Sunday, August 19, 2018
Business

Pasco County backs industrial spec space with $7 million loan

ODESSA — Graham Mavar said he first looked around Pasco County seven years ago for a suitable place to develop a high-end employment center.

"Industrial likes to go next to industrial, but somebody's got to go first. That's always the biggest challenge," said Mavar, a partner in the Tampa-based commercial real estate development firm Harrod Properties.

The company finally settled on a location — the Asturia development north of State Road 54 and west of the Suncoast Parkway — and now is partnering with Pasco County on a $26 million project to develop two roads and up to 200,000 square feet of Class A spec space for office/industrial use.

The public commitment is a $7 million, 10-year loan from Penny for Pasco sales tax revenue that will be forgiven if the company meets its stated goals of building the roads, extending utilities and constructing the spec space in two phases.

The deal, approved by the Pasco County Commission last week, is the second time in seven months the county has agreed to help finance development of class A spec space. In January, the county offered a $4 million loan to offset the projected $9.275 million cost of a 35,000-square-foot Class A office building at the Mitchell 54 West project at the southwest corner of SR 54 and Little Road.

The county's industrial recruiters say the shortage of Class A space built on speculation hampers economic development efforts.

''We've got the activity, we've got people looking — we just need more product," said Bill Cronin, president/CEO of the Pasco Economic Development Council.

The Harrod project will be on 21 acres on the western edge of Asturia, a 500-acre mixed-use project being developed by Houston-based Hines. That company purchased the former Behnke Ranch for $21 million in 2013 and has zoning approvals for 550 single-family homes, 200 townhomes, 440 apartments and multifamily units, and more than 700,000 square feet of office, commercial and light industrial space.

Harrod, founded in 1990, has 23 projects in Florida, including the Brooker Creek Corporate Center in Oldsmar and the $30 million renovation and expansion of the former corporate headquarters for Eckerd Drug in Largo that is now known as Bardmoor Palms.

Under the terms of the deal with Pasco, Harrod will build a so-called spine road from SR 54 north to connect to Perimeter Way, a road originating in the residential portion of Asturia. The spine road eventually will become part of a county collector route linking SR 54 to the future extension of Tower Road.

The county will forgive $4 million in principal after Harrod completes the required roads and constructs a minimum of 80,000 square feet of spec space. An additional $1 million will be forgiven after Harrod executes five-year leases on that space.

The remainder the loan will be waived after all 200,000 square feet of spec space is built and leased.

"We're going to have some true Class A office space in Pasco County that we've all been waiting for," commission Chairman Mike Moore said in voting for the agreement.

The Building Owners and Managers Association International trade group defines Class A space as the "most prestigious buildings competing for premier users with rents above average for the area."

Upon completion, the county estimated, the project will produce 400 jobs, in direct and indirect employment.

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