The news that United Insurance Holdings was scrapping its plans for a new corporate headquarters in downtown St. Petersburg was no surprise to Alan DeLisle, the city’s development administrator.
United Insurance (Nasdaq: UIHC), a property and casualty insurer that does business as UPC Insurance, reached out to DeLisle shortly after a new chairman and CEO was named in June.
“They gave us a heads up they were reconsidering the project. They have new leadership, their CEO changed, so we considered that significant. With Covid, we’ve been watching all of our projects closely, but we knew that this was a strong possibility,” DeLisle told the St. Pete Catalyst Friday morning.
Dan Peed, UPC’s chairman and CEO, announced on an earnings call Thursday evening that the company would discontinue the project and take a $2.8 million one-time charge related to the abandonment of capitalized costs.
UPC had planned to buy a vacant 4.6 acre parcel at 800 1st Ave. S. owned by the city for $5 million. The company was going to build a four-story, 150,000-square-foot corporate office building, a 17-story, 180-room hotel, and a three-story parking garage on the land, which is across the street from the company’s current headquarters.
The company never closed on the transaction, DeLisle confirmed.
The land is adjacent to the Tropicana Field site, for which the city is seeking redevelopment proposals, and it is “extremely valuable,” DeLisle said.
“I can’t tell you how many inquiries we’ve had about that site before the UPC deal and even after the UPC deal. We still have several interested parties,” DeLisle said. “Something positive is going to happen with that parcel. It’s perfectly located, adjacent to the EDGE District, adjacent to the Trop site, adjacent to the heart of downtown. We don’t have any concerns about its future.”
A key element of the UPC plan was the parking garage, which was a public-private partnership between the city and the company. Although UPC would have used the garage during the day, it would have provided much-needed parking at night and on weekends for downtown visitors.
But another project, Orange Station at the Edge, a mixed-use project at the old St. Petersburg Police headquarters, now includes a 400-space parking garage that will serve those needs.
“We stayed focused on additional parking in [the Orange Station] project for the EDGE district. We really did that because we felt we needed it, just in case the UPC project didn’t happen exactly the way we wanted it to, we would still have that solid parking component for the EDGE district primarily,” DeLisle said. “We feel pretty good about that. The UPC parking was just icing on the cake.”
The UPC office space was only intended to be for company employees, not other businesses looking for a place to relocate or expand in St. Petersburg. The need for space for those other businesses remains top of mind for DeLisle, who told the St. Petersburg City Council in October there is little office space currently available. The Orange Station project will have about 100,000 square feet office space. Another planned mixed-use project, a high-rise by the DeNunzio Group at 1st Avenue North and 5th Avenue North, will have about 40,000 square feet of office space. Red Apple Group’s planned multi-use development at 400 Central Ave. will have about 23,000 square feet of office. The Mirror, a project on Mirror Lake Drive by Wannemacher Jensen Architects, has 18,000 square feet of office, with 11,400 square feet remaining for lease at the end of October.
“We are thrilled that those projects are moving forward,” DeLisle said. “We’re thrilled to go through this period in time and have the strength of the economy holding up with all the other projects moving forward.”
St. Petersburg officials will continue to work with UPC Insurance, which DeLisle said is an important company to the city and to downtown.
“We don’t take this lightly,” DeLisle said. “But at the same time we know that something exciting will come and replace this project, and we hope UPC is still part of it.”