More affordable housing and an enhanced workforce programs are now in play for Moffitt Cancer Center and its partners in creating a mixed-use destination in St. Petersburg.
During the Community Benefits Agreement (CBA) Advisory Committee meeting on Monday, the group recommended that the project should move forward after representatives from Moffitt, Atlanta-based developer TPA Group and UPC Insurance shared the tweaked plans with the committee.
Last year, Moffitt, the TPA Group and UPC submitted plans to develop a 4.59-acre site at 800 1st Ave. S. in downtown St. Pete into a 75,000-square-foot cancer center that would be three stories alongside a 30-story residential tower. Moffitt and the TPA Group also plan to build a potential 14-story hotel and a parking garage with 300 public-access parking spaces.
Former St. Petersburg Mayor Rick Kriseman favored Moffitt’s proposal over other proposals received, however the new administration and creation of the CBAC have prolonged the approval process.
Since the first CBAC meeting in May concerning the project, the group revised the initial plans following points of concern from the committee and the public, such as the need for more affordable housing, a robust apprenticeship and training program, and the $19 million discount the city would give Moffitt and its partners.
As a result, the team has bumped up the workforce housing units from 57 to 70 in the 375-unit tower, with 18 units designated for those earning 80% of the Area Median Income (AMI) and 52 units for those earning 120% of the AMI.
The 70 affordable workforce housing units would provide $1.4 million in annual rent savings, or $19 million over the first 13 years of the project, according to a presentation slide.
TPA would also waive apartment application and administration fees for Pinellas County school teachers and first responders.
The team explained how the cancer center and surrounding economic benefits it would carry justify the $5 million they offered the city to purchase the site, which is far less than the site’s $24 million appraised value.
It takes a village
Fred Hames, Director of Operations and Executive Vice President for Barr and Barr’s Southeast operations, has a long track record of working with Moffitt and recalls the team’s first site visit.
“Moffitt looked at eight or nine different sites in St. Petersburg. There was something about this site that works for them, part of which is the accessibility,” he said, noting how it is centrally located and Moffitt wanted to be located on the “hard corner” of the lot by Dr. Martin Luther King Jr. Street. S.
“The only way to make it [the site] available was to create a partnership with UPC. When we created that partnership, it allowed the vacancy of 2nd Avenue and the opportunity to build in the southern zone of that site,” he said.
The city is bounded by a 65-year-long lease with UPC for the site. UPC was eyeing the site to build a new HQ, but those plans never came to fruition, Hames said.
Although the site is in a strategic location, there are “extreme first costs” including the vacation of 2nd Avenue, the relocation of utilities and the structured parking.
“We said we need to bring in other components to help offset those costs,” Hames said. “The residential part was created so they could share the costs of the garage, the utility relocations and all the stuff that Moffitt doesn’t have to bear on its own.”
Moffitt alone is making a $75 million investment for the construction costs.
Making a case
Mark Stroud, President of The Stroud Group, representing UPC, said while the valuation of the site at market value was determined to be $24 million, he said the appraisal did not deem the value of the appraised use.
“Moffitt takes up a lot of the site and reduces the density,” Stroud said. “Other things not considered are the significant restrictions placed on the site for anyone to purchase it.”
He explained that in talking with the city’s legal staff and the mayor, the city would want to include language requiring any buyer to complete the development in a given timeframe. If the project isn’t completed on time, the city could reclaim ownership of the site.
“I can assure you that would pose a significant discount for anyone,” he said, adding how it would be difficult to get a lender onboard, and that the relocation of utilities at the site would cost $4 million.
“The $5 million [offer] is reasonable and can be confirmed in-market,” Stroud said.
Moffitt Cancer Center’s operations would bring cancer care services closer to residents, create 250 new direct jobs in St. Petersburg.
The team would work with Horus Construction, a minority-owned contracting business that would oversee $22 million of the work, and a minimum of $15 million of subcontracting opportunities would be place for women-owned or minority-owned business enterprises.
“The community and economic benefits provided by this project are unmatched when comparing it to any other use,” said Evan Shaw, who leads residential projects at TPA.