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  1. Real Estate

St. Petersburg needs - and wants - to offer more office space

The Morgan Stanley Tower at 150 2nd Ave NE in St. Petersburg. [EVE EDELHEIT | Times]
Published May 29, 2018

ST. PETERSBURG — Talk to any public official in the bay area, and you'll probably hear them repeat the latest catch phrase:

Live, work, play.

Yet as St. Petersburg grows and reshapes its identity as a cultural and entertainment destination, city leaders are concerned that this side of the bay is missing one critical aspect of that mantra.

"We joked the other day in a meeting that sometimes we feel like developers don't think we do work here," said the mayor's chief of staff, Kevin King.

"They think it's only the live and play," Mayor Rick Kriseman said. "But we do work here."

The problem is that not enough people work in downtown St. Petersburg. Community and business leaders hope to change that by adding more high-end office space.

• • •

St. Petersburg has just 3.4 million square feet of office space, the thinnest of the six submarkets in the region.

By comparison, the Westshore Business District, the workspace center of the bay area, has 14.4 million square feet.

St. Petersburg also lags behind the Interstate 75 corridor, downtown Tampa, north Pinellas County and even the nearby Gateway area, according to the most recent figures from Colliers International.

Comparisons for high-end locations are even more stark: St. Petersburg has just 1.7 million square feet of coveted Class A office space.

Class A is real estate parlance for the best working space on the market. It's well-located and professionally managed, attracting top tenants and the highest rents.

Class B are older properties that are just a step down. Class C are in less desirable areas that need work.

The Westshore Business District has 7.5 million square feet of Class A space. Even the I-75 corridor has more than twice as much Class A space as downtown St. Petersburg.

City leaders fear that if they don't find a way to add office space, and thus attract more companies, St. Petersburg could cement itself as a commuter suburb for Tampa.

Even worse, if another economic downturn hits, the city might not be able to sustain tax revenue if tourism and arts dollars start to dry up. Office space would provide a steadier source of revenue.

As usual in St. Petersburg, there is some resistance to adding another element to an increasingly crowded downtown.

"People want to see development, but they don't want to see it in their neighborhood," developer Larry Feldman said. "Some of those folks feel you can't have arts and culture in addition to big buildings."

It's different across the bay. Tampa, which saw significant investment in high-end office space in the 1990s, continues to grow as the area's leader in office space. Tampa Bay Lightning owner Jeff Vinik and Cascade Investment's $3 billion redevelopment project Water Street Tampa will only deepen that market.

"We're kind of polar opposites in some ways, Tampa and St. Pete," Kriseman said. "We have a very vibrant, residential downtown. Tampa has a very business downtown, without the residential component.

"The irony is that each of us is trying to get what the other has."

• • •

St. Petersburg hasn't built any new Class A space in almost 30 years.

Only one building downtown — 200 Central Ave., the 28-story tower formerly known as Pritatek Plaza now looking for a new name — qualifies as Class A, said Kevin Yeager, senior associate for office and retail services with Colliers International.

Without any new office construction on the horizon, developers are instead finding creative ways to renovate and modernize existing properties, hoping to entice companies, especially those out of state.

Feldman's company has remodeled multiple buildings downtown, including the City Center/Northern Trust building at 100 2nd Ave. S, the Morgan Stanley Tower at 150 Second Ave. N, and First Central Tower at 360 Central Ave.

Some of the changes might seem simple: renovated bathrooms, more windows, quicker elevators and amenities like a gym or coffee bar. But little changes can have a big effect on employees. They also allow developers to re-envision a space and imbue it with character.

"Use of light is really our major branding thing when we reinvent these office buildings," Feldman said. "But all of this collectively is how we differentiate."

Because of changes in how companies use space — think desk sharing and allowing employees to work at home a day or two a week — some employers need less space. But the space they do want must be open, modern and engaging.

Take what Steve Gianfilipo, founder of Gianco Companies and the multi-use downtown work space Station House, is doing with a nearly 100-year-old building at 689 Central Ave.

He is converting the Green-Richman Arcade into a co-work space. A 2,616-square-foot layout that formerly could accommodate six to seven people will soon be a work space for 15-20, Yeager said.

• • •

Ultimately, nothing except new construction will substantially change the calculus for St. Petersburg, Yeager said.

That's where the 86-acre elephant in the city comes in: Tropicana Field.

Regardless of whether the Tampa Bay Rays stay in St. Petersburg or move to Tampa, the Trop will come down.

City and county officials are salivating at the chance to redevelop the dome's prime urban footprint.

Many in the city — from developers to Kriseman to J.P. DuBuque, president of the city's Economic Development Corp. — point to the property as a potential salve for St. Petersburg's real estate challenges.

It represents a great opportunity, DuBuque said, and the decisions made regarding the site will shape the city for decades.

"Between what Jeff (Vinik) is doing in Channelside and what the opportunities are with the Trop site," DuBuque said, "we'll be on everybody's list."

Contact Caitlin Johnston at cjohnston@tampabay.com or (727) 893-8779. Follow @cljohnst.

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