Feds to St. Petersburg: Give back our $2.2 million

ST. PETERSBURG — A slumping, bent sign once stood beside an empty lot on the corner of Seventh Avenue S and 22nd Street bearing this hopeful promise: “City Jobs Initiative - Coming mid-2018.”

But the city has yet to fulfill that promise, and the 13 acres known as Commerce Park remains barren. Now the federal government says it wants its $2.2 million back.

The Department of Housing and Urban Development gave that money to the city 12 years ago to buy land on which St. Petersburg officials promised to create permanent industrial jobs. The federal government has granted the city numerous extensions, yet the land remains undeveloped and those jobs were never created.

Federal officials say they’re done waiting. Last month, they denied the city’s latest request for an extension.

“HUD has patiently provided numerous extensions," housing department spokesperson Jereon Brown said in an email to the Tampa Bay Times. “In fact, we’ve provided extensions to the extensions. Despite the extensions, and over one decade, the city did not use the funding to provide a significant public benefit through the creation of jobs.

"At some point every project has to leave the planning board and hit the dirt.”

City officials said they’re frustrated, too. The goal was to build industrial businesses on Commerce Park’s 13 acres that would put people to work. But now the project is in limbo while the City Council ponders its next move.

St. Petersburg Development Administrator Alan DeLisle blamed the developers for the delay, saying they were never able to obtain financing for the project.

“There’s always risk in development projects," he said. "There’s always risk that it’s not going to get to the goal line. In the end it comes down to the entity you’re doing the arrangement with being able to finance the project.”

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The timing of the project was unfortunate from the start.

It came together right before the Great Recession hit. The initiative was conceived in 2007 under Mayor Rick Baker to redevelop the blight along 22nd Street S, near where Interstate 275 slices toward Tropicana Field. The federal government gave the city the funds to start buying land across the street from a Pinellas County job training center.

So the city started assembling land to attract businesses that would hire those workers. The plan made sense to Baker.

“At the end of the day we’d have a great job training program," he said. “And then land upon which we would have jobs.”

The city was still buying the properties when Baker left office in early 2010. The project then fell to Mayor Bill Foster’s administration, but he said the city soon found itself in the throes of a tanking economy, thwarting attempts to develop the land.

Mayor Rick Kriseman took over in 2014, and his administration soon found takers for the land. In May 2015 his office solicited plans for the parcel and chose a local development group that included a marine supply company and a motorcycle dealer. Those businesses promised to build warehouses on the property.

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There have been nothing but delays ever since. The development group couldn’t secure the financing it needed to build, DeLisle said, and the city had to file eviction paperwork to remove the motorcycle dealer from the development agreement after its owners stopped communicating with the city.

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The federal grant was issued to St. Petersburg in 2007 with certain requirements. The city had to promise to create jobs for low and moderate-income individuals, some of whom had to live within the South St. Petersburg Community Redevelopment Area. Later, the city also promised to build workforce housing on the property.

In hindsight, Foster said the parcel wasn’t the right fit for industrial businesses. He also said that sector isn’t “the golden cow" it once was.

“It’s just not attractive for industrial uses," he said. "We’ve had 12 years of persistence with three different administrations, and pretty much free land, and nobody wants to take it.”

The city is expected to pay back the federal funds using its budget surplus. But city officials argue that there is no net loss because they can ask the federal government to apply those funds to another project.

And by repaying those funds, the city said it is no longer obligated to adhere to the original parameters for creating jobs. Mayoral spokesperson Ben Kirby said the city is committed to fulfilling those promises anyway.

In the meantime, the city is still trying to build on Commerce Park. City officials are still negotiating with the marine supply company, which DeLisle said has secured additional financing.

“There’s been urgency all along to get this done so that we cold create jobs for that community,” DeLisle said, “and that urgency is not going to go away.”