.com's publication deadline. But associates tell GlobeSt.com that DiVenanzo feels the hospital should donate the building to a non-profit group that could quickly decide its future.

"Somebody has to get off the pot," another contractor tells GlobeSt.com on condition of anonymity.

Frank Gaylord, a prominent Eustis lawyer, land owner and chairman of the hospital's task force deciding the building's fate, has promised merchants a decision shortly.

Meanwhile, Downtown merchants' speculation revolves around the best use for the 1938-built structure in lieu of tearing it down. Converting the property to a veterans hospital or a nursing home was an early suggestion. Developing the block-long asset into retail shops and apartments is the most recent idea.

"Whatever is developed has to be a strong enough magnet to bring people to work, play and shop Downtown," Daryl M. Carter, president of Orlando-based Maury L. Carter & Associates Inc., tells GlobeSt.com. Carter's family-owned company is one of the prime backers of current Downtown development in the south end of Lake County, in Clermont and Groveland.

Although there has been no public disclosure of what the hospital thinks it might get for the old building on the open market, area brokers familiar with the hospital property and construction industry estimators tell GlobeSt.com a sale would probably yield the hospital at least $50 per sf or $16.25 million for the 325,000-sf building if a buyer could be found quickly. Annual maintenance costs alone are $1 million.

Replacing a similar-sized structure for office or high-end retail would be in the $125 per sf to $150 per sf range. That would total $40.62 million or $48.75 million.

"The critical mass (of population) just isn't there to sustain that sort of investment," a local independent planner tells GlobeSt.com. The permanent population of Eustis is 16,590 and the 20-mile radius population is an estimated 60,000. Lake County's total population is 210,528, according to the last US Census Bureau count.

Also awaiting the hospital's decision is the city itself. If the structure has to come down, the city may have to share in the demolition and removal costs, estimated at $2 million. That would cripple the city's budget without financial assistance from both Lake County and the state, city manager Mike Stearman has stated.

Waterman Hospital was founded as a legacy of Frank Waterman, the late president of the former Waterman Fountain Pen Co. He was a frequent winter visitor to Eustis and enjoyed the warm climate. Lewis Edson Waterman, a New York City insurance agent, developed the fountain pen concept in 1883.