Thursday, April 19, 2018
Business

Retail, real estate experts mixed on whether proposed Rays complex in Carillon is viable

ST. PETERSBURG — The Tampa Bay Rays are seeking permission to bat around ideas for a new ballpark, a hopeful sign for developers of a potential stadium in the Carillon Business Park.

But to really take off, the Rays Park at Carillon project will need support from an even bigger team: the office, retail and apartment leaders who would run the businesses beyond the field.

Commercial real estate brokers and lenders said the proposal pitched by developer Darryl LeClair has legs: centered among Tampa Bay's biggest cities, Carillon has a booming office sector and plenty of room to grow.

But some doubt that the striking project, which LeClair's firm CityScape estimated could cost up to $570 million, could attract enough business muscle to keep it from falling apart.

"There's a lot of skepticism that people would go there, a lot of skepticism that it would get funded, and a lot of skepticism that it would be successful," said Darron Kattan, a managing director at Tampa commercial real estate firm Franklin Street.

"The Rays do not have a track record of drawing in a big audience, and that's something lenders and developers will look for," Kattan added. "Real estate investors would be very cautious about putting their money out there, simply because it's unproven."

No major league stadium blends nonbaseball construction and the playing field to the same extent as this proposal, where 1.6 million square feet of attached buildings and retail space form a large part of the outer walls.

Site plans call for a halo of Mediterranean Revival-style offices, retail space and apartments surrounding the ballpark's outer plaza, with a "premier hotel" on the first-base line and a concert venue beyond center field.

CityScape has promoted Carillon's mid Pinellas location as key to its success, better able to entice Tampa fans than the Rays' downtown St. Petersburg home at Tropicana Field.

Though it's home to 3,000 residents, Carillon is known primarily as an office park and the headquarters of employer giants like Bright House Networks and Raymond James Financial.

Corporate bosses would get great use out of the park, said Mark Klein, CEO of commercial real estate firm Klein & Heuchan. Business leaders could whisk visiting clients to games, move workers into nearby apartments and boast of all the entertainment to prospective employees.

"If you don't have to have your workforce driving from suburbia, with the cost of gasoline, that's big," Klein said. "People like to live and play in the same place."

In the Gateway area, which includes Carillon, only 6 percent of the primo "Class A" office space is vacant, half the rate of downtown Tampa and a third the rate of West Shore, according to real estate data firm CoStar. That's a sign of healthy demand and, for developers, a potential opening to build anew.

"In all the markets I'm involved with, that's the busiest market I've got," Osprey Real Estate Services North Bay president Wendy Giffin said.

The project, brokers said, could also attract investors in apartments looking for land that could set their complexes apart.

Apartments proved a strong investment during the housing crash, and vacancies in Tampa Bay remain low as rental rates continue to climb.

Retail and residential "investment folks are pretty high on the idea that this could happen," said Lee Arnold, the CEO of commercial brokerage Colliers International Tampa Bay, who represents some Carillon tenants.

Landlords of apartments that could potentially look out over the field, he added, would also be more than happy to charge tenants a premium for their unique arrangement. "This won't be subsidized housing," he said.

But brokers said ballparks carry baggage that could persuade potential neighbors to steer clear.

The 35,000-seat stadium would be anchored by a ball game only 81 days a year, lending uncertainty to businesses' bottom lines. Splitting Carillon's 14,000 current parking spaces among office workers and baseball fans during afternoon games could prove a hassle. And nearby residents would have to contend during games with heavier traffic, spotlights and noise.

LeClair said Tuesday that Carillon's parking area would be expanded during development, and called the 81 games "the juice" that would sweeten the park's strong everyday demand.

The project's proposed retail space, LeClair said, would be targeted toward restaurants and bars that could offer dinner and drinks to the park's "captive audience."

But some brokers questioned whether restaurateurs or other retail leaders would take a chance far from the more established customer bases, and perhaps easier money, of Tampa and St. Petersburg's urban centers.

"The stadium could be gravy for certain kinds of uses, like marquee restaurants that think central Pinellas would be a great area to expand," said Tom McGeachy, a managing principal for Ciminelli Real Estate Services. But "I don't know that the stadium by itself is going to be a driver for a huge amount of retail … with such limited demand."

Whatever happens, the project will need strong corporate commitments before investors will open up funds, lenders said. Few financiers want the risk of a new startup in an untested market.

"Someone's got to do their marketing up front and find out who's going to be there," said Lee Weaver, a senior vice president of commercial real estate investment firm Northmarq Capital.

Massive multiuse complexes anchored by pro-sport stadiums like Los Angeles' L.A. Live and Cleveland's Gateway Sports and Entertainment Complex have shown the idea can work. But those developments took off in the established downtowns of big cities — a far cry from Carillon's mid-county hush.

Chris Eastman, the chief development officer for LeClair's development firm Echelon, said the stadium would help transform Carillon into a true urban core.

"It's not established as a fourth city yet," Eastman said, "but upon build-out, when we do what we plan on doing, that urban core will be established and the entertainment will be there."

If the ballpark idea crumbles, LeClair said the proposal would cut the stadium and transform into a mixed-use town center. Nearby businesses, like a Publix supermarket and the Courtside Grille, have already sounded their support.

But Tampa Bay's current mixed-use centers don't exactly have a good batting average, either. BayWalk, Centro Ybor and the Channelside Bay Plaza have all stumbled, brokers said, because they lacked the right scale and mix of tenants — a problem, they said, that could hurt this proposal, too.

"I'd be concerned that one project is being relied on to turn an area into a destination. I think that would honestly be a mistake," said Kattan, the managing director at Franklin Street. "Unless you work there, there's not much reason to go to Carillon."

The head of Kattan's firm, Andrew Wright, is part of a group led by Tampa Bay Lightning owner Jeff Vinik seeking to take over the Channelside complex, in an area also rumored to be a home for a new Rays stadium.

LeClair said "there isn't any comparison" between his proposal and the other mixed-use centers, pointing to the park's low vacancy rate as evidence that Carillon is ready to play.

"It's already gotten an established record," LeClair said. "It has already proved its success."

Contact Drew Harwell at (727) 893-8252 or [email protected]

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