Tuesday, November 21, 2017
Business

Tampa looks to sell city block to New Orleans developer HRI Properties for $7.5 million

RECOMMENDED READING


TAMPA — New Orleans-based HRI Properties emerged Thursday as the winning bidder for a city-owned block in the heart of downtown that has sat vacant for nearly 20 years.

HRI offered to pay $7.5 million for 1 acre next to City Hall at the corner of E Kennedy Boulevard and N Florida Avenue.

The company plans a 21-story tower with a 223-room Hyatt Centric Hotel, 225 apartments, 7,000 square feet of retail and a 408-car garage. There will be a restaurant, though developers haven't determined which one, as well as a street-corner Starbucks.

"We've been targeting a project in downtown Tampa for many years," said HRI president and CEO Thomas Leonhard Jr.

The company has done $2 billion worth of mixed-used projects nationwide, but this would be its first development project in Florida.

Five years ago, it submitted a proposal to redevelop the old federal courthouse on N Florida Avenue. It likes Tampa for its good record on job creation and its impressive numbers on hotel revenue per available room.

When the city put out its request for proposals in July, Leonhard said HRI liked the idea of being in the center of downtown across from City Hall and that an entire city block was available.

"We just thought it would be a great opportunity to make a significant investment in downtown Tampa," he said.

HRI expects to start building the $120.8 million tower in the third quarter of 2017. Construction will create 527 jobs. Once the building opens in May 2019, its lobby oriented toward City Hall and nearby office towers, it will have a staff of 174.

HRI, Leonhard said, is one the few companies around that operates hotels and apartments in one operation. In Tampa, both renters and hotel guests will be able to use the rooftop pool over the parking garage, order room service or dry cleaning and charge food and beverages to their rooms or rental accounts. Apartment rents are projected to be $1,900 a month for one bedroom, $2,900 a month for two bedrooms and $3,700 a month for 11 top-floor penthouse apartments.

The city put out a request for proposals in July and received responses about three weeks ago from HRI and two other bidders:

• Mill Creek Residential of Orlando, which offered the city $5 million for its land.

• A partnership of several companies with high-profile projects in Tampa: Development Services Group, based in Memphis, plus the Framework Group and Forge Capital Partners, both of Tampa, and the Beck Group, which has an office in Tampa. The group valued the land at $5.5 million, but deducted $3 million to cover the cost of building public parking and offered the city $2.5 million cash.

"The city received very attractive proposals from three very qualified teams," Buckhorn said in announcing the decision. "After careful analysis, HRI's proposal offered exactly what the city of Tampa was looking for. HRI offered not only a vision that would add to Tampa's burgeoning downtown but also offered an attractive purchase price, density and innovative design.

"We look forward to this new project joining the rapidly growing Tampa skyline," he said. For six years, he said, the focus of the city's work has been "a livable, walkable and pedestrian-oriented downtown."

A fourth proposal, a $5 million offer from the owner of the office building at 501 E Kennedy, came in after the city's deadline and was not considered.

Originally, the city asked for any project to include about 200 spaces in its garage for use by the city.

After all the developers said that would create a hardship, the city agreed to accept fewer spaces, said Bob McDonaugh, Tampa's top development official.

HRI is offering to give the city exclusive use of 127 spaces — more than the 90 spaces now on the site.

City Hall bought the land, previously the site of the Cold Storage Cafe, for $1.3 million in 1997. The Hillsborough County Property Appraiser estimates its market value at about $2.7 million, but "it's not throwing off any property tax revenue right now," Buckhorn said in an interview Wednesday.

Once built, the 258-foot-tall tower is expected to generate about $300,000 a year in property taxes to the city, McDonaugh said.

Tampa officials based their decision on the return to the city, the density of the project and the project design, McDonaugh said. Density was important, he said, because more development on site means a higher-value project and more tax revenue to the city.

Now the city must develop a purchase contract and development agreement that will go to the City Council for approval. That process will include getting an appraisal of the site.

"I am confident that this number will prove out," McDonaugh said of HRI's offer.

Meanwhile, Buckhorn said he has no interest in selling the land to anyone who would sit on it.

"I want to see dirt moving on that site," Buckhorn said. "That's why we put it out to the marketplace. I want to see that site developed while the real estate market is booming."

Nor, Buckhorn said, should the buyer think about a quick resale.

That's something Framework and another company did in Ybor City. In June 2015, they paid the city $660,000, its appraised price, for about 1½ acres of city land, plus another $970,000 to the Catholic Diocese of St. Petersburg for a neighboring parcel.

Less than a week later, they sold both parcels, totalling about 3 acres, plus their plans, part of a street that had been vacated and the development approvals they had received for an apartment project, to a South Florida developer for $4.25 million.

"Not interested," Buckhorn said when asked whether he would be open to a buyer with a similar plan for the block next to City Hall. "Once we start the negotiations with them, which is where the nitty-gritty will be determined, I will make sure that my preferences are known."

Along with Hyatt, HRI's project team includes Baker Barrios Architects, general contractor DPR Construction, Capital One and Tampa real estate broker Jeannette Jason of Cushman & Wakefield.

HRI wants to move quickly on this project, Leonhard said, and hopes it won't be the company's last in Tampa.

"We really don't buy land and turn around and sell it," he said. "We really only buy land to develop it and ... when we go into a market like Tampa, we want to do multiple projects."

Comments
A new threat this shopping season: toys that can spy on kids

A new threat this shopping season: toys that can spy on kids

ST. PETERSBURG — Not all sinister toys are as obvious as a Chucky doll. Many present more subtle threats — choking hazards, high lead content, privacy concerns. And as the biggest shopping season of the year kicks off, consumer advocates are urging s...
Updated: 1 hour ago
Copa Airlines to fly daily nonstop from Tampa to Panama next summer

Copa Airlines to fly daily nonstop from Tampa to Panama next summer

TAMPA — Panama’s Copa Airlines, which four years ago became the first airline to offer service between Panama and Tampa Bay, said it is increasing its nonstop service between Tampa International Airport and Panama City to daily flights starting in Ju...
Updated: 2 hours ago
Irma did not stop tourists from setting record visits to Florida so far in 2017

Irma did not stop tourists from setting record visits to Florida so far in 2017

Despite Hurricane Irma, Florida hit another record high number in tourists visiting the state in the first nine months of this year, according to figures released this week.Visit Florida, the state’s tourism bureau, said 88.2 million visitors came to...
Updated: 3 hours ago
FCC chairman unveils proposal to repeal net neutrality

FCC chairman unveils proposal to repeal net neutrality

WASHINGTON — Federal Communications Commission Chairman Ajit Pai on Tuesday followed through on his pledge to repeal 2015 regulations designed to ensure that internet service providers treat all online content and apps equally, setting up a showdown ...
Updated: 4 hours ago
Crime Stoppers, Straz Foundation still working out Seminole Heights reward money

Crime Stoppers, Straz Foundation still working out Seminole Heights reward money

TAMPA — You can collect $110,000 in reward money for information leading to an arrest in the Seminole Heights killings, but for now you’ll have to make two stops.The David A. Straz Foundation announced Monday it would contribute $10,000 to a reward f...
Updated: 6 hours ago
Barricades reinforce security for holiday events on St. Petersburg’s downtown waterfront

Barricades reinforce security for holiday events on St. Petersburg’s downtown waterfront

Times Staff Writer ST. PETERSBURG — World and national tragedies are changing the city’s approach to security for special events at North Straub Park.With the approach of the holidays, concrete barricades have been erected at a section of the park’s ...
Updated: 11 hours ago
Ybor ’s first public school, long gone, still has a story to tell about district’s history

Ybor ’s first public school, long gone, still has a story to tell about district’s history

TAMPA — It’s been more than a century since Ybor City’s first public school was demolished on the plot of land now identified as 1311 E. Eighth Ave.For the past 22 years, the popular concert venue New World Brewery took up the space and one next door...
Published: 11/21/17
Hurricane Irma hurt some Tampa Bay home sales even in October

Hurricane Irma hurt some Tampa Bay home sales even in October

Pinellas County home sales took another hurricane-related hit in October as the rest of the Tampa Bay area bounced back from Hurricane Irma.But while prices in all four counties rose once again, the rate of increase continues to slow. Hillsborough’s...
Updated: 2 hours ago
Up for sale? Activist investor grabs stake in Tampa’s Bloomin’ Brands

Up for sale? Activist investor grabs stake in Tampa’s Bloomin’ Brands

TAMPA — If you tread water too long in the same spot, someone might start asking why you’re not trying to swim somewhere.Tampa’s Bloomin’ Brands — parent company of such prominent restaurant chains as Outback Steakhouse, Carrabba’s Italian Grill and ...
Updated: 5 hours ago
St. Petersburg council okays restaurant deal for Manhattan Casino

St. Petersburg council okays restaurant deal for Manhattan Casino

ST. PETERSBURG — The City Council on Monday approved a lease for the Manhattan Casino, a landmark building in the city’s historic African-American business and entertainment community.It was a controversial decision for some of the city’s black resid...
Updated: 6 hours ago