St. Petersburg City Council members next month will be asked to approve the sale of city-owned land at 800 1st Ave. S. to United Insurance Holdings Corp. for $5 million.
United Insurance Holdings (Nasdaq: UIHC), a property and casualty insurer that does business as UPC Insurance, plans to build a 150,000-square-foot Class A corporate headquarters on the site, as well as a 500-space parking garage and space set aside for retail and a hotel in the future. The company said it will add about 300 jobs to its current workforce of about 250 employees.
The UPC headquarters would be the first new office construction in downtown St. Petersburg since the Duke Energy headquarters on 1st Avenue North opened in 2007.
Negotiations between the city and UPC have been going on since October, when the city council approved a term sheet for the property sale.
UPC wants to buy 4.6 acres of city-owned land, which is currently vacant and used for parking. The site is a block north of the company’s current headquarters. The planned purchase price is less than its market value, which ranged between $8.2 million and $9.7 million in two separate appraisals last year.
In exchange for buying the property for below-market value, UPC has promised to make most of the parking garage open to the public at market rates during evenings and weekends, when there’s high demand for parking for people going to restaurants and other businesses in the nearby Edge District.
The city will get other benefits from the sale, according to a document prepared for the city council.
The project will add more than $2 million to the city’s property tax collections over 10 years, or about $207,716 a year. Construction and equipment costs are expected to total $50.1 million, and the completed project would have an assessed value of $30.75 million.
The 300 new jobs UPC will have direct and indirect earnings impact of $23.4 million, based on an average annual wage of $53,470. UPC’s median wage is actually much higher, more than $80,000, the document said.
The city said it would provide UPC with an employment credit of $10,000 for each resident of the South St. Petersburg Community Redevelopment Area who is hired and retained for a year. The employment credit is capped at $250,000.
The deal calls for UPC to complete at least 25 percent of the development within 12 months after building permits are issued, or the land reverts back to the city.
The city council is scheduled to vote on the deal at its May 2 meeting.