Progress on Tangerine Plaza remains ‘frozen’ in time

Since 2017, city officials have worked to reestablish a grocer along a culturally significant corridor in South St. Petersburg known for its lack of fresh food, retail and housing options.

Predominantly Black residents who call 22^nd Street South (the Deuces) corridor home will soon have 68 new attainable homeownership opportunities through two new developments. However, where they will shop for groceries remains a mystery.

James Corbett, city development administrator, led a presentation Thursday on plans for the much-maligned, city-owned Tangerine Plaza. Emotions ran high at the Economic and Workforce Development Committee meeting due to a lack of information and miscommunication.

“Verbal updates aren’t good enough,” said Councilmember Gina Driscoll. “Not when it’s been seven years. I’m sitting here ready to give input on something that you’re telling me … isn’t even what you’re working on anymore.”

The Sugar Hill Group first sought to acquire the property at 1794 22^nd St. S. in 2020. Those negotiations collapsed, and the development team submitted an unsolicited proposal in June 2022.

That included a 75-year, $1.5 million lease, which equates to $20,000 annually. The group plans to demolish the 40,000-square-foot space and construct two buildings with 155 affordable housing units. The developers must allocate 10,000 square feet to a grocer.

While terms have changed, that was the latest information in background documents. Corbett thought he was providing a verbal update, and City Administrator Rob Gerdes agreed that it would be “unusual” to offer a draft term sheet during the negotiation process.

Corbett said Sugar Hill would pay $100,000 annually under a new lease-to-own agreement. He said the group could exercise the $1.5 million purchase option once it receives a binding commitment from a grocer and meets other conditions.

The plaza has remained empty since a Walmart Neighborhood Market left seven in 2017. “If they (Sugar Hill) don’t have a grocer identified by now, it’s not going to happen,” Driscoll said.

“I’m at the point where it’s like, let’s just cut our losses and break free of this,” Driscoll added. “It’s becoming an albatross for us.”

In 2022, the total project cost was $37.3 million. Sugar Hill’s estimates included $12.7 million in state and city subsidies.

However, the group must control the property to receive state funding, necessitating the new agreement. Corbett said the site appraised for roughly $2.6 million in April 2018.

Councilmember John Muhammad questioned the $1.5 million purchase price when land values have soared and would likely continue increasing. “It’s understood that we’re not selling the property for market value in order to gain the benefit of the workforce and affordable housing,” Corbett replied.

Driscoll suggested noted the city has a deal “on the table” for the property. Developer Robert Blackmon, a former city council member and mayoral candidate, submitted a $1.62 million all-cash proposal in August 2023.

He pledged to reactivate the space as a grocery store-anchored retail center. Blackmon’s proposal also included a deed restriction to ensure that functionality for at least five years.

After the meeting, Blackmon expressed a willingness to increase the timeframe – and his cash offer. “Everything would be negotiable,” he told the Catalyst.

“But they have to start negotiations with me. They won’t even respond to me.”

An initial rendering of Habitat for Humanity’s Pelican Place development, directly across from Tangerine Plaza. Image provided.

Blackmon would not build housing on the site. He said several metrics show rental rates decreasing and vacancies increasing.

In addition, Habitat for Humanity of Pinellas and West Pasco County is building 44 townhomes across the street from Tangerine Plaza. CEO Mike Sutton wrote a letter supporting Blackmon’s proposal in September 2023.

“Markets change, cycles change,” Blackmon said. “Life has moved on, yet this site has just sat frozen. And you (city officials) just poured $19 million into 24 townhomes on the same road.”

Driscoll noted that Sugar Hill must demolish the property, and Walmart’s lease runs through 2026. Both aspects could further delay construction once the city reaches an agreement.

Amy Foster, housing and neighborhood services administrator, said the city is waiting to gain more confidence in Sugar Hill before terminating its lease with Walmart. Council Chair Deborah Figgs-Sanders does not support selling the site due to operational uncertainty.

She believes creating 115 rental units for those earning less than 80% of the area median income (AMI) provides the most community benefit and mitigates gentrification. While Foster said that cap was the goal, state funding could require Sugar Hill to increase income limits.

Sugar Hill’s previous proposal included 87 units for those earning below 60% AMI. Those income restrictions are seemingly shelved.

Administrators will conduct new property appraisals and present additional information to the committee in about six weeks. Corbett said he shared his colleagues’ frustration with the delays.

“As far as process and communication is concerned, certainly, it seems like that needs to be improved,” Corbett said.