Downtown St. Petersburg is off the charts in terms of the growth it has experienced over the last year, with giant cranes hovering over sites throughout the city and more companies outgrowing office space.
On Tuesday, the St. Petersburg Downtown Partnership released its 2022 downtown development guide, which highlights the residential and commercial activity in the city and what it means for the future.
Today, there are nearly 16,000 people calling downtown St. Petersburg home, according to the most recent American Community Survey by the U.S. Census. The news of companies growing and relocating in the city coupled with the quality of life is creating an influx of new residents – fueling a big boom in residential, office, retail and hospitality development.
With the demand outpacing supply, the market is adjusting by increasing prices, and the city is grappling with how to meet the demand while creating a sustainable and equitable future for St. Petersburg.
To highlight the growth from over the year and what to expect in 2022, the downtown guide includes information from local industry leaders including Alison Barlow with the St. Pete Innovation District, Wendy Giffin with Cushman and Wakefield, Barbara Vogleweds with the Edge District Association, David Foote with the Grand Central Association and many others.
Here’s an inside look and highlights of the guide:
The wage breakdown
Overall, the Tampa Bay MSA is a top 10 market to watch in 2021. The MSA’s metrics outperform numerous MSAs as it has a median household income of $61,631 with a low 4.7% unemployment rate. The MSA’s homeownership rate is 63.5%.
The income disparity between African Americans and Caucasians is $17,174, which is much lower than other MSAs.
In downtown, the annual wages exceed the county and the state.
The top six employment categories and earnings in downtown St. Pete are:
- Health services, which is at the top with average earnings of $73,549
- Government; $51,943
- Leisure and hospitality; $42,210
- Science; $85,571
- Finance and real estate; $112,843
- Business services; $117,829
The tight commercial and office sector
The guide states that 18 new projects were announced in 2021 with nine residential and six mixed-use projects, and two co-working developments along with one hotel.
The new office developments announced in 2021 would bring an additional 214,000 square feet of new office space to the market.
“The city has prioritized the development of new and retrofitted office space to accommodate relocating and growing companies,” the guide read. It provided a breakdown of the available classes of office space.
For Class A office space, there’s a 5.8% vacancy rate with 89,498 square feet available, which is priced just above $31 per square foot. There’s a 2.7% vacancy rate for Class B office space with 13,956 square feet available, which is priced above $28 per square foot.
There’s no availability of Class C office space.
The guide states the office vacancy rate is at 4.9%. At one point, the vacancy rate dipped below 4%.
The St. Petersburg market’s vacancy rate is approximately one-third the national average, Tampa Bay average and that of the largest local markets seeing significant development activity. St. Pete is the only market in this comparison with a 2021 vacancy rate falling below that of pre-pandemic levels, according to the guide.
A list of major downtown tenants includes ARK Invest, which is listed at the top; Bank OZK, Bayfront Health St. Petersburg, Cyndeo Wealth Partners, Duke Energy and Dynasty Financial Partners, which is in the process of buildings a new office tower for its headquarters. The list goes on to mention Raymond James Financial, the University of South Florida, L3Harris Technologies and several other hospitals among others.
The guide mentions the new Maritime and Defense Technology Hub. The Hub at 450 8th Ave. Southeast, formerly used as the SRI International building, is the first-ever hub of its kind in Tampa Bay. The facility, adjacent to the Coast Guard station, opened in late December. It was created to have spaces for companies seeking a waterfront location to deploy vessels and have a hyper-secured site for highly-classified operations.
The guide also has an entire page dedicated to the redevelopment of the 86-acre Tropicana Field and focused on Midtown Development’s proposal that former Mayor Rick Kriseman selected.
Midtown’s plans consist of building up to 10,000 residential units with a blend of affordable and workforce housing, new office space, 3.3 million-3.95 million square feet of indoor/outdoor office space, and other elements.
However, newly-elected Mayor Ken Welch said he would revisit the proposals for the Trop site and determine how to proceed forward.
Meeting the high demand for residential development
As more people flock to downtown, the tight residential market is causing more units to pop out of the ground.
There are approximately 100 active neighborhood associations within 10 miles of downtown.
In 2021, 2,350 new residential units were announced. Today, 714 units are under construction and 600 are completed.
The downtown market has a total of more than 7,800 units.
The demographics show the average age of the downtown St. Pete resident is 49 and earns a median income of $100, 272.
The homeowner incomes have significantly increased over time, as have their average household size, which points to more couples and families moving in.
While the average income is six figures, according to the downtown resident profile, there is a big cry from residents to developers on creating more affordable and workforce housing.
The guide acknowledges the need for more affordable housing and notes four projects that are projected to bring 326 new affordable units to the St. Pete market.
It also stated the City of St. Petersburg is the first municipality in Florida to take advantage of a Florida House Bill that allows for affordable housing in zoning districts where it was previously restricted to Neighborhood Suburban, Neighborhood Traditional, Industrial Suburban and Industrial Traditional use. Requirements for developers include the zoning district location, property size, minimum number of units, mandatory affordability for all units to be at or below 120% of the AMI (area median income), a minimum affordability period and proximity to services.
Sperling, which publishes an annual analysis of major cities throughout the U.S., compares the cost of living, analyzed by factors such as groceries, utilities, health and housing.
An index below 100 means the city is cheaper than the U.S. average on a given category.
Despite the rise in overall costs, St. Pete’s overall cost of living index is lower than a majority of its peer and relocation cities.
A look at the city’s assets
It’s evident the city’s arts and culture scene and walkable streets take center stage whenever business recruiters and economic development leaders market the region.
The guide states that 98% of arts and culture visitors come to St. Pete as its home to 10 museums and over 600 murals.
The notable museums include The Dalí, the Museum of Fine Arts, the American Museum of Arts and Crafts, The James Museum of Western and Wildlife Art, and the Carter G. Woodson African American Museum, which will have a new home in the city.
Other assets of the city spotlighted in the guide include:
- 2,400 acres of parkland
- 27 parks
- 77 athletic fields
- Five beaches
The city’s grid was purposefully designed to have small walkable blocks leading up to the waterfront parks. Political leaders have prioritized bike infrastructure in urban streets to promote alternative means of transit.
While the Tampa Bay region doesn’t have a true form of mass transit, the city does have a bike-sharing program, bus services provided through the Pinellas Suncoast Transit Authority and the Cross-Bay Ferry, which links St. Petersburg and Tampa.