The "demonstration project" designed to prove that affordable housing could be built downtown is no closer to reality than it was when it was announced eight months ago. St. Petersburg Progress, which was developing the project, has been unable to secure the project's target piece of land for an acceptable price. And Martin Normile, president of St. Petersburg Progress, says he's afraid that affordable land may not be available for his project.
Normile has been negotiating with Dr. Edgar Buren for the 14-unit Le Petit Vinoy apartment house at 266 Seventh Ave. NE. Normile has lined up 10 banks that would provide construction loans to build 10 two-story town houses on the site.
"For the market that we're looking at to build these for, there would probably have to be land costs of $7,000 to $10,000 a unit," Normile said Monday.
"Petit Vinoy is over $25,000 a unit. Other sites we're looking at are $15,000 (per unit). Our struggle is to find something at the appropriate price or structure the deal to bring the cost down to $7,000 to $10,000" a unit, Normile said.
Normile said he still is negotiating with Buren but holds out little hope of striking a deal. Buren agreed.
"I think the price they offered me was unacceptable. I had to pay
commissions to both bands of Realtors. By the time that was done, I would have to borrow money to pay taxes," Buren said.
Buren said he paid $268,500 for the apartment complex five years ago. Normile offered him $250,000, Buren said, which wasn't enough.
And Normile said even at $250,000, that comes out to $25,000 for each of the 10 units. Since he wants to sell the units for around $70,000 each, that doesn't leave enough money to build the kind of housing he wants.
But Normile hasn't been able to find anything else, so the project sits and waits. And Normile worries that affordable housing may be out of the question in downtown.
"The land costs make it very difficult," Normile said. "It's either income producing or it is already developed. If it is developed, it has some value that you have to either convert to our product or remove it.
"People are building projects of this nature in Pasco, Hernando, Citrus County for $7,000 to $10,000 (per unit for land)," Normile said.
Larger projects and projects aimed a more affluent market don't seem to have this problem. Interest is strong in a 41-unit complex planned for land adjacent to the Vinoy Park Hotel in which units would range from about $300,000 to about $900,000.