Thursday, June 21, 2018
Business

Developers plan condo and townhouse projects for downtown St. Petersburg

ST. PETERSBURG — Developers of boutique condos and million-dollar townhouses are returning to downtown, promising a "rebirth of luxury" after years of housing misery but raising doubts over risk and demand.

One block north of BayWalk, a proposed 11-story condo project called Maranatha by the Bay recently returned to the market after seven years of recession delays.

And across the street from the Vinoy Renaissance Resort, agents last week listed four Renaissance City Homes, modeled after Manhattan brownstones and selling for $2.4 million each.

Though nothing has been built, the listings open the door to potential buyers and show how some developers are gambling big on recovery at last.

Though the recession detonated plenty of similar projects, agents sound upbeat about their prospects. At Maranatha, Keller Williams Realty broker partner Lonnie Orns said he will receive over the next week about half a dozen deposits at $10,000 a piece.

Maranatha traces its roots back to the boom days of 2005, when Frank Menna, an apartment-building flipper in Old Northeast, planned a tower of 19 luxury condos crowned with a $1.5 million penthouse.

Menna razed old buildings, presold five condos and prevailed over neighbors who complained it was too "South Beach." But when the market nosedived, Menna mothballed the project, leaving the corner of First Street and Fourth Avenue N unturned.

Seven years later, Menna is reviving the project, offering 16 condos, a two-story penthouse and a pool, fitness center and rooftop deck facing toward Tampa Bay.

Prices dropped nearly 30 percent since their 2005 listing but are still in the high end, with condos running from $475,000 to $725,000 and the penthouse at $1.5 million.

"If you wanted to buy a nice unit in a new-construction building, there is nothing available," Menna said. "A million people want something downtown and it's not there. The market demanded it."

Maranatha's condos are a steal compared with the opulence of Renaissance, the four-story townhouses planned for Fifth Avenue N and Beach Drive and facing toward North Straub Park.

Each of the 6,000-square-foot homes would offer four bedrooms, five bathrooms and a three-car garage, as well as a wine vault, library, rooftop terrace and personal elevator.

Fronted with brick and trimmed with stone, the brownstone-style townhomes would, as Smith and Associates agent Marian Yon Maguire said, "tie in downtown living with a Northeast feel."

After a week on the market, the project has fielded two dozen calls of interest, Yon Maguire said. She expects to sell one of the homes within the next six months.

Developers nationwide are increasingly kicking into action, with new home construction last month rising to its highest level in four years, Commerce Department data shows.

And with Florida's for-sale supply of condos and townhouses dropping 40 percent over the last year, Florida Realtors data from August shows, some developers are betting they can carve out a lucrative niche to meet demand.

Much of the development muscle is going toward sprawling subdivisions and apartment towers, like a 35-story skyscraper proposed for the downtown Tampa riverfront.

But condos are seeing new life, even outside the urban core. Developers from West Palm Beach recently resurrected the Waterclub on Snell Isle, a $30 million campus of condos and townhomes starting around $400,000.

To tie in buyers to Maranatha and Renaissance, though, developers will need more than a sales pitch and a hope that the market is turning. Condo construction remains a risky business, even before breaking ground.

Joel Cantor, who developed downtown condo tower Signature Place, said the costs of construction like concrete and steel are high, trimming the potential for profit. And lenders are still hesitant to offer enough funding for massive projects for fear of a backfiring default.

"The return is undersized and the risk is oversized," Cantor said. "You'd have to be out of your mind to take that kind of risk without significant equity."

Renaissance will be self-financed to the tune of $7.5 million, according to Palm Harbor-based F&M Development, which has also built townhomes in South Tampa and commercial plazas across north Pinellas County.

But Maranatha will require lender financing, said Menna, who has also developed a retail and residential complex on John's Pass. He said he's confident he can find a bank that will want in on the deal.

Either project's success could change the landscape of downtown and persuade other developers to follow along with their own investments.

Some projects could already be waiting in the wings, including one rumored development that could prove taller than Maranatha, according to Keller Williams Realty agent Estelia Mesimer.

But whether buyers will show interest — in not just paying for a unit, but waiting months to move in — remains the million-dollar question. Some, like Cantor, are unconvinced.

"It's a nice concept, but they're a little ahead of themselves," Cantor said. "We're not there yet. Hopefully, pretty soon."

Times researcher Natalie Watson contributed to this report. Contact Drew Harwell at (727) 893-8252 or [email protected]

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