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St. Petersburg entertains offer for prime downtown real estate

One developer proposed replacing the Municipal Services Center on Central Avenue with a major new development and building a replacement government building nearby.
St. Petersburg has put the Municipal Services Center, center, up for sale. The building, on Central Avenue between Third and Fourth streets, is catty-corner to a development planned for the grassy lot in the foreground that could include west Florida's tallest condo tower. [JOSH SOLOMON  |  Times]
St. Petersburg has put the Municipal Services Center, center, up for sale. The building, on Central Avenue between Third and Fourth streets, is catty-corner to a development planned for the grassy lot in the foreground that could include west Florida's tallest condo tower. [JOSH SOLOMON | Times]

ST. PETERSBURG — The city has owned prime downtown real estate on Central Avenue since the sleepy days of St. Petersburg, before there were high-rises, restaurants and a thriving nightlife scene.

Now, with downtown bustling and only getting bigger, city officials want to let that land go. They are looking to sell the Municipal Services Center, the fading orange building and attached parking garage on Central Avenue between Third and Fourth streets that houses city offices.

The decision to put that land up for sale came after the city received an unsolicited bid from a developer. Property Management Group, a developer with offices in New York and Miami, proposed buying the building from the city and constructing a new municipal center several blocks away that also includes apartments, office space and parking. On Central, Property Management Group would also build a mixed-use project that could include condominiums, apartments, office space, upscale retail, a hotel and parking.

It would be the second major development in that part of town. A $300 million mixed-use project on the 400 block of Central just cleared a city hurdle. That project, across from the Municipal Services Building, is being developed by New York-based Red Apple Group and could yield the tallest condo tower on Florida’s west coast at 45 stories, plus a 20-story hotel and an 842-space parking garage.

In order to consider the concept, city officials must give others a chance to submit their own ideas. Alternative proposals are due by Jan. 31.

Redeveloping the municipal building has been a goal of Mayor Rick Kriseman’s since shortly after he was reelected in 2017. Without any ground floor restaurant or retail space, the municipal building disrupts Central between the Jannus block to the east and the 400 block to the west.

The specifics of Property Management’s proposal are that the company would buy the 0.8-acre Municipal Services Center property for $12 million in cash. The city would contribute land, about 1.38 acres, on the north side of Second Avenue N between Fourth and Fifth streets, worth about $10 million, according to Property Management. That’s where the company would build the new government building, plus 100,000 square feet of office, 500 parking spots and 220 residential units, of which 33 would be at the workforce level, or housing for those who make up to 120 percent of the area’s median income.

The site of the new municipal building is across from City Hall and among other county government buildings.

Property Management estimates it will take $35 million to complete that project. The city would pay annual rent of $1.75 million for the office space, and would have the option to buy the building back after five years, per the proposal.

On the Central Avenue site, Property Management would build a “world class" 1.5 million square-foot building, that could include 100,000 square feet of office space, 100,000 square feet of retail, a hotel with at least 200 rooms, 500 residential units and 1,000 parking spots.

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