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City land policy changes will increase development clarity

Mark Parker

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The city-owned 800 1st Ave. S. property. The TPA Group and Moffit Cancer Center submitted a since-rejected bid to purchase the site well-below market value in August 2022. Photo: GoogleMaps.

St. Petersburg’s mayoral administration hopes to provide some long-sought-after clarity for developers seeking to acquire city-owned parcels, particularly after a failed bid to build a Moffit Cancer Center.

Administrators shared the policy change with city council members during an Oct. 12 committee meeting. They want to mandate that developers designate at least 30% of all housing as “affordable” units at or below 80% of the area median income (AMI) or “workforce” units at or below 120%.

Developers could eschew that requirement and pay market rates for the land. The Moffit facility was just one aspect of an unsolicited bid to build a mixed-use development downtown.

The TPA Group and Moffit offered $5 million for the 4.59-acre site, valued at $24 million. The project’s proposed 30-story residential tower would feature 400 units, with over 80% at market rates.

“You’ll remember the Moffit deal fell apart over this particular number,” said Amy Foster, housing and community services administrator. “We’re trying to signal some surety for the development community.

“And we’ve heard from them, loud and clear, that this is exactly what they want. So, this is an effort to get closer to that.”

A rendering of Moffitt’s planned campus in St. Petersburg. Image: City documents and Moffitt Cancer Center.

Multiple council members noted that some projects can provide community benefits without the housing component. Foster said the policy allows flexibility for each proposal, and the council and administration previously established the 30% affordability goal.

Project discussions between Moffit officials and administrators are ongoing. City administrator Rob Gerdes noted the project was an unsolicited bid, and the city would likely issue a request for proposals (RFP) for that and other city-owned sites moving forward.

“We could have negotiated with TPA (the lead developer) and said … ‘You don’t have to do any affordable housing, but then you have to pay us market rate for the property,’” Gerdes added. “Then we could have transferred that to the HCIP (Housing and Capital Improvements Projects) fund. So, it gives us some different options.”

Aaron Fisch, director of real estate and property management, said the city owns nearly 1,000 properties. He explained that an unsolicited bid for sites encompassing four or more residential units would trigger the RFP process.

The mayoral administration will have discretion over implementation. While Gerdes called it unusual to seek the council’s support for administrative policy, he said the discussion was in the “spirit of collaboration.”

Councilmember Gina Driscoll said city officials must also foster job growth to help mitigate housing affordability issues. Gerdes said an RFP would “spell out” office space and commercial goals in mixed-use developments.

Driscoll also expressed concern that the RFP process could delay “attractive,” much-needed projects – like an unsolicited bid to redevelop Tangerine Plaza. Former council member Robert Blackmon recently submitted a $1.6 million cash offer to buy the South St. Pete property, and pledged to put a grocery store in a federally designated food desert.

Foster said a proposal must include a housing component to trigger the RFP. “If we wanted a grocery store, we could go through the process we have now,” she added. “If someone else submitted an unsolicited proposal and included affordable housing on that (site), then it does trigger an RFP.”

The Sugar Hill Group submitted an unsolicited proposal for the mostly vacant Tangerine Plaza in May 2022. The developers seek a 75-year, $1.5 million lease, which equates to $20,000 annually.

Sugar Hill’s plan includes demolition of the 40,000-square-foot space, and the construction of 115 affordable units and a smaller retail center. However, funding – and time – remain issues.

“I look forward to seeing how we can start moving the wheels a little bit faster to get some things going with these properties,” Driscoll said. “Tangerine’s a great one; Moffit is another one.”

Gerdes appreciated Driscoll’s feedback and said administrators are trying to balance “time versus clarity.” Driscoll said the discussion underscores the need to issue RFPs proactively.

Gerdes said the Historic Gas Plant District’s redevelopment process highlighted the benefits of an RFP. He noted that Mayor Ken Welch listed over 22 guiding principles for the project to achieve the desired outcome.

Administrators realized they should “do that more often,” Gerdes said. “Let’s tell the development community what we as the city value.”

Administrators will gather feedback from industry stakeholders and present several proposed changes to the full city council at an undetermined date.

 

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4 Comments

4 Comments

  1. Avatar

    HAL FREEDMAN

    October 14, 2023at4:38 pm

    Questions about Gas Plant:
    1) Are Rays/Hines paying market value for the land?
    2) If not, shouldn’t they be held to the 30% on-site requirement for affordable units as a % of total residential units?
    3) What are the priorities here? Baseball or some small recompense to the community displaced by the Trop?

  2. Avatar

    Bill Herrmann

    October 14, 2023at2:53 am

    The Mayor is RIGHT!

    St. Petersburg needs to stop these backroom no-bid deals called “unsolicited offers”. As we have seen with the Marina, “unsolicited offers” don’t always yield the best partner, but the entity who decision-makers like.

    Requiring RFPs ensures that the City complies with the Government in the Sunshine standards. It lets EVERYONE know what the City seeks in the deal, and requires bidders to commit to doing so IN THE SUNSHINE. Transparency will also foster confidence in local government.

    Having significant experience in writing and reviewing RFPs, I am confident that staff will master the skills to generate a RFP in 30 days or less. That said it is reasonable to go from “let’s put a RFP out there”, to a package in 30 days, 30 days for responses and then 30 days to evaluate the bids. Allowing for some slippage, staff would go from concept to a selected bidder in 90-120 days.

    Mr. Blackmon’s offer has been in the papers for about 90 days. Imagine if there WAS an RFP. That deal could be moving forward!

  3. Avatar

    Ryan Todd

    October 13, 2023at7:17 pm

    Welch’s denial of Moffit’s proposal is rich considering the amount of affordable housing included in the Rays’ development plan for the new Trop and the fact that we’re paying $600 million toward the project – Welch balked at the price offered by Moffit for the land.

    I’m sure Moffit could have secured that deal if Stuart Sternberg owned them.

  4. Avatar

    Alan DeLisle

    October 13, 2023at5:40 pm

    The real issue is that not all project are about housing. Moffitt was about other value. Let the market respond and the economy will be stronger.

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