Hometown roots are a big part of the reason Jay Miller, president of J Square Developers, is excited about developing a $70 million mixed-use project in the EDGE District.
“I’m a St. Pete native and to be honest, I enjoy developing here in St. Pete in my hometown more than I do out of town,” Miller said. “It’s nice to be able to drive by the projects we develop and see how they turn out, and feel proud.”
Miller is a principal in EDGE Central Development Partners, the team selected by Mayor Rick Kriseman to redevelop the site of the former St. Petersburg Police headquarters at 1300 1st Ave. N.
Edge Central’s project will include 100,000 square feet of Class A office space, a 600-space parking garage with 400 public parking spaces, 60 market-rate condos and 30 workforce rental housing units, 22,000 square feet of retail space and an outdoor public plaza.
It will be the first sizable speculative office development in downtown in many years. It comes as the downtown office market increasingly is squeezed, with vacancy rates expected to drop below 5 percent by the end of this year, Miller said. Without enough vacant office space, it is difficult to attract and retain businesses.
A term sheet calls for the city to sell a cleared development site to EDGE Central for $6.4 million. The purchase price was discounted from fair market value based on the planned office development and the economic impact it would have on the city. The purchase price could be cut by as much as $1 million if EDGE Central takes on the demolition itself.
Provided the city council approves the agreement, Miller hopes demolition will start within 12 months, with construction expected to take an additional 18 to 24 months.
Like Miller, the other members of the EDGE Central team also have deep roots in the area.
“We’re the local boys,” Miller said.
Bowen Arnold is the founder of DDA Development, a Tampa company with a significant background in multifamily development. DDA will take the lead on the residential development for EDGE Central.
William Conroy is a St. Pete-based real estate attorney at the Johnson Pope law firm, and Craig Sher is executive chairman of The Sembler Co. in St. Petersburg. Both are long-standing residents of the area.
They all have watched the EDGE District evolve over a number of years.
“It already has an eclectic mix of some of the most popular independent restaurants and shops in St. Pete,” Miller said. “It has a youthful vibe and tends to attract a younger clientele.”
The EDGE Central project, along with a hotel, retail and co-working project unveiled last week by PTM Partners, will take the EDGE District to another level, with higher density and more mixed use elements, Miller said.
Miller talked with the St. Pete Catalyst about each of the key points in the project.
St. Pete Catalyst: I understand you don’t yet have any tenants for the office space. What makes you confident you can fill the space?
Miller: Because of the trends we’ve been observing over the last couple of years. The fact that downtown St. Pete has attracted several out of town companies to relocate here, largely because of the appeal of the district as a place to work and live and play, and because the office vacancy rate is expected to be below 5 percent by end of year.
We’re seeing trends that are different than the traditional office market. We’ve had office users, like L3Harris, which are traditional suburban tenants, decide to relocate downtown, even though their occupancy costs are higher, largely because it’s important to attract a quality workforce and keeping them. Being in a downtown location increasingly is the preference of employees.
So you’re seeing a lot of a lot of office users who 10 or 20 years ago might have gravitated to the suburbs because of free parking and ease of access decide to relocate downtown, particularly in St. Pete and also in downtown Tampa.
St. Pete Catalyst: Other developers have said it’s hard to make the finances line up for workforce housing. How are you able to do it?
Miller: A couple of things. First, there was a lot of discussion with the city on how to make it work. Part of it is land price. This is city-owned land and the city worked with us on the land price to help us make the economics of the workforce housing work.
No. 2, the fact that it is a mixed-used project and we can combine the economics of the various components also created a benefit for us in terms of making the apartments work.
St. Pete Catalyst: I understand the parking will be a public-private partnership?
Miller: It’s a model the city put together on another development site. The city will largely fund the cost of the public parking spaces. We will build it. The city will continue to own the garage, but we’ll operate it as a partnership with an obligation to operate the 400 spaces as a public garage, offering the same rates to everyone, whether it’s our tenants or other businesses in the district, and of course to provide hourly parking for customers in the EDGE District.
The fact that we’re able to develop the garage through a public-private partnership is really key in terms of making the office economics work for us.
St. Pete Catalyst: Do you have any retail tenants lined up?
Miller: We don’t have any lined up yet, but we expect to have a mix of food uses, local and national retailers. It will be along Central Avenue and in the public plaza we are developing as part of the project. We think the synergy of office, residential and parking will create an ample demand along with the fact that the EDGE District already has an appeal of its own for retail and restaurant uses.
St. Pete Catalyst: One of the things that intrigued me in your original proposal was a living green wall. Are you still planning that and what outdoor space have you envisioned?
Miller: The outdoor space is a public plaza that we’ve designed to have a degree of intimacy. It’s not going a big vast wide open space. It will have outdoor cafés and food uses bordering it and will be activated by outdoor seating. It’s small enough to feel comfortable whether there are 15 people or 200 people in it. We hope to activate it with the types of activities you see in great urban space, like the Armature Works, where you can just sit and people-watch, or there might be entertainment.
And yes, we are still planning to have the green wall on one side of the garage. It will have a nice natural Florida feeling.
The total project cost remains in the $70.4 million range EDGE Central projected when it submitted its bid for the site, Miller said.
Conroy and Sher are principals of BackStreets Capital LLC, which will provide investment financing. The development team will be in the market for bank financing.
While the condos will be sold to private homeowners, EDGE Central expects to retain ownership of the commercial elements of the project.
Also involved in the project is St. Petersburg-based Place Architecture and Cushman & Wakefield’s Wendy Giffin, who will handle office leasing and marketing.
“We’re very excited to be doing this project. We have a great team and each partner brings expertise,” Miller said. “We’re excited about working with the city, which has been very supportive, and we plan on delivering a great project.”