ST. PETERSBURG — What could be a $30 million renovation of the city’s downtown municipal pier cleared its first hurdle Thursday.
City Council voted to enter into an agreement with marina company Safe Harbor Development, which won a bid to rebuild the aging docks and run the marina.
The contract is just a pre-development agreement, which gives Safe Harbor 120 days to hammer out details, including drawing up design plans and coming to an exact estimate for the cost of the project. After that, the city and Safe Harbor can enter into a binding development and lease agreement, or either side can pull out of the project.
But this initial agreement lays the foundation for a relationship between the city and Safe Harbor Development by which Safe Harbor puts up the money for the renovations in exchange for the right to operate the marina for decades and collect most of the revenue.
Darby Campbell, president of Safe Harbor Development, pitched council members during a virtual City Council meeting on his vision for an open and accessible marina that complements the new St. Pete Pier and is inviting to the whole community, not just those with boats. Right now, he said, the marina is cordoned off by fence and largely out of reach for the vast majority of people who don’t rent a slip there.
“We like to create opportunities for leisure and hospitality," Campbell said. "What we try to do is create an environment that everyone can enjoy.”
It was that “vision," Mayor Rick Kriseman said during the meeting, that drew him to Safe Harbor over three other groups that vied for the bid to renovate the marina.
“What we heard from Darby and his team was that this is a community asset and it should be open to the whole community. And you’ve just built this magnificent new pier, so whatever we do needs to tie into the pier," Kriseman said.
The city is not selling the marina, but is considering leasing it to Safe Harbor initially for five years, which is the longest lease of waterfront property allowed by the city’s charter.
During that period, Safe Harbor would endeavor to complete the project, which would include replacing the docks, walkways, finger piers and utility systems. The company estimates a 30 to 36 month construction timeline once it secures all the necessary approvals and permits.
After the first years are up, the city could seek a referendum from voters that would allow Safe Harbor to lease the marina for any number of years. The company estimates it would need 20 years to recoup their initial investment and make a return. Alternatively, the city could lease the marina to Safe Harbor in five year chunks.
Safe Harbor’s proposal includes paying the city a base rent of $250,000 annually, plus 25 percent of revenue from everything except fuel and retail sales. The city will only see 2.5 percent of the revenue generated by those sales. Up to half of the city’s portion of the revenue would go back to Safe Harbor in what’s called a rent offset, which helps the company make up its initial investment.
The marina wouldn’t close during construction, but some boats might be shifted around to make way for the renovations. But rent will go up, Kriseman warned, in response to several council members who expressed concern about affordability and pricing out longtime slip renters.
“The truth of the matter is our rates have been below market for a very long time,” the mayor said. “There is no way that we would be able to hold our rates at where they’re at. We would have to raise rates ourselves.”