Jack Dougherty is about to bring another development to life in the Skyway Marina District.
Dougherty, who owned the former Flamingo Resort, bought part of an old shopping mall on 34th Street South and plans a high-end senior living center on the site, as well as a retail strip center.
The projects are just north of Marina Walk, the 245-unit apartment complex Dougherty is building where the Flamingo used to be located.
Dougherty’s company, Allied Group Holdings II LLC, paid a total of $5.7 million for two parcels that made up the southern and middle half of the Skyway Mall development. He bought the southern parcel, at 4537 34th St. S., for $3 million from Maximo Plaza Inc. in Santa Monica, Calif. He paid $2.7 million for the middle parcel, at 4401 34th St. S., acquiring it from John-Mary Enterprises Ltd. In Tampa. The deals closed on Oct. 16.
He is eyeing a purchase of the northern part of the property, which retains the Skyway Mall name and is still owned by the original owners.
Dougherty’s new project is one of a growing number of redevelopments in the Skyway Marina District, the area along 34th Street South from 30th Avenue to 54th Avenue. The district, with its $1 million dollar waterfront homes and 10-minute drive from downtown St. Petersburg, has been a major focus for Mayor Rick Kriseman’s administration, which has pushed for the last six years for projects that would turn outdated mom-and-pop hotels and vacant stores into thriving residential and retail developments.
The Skyway Mall shopping center was built in the 1970s and had the same owners for more than 40 years, Dougherty said.
“Over that period of 40 years, nothing has been done other than the mall deteriorating year by year by year,” Dougherty said.
The senior living center he is planning will have 154 units for both independent and senior living. The eight-story building will face towards Boca Ciega Bay to the west. Dougherty expects to start the project in the second quarter of 2021.
The retail strip center will be on the front part of the property, facing 34th Street South, and next to an existing McDonald’s.
There are four multifamily apartment projects underway in the Skyway Marina District — Dougherty’s Marina Walk, Phillips Development’s 296-unit Sur Club, ContraVest’s Addison with 308 units, and SkyWay Lofts, a 65-unit affordable housing project from Blue Sky Communities.
“You don’t want a lot of apartments all in the same place at the same time. They tend to cannibalize each other,” Dougherty said, adding there’s been little new high-end senior living built in St. Petersburg. “This is something different in the area that’s not a multifamily project.”
Dougherty got a $3.535 million mortgage from LV Lending in Miami for the purchase.
“Financing is tough as can be right now. Most banks and most mortgage companies have put what they call a pause on new lending to see how things turn out, to see what goes on. About 75 percent of the lenders have paused and 25 percent are still lending, so it makes it even more difficult because you have all this competition for those lenders still out there,” Dougherty said. “Especially on a land purchase, which is essentially what that property is. They’re not financing the buildings that are there and that’s even more difficult to find.”
While there is still plenty of obsolete real estate product in the Skyway Marina District, commercial real estate activity in the district has slowed slightly during the Covid-19 pandemic, said Frank Bozikovich, a sales associate at Commercial Partners Realty who was involved in the transactions for the Sur Club, Addison and SkyWay Lofts projects. Financing is one reason for the slowdown.
“Lenders have become a lot more cautious in terms of willingness to lend,” Bozikovich said. “They’re proposing terms that often don’t make sense, or that developers can’t work with.”
Another factor, both locally and nationally, is the impact of Covid-19 on the restaurant sector.
“The quick serve restaurants are still expanding, at least some of them, because people can’t go to their favorite sit-down restaurant, and drive-through works well. There are developers still looking for sites for those quick serves,” Bozikovich said.
Overall, the Skyway Marina District remains a desirable area for commercial real estate, Dougherty said.
“It’s like priming a pump. Once people see the value of the area, everyone starts wanting a piece of it,” Dougherty said. “I remember when 4th Street North used to have a lot of older mom-and-pop hotels. Once things started happening on 4th Street, it became one thing after another thing after another thing because people saw the value. It was the same thing with downtown St. Pete. Many years went by without much of any traction downtown and then once activity started again, things picked up exponentially. That’s what I’m seeing in the Skyway Marina District, a lot of activity for commercial real estate.”