In a move that surprised several commercial brokers, the board rejected a $29 million offer for the 182-bed building from Los Angeles-based Dream Harvest Inc. which planned to develop the former hotel resort property into a new seniors multifamily complex, spa, 10,000 sf of retail and a paddleboat dock for dinner cruises.

Instead, the community trust will sell the land to the highest and best-qualified bidder after the beige brick building is demolished at an estimated cost of $2 million.

Area brokers tell GlobeSt.com on condition of anonymity the 14 acres might generate $2.30 per sf or about $100,000 an acre. That would bring the trust $1.4 million.

The city of Eustis supports a residential-retail blend for the redevelopment, a mix Dream Harvest was willing to produce.

The demolition work would tentatively begin in fall 2003 after the 1,100 workers at the hospital are transferred to the new $129 million, 204-bed, twin tower Waterman Hospital on U.S. 441 in Tavares, FL, nine miles north of the old hospital.

Hospital officials couldn't be reached at GlobeSt.com's publication deadline. But hospital staffers intimate with the deal tell GlobeSt.com on condition of anonymity the board rejected the California developer's deal because it thought the project might be stalled for months or years, awaiting local, regional and state approvals and construction permits.

By selling the land outright, the community trust would pocket the cash immediately and use it to fund local civic projects, hospital staffers tell GlobeSt.com.

The board's decision, however, hasn't stalled Dream Harvest's efforts to do the project. The company was scheduled to make a formal presentation of the venture to city officials this week. Dream Harvest officials couldn't be reached at GlobeSt.com's publication deadline.

The line of potential developers is expected to be lengthy when bidding for the land begins next year. The hospital has been unable to find a buyer for the property over the past few years, largely because the existing building has annual maintenance costs of $1 million.

Heirs of New York's Waterman Fountain Pen Co. developed the site in in the early 1900s as a hotel resort. The hospital was built in 1938.

Instant Insights /

GlobeSt.com UPDATE: Hospital Rejects $29M Purchase Bid; Votes for Demolition

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