ST. PETERSBURG — As the economy rebounds, a growing number of multifamily housing projects are in the works. There are plans for an estimated 900 or more units that will meet demand or possibly oversaturate the market.
The developers of the Portland, which offers workforce housing to limited-income residents at 300 Eighth St. N, hope to build a similar 12-story tower called the Lansing near Tropicana Field. The project at 11th Street and First Avenue N would have 75 units and charge rents of about $600 to $800 a month.
Justin Wilson, with 908 Development Group, thinks this project will be as successful as the fully leased Portland because housing grants and other incentives allow for lower development costs and rental rates of less than $1 a square foot. He wonders if a plethora of new complexes charging higher rental rates will fare as well.
"There has been a pent-up demand," he said. "But if there are five or six projects in the works, I'd have to go in and see how many units are proposed in each one. It might be too many to deliver all at the same time to a municipality as small as St. Pete."
One of the newest multifamily projects on the horizon has roots dating to 2000.
A subsidiary of Wells Fargo proposes to build a 150-unit development near the intersection of Gandy Boulevard and Fourth Street N. The project, at 10980 Oak St. NE, would consist of five three-story apartment buildings around a pool and clubhouse.
Dave McNulty of Wells Fargo declined to comment except to say the bank acquired the property through foreclosure. Don Mastry, a real estate attorney with Trenam Kemker law firm, is working on the proposal. Mastry said the property will likely be sold to Bayfair Properties, a Tampa developer of multifamily projects and custom homes. A Bayfair representative could not be reached for comment.
A public hearing on the project will be held at the city's Development Review Commission meeting at 2 p.m. June 6 in City Council chambers, 175 Fifth St. N. The city's development review staff is recommending approval.
A similar project was proposed for the same location in 2000, but that was five owners ago. The changes in ownership and stalled development plans mirror the ups and downs of the real estate economy and demand for multifamily housing.
In 2000, developer Grady Pridgen planned to build a mix of lofts and traditional units in two buildings designed to look like multigabled houses. His entity, Oak Street Development, bought the land for $380,000 in 1998. But at the end of 2000, a California teachers fund bought the property for $1.3 million. Three years later the retirement fund sold it to a Minnesota investment group for $1.6 million.
In 2005, Pridgen bought the land again for $3.5 million. He pursued development of the apartments with the city but never broke ground. Wells Fargo foreclosed on Pridgen's land and took title of it in 2010. Pridgen could not be reached this week for comment.
But now the time seems right again for multifamily development.
"We're seeing an increase in interest and answering questions from various developers. A number of different people are talking about a number of different multifamily projects," said Philip Lazzara, a zoning official with the city's development services offices.
"There isn't enough product out there for us to fill. When we get a listing we probably get 10 people or more who want to see it," said Shirley Rigo, a property manager for Coldwell Banker, who specializes in renting condos and single-family homes. "Everybody wants to be downtown."
There are many reasons. Business executives are taking jobs here but leaving their families elsewhere to finish school and sell the house. Others want to rent before deciding where to buy. People who moved in with parents during the recession are back on their feet and renting again. And others who lost homes to foreclosure now must rent.
Also, during the real estate boom, apartments were converted to condos, and mobile home parks were razed so land could be sold for condo development. With the economic downturn many of those projects never happened. That also feeds the demand for rental units, according to Mike Meidel, director of Pinellas County economic development. Although population growth is close to flat, many of those coming in want to rent apartments as they familiarize themselves with the area and make sure their job is stable, he added.
"So there is a lot of demand for rental housing and you can see that in the (low) vacancy rates in existing properties and the banks see that and they will loan money for multifamily projects," Meidel said.
A Cleveland-based developer is planning a 300-unit upscale apartment complex in downtown St. Petersburg between Fourth and Fifth streets and Third and Fourth avenues S on what is now a Tampa Bay Times parking lot. The company plans one- to three-bedroom units ranging from 600 square feet to 1,200 square feet. Monthly rents would range from $800 to $1,800.
Then there is the site plan on file with the city for a seven-story mixed-use development on Third Street S next to the downtown Publix that calls for 296 units.
The Miami owners of the Tropicana building in downtown St. Petersburg are making plans to tear down the 41,000-square-foot structure at 25 Second St. N to make way for a new residential and hotel complex. The developer, Tropicana Redevelopment, hasn't specified how many residential units it will build but said the project will be "very large."
Katherine Snow Smith can be reached at (727) 893-8785 or [email protected]