Friday, June 22, 2018
Business

New York developer Red Apple Group pays $2.6 million for downtown St. Petersburg arcade

ST. PETERSBURG — The New York firm under contract to buy and redevelop a prime downtown block has purchased an historic building directly across the street.

Red Apple Group paid $2.625 million this month for the Florida Arcade, a 1920 structure at 449 Central Ave. that now houses the popular Il Ritorno restaurant, the Kalamazoo Olive Co. and several other shops and offices.

The company, headed by billionaire John Catsimatidis, did not return calls for comment Tuesday morning so it is unknown what it plans for the arcade or whether the current tenants will remain. But at least part of the 15,000-square-foot building presumably could house sales and construction offices for Red Apple's project on the 400 block of Central across the street.

The company is due to close soon on the two-acre block and build what Catsimatidis has described as a mixed-use complex with a hotel, office and retail space and at least one, 41-story tower with residences.

James Ryan, owner of the Kalamazoo Olive Co., said he had heard that Red Apple, which is acquiring other properties in Florida, might use the arcade as its state headquarters. When Kalamazoo opened in mid-2010, there was nothing else on that stretch of Central except a chocolate shop and a rug company that was going out of business, Ryan noted.

"We were certainly part of the downtown renaissance,'' he said, "and that's why we're a bit concerned about whatever potential (rent) increases there will be that could price us out of that block after we helped it come back.''

Ryan said he and other tenants were given relatively short-term leases because of the age of the previous owner, a woman now in her 90s.

The $2.625 million that Red Apple paid Feb. 1 for a single, relatively small building shows the rapid escalation of prices in thriving downtown St. Petersburg. In 2014, a South Florida developer paid $17.25 million for an entire block closer to the waterfront where it is now building a 41-story condo tower, ONE St. Petersburg, and a Hyatt hotel.

Aside from the Florida Arcade, a two-story pink survivor of St. Petersburg's first real estate boom, the block across from Red Apple's project contains several other historic structures. Among them are the Kress Building, the Snell Arcade and the nation's first open-air post office.

Property on the north side of that block is owned by the U.S. Postal Service and Christ United Methodist Church.

Most of downtown St. Petersburg between Central and Fifth Avenues N is part of a local landmark district where preservation of historic buildings is encouraged but not mandatory. A previous owner of the 400 block of Central recently tore down the 1920s-era Pheil buildings there to make way for Red Apple's project.

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

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