Thursday, December 14, 2017
News Roundup

Tropicana Field: The next big urban mixed use development?

ST. PETERSBURG — Thirty years ago, St. Petersburg took a leap of civic faith when it leveled a low-income neighborhood to attract a baseball team.

Now Tropicana Field's 85 asphalt acres offer another chance for neighborhood rehabilitation — this time without baseball.

More and more Americans want to live in dense urban areas. It's a shift as profound as the exodus to suburbia that followed the Great Depression, real estate experts say. Almost any large urban tract holds potential for mid-rise offices, dollops of green space and hundreds of residences stacked above shops and parking garages.

"Go to Atlanta, Charlotte or any other city of size and this is where it is all happening,'' said Larry Richey, managing director of Tampa real estate consultants Cushman & Wakefield.

Tropicana Field's proximity to a vibrant waterfront makes it a natural fit for urban density, he said.

"It's not very common to be able to put together that large a site for a master planned project anywhere in a desirable area like Florida,'' Richey said. "It's a special place.''

The Tampa Bay Rays, wanting a new stadium elsewhere, have begun to tout the Trop's redevelopment potential as more valuable to the city than baseball.

The city "is sitting on an enormous piece of land in a rapidly growing downtown that is, frankly, lying fallow,'' Rays vice president Michael Kalt recently told the Pinellas County Commission.

The remaining debt on the stadium "pales in comparison to what can come from property and sales tax generation if you put that land to use," he said.

When the team pitched a waterfront stadium in downtown St. Petersburg in 2008, a developer bid $65 million to buy the Trop property and load it up with $1.2 billion of mixed use construction. Property taxes and fees for the city were estimated at $7.5 million a year, with a like amount for county government and schools.

Of course, those numbers were stoked by pre-recession euphoria. But the momentum of dense urban development remains.

In his book Great Reset, Toronto University professor Richard Florida says the recession accelerated an irreversible cultural shift.

The "creative class'' — scientists, engineers, lawyers, educators, financial analysts, artists and entrepreneurs — wants to live in diverse, amenity-rich neighborhoods.

This Starbucks generation is often single, or unmarried couples, or young marrieds who "have been dealing with the effects of economic contraction,'' Florida wrote last month for the Urban Land Institute. "Urban living provides them with thicker job and dating markets, opportunities to share rent with roommates, and plenty of things to do in their off hours, from bar hopping to graduate school.''

In the latest census data, city cores grew faster than surrounding suburbs in 27 of the nation's 51 largest metropolitan areas, including the Tampa Bay area, Florida noted. A decade earlier, only four metro cores grew faster.

Baby boomers also add to the mix, said Mark Toro, who runs Atlantic Station, a dense, mixed-use development in Atlanta. Many retirees or near retirees want to shed mortgages and lawns for smaller spaces, Saturday markets and concerts in the park.

"The Echo Boom and their parents are both seeking the same thing. It's a barbell effect,'' Toro said. "The parents have the disposable income, the young people have no burdens in their life.''

Transformation

Thirteen years ago, it was a defunct steel mill sitting on contaminated soil near Midtown Atlanta. The acreage was half again as big as the Trop's, but the surroundings were similar. A low income neighborhood flanked one side, an interstate highway the other.

Now about 5,000 people live in Atlantic Station; another 5,000 work there. Visitors flock to home-grown restaurants, shops and street fairs.

Creating a neighborhood from scratch did not come easy.

The first residents arrived in 2003, the first shops in 2005. But when the economy tanked, condos and office buildings slipped into foreclosure. The original financier — AIG — was in no shape to help. A few struggling restaurants converted to nightclubs, attracting late-night riffraff. Residents complained of crime. Shoppers lamented the dark, confusing parking garages.

North American Properties took over in late 2009 as turnaround specialists.

They closed the nightclubs, beefed up security, lit up the parking garages and imposed behavior standards on visitors.

They used Facebook and Twitter to find out what types of shopping and dining would attract Atlantans. The response? Fewer chain outlets. Leave those to the malls. More local brands unique to Atlanta — more like a walking neighborhood.

North American also emphasized "experiential retail.'' Whole Foods gives cooking classes. Clothier Athleta holds yoga classes. Meehan's Public House sponsors a St. Patrick's Day street party.

The developer helps boost urban bustle with frequent events in common areas: Improv in the Park, a professional tennis tournament, Cirque du Soleil and last week's "Beer, Bourbon and BBQ'' tasting — much like St. Petersburg uses its waterfront park system as a civic stage.

How is it working?

About 1.4 million square feet of Class A office space — similar to downtown St. Petersburg's inventory — holds regional headquarters for BB&T and Wells Fargo banks but is only 75 percent full, said Toro, who is North American's managing partner.

That's tepid compared to Tampa Bay's 85 percent office occupancy rate. But other enterprises are faring better.

Retail space, including IKEA, Target, Publix and H&M, is 90 percent full, as are nearly 3,000 residential units — with apartments and condominiums ranging from five to 47 stories.

Holiday sales last year ran 18 percent above 2011, Toro said, compared with the national average gain of 4 percent.

"Reurbanization is here to stay,'' he said. "Young people are prepared to pay enormous rents in order to have a walkable community outside their door."

Toro is unfamiliar with the Tampa Bay area but said the Trop's size and location looks promising on Google maps.

"Ninety acres in the middle of a thriving metropolis and intersection of three interstate (branches) is exactly the situation where the market is driving us.''

'We need to think big'

Michael Harrison does know the Tampa Bay market and preaches caution. He is a senior vice president at Houston-based Hines. Their proposal to redevelop the Trop site in 2008 lost to the Archstone-Madison bid. Hines also just broke ground on Azure, a 308-unit luxury apartment complex in Carillon.

"There is clearly movement back into urban areas and not in just the big cities,'' Harrison said. "You are seeing it in Nashville and Raleigh-Durham.''

But Harrison questions whether downtown St. Petersburg can generate enough jobs to support so much new housing.

The Gateway area of St. Petersburg and downtown Tampa have twice as much office inventory as downtown St. Petersburg. West Shore has four times as much. Yet several major apartment complexes already are planned near downtown St. Petersburg.

"They are all going to need to be absorbed,'' Harrison said. "At some point, not everyone is going to want to live downtown if they work in Carillon or West Shore.''

Bank financing also has shriveled, he said.

"Everybody is more cautious now,'' he said. "In housing, you have to show demand. In office construction, there is going to have to be pre-leasing. If (downtown St. Petersburg) were booming, people like Hines would be down there buying sites right now, and we are not.''

Another issue is public transit. Today's young professionals often take a dim view of car ownership, Toro said. The Atlantic Station shuttle to a nearby MARTA station is the nation's busiest.

The Trop could connect easily to downtown and even the beaches with an expanded trolley system, but getting to Carillon, West Shore or the airport might prove difficult.

"It doesn't have to be a train,'' Toro said. "It could be high-speed buses, but you need it."

Pinellas real estate broker Paula Claire Smith said Central Avenue is already changing.

She cited Fusion 1560, a high-end apartment stacked on a parking garage that opened two years ago next to the stadium. Its ground-level retail spaces remain empty, but that's about to change, she said.

"A lot of people are circulating, looking for parcels in that area,'' Smith said. "It's hard to say today what is going to be happening five or eight years from now,'' when the Rays could theoretically be ready to move.

Take Miami, she said. Developers are back to building high-rise condos along tony Brickell Avenue, just south of town.

"Look at the absorption they had after all that glut in 2007,'' Smith said. "People said, "Oh my gosh, they will never build condos again.' ''

Former Sembler Co. CEO Craig Sher said St. Petersburg should convene a group of civic and business leaders to plot out Trop development.

"We need to think big,'' Sher said. "You could literally reshape the city.''

His vision? Focus first on jobs because residential and retail components will follow. Go after a corporate headquarters — or two, Sher said, creating a little "Carillon South'' with parking garages instead of surface lots.

A buyout settlement from the Rays could help underwrite streets and utilities, he said. The city could offer free land for the right corporations.

"With the weather, the waterfront and free land, we could compete with anybody.''

Sher also would invite St. Petersburg's academic, scientific and medical community to consider the Trop for expansion and for recruiting like-minded employers from outside the city. A small convention center, for gatherings of 1,000 to 2,000 people, could thrive, he said.

Build out might take 10 or 15 years, but "we could create 10,000 jobs, with tall buildings, internal transportation tied to public transport, linked to the south side, so it's not a fortress walling off black St. Petersburg,'' he said. "It's exciting. I can't sleep at night for thinking about it.''

The Rays will probably move to Tampa at some point, Sher said.

"Let's not cry over that. Let's mourn for five seconds and figure out how to move forward."

Reach the reporter at [email protected] or (727) 893-8442.

Editor's note: Stephen Nohlgren and his wife own a small office building two blocks from Tropicana Field. It could rise in value if the Tropicana Field acreage were developed.

 
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