Five developers have offered to buy the City of St. Petersburg’s Municipal Services Center building downtown.
All of the proposals call for constructing a new Municipal Services building a couple of blocks away, on city-owned land on 2nd Avenue North that’s currently being used for surface parking. The plans vary on how they would deal with the existing Municipal Services Center at Central Avenue and 4th Street; some of the developers would replace it with a newly built mixed-use structure, while others would renovate it and turn it into office and retail space.
Two of the proposals come from locally based developers. Echelon LLC, the master developer of Carillon Park, and Third Lake Partners, whose holdings include ONE St. Petersburg and 200 Central, have formed a joint venture for their Municipal Services proposal. Blake Investment Partners, headquartered in St. Petersburg and with a track record of 17 projects in the city, also submitted a proposal.
The other plans come from The Allen Morris Co. in Coral Gables; Lincoln Property Co. in Dallas, which owns the Tampa Bay Times building at 490 1st Ave. S.; and Property Markets Group, with offices in New York and Miami.
Ultimately, it will be up to Mayor Rick Kriseman to select a plan and up to the City Council to approve an agreement with the developer.
The city put out a call for plans after receiving an unsolicited bid in December from Property Markets Group. PMG proposed a joint venture with the city to build a new office building on city-owned land on 2nd Avenue North between 4th and 5th streets. PMG would buy the existing Municipal Services Center for $12 million and replace it with a 1.5 million square foot mixed-use building with offices, retail, residential units, a hotel and parking.
Earlier report: Real estate developer proposes massive downtown St. Pete project
The city publicly released four alternative proposals Wednesday morning, about five days after the Jan. 31 submission deadline.
Here are the highlights of each.
The company would enter into a public-private partnership with the city of St. Petersburg to develop and finance a new 150,000-square-foot Municipal Services Center office building on 2nd Avenue North.
The city would lease the building for 30 years, after which time it would own it free and clear. Annual lease payments would be about $16 a square foot. A preliminary budget puts the cost of the new Municipal Services Center at $46.8 million, with a projected timeline of 27 months.
When the new municipal office building is complete, Allen Morris would buy the existing building, at 1 4th St. N., “at the appraised value,” and would build a 280,000-square-foot building with ground-floor retail, office, residential and/or a hotel. The company would allocate no more than 10 percent of the units towards workforce housing. The deal would not require a public hearing because Allen Morris isn’t seeking to increase the allowable density on the site.
Blake and the City would co-design and build a new Municipal Service Center, executing a $43 million build-to-suit contract for a 120,000-square-foot Class A office building with 600 secure parking spaces on the 2nd Avenue site. About 100,000 square feet would be finished to the city’s specifications to meet current staff needs, with the remaining 20,000 square feet left as an unfinished shell for future expansion. The city would lease the space for 20 years for $27 a square foot, and the city would have the option to buy the building anytime during the first five years of the lease.
After the city vacates the current Municipal Services building, Blake will buy that structure for $10 million. Blake would then renovate it, converting it to Class B office space and agreeing for 10 years not to use the property for anything other than office and retail, in a concerted effort to attract new businesses downtown.
The project could be completed within 12 months and with minor disruption to Central Avenue, Blake said.
“Blake believes this property represents the only way the City will be able to offer affordable, second generation space at reasonable rates on any scale,” the proposal said. New construction would cost about $300 a square foot, pushing rents into the high $40 a square foot range, pricing out smaller users and local businesses, the Blake proposal said. “Blake believes it will not only have local businesses relocate into the building but that a hip, affordable building will attract new businesses relocating from out of state.”
Blake projected the project could bring 440 new jobs to the downtown core.
The project potentially could include a Special Operations Memorial museum, honoring the U.S. military.
Lincoln would form a joint venture with the city to develop a new Municipal Services Center on the 2nd Avenue site. Dubbed “City Commons,” the new MSC would be a twin-tower, Class A office on top of parking, ground floor retail and a public park. It would have up to 250,000-square-feet of office, up to 30,000-square-feet of retail and a 1,000-car parking facility. About 150,000 square feet of office space would be for the city’s use, with the rest built on a speculative basis.
The city would lease the new building and parking facility, and could elect to buy it from the joint venture at any time in the first five years of the lease. If the city doesn’t exercise the purchase option, the joint venture could elect to continue the lease or sell the building; if it’s sold, the city and Lincoln would split the net profits.
Lincoln also would buy the existing municipal building for $11 million. On that site, it would build a Class A mixed-used development that could have up to 200,000 square feet of office space, 400 for-sale and rental residential units, club level restaurant and meeting space, a 200-key hotel, 25,000 square feet of ground floor retail, and a 1,200-space parking garage.
Lincoln’s proposal did not include a timeline for the project.
Third Lake-Echelon joint venture
The joint venture submitted two plans. Under both scenarios, the joint venture would buy the existing MSC for $12.25 million in cash and continue to use the building for its remaining useful life. The Third Lake-Echelon partnership would invest capital to provide new retail on Central Avenue, while also activating the corner of 3rd and 4th streets, as well as renovating and repositioning the existing office space to meet current market demand. When market demand supports it, the MSC would be demolished and redeveloped into a mixed-use project.
Renovation would bring new, much-needed supply of Class B office space to the downtown core and create opportunity for new jobs that would otherwise be priced out of the market, the Third Lake-Echelon plan said.
It also would “unlock the potential” of the vacant land, currently a surface parking lot, at 200 Central, a neighbor to the existing MSC. “We believe common ownership and control will help to create a strong and more cohesive neighborhood experience. 200 Central’s owner already have planned expansion for the building and when integrated with the MSC and the [new] MSC, this will be exponentially beneficial to the city,” the proposal said. “Without ownership of the MSC, further development of the 200 Central site (including the adjacent surface parking lot) will result in underutilization of important core land, fewer jobs and less potential tax revenue.”
The Third Lake-Echelon joint venture plans differ on a planned new Municipal Services Center building. Under one scenario, the 2nd Avenue site would be divided in two. A new MSC, up to 20 stories tall, would be owned by the city on the west side of the property. The east side would be used for a future residential/retail development with ground floor retail and 20 stories of multi-family units, of which 20 percent would be workforce housing.
The second scenario, Proposal B, does not include the future residential/retail project.
Both plans project a two-year timeframe to build the new Municipal Services Center after the design is approved.