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Taxpayers have $7M invested in St. Petersburg's Midtown plaza

St. Petersburg Mayor Bill Foster spoke at the Sweetbay Supermarket in Tangerine Plaza on Monday. “Short of a reversal of fortune, it will go dark,” he said later in the week.

SCOTT KEELER | Times

St. Petersburg Mayor Bill Foster spoke at the Sweetbay Supermarket in Tangerine Plaza on Monday. “Short of a reversal of fortune, it will go dark,” he said later in the week.

ST. PETERSBURG — Residents should think of the Sweetbay Supermarket in Midtown as more than a grocery store.

The city invested more than $7 million in public money to bring the grocer to the economically depressed neighborhood.

Taxpayers paid $5.1 million to buy land and demolish old structures that occupied the corner of 22nd Street S and 18th Avenue S. To help Tangerine Plaza go from a drawing board to aisles of fruit and vegetables, residents spent $1.4 million to build out the inside of the store. Another $400,000 was spent to bury nearby power lines.

The plaza is one of many public investments in Midtown. Since 1999, more than $200 million in public and private money has been spent on 25 projects like schools, a library and a health center.

But market forces didn't attract a grocery store until 2005. At that time, then Mayor Rick Baker assembled land to make the location more attractive to private development. The city still owns the land under the 48,000-square-foot plaza.

Larry Newsome, head of Urban Development Solutions, leases the property for $5 a year. The agreement expires in June 2044, but can be extended to 2064 with two 10-year renewals.

Newsome said his lease with Sweetbay lasts 13 more years. The company has said it plans to honor its lease obligations. Neither party would release what the grocer pays in monthly rent.

Elected officials, church leaders and community leaders decry the store's impending closure, saying Tangerine Plaza is critical to Midtown's continued redevelopment. Sweetbay recently announced it was shuttering the store, along with 21 others in the Tampa Bay area, because of poor sales.

Newsome said he hopes Sweetbay will delay the closure for six months until another grocer can be lured to the plaza.

"Right now, we're in the battle to save a grocery store," Newsome said.

The closing date might raise some eyebrows.

Sweetbay and Newsome used federal New Markets Tax Credits to help launch the store.

The tax credits were created in 2000 to give lenders an incentive to make loans to projects that otherwise might not be able to get traditional financing.

The credits for the project expire Feb. 14 — a day after the store is slated to close.

If Sweetbay stayed open, Newsome could have raised the rent. He said he doesn't believe that is a factor for the closing.

Sweetbay officials said the same.

"The reason we're closing the store is simply because the store was underperforming," said spokeswoman Nicole LeBeau.

Sweetbay officials would not disclose sales figures for any location since Sweetbay is a publicly traded company.

During Thursday's council meeting, Mayor Bill Foster said he and Newsome would take a road trip to meet with Sweetbay officials in other states. But Foster isn't hopeful the decision will be reversed.

"If Sweetbay does become dark, it shouldn't be for long," he said. "Short of a reversal of fortune, it will go dark."

Council chairman Karl Nurse compared Tangerine Plaza to a large rock being tossed in water with the ripple triggering more development in Midtown.

Despite its importance, he said Midtown will survive if Sweetbay leaves.

"Midtown is not going to collapse as a result of this," Nurse said.

However, the momentum started in 2005 could come to an end, said council member Wengay Newton.

He fears the smaller businesses in and near Tangerine Plaza will lose sales and go under if a new grocer isn't found quickly.

"When Sweetbay goes dark, all the ancillary businesses will go with it," he said.

The city has leads with other grocery vendors to possibly fill the space. Suitors include Aldi, Save-A-Lot and Walmart.

Midtown residents need a quality grocer and not a discount retailer, said council member Leslie Curran.

"We're going to settle for trying to get a Save-A-Lot or something like that," Curran said. "If I were in that community, I'd be screaming. They deserve better than that."

Newsome also has a similar deal to lease part of the city-owned Manhattan Casino. He plans to open a franchise this year for Harlem-based Sylvia's Queen of Soul Food Restaurant.

Although on a much smaller scale, Tangerine Plaza is similar to Tampa's Channelside Bay Plaza.

The Tampa Port Authority owns the land underneath the plaza and has long-term agreements with private partners for the property. The port doesn't own the buildings just as St. Petersburg doesn't own any of the structures on Tangerine Plaza.

If the properties fail, taxpayers could be on the hook.

Mark Puente can be reached at mpuente@tampabay.com or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.

Taxpayers have $7M invested in St. Petersburg's Midtown plaza 01/26/13 [Last modified: Saturday, January 26, 2013 8:31pm]

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