City officials increase housing subsidy by 322%
The St. Petersburg City Council unanimously approved increasing funding, from $2.3 million to $9.7 million, for a long-awaited project that will provide 264 affordable and workforce housing units.
The South St. Petersburg Redevelopment District Fund will provide the additional $7.4 million in tax increment financing. The money will help transform the former Tibbett’s Lumber Company site into the Fairfield Avenue Apartments.
In August 2022, city officials allocated $2.28 million to the project. During the Nov. 9 council meeting, chair Brandi Gabbard said she understood concerns surrounding developers amending agreements and asking for additional subsidies.
“It’s a big dollar, but we have the money, and we have the money allocated for this need,” Gabbard added. “And no one else has come forward for the money.”
The project represents the state’s first under House Bill 1339. The 2021 legislation, a precursor to the “Live Local Act,” allows local governments to create affordable housing in previously prohibited zoning districts.
In April 2022, the city council unanimously approved transforming an industrial-zoned old lumber yard at 3300 Fairfield Ave. S. into 264 affordable and workforce housing units. The Fairfield Avenue Apartments will allocate 53 homes for households earning less than 50% of the area median income (AMI) – currently $30,450 for one person.
Another 67 units are for those making below 80% of the AMI, and the remaining 144 apartments are for households earning less than 120%. Gabbard credited the project’s developers, Fairfield Avenue Apartments LLC, for not decreasing the number of units or increasing income limits.
Gabbard said similar projects throughout the state have also stalled, and many municipalities lack St. Petersburg’s available housing funding. She also noted that Pinellas County Commissioners are contributing $12.4 million.
“I think we’re really fortunate with this project,” Gabbard said. “And that’s why the money doesn’t give me the heartburn that it would if we were being asked for different kinds of changes. I want more projects like this.”
Pinellas County Commissioners recently increased their funding allocation for the long-delayed project by 120%. Rendering: HP Capital Group.
George Smith, economic development officer, said the 322% funding increase “is not an issue.” He said officials have uncommitted and unencumbered money set aside for affordable housing projects in the South St. Pete Community Redevelopment Area (CRA).
The site sits between Fairfield Avenue South and the Pinellas Trail, with 34th Street to the west and 31st Street to the east. In May 2022, county commissioners allocated $5.6 million to acquire the land and ensure a 99-year affordability term.
The city council contributed $2.28 million towards construction three months later. However, the project stalled for over a year as building costs and interest rates soared.
Attorney Brian Aungst Jr., the developers’ legal counsel, noted that the project cost increased from around $60 million to $87 million. County Commissioners more than doubled their initial allocation, from $5.6 million to $12.4 million, at their Oct. 31 meeting.
Aungst told council members that his clients are close to receiving a $56 million loan from the U.S. Department of Housing and Urban Development (HUD). The developers will also contribute $8.2 million, and he said the increased city funding would mitigate “market-oriented issues.”
“Construction contracts are almost finalized, and construction – God willing – could begin as early as January,” Aungst said.
The Fairfield Avenue Apartments site is bordered by the Pinellas Trail to the south and Fairfield Avenue South to the north. Screengrab.
Mark Van Lue, housing development manager, said the city’s per-unit subsidy is $36,742. He noted that recent “100% affordable” projects cost approximately $46,288 per home.
Van Lue called the development shovel-ready and expects a 20-month construction timeline, with the Fairfield Avenue Apartments opening in late 2025. He also believes soaring construction costs and interest rates are stabilizing.
“I think we’ve probably seen the worst of it,” Van Lue added. “It’s just been a historically unseen era in the last couple of years.”
