TAMPA — Publix and Walmart have already passed on building a new store at the Encore public housing project.
Now, a third effort to bring a grocery store to the downtown Tampa urban renewal project has stalled.
St. Petersburg firm J Square Developers recently backed out of a $2.2 million contract with the Tampa Housing Authority to build a midsize grocery store on a two-acre lot at the northwest corner of Nebraska Avenue and E Harrison Street.
The deal was expected to bring a retailer that caters to lower-income shoppers, such as Lidl or Aldi. But J Square exercised a provision that allowed it to back out without penalty after a 120-day inspection period.
"The tenant we hoped to attract to the site simply didn't believe there were enough households in the immediate vicinity yet to support their business model," said Jay Miller, J Square president, who did not name the retailer because of confidentiality commitments.
The decision is another setback for Encore, which was planned as a walkable community but has struggled to add stores and restaurants to its apartment block.
The project, which replaces Central Park, includes two senior apartment blocks and another for families. The first apartment block opened in December 2012.
It wasn't until January that people in Encore finally got a first restaurant when Michelle Faedo's Tampeno Cuisine opened for business. A grocery store is also seen as a priority for the more than 1,000 residents, many of whom are seniors without their own transportation.
"It's disappointing they didn't proceed," said Leroy Moore, the housing authority's chief operating officer. "But we still have the land. The land is not getting cheaper."
When complete, the community on the eastern edge of downtown near Ybor City will accommodate 2,030 residential units, 50,000 square feet of commercial retail space, 59,000 square feet of office space and a hotel.
Moore said there is still a lot of interest in the grocery store lot.
"We have never been in a hurry; we don't have any debt so we're patient," he said.
Still, finding another retailer may be a challenge.
To keep Encore walkable, the Housing Authority doesn't want a store that requires surface parking like a typical strip mall supermarket. That likely means the project will need to include a parking garage.
Parking led Walmart to back out in 2014 after Housing Authority officials balked at the retail giant's request to fill a neighboring lot with parking spaces.
Publix also looked at buying two Encore lots in 2013 but decided against it.
Instead, Publix opted to build a 37,600-square-foot store less than half a mile away at Twiggs Street and Meridian Avenue in Channelside. That store, which would be competition for any Encore grocer, is under construction. No opening date has been set.
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Another complication: To prevent the land from ending up in the hands of property speculators, the Housing Authority is requiring that the buyer design the store and break ground within one year.
"We're only looking for serious offers," Moore said.
The Housing Authority does have some grounds for optimism at Encore, Moore said.
An Ybor City site now touted by the Tampa Bay Rays as their choice for a new ballpark is just a third of a mile from the eastern edge of the Encore development. If a financial package for the ballpark is finalized, the surrounding land will become more highly prized by developers.
"If we're still having these challenges after that, then certainly I think we have a pricing problem," Moore said. "Structured parking is a big cost for a smaller grocery store."
Contact Christopher O'Donnell at email@example.com or (813) 226-3446. Follow @codonnell_Times.