Place
What will become of the former Moffitt site downtown?
St. Petersburg administrators expect a city-owned surface parking lot across the street from the upcoming Historic Gas Plant District to become an $80 million to $120 million mixed-use development.
That price point would prevent its discounted sale from triggering the city’s community benefits ordinance. City council members approved a $10 million offer for the 1.53-acre downtown property in a 6-2 vote Thursday evening.
The land, at 298 Dr. MLK Jr. St. S., sits directly east of Tropicana Field’s Lot 8. Moffit Cancer Center previously offered the city $5 million for the site and proposed a $200 million campus with a 30-story residential tower, a 14-story hotel and a 300-space parking garage.
“I, like other council members, was not happy – at all – when the mayor terminated the Moffit agreement,” said Councilmember Ed Montanari. “But what’s done is done, and it’s time to move forward.”
Tampa-based Third Lake Partners (TLP), which owns the abutting parcel and building, will now control the site. Mayor Ken Welch scrapped Moffit’s plans in August 2022 due to the low offer and a lack of proposed affordable housing.
TLP subsequently submitted an unsolicited $6 million bid. After extensive negotiations, the developer increased its offer to $10 million .
Two appraisals valued the property at $15 million and $16.4 million, respectively. However, a cumbersome lease and critical right-of-way factored into the sales price.
The city now holds a 99-year lease on the parking lot (expiring in 2086). TLP bought the neighboring 800-block parcel that housed United Property Insurance’s headquarters for $10.5 million in November 2022.
The firm, which then became the lot’s lessee, pays roughly $21,068 in annual rent. The city’s 2023 tax bill topped $56,000; per the lease, officials can only adjust rent for inflation every five years.
It also requires the city to provide 90 ground-level parking spaces to tenants, which TLP will waive. Administrator Rob Gerdes said any other buyer must fulfill that requirement and cover increasing property taxes until 2086.
“That would be extremely difficult to accomplish, and it’s unlikely that anybody else is going to want to take on that lease,” Gerdes added. “The adjacent property owner – the property is more valuable to that person than anyone else.”
The city is currently losing money on the surface parking lot. Image: Google.
TLP will also vacate a portion of right-of-way along 2nd Avenue North. “This would act as a game day street into the Gas Plant project,” noted Aaron Fisch, the city’s real estate and property management director.
Administrators believe that space is worth $4 million. “That pretty much brings it up to market rate when you consider how much the city is going to receive or save over the length of the lease,” said Councilmember Gina Driscoll.
TLP must commence construction on a mixed-use development with residential, office, retail or hotel uses within five years or face a $4,167 monthly penalty. Administrators will not mandate an affordable housing component.
Projects must receive a city subsidy equal to 15% of construction costs or $30 million to activate St. Petersburg’s community benefits ordinance. When accounting for the $16 million valuation and $10 million sale price – but not the right-of-way value or tax savings – the public contribution is $6 million.
Brian Caper, the city’s workforce and economic development director, said the process would not apply unless TLP’s project fell below $40 million. Based on conversations with the developer, administrators believe it will “exceed two to three times the threshold … to trigger the community benefits ordinance.”
A city map highlighting the subject properties. Screengrab, city documents.
Councilmember Lisset Hanewicz asked if “we have anything in writing” that guarantees those project costs. Caper said they do not; however, he noted that it “would not be financially feasible” to build anything under $40 million downtown.
Hanewicz also noted that the lease issues existed when Moffit proposed redeveloping both parcels. “I may have to approve this,” she added. “But I want to make it clear – I’m not happy with that.”
Councilmember Copley Gerdes asked for the administration’s thoughts on including a project cost mandate in the development agreement. Administrator Gerdes, his uncle, said the five-year construction timeline “covers us.”
“Look, we understand the point, but we’ve answered the question,” he added. “We don’t believe we’re outside our ordinance, and we’d be very concerned about renegotiating this agreement.”
The sale will benefit the city’s affordable housing efforts. Officials will transfer $6 million from the General Fund to the Economic Stability to repay a short-term loan for the Deuces Rising project that received a $19 million subsidy for 24 affordable and workforce townhomes on 22nd Street South. The remaining $4 million will go towards the Housing Capital Improvements Fund.
Councilmember Gerdes, Brandi Gabbard, Montanari, Driscoll and Hanewicz approved the sale. Councilmembers Richie Floyd and John Muhammad dissented.
S. Rose Smith-Hayes
January 18, 2025at6:24 pm
Amazing, they should have let Moffitt have that deal. This current deal stinks. As it seems, they could sell the property or lease it unless the contract forbids it. We do not know. I see no benefit for local taxpayers for their sale.
Alan DeLisle
September 15, 2024at8:12 am
When will the absurdity end? When will some of the Council members end the sell out to an incompetent Mayor. Yeah I did the original deal with Moffitt on behalf of Mayor Kriseman. It was far more important than keeping the Rays. And it was a great deal for the taxpayers and those needing cancer care.
Tom Tito
September 14, 2024at12:53 pm
Thank you Peter Kent for providing factual information and thank you council members who asked tough questions.
AM
September 14, 2024at10:13 am
The Moffitt deal would have brought in taxes and good paying jobs. Now we signed a deal with nothing to show for it. What a waste of taxpayers money.
Peter E. Kent
September 14, 2024at7:47 am
The mayor sold this $18 million parcel to a financial advisor for $10 million. Both appraisals valued this parcel at $18 million sixteen month ago, but the recent approval of the adjacent rezoned Rays-Hines deal should greatly increase its value to $20-30 million.
The city reduced its selling price by $6 million because of an ongoing lease of 90 parking spaces for an annual lease payment of $21,068 to the city while the city pays $56,000 in property taxes on it! Just cancel this lease and let a court decide the damages. One appraiser said such a lease was worth $1.5 Million, the other said $3 million, not $6 million.
The city reduced the selling price by another $2 million for the claim that this parcel included the active south half of Second Street South which has traffic lights at both ends. Imagine the court’s reaction to the parking lot leaser blocking an active street! Neither appraiser gave this claim any value.
Unlike the 70 affordable housing units that Moffitt promised to build on this site, the buyer promises none. Rather the city sold a property worth at lease $18 million to a financial advisor for $10 million without restrictions. Now that advisor has five years to flip it at a tremendous gain or hold it indefinitely for further gains at a “penalty” of $50,000 a year. Mayor and city council, you were informed before voting that this deal stinks
S. Rose Smith-Hayes
September 13, 2024at6:04 pm
I wish that we knew what they are thinking, some of the ideas baffle me.
Tim K
September 13, 2024at6:02 pm
Now they can have a pier party
JudyToo
September 13, 2024at4:53 pm
Thanks a lot from all those, including me, who currently have to have someone drive them to the Moffitt facility 2-3 times/week.
It is only an hour each way except when the traffic is horrible, especially on 275 in Tampa near the I-4 intersection.
Moffitt would have brought so much to so many sick people in Pinellas County but you had to have the money to benefit 24 people who need affordable housing and pay off a loan on “the Deuces Rising” project.
Our mayor and city council have an agenda and will carry it out no matter how foolish it is.
Hopefully they will take their clown show to the new stadium and entertain more people.