Office, industrial real estate projects get a boost from Pinellas grant program

Pinellas County has $80 million in grants over the next 10 years for developers and businesses that want to construct or redevelop industrial or office buildings in the county.

Pinellas County Economic Development opened a 30-day window on Wednesday for applications for the Employment Sites Program, which draws on earmarked Penny for Pinellas sales tax funding to provide the grants. The grants are available for developers or businesses that need help to close a funding gap and to make a project financially viable.

It’s the second round of applications for the grants. The first round of applications, which closed in March, resulted in four applications. If approved they would create over 216,000 square feet of new industrial space and 120,000 square feet of redeveloped offices.

Pinellas County Economic Development has never done this kind of program before, said Teresa Brydon, manager of the Pinellas County Employment Sites Program. The program stemmed from the realization over the past 20 years that the county was built out and has little land available for new projects.

“We’re probably one of the first communities in the Southeast that is dealing with buildout of the community. We’re sitting on less than 4 percent vacant land,” Brydon said. “The majority of the ‘green’ land that we have is single-family home lots throughout the county, and when companies say do you have 10 acres of vacant land, it’s very difficult to secure that.”

That means big projects have sometimes had to locate out of the county because there’s not enough land available for them to build or expand, she said.

“So over the years, Pinellas County commissioners and all the communities have worked with Forward Pinellas in creating industrial land rules and regulations so that we could maintain that land and be able to use it to bring better-paying jobs, as well as allow businesses that are here to expand their footprint,” Brydon said.

Both the office and industrial sectors are targeted because they offer high-paying jobs. But while office buildings can expand by adding height, industrial spaces are generally one story and need land to expand.

Among Florida counties, Pinellas has the third-largest manufacturing sector, with a concentration in medical manufacturing, plastics, defense and pharmaceuticals. Pinellas wants to keep the companies already here as well as attract new ones, but growth and expansion projects can bring unexpected issues to the surface.

“If someone has bought an existing structure and wants to tear it down to build a new facility and they start to do a demo and then realize they have some kind of contamination, that’s where we come in with this program. We have the ability to offset the gap that now exists because they can’t build out that facility. We’re there to support the projects that run into issues or concerns,” Brydon said.

Regulations for building construction have changed over time, she said. Most of the county’s industrial buildings were constructed in the late 1970s or early 1980s, when there were minimal storm water requirements, for example. Now, when a company wants to expand that structure or redevelop on the site, they have to meet existing requirements, sometimes at enormous cost.

“They might be able to afford to build the building, but when they are looking at rules and regulations that make it more expensive, that’s when they come to us, to help offset the extra cost,” Brydon said.

Grants awarded under the Employment Sites Program can only be used to fill the funding gap for a capital improvement.

Developers building spec projects without a signed tenant will be asked for a market analysis that will be used to determine if the new structure will be for a manufacturing use and not for a warehouse.

Existing businesses that want to tap the grant funding to expand must have at least 50 percent of their business outside of Pinellas County, a provision designed to tap new revenue streams back to the county, Brydon said.

Click here for more details on the Employment Sites Program.

Brydon expects to ask the Pinellas County board of county commissioners to review and vote on the first four applications this summer. If commissioners approve them, the county will undertake a more stringent due diligence process, using a third-party consultant to review the anticipated funding gap. The outside consultant would ensure that financial details provided by the applicants are kept confidential.

The $80 million earmarked from Penny funds for the Employment Sites Program over 10 years is separate from another $80 million in Penny funds set aside for affordable housing assistance over the next decade. Both programs get money from Penny IV funds, a 1 percent sales tax approved by 83 percent of Pinellas County voters on November 7, 2017.