Years could change what works in Trop site redevelopment

ST. PETERSBURG — The proposal to remake Tropicana Field into an anchor for downtown's west end relies on a steady course of construction over 10 years, with each brick building on the next.

Starting at 10th Street S and moving west to the interstate, the three-phase $1.2-billion project would bring retail, then residences, then office space.

The plan is conceptual. City Council members first must agree on Thursday to pick a developer, then city voters must agree in November to build a new stadium on the waterfront.

But experts in the development industry, and those familiar with St. Petersburg, caution that the plan — if it comes to fruition — is likely to change. In fact, the proposal submitted by Archstone, one of the nation's leading apartment builders, and its partner Madison Marquette, may only be a template for the 86-acre site.

Shifting dynamics are typical of such a large scale development built over several years, developers say. What may seem like a good fit for office space today may end up working better as an apartment high-rise by 2015 or 2020.

"You have more variables to get right," said Steve Mauldin, senior vice president with Crosland, a mixed-use developer in Charlotte, N.C. "Or not get right. The difficulty of a project like this is exponential.

"It's tricky from a financing standpoint. It's tricky from an operational standpoint. It's tricky from a construction standpoint."

Retail comes first

As part of their so-called EcoVerde proposal, Archstone and Madison would guarantee to build at least 700,000 feet of retail space in the project's first phase. The work could start in 2010 and be completed by 2013, the developers say.

On tap could be a Whole Foods grocery store and a Bass Pro Shops, along with an upscale movie and entertainment complex, and eventually a department store.

"There's a great vacuum, a great desire for retail," said Ken Miller, a senior vice president with Archstone, the company primarily responsible for the redevelopment. "We see the retail as a way to re-energize that part of the downtown.

"Following that, it's (like playing with) Lego blocks."

Retail, Miller says, creates a need for residential.

A local expert says the developer would have no difficulties filling 1,935 new apartments. The plan also calls for 755 condominiums.

For rental units, "it's a very attractive area," said Michael Slater, president of Triad Research and Consulting, which studies housing trends across the Tampa Bay area.

Of the units, at least 387 would be classified as workforce housing. The rest would be market rate.

And residential creates the need for office and hotel space, Miller says.

"They aren't making any 86-acre sites that are vacant," said Michael J. Bayard, a senior research fellow with the Urban Land Institute, . "This is not something you find in a downtown location."

Archstone's proposal would increase the amount of office space downtown by 60 percent, says Alan Feldshue of commercial Realtor Colliers Arnold.

Feldshue said new office space is not currently needed, but access to the interstate could create new demand.

Key will be the timing of the projects, Feldshue said. The majority of the office space planned at the Tropicana site would not open until 2020.

"Yes, right now we're having a little problem, but that isn't going to last forever," said Tom Pizurie with NAI Tampa Bay, a commercial real estate firm.

'A major player'

With Archstone, City Council members on Thursday will be asked to endorse one of the nation's leading apartment builders.

The company, which recently sold for a record $22-billion, controls more than 92,000 residential units nationwide, including high-rises in Washington, D.C., New York, Boston, Los Angeles, and San Francisco.

It is owned by Tishman Speyer, a leading office and residential developer, and Lehman Bros., a publicly traded investment banking firm that said it lost $2.8-billion between April and June.

Archstone officials said this week that Lehman Brothers' financial losses will not affect its development of the Tropicana site. This year alone, the company financed $2-billion in new construction, officials said. The Tropicana project requires $1.2-billion over 10 years.

For all of its residential success, however, Archstone's track record in urban, mixed use projects is less distinctive.

The company turned to mixed-use projects five to six years ago, Miller said, and currently is working on at least three major redevelopments.

A review of Archstone's portfolio suggests that the Tropicana project would be the company's largest, though Archstone is already redeveloping a Major League Baseball parking lot.

In Anaheim, Calif., Archstone is planning a 50-acre, $625-million redevelopment in the parking lots adjacent to Angel Stadium, home of the Los Angeles Angels of Anaheim.

Archstone also is teaming with two developers to redevelop eight acres in Chevy Chase, Md., with a Whole Foods, Bloomingdale's, 432 apartments, and 305,000 square feet of office space.

And the company is partnering with Hines — the other finalist for the Tropicana site — on an $800-million redevelopment of Washington, D.C.'s old convention center.

The company's relative inexperience in major mixed-use development should not pose a significant concern, said Gary Dreher, the managing principal with TOLD Development Company, a mixed-use developer in Minnesota.

"They're a major player. They have a very strong reputation," Dreher said. "That's probably the most critical thing to a project the size you're talking about — finding a group that has the wherewithal to do it."

Madison Marquette, the second half of the development team, is a smaller retail and residential developer that has invested $1.6-billion in 33 properties since 1992.

It's partnering on a $500-million urban redevelopment of Emeryville, Calif., called Bay Street, and is the redeveloper of a section of beach front in Asbury Park, N.J.

Council decision

City Council members on Thursday will be asked to approve formal negotiations between Archstone and city officials, with hopes that the two sides can reach a preliminary agreement on a development program by Aug. 1.

Any deal is contingent on the approval of the Tampa Bay Rays moving to a new waterfront stadium.

Overall, the Archstone proposal boasts lofty claims: 5,574 new permanent jobs with an average salary of $40,000 a year; $7.5-million a year in new city taxes; and $37.5-million a year in total tax revenues.

"Archstone seems quite capable," City Council Chairman Jamie Bennett said.

Years could change what works in Trop site redevelopment 06/17/08 [Last modified: Thursday, June 19, 2008 6:14pm]

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