Connect with us

Thrive

City considers policy change following subsidized housing project

Mark Parker

Published

on

St. Petersburg officials are working to create affordable townhomes at a city-owned site on the corner of 7th Avenue and 22nd Street South. Councilmembers approved borrowing $6 million from the Economic Stability Fund in January to offset soaring project costs. Photo by David Krakow.

In January, the St. Petersburg City Council approved borrowing $6 million from the Economic Stability Fund to help offset the embattled Deuces Rising Project’s $19.1 million price tag.

Councilmember Lisset Hanewicz noted an additional $6.5 million in federal American Rescue Plan Act funding, the land and previous site work pushed the public subsidy for each of the long-delayed development’s 24 affordable townhomes to over $800,000. “You couldn’t run a business like this,” she said at the Jan. 18 meeting.

Councilmember Ed Montanari now wants to cap Economic Stability Fund (ESF) loans at $5 million. He called the money a “last resort” intended to help the city rebuild after natural disasters.

“I look at our General Fund – it’s kind of like your checking account,” Montanari explained at a March 28 Budget, Finance and Taxation Committee meeting. “The Economic Stability Fund is more like a savings account. It’s supposed to have restrictions on it for disasters.”

City documents state that officials can use the funding if there is a significant budget shortfall or during catastrophic events. The ESF can also provide long-term loans to other funds with the mayor’s recommendation and the city council’s approval.

In 2021, the city council approved transferring $5 million from the ESF to the Affordable Housing Fund. Administrators plan to repay Deuces Rising’s separate $5.98 million loan using land or townhome sales proceeds by Oct. 1, 2027.

“We have roughly $32 million in the Economic Stability Fund,” Montanari said. “And we have loans of almost $11 million. The fact that we’ve spent a third of it on these projects concerns me greatly.”

Montanari said the council recommended a $5 million cap in 2021. However, that was not included in official policy.

Tom Greene, assistant city administrator, expressed concern that capping the dollar amount would limit financial flexibility. He suggested adding more restrictive language.

Greene also noted that tapping into the ESF for the Deuces Rising project prevented administrators from externalizing the debt and incurring interest costs. “I think we managed that process fairly well,” he added.

Councilmember Brandi Gabbard, absent from the Deuces Rising meeting, said she would “have never voted to put this amount of money forward for that particular project.” She supported dedicating $5 million in ESF funding to three affordable housing developments, but not a subsequent project that “is that and then some.”

While Gabbard understood Montanari’s rationale for requesting a change, she remained hesitant to approve a cap on loans due to the threat of environmental disasters. “What would be the ramifications of that?” she asked.

Council Chair Deborah Figgs-Sanders agreed with both sentiments. “With the Deuces Rising project, in hindsight, I wish we would have a had a little bit more conversation and understanding …,” she said.

However, she was also reluctant to approve a change without further discussion. Greene explained that the previously approved $5 million affordable housing loan went to private developers, while the city leads the Deuces Rising project.

“I understand the confusion that created,” he added. “But in our minds, those were two separate loans and advances from the Economic Stability (Fund).”

Councilmember Copley Gerdes said codifying a $5 million limit would preempt current and future city officials. He also expressed confidence in St. Petersburg’s fiscal responsibility.

Gerdes noted that following the pandemic, “one of the worst economic times in our lives,” nearly every city fund has “well beyond the required balance.” He also preferred to discuss tweaking inter-fund policy language rather than adopting a limit.

Montanari’s motion failed to advance. However, he pledged to request another discussion regarding appropriate ESF uses and expenditures at a later date.

 

 

 

 

 

Continue Reading
12 Comments

12 Comments

  1. Avatar

    S. Rose Smith-Hayes

    April 4, 2024at10:16 pm

    After this, Please sell the property at Tangerine Plaza to Positive Impact Please. They are in the area and know the people. They know their needs.

  2. Avatar

    Steven Brady

    April 4, 2024at12:57 pm

    John is 100% right. This reeks of cronyism.

    All in the name of “doing good.” There is nothing good about this.

  3. Avatar

    Steven Brady

    April 4, 2024at12:53 pm

    I just moved here 1.5 years ago. This is an outrageous waste of taxpayer money.

    Who are the people who suggested this and approved this?

    Government should not be in the business of building residential housing.

    $800,000 per townhome is affordable?

    I would stop the project and sell it as quickly as I can and never do it again .

  4. Avatar

    S. Rose Smith-Hayes

    April 3, 2024at7:38 pm

    $19.1 million and you do Not have the funds? Go back to where the error was made and figure out how to Not let this happen again. After this issue, I am now worried about financing on the Hines/Rays deal. Can we afford it????

  5. Avatar

    Alan DeLisle

    April 2, 2024at6:22 am

    You think this is an irresponsible giveaway? The Rays/Hines deal is a billion times worse!!? But I can assure you that the same thing will happen. The Council will pass it and then many years later when the site has a stadium and little else and the city can’t afford this and that, the council members will say, “Oh, they didn’t tell me this or that. We need a POLICY change.” Welch and each Council member should be forced to read “Profiles in Courage.”

  6. Avatar

    drew kaye

    April 1, 2024at9:56 pm

    Why doesn’t the St Pete City Council consider forcing Florida lawmakers return the $2.3 billion dollars diverted and misused from the Sadowski Trust Fund instead of borrowing $6 million from the Florida Stability Fund. If they just force them to return even 1/2 of the funds, they could subsidize the entire project along with others it was appropriated for like Habitat for Humanity. It should not be used to lend money to developers building high end projects.

  7. Avatar

    Donna Kostreva

    April 1, 2024at8:58 pm

    Mr. Montanari is the voice or reason on council. He will be missed at the end of his term.

  8. Avatar

    Mike

    April 1, 2024at8:09 pm

    Thank you to the author for using the word “subsidized” and not perpetuating the myth of “affordable”. Nothing about these projects are “affordable”. Someone is paying. That someone is you.

  9. Avatar

    JAMES R. GILLESPIE

    April 1, 2024at7:25 pm

    agree with above comments. the expenditure is irrational ater $500k. do council members understand investment and financial reality? apparently at least two do and rightly question the amount. thinking like this makes a resident and voter wonder about the structure and execution of the hines/rays proposal.

  10. Avatar

    Steve D

    April 1, 2024at6:25 pm

    John, your analysis is spot on. You can’t expect career politicians and bureaucrats to understand why this should be considered a scandal.

  11. Scott Wagman

    Scott Wagman

    April 1, 2024at3:51 pm

    Restricting ESF funding is exactly what is needed given Council’s proclivity for using it as a slush fund.
    There seems to never be a pot of money that the City, County and state doesn’t want to dip into for projects unrelated to their core mission.
    Thank you, Ed.

  12. Avatar

    John Donovan

    April 1, 2024at3:48 pm

    Follow the money. Someone, or a few people perhaps, want this project built. Is it a builder? Or are the future home recepients already known? Borrowing from a natural disaster fund to help cover a self-made economic disaster requires a lot of nerve. By what logic are we to believe the general population of St. Petersburg are beneficiaries? Don’t expect TBT to investigate. Non-profits/NGOs fund some of their operations/reporters. This is not just another day at the city office. Just because city property tax revenue is rising faster than they can spend it, doesn’t mean they should spend it. This one stinks! Vote no every way possible, and investigate.

Leave a Reply

Your email address will not be published. Required fields are marked *

By posting a comment, I have read, understand and agree to the Posting Guidelines.

The St. Pete Catalyst

The Catalyst honors its name by aggregating & curating the sparks that propel the St Pete engine.  It is a modern news platform, powered by community sourced content and augmented with directed coverage.  Bring your news, your perspective and your spark to the St Pete Catalyst and take your seat at the table.

Email us: spark@stpetecatalyst.com

Subscribe for Free

Share with friend

Enter the details of the person you want to share this article with.