City gives significant subsidy to propel Deuces development
Soaring costs and soil contamination have stalled an ambitious multi-use project meant to spur jobs, entrepreneurialism and homeownership opportunities on a historic Black corridor in St. Petersburg since April 2021.
The residential component of the Deuces Rising development is finally moving forward – at taxpayers’ expense. The public subsidy for each of its 24 units is just under $500,000.
City council members accepted Black-owned and Tampa-based Horus Construction Services’ $13 million Guaranteed Maximum Price (GMP) proposal Thursday. They also approved a $6 million inter-fund loan to offset the embattled project’s $19.1 million price tag.
“This is a significant subsidy – more significant than what we would typically do,” said City Administrator Rob Gerdes. “First of all, 22nd Street South (the Deuces) is the historic heart of the Black community in St. Petersburg. There’s been some progress made there, but not enough. This particular property has a history of failed development.
“For these reasons, we feel that it’s important enough for us to step in with taxpayer money to make this happen.”
For comparison, another stalled townhome project in the South St. Pete Community Redevelopment Area recently received just over $1 million to provide 11 homeownership opportunities. That equates to $91,000 per unit, less than a fifth of Deuces Rising’s subsidy.
Gerdes said the mayoral administration understood the council’s extensive concerns. He also believes the project at the corner of 7th Avenue and 22nd Street South could catalyze the Deuces corridor.
City officials bought the site across the street from the shuttered Historic Manhattan Casino in 2007. It has since remained a confluence of weeds, contaminated soil and deferred dreams.
The project cost does not include the 2.7-acre property or 40,000 square feet of planned commercial space. While the public-private partners could add that component in the future, they scrapped the proposed entrepreneurial incubator.
An aerial sketch of what was once called the Sankofa on the Deuces project, with street-facing commercial space. Image: City of St. Petersburg.
Councilmember Lisset Hanewicz said the land and previous site work push the public subsidy over $800,000 per unit. “You couldn’t run a business like this,” she said.
Hanewicz said she wants the area to flourish and would support the “anomaly.” She also called the spending unsustainable and credited $6.5 million in federal American Rescue Plan Act funding for lightening the city’s burden.
“We’re at a point where we have to do something with this,” Hanewicz added.
Half of the 24 two and three-bedroom townhomes are for those earning less than 80% of the area median income (AMI), or $69,500 for a four-person household. City officials capped the remaining workforce housing units at 120% AMI, or $104,280 for a family of four. Sale prices range from around $220,000 to $320,000.
The city must remediate the site’s contaminated soil. City architect Raul Quintana said the first phase would only include the townhome property. “The remediation standards for residential are much higher than commercial,” he said.
Quintana explained that the city could pave over other toxic portions of the site. If city officials scrap the commercial component entirely, Quintana said they would still “be committed to remediating that portion of the parcel for whatever use it will ultimately have.”
Mark Van Lue, housing development manager, expects a 30-year affordability mandate. However, he said officials have yet to establish sales terms.
Van Lue said the city typically implements a first right of refusal to ensure subsidized units are resold to qualified buyers. Administrators could not provide an updated land valuation.
Councilmember Richie Floyd noted that the $500,000 per-unit subsidy could fund several additional affordable homes. He called the city’s dedication to the project “admirable” but would have liked to explore other opportunities for the site.
St. Petersburg’s financial lift could have been exponentially worse. The GMP once ballooned to $33 million.
Gerdes whittled that down to $19 million through extensive negotiations. He said administrators would apply learned lessons to future projects.
“Yes, we’ve thought about other opportunities, but four or five more years of the property sitting vacant just breaks our heart, to be honest with you,” Gerdes said. “If this is approved, we have a shovel in the ground in three months.”
The council voted 5-2 to fund the project, with Councilmember Brandi Gabbard absent. Floyd and Councilmember Ed Montanari, who said the deal was “so far out of the ballpark it’s not even in the gray area,” dissented.
Ryan Todd
January 20, 2024at7:23 pm
Let’s Go!
Recall Welch! Please, if any political leaders are reading this, lead a recall! Help us.
Ted
January 20, 2024at6:54 pm
Mayor Welch is only interested in reparations and sells them under the guise of equity and inclusion. Rather than call him out on it and voting against these initiatives, our current city council members let him get away with it. I remind Councilwoman Driscoll of this regularly and would encourage all interested parties to do the same with their respective council persons. Wasting tax dollars in the name of equity is the failed policy of many of America’s largest democratic run cities and Mayor Welch is hell bent on adding St. Petersburg to that list. Recall the mayor ran the proposed Moffit Center out of town. Let’s change our leadership before they waste more taxpayer money or run other more deserving projects to our neighboring, less-woke cities.
Atle
January 20, 2024at9:00 am
A total of $800K plus another $200K from potential buyers. What a waste. You could buy many more units for that kind of money. Crazy waste is easy when it’s not your money.
Laura
January 19, 2024at10:22 pm
What breaks the taxpayers hearts is the lack of regard the council members have for our hard earned money.More and more long time residents are moving away because they can’t afford to live here anymore as the council members just keep spending.
Velva Lee Heraty
January 19, 2024at8:54 pm
Interesting when I speak my truth based with historical facts about wasting tax payer dollars it doesn’t get published. No free press here!
Mike C
January 19, 2024at8:45 pm
Again, another ridiculous and obscene waste of taxpayer funds. Where is the accountability? Thumbs up Mark Parker for the article. Folks, do we aspire to be NY, NJ, etc? Watch out, were headed in that direction with this leadership. Wasteful Sun crawler, destroyed zoning, nonsense funds appropriations, approved housing with no parking…. leadership out of touch with reality.
Tim
January 19, 2024at5:33 pm
Amen you can buy existing housing for less than that that area is so polluted it’s a federal Brown area nobody can live there what the hell is wrong with these people just slinging money all over
John Strauss
January 19, 2024at4:46 pm
This is an outrageous amount of money for ‘affordable’ housing. Luxury housing doesn’t cost that much more. I left NY to escape this creeping socialism and waste of taxpayer monies. This stuff should never happen here. This radical leftwing mayor and city council should be voted out for this and other policies – like hiring a chief diversity officer just when everywhere else is eliminating this sort of woke and racist nonsense.
Velva
January 19, 2024at4:31 pm
Between this decision, the 60 million overrun cost of the new pier, and the tax payer subsidy requested for the Rays we can now call St. Pete “Sucker City” while a handful of modern day Carpetbaggers, with the help of our mayor, are laughing all the way to the bank. I’m embarrassed for us.
JAMES GILLESPIE
January 19, 2024at4:24 pm
I AGREE WITH THE COMMENTS THAT THE SPENDING/SUBSIDY IS EXCESSIVE AND NOT ADEQUATELY JUSTIFIED WHEN THE CITY NOTES THIS IS AN AREA OF FAILED DEVELOPMENT. IT IS RIGHT TO PROVIDE WORKFORCE AND AFFORDABLE HOUSING BUT NOT AT THIS COST. IF THIS SUBSIDY FIGURE STANDS WHAT IS TO STOP IT FROM GROWING MORE IN THE NEEDY AREA. I THINK THE CITY EXERCISED FAULTY JUDGMENT AND SETS A BAD PRECEDENT WITH USE OF TAX FUNDS.
John Donovan
January 19, 2024at4:11 pm
Broken heart? We make emotional decisions with the taxpayers money? Time for new mayor, council and administrators. But some get it right: Councilmember Lisset Hanewicz said the land and previous site work push the public subsidy over $800,000 per unit. “You couldn’t run a business like this,” she said
Lucy Sage
January 19, 2024at4:10 pm
The price tag may be high, but after so many promises unfulfilled when the Gasplant and neighboring neighborhoods were supplanted, it seems fair
John Donovan
January 19, 2024at4:08 pm
$500k per residence? You can still buy homes all day long for cash and 100% ownership in St Petersburg at that price, with a yard.