Construction costs escalate for 22nd Street townhomes, incubator

The multi-pronged Sankofa project, which will include affordable townhomes and a digital and technology business incubator, now has a hefty price tag that the developers will need to offset. 

On Thursday, the St. Petersburg City Council unanimously approved the second amendment to the design-build at risk agreement (DBAR), with a Guaranteed Maximum Price (“GMP”) between the city and general contractor, Horus Construction Services, a Black-owned St. Petersburg firm. The approved amendment is for additional preconstruction phase and construction management phase services for roughly $1.1 million for the new Deuces Rising townhomes and commercial development at Commerce Park. The total GMP is expected to be determined this late summer. 

The project, which is across from the Manhattan Casino, entails building 24 two-story affordable townhomes. On the commercial aspect, there would be 40,000 square feet of commercial space that would be able to house retail, office and restaurant/café with outdoor seating, and an incubator and micro office spaces. 

The entire project was estimated to cost $16 million; however, that number has spiked closer to the $25 million range, said City Administrator Rob Gerdes, who spoke on behalf of Sankofa (representatives for the development group were not in attendance). 

Multiple factors, Gerdes said, caused the cost increase, such as the funding for Fairfield Avenue, buildout infrastructure costs and construction materials. 

“We are working diligently to try to offset the cost increases we are seeing,” Gerdes said. “We also had a positive meeting lately with the county related to Penny for Pinellas dollars. We do have a current application in for the county on the townhome portion on the development. They’ve had discussions with me to wait till we get a GMP before they make a decision on funding.” 

He added that the county has made changes to its economic development funding program for Penny dollars, which could allow Sanfoka to submit an application to receive funds for the incubator concept. 

The group is using American Rescue Plan funds and city funds for the project. Gerdes said they will need to borrow money for the construction, which could be funneled through a contribution from the Community Redevelopment Agency Tax Increment Financing. 

Sanfoka hopes to start construction this December and be sustainably complete by 2023 with tenants moving in after. 

James Jackson Jr. with engineering presented the latest sketches of the site plans to the board. 

The design process started in May with Sankofa. The residential sketches show the clustering of townhomes in groups of four along Fairfield Avenue. Between each cluster are sidewalks and a shared parking lot. 

A sketch of the elevation of the townhomes.  

The townhomes will be a mix of two and three-bedroom units ranging from 1,400 square feet to 1,700 square feet that would serve those earning 120% of area median income (AMI) or below. They would feature porches and balconies. 

Meanwhile, there will be two main commercial buildings – one 20,000-square-foot building and a 12,000-square-foot building separated by corridors.  

“It’s all about this building being a nerve center for entrepreneurship in the like of those kinds of business endeavors,” Jackson said about the North building. It will also have micro-retail space. 

“The intent is to attract occupants that are trying to have business startups in those spaces,” he said. 

There will be a reception area for mail, a Sankofa business office, micro office spaces, a shared meeting/coworking portion and vacant tenant space to be developed, which could be larger office spaces. 

The North building also has a covered rooftop. 

“This [rooftop space] was explored as an idea of additional space for not only the tenants but anyone needing to reserve space – a potential idea for a revenue source … Another reason why this came up, is a year ago, as you can imagine with Covid, the idea was to have outdoor space to conduct some sort of business because Covid required different actions,” he said. 

The second floor the South building where there would be a multimedia studio, digital tech incubator space and a 3D printing lab. 

The neighboring South building’s second floor is the last Sankofa piece, which is focused on the tech businesses. 

“Startups can lease these spaces for anything in the digital tech world,” Jackson said, noting a 3D printing room on the level.