City retains legal team, completes appraisal for the Trop

As the City of St. Petersburg works to move towards finalizing a term sheet with the Tampa Bay Rays and Hines team for the redevelopment of Tropicana Field, the city has hired a legal team and an appraiser. 

During a Thursday, Feb. 16, city council meeting, the members unanimously approved a $250,000 contract to retain Minneapolis-based law firm Faegre Drinker Biddle and Reath to represent the city on the Trop/Gas Plant District redevelopment. 

The firm has an extensive background in working with sports teams, sponsors and cities, including the U.S. Bank Stadium (the home field for the Minnesota Vikings football team), working on the redevelopment of the Climate Pledge Arena (home of the new Seattle Kraken hockey team), and representing the Colorado Rockies baseball team, according to city documents. 

The retainment comes after the city received a completed investigation, analysis and land appraisal for the Trop site from Tampa-based consultant Urban Realty Solutions, determining the 76.19 acres are valued at $330 million.

The valuation is solely based on the land and doesn’t include improvements or demolition costs. 

In the 116-page report sent Feb. 9 to the city and made public late last week, Urban Realty Solutions said it evaluated the two primary parcels comprising of the stadium and main parking lot totaling 61.81 acres, which are divided by Booker Creek. There are also three parcels that total 14.36 acres, except for a small non-contiguous parcel west of Interstate 275. 

Additionally, a 2.02-acre vacant site at 902 Second Ave. South, which encompasses an entire city block, is included separately. 

The valuation of Tropicana Field/Gas Plant District. City of St. Petersburg documents.

The report surfaced following St. Petersburg Mayor Ken Welch’s selection of the Tampa Bay Rays and Hines joint proposal as the top development team. 

According to the Rays/Hines joint proposal, the team would offer $64.5 million and values the land at $97 million. 

Their total public funding request (assuming city share per property tax millage) would be $89 million, and there would be $150 million in infrastructure costs. A new stadium is estimated to cost north of $1 billion. 

A development agreement for the stadium is expected to be executed this year, while an agreement for the remaining acres will be reached by early next year. 

RELATED: How will stakeholders split the Rays stadium bill?

Highlights of the property appraisal 

The full appraisal can found here. 

• In adjusting these sales to the St. Petersburg Central Business District (CBD) market location, URS reviewed land sales in the downtown market. Sales of these smaller parcels are in the $400 per square foot, but the prices paid per square foot for smaller parcels are far higher than the value per square foot of the overall subject tract. 
• The report takes into account the zoning of the property. The site has an overall land use CBD designation and is zoned DC-1 and DC-2 – Downtown Center and Industrial Traditional (IT). “It is typical that large proposed mixed-use developments require approvals and zoning changes, generally within an overall master plan approval. In this instance, zoning is in place, but many details of the development will require extensive planning and permitting,” the report reads. 
• At the time of the appraisal, URS said third-party financing is readily available for the acquisition and/or redevelopment. Conversations with commercial bank lenders implied that appropriate interest rates for similar properties would typically range from approximately 5% to 7%, dependent on the term and length of the period between interest rate reviews. The loan-to-value ratio would typically range between 50% to 75% of value.
• There were no significant easements related to the subject site. “However, typical utility easements may be present and should not negatively affect the property.” The appraiser and URS are not aware of any title encumbrances, easements, encroachments, deed restrictions, covenants, association rules and/or special assessments. 

The Tropicana Field/Gas Plant District property and parcels. Image: City of St. Petersburg documents.

The area’s economics

• In the specific area, the five-year projection for the population is over 3.7 million, representing a change of 0.61% annual growth from 2022 to 2027.
• Regarding housing, 58.8% of the 1.7 million-plus housing units in the area are owner-occupied, 28.9% are renter-occupied and 12.2% are vacant. The current median household income in the area is lower than the overall median household income for the U.S. 
• Roughly 65.1% of the residents have white-collar occupations, 16.7% have services occupations and 18.2% have blue-collar occupations. 
• Projections show 90,725 adults, or 3.1% of the population, will attend a regular season Major League Baseball game in an average year in the area, while 533,744 adults, or 18.2% of the population, regularly watch Major League Baseball games on TV in the area.

Comparing the Trop/Gas Plant District to similar sites 

URS compared the site to other properties, which have recently sold or are offered for sale, with similar scales, financial and/or economic attributes. 

There were eight sites identified, with the first being the $310 million sale of land near the Great America amusement park in Santa Clara, California.

The seller first developed this amusement park in the 1960s, adjacent to Levi’s Stadium. The 116-acre site was purchased by real estate firm Prologis as a leaseback with a 3.95% capitalization rate in 2022. The purchase agreement intends for the seller to close operations within 11 years, and they will pay ground rent in the interim, according to URS’ report. 

Other comparable sites included the Apple office development in San Jose, California. In 2015, the 43-acre property sold for over $138 million. The site is approved for up to 2.8 million square feet of office space. 

Local properties were also listed as comparable sites, including the redevelopment of the Northwest Mall in South Florida. The 115.7-acre site near Hard Rock Stadium sold for $291 million in 2022.

The list also mentions local developer Daryl Shaw, who’s partnered with Kettler Management to acquire Ybor City parcels for the mixed-use Gas Worx development. Shaw paid a total of roughly $100.4 million for 17 assembled parcels for the project that will encompass a total of 50 acres. Additionally, Shaw has filed plans to create a 33-acre, mixed-use waterfront development dubbed Ybor Harbor, which would surround the Ybor Channel.