A proposal by United Insurance Holdings Corp. to build a new headquarters in St. Petersburg and add 300 jobs would pump up local economic spending by more than $23 million.
That’s among the benefits cited by Mayor Rick Kriseman’s administration, which is recommending the City Council approve a $5 million offer from United Insurance to buy 4.6 acres of city-owned land at 800 1st Ave. S.
Kriseman’s administration chose the offer from United, which does business as UPC Insurance, although Related Development LLC in Miami said it would pay $1.5 million more than the insurance company for the property. Related offered $6.5 million and said it wanted to build luxury apartments on the site.
The property had an estimated market value of $8.165 million as of Sept. 21. The city is allowed to sell land to private developers for less than fair market value, and has actively used this authority throughout downtown to both sell land and lease city property to promote economic activity, the administration’s recommendation said.
United Insurance (NASDAQ: UIHC), a publicly traded property and casualty insurer with $654.4 million in 2017 revenue, wants to build a 150,000-square-foot Class A office building and a parking garage with 500 spaces, with additional space set aside for retail and a hotel.
A request for comment from John Forney, president and CEO, was not immediately returned.
The UPC proposal is in the best interest of the city, the administration wrote in its recommendation to the City Council, which will consider a term sheet for the deal at its Oct. 4 meeting.
The administration cited several factors in recommending the UPC proposal:
- UPC Insurance is in one of the city’s Grow Smarter target industry clusters, financial services.
- Keeping a business in a community is less costly than attracting new industry.
- If UPC could not find a suitable new headquarters location, it’s possible the company could leave the city, and the city could lose some of the 250 jobs already housed at the firm, plus the positive financial impact of the new jobs the company plans to create.
- UPC’s new garage would have parking available for the public at night and on weekends, adding downtown parking and saving the city the cost of publicly funding a parking facility.
- UPC Insurance invests in the community, supporting organizations and events such as the Ronald McDonald House, the Guardian ad Litem Superhero 5K, CASA and Moffitt Cancer Center’s Magnolia Ball, among others.
The property’s value would go up to about $30.75 million as a result of the UPC projects, the recommendation said. The city expects to pick up an additional $207,716 annually in tax revenue as a result.
The capital investment generated by the project would be just short of $51 million, and the creation of 300 new jobs would have a direct and indirect earnings impact of $23.4 million, if the new jobs paid an average of $53,470, or 115 percent of the Pinellas County median wage. In actuality, UPC has a median wage of over $80,000, the recommendation said.
The median worker at the company made $81,663 in 2017, the insurer said in its proxy filing with the U.S. Securities and Exchange Commission.