Part Two in a two-part series
The two finalists vying to redevelop St. Petersburg’s historic Tomlinson Adult Education Center and its 1.7-acre property are also establishing a footprint in the area through two other significant projects.
For Minneapolis-based Sherman Associates, that means a $7 million renovation of The Hotel Zamora. The company acquired the 72-room boutique, Mediterranean-style facility in September 2022 for $38 million.
However, developer Michael Liberatore, a Palm Harbor resident, said Sherman Associates has strived to create workforce and affordable housing since the late 1970s. He also expressed his company’s excitement to collaborate with the Pinellas County School (PCS) district.
“It’s a great problem to solve,” Liberatore said. “If we can provide housing for teachers, what can be better than that?”
PCS decided to retain ownership of the 99-year-old Tomlinson building to help mitigate the local workforce housing shortage. While Sherman Associates has built over 12,000 mixed-income units throughout the Midwest, the firm’s leadership pledged to seek additional opportunities in the area when announcing the Hotel Zamora purchase.
Liberatore relayed that George Sherman founded the company in 1979 when interest rates soared above 20%. He called leveraging the firm’s experience navigating six real estate cycles “pretty amazing.”
“They’ve weathered the storm,” Liberatore added. “And they’ve been preparing for this storm we’re facing now. Approximately three years ago, they refinanced all their assets, so they’re in a great position to make sure any development we’re working on is going to be successful and well-funded.”
While Liberatore declined to comment on many specifics regarding the Tomlinson redevelopment out of respect for the process, their proposal calls for transforming the nearly century-old building overlooking Mirror Lake into 27 “spacious” and “historic” lofts.
The first floor would feature a café and patio, dog park, coworking and meeting space. An adjacent 17-story tower would include 208 apartments, 265 parking spaces and various other amenities.
The Tomlinson Lofts and Tower would provide 235 workforce and market rate units, with 117 capped at 90-120% of the area median income and reserved for teachers and staff.
Welcome to St. Pete
Liberatore noted he has two young children who will soon enter district schools and that the entire development team is local. “We’re invested in this community,” he added.
Rob Ruvin, director of business development, moved to Sarasota three years ago to open Sherman Associates’ regional office. While the Hotel Zamora was the first local acquisition, he said, “We’re here to stay.”
“We’re here for the long-term, and we’re being selective in the projects we’re involved in.”
Liberatore said Sherman Associates has previously converted at least five historic schools into housing. In addition, the firm partnered with woman-owned All Trades Construction, a local company with extensive preservation experience.
Sherman Associates is a preapproved U.S. Department of Housing and Urban Development (HUD) borrower, and Liberatore said they would tap into that resource to fund developments. He added that his company enjoys a longstanding partnership with RBC Capital Markets and works directly with St. Pete-based Helen Feinberg, who leads the company’s Housing Finance Group and previously chaired Florida’s Affordable Housing Study Commission.
“When we talk about public-private partnership, this is what it’s all about,” Liberatore said. “How do you marry the private sources with the public interest?”
He noted that PCS prefers a land lease and said the two parties would workout the details during the negotiation process. Sherman Associates’ proposal states the firm would fund the nearly $95 million project with a $58 million construction loan, $5.5 million in private equity and $21 million in county and city Penny for Pinellas funding, in addition to state and federal sources.
Liberatore explained that the city’s “great market rates” would offset some of the money lost on the workforce units. While that creates a balance, he said subsidies are still needed to provide a public benefit.
“Building housing in St. Pete is great for everyone,” Libertore said. “We’re in the business of building housing for all incomes and all ages, and that’s a quote directly from our president.
“It’s got great services, great amenities. It’s a great location.”
He credited county commissioners for using sales rather than property taxes to fund Penny for Pinellas and called it a great solution to creating affordable housing. However, he said developers must look at multiple options to ascertain solutions.
A recently passed housing bill offers extensive tax breaks on affordable units, but timing and availability remain unclear. Sherman Associates will apply for the new benefits, and Liberatore said that could potentially increase affordability, but they would not include that in a proposal until approved.
Liberatore noted that student success is the foremost priority for PCS, and providing attainable housing for teachers who work in St. Pete will increase consistency. He said that would positively impact children and create long-lasting benefits to them and their families.
“We can do it by using what is available today,” Liberatore said. “Great market rents, great subsidy from the county and city, and then the land.”
Read Part One here.