DADE CITY — Pasco County is poised to help a Tampa developer bring 120,000 square feet of Class A office space to the State Road 54 corridor.
Later this month, Pasco County commissioners will consider a $2.9 million incentive for Colwell Avenue Properties, which is under contract to acquire nearly 22 acres from the LeDantec family at 17905 SR 54 in Lutz. The undeveloped site abuts the Ballantrae subdivision and sits between a Pasco County fire station on the east and a strip of retail stores to the west.
Colwell Avenue Properties, an affiliate of the Rizzetta & Co. property management firm, plans to build a pair of three-story office buildings that will each total 60,000 square feet. If approved, as expected, it will mark the third time since 2017 that the county has agreed to help finance Class A office space on speculation.
"We know it (Pasco) doesn’t have enough Class A office space. In a growing area that’s a great place to live, we think it will be an attractive site for companies to locate their offices,” Bill Rizzetta, head of the Colwell Avenue Properties commercial real estate development group, said via email.
This is the fourth office building to be developed by the company. Its portfolio includes Wesley Chapel Commons on Old Pasco Road in Wesley Chapel. That 15,000-square-foot office complex, built a dozen years ago, is fully occupied.
The company initially sought a nearly $5 million incentive package from the county for its $27.1 million capital project, Pasco’s economic growth manager David H. Engel told commissioners in a memorandum.
Under the proposed deal, the county will loan $1.5 million to the developer from its so-called PADS and PORS program, acronyms for Pasco Accelerated Development Sites and Pasco Occupant Ready Structures. Those are financed by the Penny for Pasco sales tax.
Additionally, the county plans to rebate $1.435 million in property taxes to Colwell Avenue Properties over a 10-year period. The county said the project should lead to 400 new jobs, both directly and indirectly, with an expected payroll of $17.7 million.
The project’s first building is expected to be completed in January 2021.
The incentive package was scheduled to be considered by commissioners at their Oct. 7 meeting, but was delayed until Oct. 22 so a budget amendment can be voted upon at the same time.
The financial assistance for Class A office space is becoming a familiar strategy for Pasco.
Last year, the county loaned $6 million to Land Investment Partners of Atlanta for Edison Suncoast, a pair of three-story, 75,000-square-foot buildings offering Class A office space. The first building is under construction and expected to be completed in the first quarter of 2020. The $37 million campus is near the southeast corner of SR 54 and the Suncoast Parkway in Lutz.
In early 2017, the county offered a $4 million loan to offset the projected $9.3 million cost of a 35,000-square-foot Class A office building at the Village at Mitchell Ranch project at SR 54 and Little Road. Construction of that building has not begun.
Additionally, in July 2017, the county committed to a similar $7 million, 10-year loan for up to 200,000 square feet of industrial flex space and office space from Harrod Properties in the Asturia development north of SR 54 and west of the Suncoast Parkway.
The county’s industrial recruiters have said the shortage of Class A space built on speculation hampers economic development efforts. The Building Owners and Managers Association International trade group defines Class A space as the “most prestigious buildings competing for premier users with rents above average for the area.”
All three county-backed spec office buildings are along the SR 54 corridor between Trinity and Lutz, but neither Rizzetta nor Bill Cronin, president and CEO of the Pasco Economic Development Council, said they feared over-saturation.
“The growth is coming this way, and really, the people who have the most money in these projects do plenty of market analysis before they build,'' said Cronin. ”If there wasn’t a market, they wouldn’t build.''
''We are seeing that there is a lot of pent-up demand, with no supply of Class A space. So we are confident that overcapacity will not be an issue,'' said Rizzetta.