Largo OKs $81M City Hall project despite cost escalations

This month, the City of Largo approved a nearly $70 million contract for a mixed-used project encompassing a new state-of-the-art City Hall – which will now be one of the city’s largest projects to date. 

The project called Horizon West Bay is a mixed-use project with the new City Hall, significant retail spaces and a parking garage. It will be built on the northern 400 block of West Bay Drive. 

The newly approved $69.6 million guaranteed maximum price (GMP) contract is with Clearwater-based general contractor firm Biltmore Construction Co. The overall project is estimated to cost roughly $81 million in total. 

“It will be the catalyst for a walkable and vibrant downtown, a true renaissance in our community’s history,” City Manager Henry Schubert said during the city commission meeting on Aug. 2. “[But] this journey has not been an easy one. The cost of this project has increased due to numerous factors beyond our control.” 

Inflation tied with rate increases and supply chain issues triggered the cost increase. He explained that after an extensive review of the design, there were some adjustments made to help reduce the cost while still maintaining the soul of the project.   

“I’ve been practicing architecture for 34 years, and I’ve never seen market fluctuation like this,” said John Curran with ASD Sky, the architectural firm leading the project. 

Largo City Commissioners previously approved barrowing roughly $62.4 million through municipal bonds for the project that would be paid off over 30 years. The remaining $18.8 million difference will be funded through taxable and non-taxable bank-qualified debt.

Thus far, the city has spent roughly $7 million to acquire the site and the initiate the design work. 

The plans for a new City Hall and a chance to help revitalize downtown formed in 2019 after the current building on Highland Avenue, which is over 46 years old, was deemed no longer suitable for use with little to no resistance to storm damage and flooding, and the repairs needed.

The new City Hall will have 18,000 square feet of ground-floor commercial space, a public plaza and a five-story parking garage with more than 300 spaces.

“I’m very confident the project will be full of tenants by the time you deliver,” said Ken Krasnow, vice chairman of institutional investor services at Colliers International, which is the firm tasked with leasing the retail component of the Horizon West Bay project. 

In total, Colliers expects to fill the spaces with 10 to 14 tenants.

The parking garage is scheduled to be the first structure to get underway and will offer 6,000 square feet of retail facing the courtyard that would likely attract restaurants and microbreweries. 

“It is challenging with what we call first-generation spaces. It can be very expensive to get restaurants and breweries into spaces that are in a raw condition, but we’ve talked about the type of improvements needed for the tenants,” he said, explaining that while certain buildouts would need to be made for those types of uses, the tenants would sign longer-term leases and the city would then recoup its investment.  

The tenant mix at the City Hall building would likely include ice cream and coffee shops, a yoga studio and other traditional mixed-used retailers. 

On average, the rent would be in the mid-$20 range per square foot, which would yield $400,000 to $500,000 of annual revenue for the city, Krasnow said. 

A rendering of the new City Hall.  

The development team also highlighted how the modern building will be platinum Green certified and outfitted with hi-tech features and finishes including solar panels, a water harvesting system, a multistory living green wall that can be seen from the lobby, digital signage, large windows that will allow natural light to flood in, collaboration rooms and retractable walls that will create an indoor and outdoor experience. 

Construction is expected to take place this year and is scheduled to be completed by late 2024.