The Department of Veterans Affairs already has invested more than $600,000 in the design of a $24-million building at the VA Medical Center at Bay Pines.
But the agency nonetheless is considering whether to make an offer on the old Florida Federal Tower in downtown St. Petersburg that was purchased as an office for an insurance company just last September.
Linda Stalvey, spokeswoman for the VA in Washington, D.C., said the agency is conducting a cost analysis to decide whether it would be more economical to abandon the plans for the Bay Pines building and instead try to buy the old Florida Federal Tower building at 360 Central Ave.
"Right now, we have directed a couple of questions toward the owners of that building," Stalvey said. "But we are in no way negotiating a sale yet."
The VA's interest in the building comes just three months before its newest owner, Bankers Insurance Group, was planning to move its operations there from offices near Fourth Street N and Gandy Boulevard.
But if the VA's price is right, Bankers certainly would be willing to sell, said Kris Delano, general counsel for the insurance company.
"Any of our physical assets are for sale at some price," Delano said. Without naming a price the company would take for the building, Delano said, "I can tell you, we'd be willing to sell it for a lot less than $24-million," referring to projected cost of the VA building at Bay Pines.
Delano said Bankers has no plans as to where it will go if it sells the Florida Federal Tower.
It would take a lot less than $24-million, in fact, for Bankers to make a tidy profit on the Florida Federal Tower. The company paid $5.4-million for the building last year.
Since then, Bankers has done some renovation work and leased some space in the building, but has yet to move more than a few people into it.
As a result, the 242,600-square-foot building is only about 25 percent occupied, mainly by a few law firms, said Mark Weaver, a Trammell Crow Co. agent who is managing the building for Bankers. If and when Bankers moves in, Weaver said, the building could be about 75 percent occupied.
Stalvey, the VA spokeswoman, said she does not know why the agency is considering only the Florida Federal Tower as an alternative to a new building at the Bay Pines complex for relocating VA operations now housed at the William C. Cramer Federal Building at 144 First Ave. S.
But Delano said he thinks it was on the directive of a top VA official who recently visited the city.
"From what I understand, it was either the (agency) secretary or deputy secretary who took an interest in that building and asked that a (feasibility) study begin," Delano said.
Marty Normile, executive vice president for the downtown redevelopment group St. Petersburg Progress, said he was encouraged by the news that the VA still is considering a location downtown instead of at Bay Pines _ especially if Bankers still plans to move downtown also.
"We want it all," Normile said. "We want Bankers _ that's going to be a terrific addition to the downtown _ and we want to keep the VA here too."