The city drew another step closer to landing a jobs-rich mail-order pharmacy company with the federal government's announcement Thursday that it will stand with the city to back the project.
No checks were passed out, but federal urban redevelopment officials said their agency will allow the city to use federal funds to guarantee up to $6.25-million in loans to the project.
Overall, starting up the pharmaceutical distribution business will cost an estimated $15.9-million and would create a minimum of 372 jobs, most of them targeted to low- and moderate-income residents.
In addition to the $6.25-million loan, the project's backer, WHJoint Venture, LLC/Max-E, LLC, previously known as the Washington-Harris Group, also has qualified for a $2.1-million short-term federal loan, said Alex Sachs, spokesman for the U.S. Department of Housing and Urban Development.
Sachs also noted that the private backer now must come up with at least $720,000 of its own money to make the deal work.
"The city and the federal government have done everything they need to do right now to make this deal work," said Doug Tuthill, who helped negotiate the terms as a member of the interagency task force on St. Petersburg.
"The question right now is whether the Washington-Harris people can come up with their down payment. Everybody else has done their stuff," Tuthill said. "In fact, the city has bent over backwards to get this far."
Officials with Washington-Harris, based in Maryland, could not be reached Thursday evening for comment.
Last summer, members of the group signed a contract to purchase the old Belk department store site at 3100 First Ave. S for their distribution operation. They estimated the cost of purchasing the parcel, renovating the existing building and constructing a 30,000-square-foot addition at $7.25-million.
In addition to the possible creation of hundreds of new jobs near an area of the city where unemployment is highest, city officials have encouraged the project as a way to help a once-flourishing commercial hub rebound.
Washington-Harris officials have said they would rely on Department of Defense minority business contracts to supply mail-order pharmaceuticals to the federal agency for the start-up phase of their business.
In time, they hope, they could expand their business to serve other federal agencies, such as the Veterans Administration, and private health care providers, such as health maintenance organizations.
To help ensure their success in the early years, the group would tap into a defense department program that pairs new, minority-owned firms with established companies already operating in the same economic sector.
In Washington-Harris' case, for example, the company would rely on the guidance of Geneva Pharmaceuticals, the world's second-largest supplier of generic drugs.
The loan program the company would be able to tap into comes to the city from HUD's community development block grant program. Each year, virtually all cities can apply for a certain amount of the money, which is earmarked to finance creative city redevelopment projects that private lenders might deem too risky.
In Tampa, for example, HUD also announced Thursday it would guarantee a $9.07-million loan to support construction of the Centro Ybor retail and entertainment center, part of that city's ongoing effort to revive the Ybor City historic district.