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St. Petersburg to build 24 subsidized townhomes in $19 million project

The Deuces townhome project has been in limbo since it was first proposed in 2021.
 
A sign is seen on the corner of Seventh Avenue South and 22nd Street South in St. Petersburg. The City Council has voted to spend $13 million to build 24 affordable and workforce townhomes on either side of Fairfield Avenue along 22nd Street South, known as the Deuces.
A sign is seen on the corner of Seventh Avenue South and 22nd Street South in St. Petersburg. The City Council has voted to spend $13 million to build 24 affordable and workforce townhomes on either side of Fairfield Avenue along 22nd Street South, known as the Deuces. [ CHRIS URSO | Times ]
Published Jan. 19|Updated Jan. 19

ST. PETERSBURG — Three years since the City Council hired a contractor to build affordable townhomes for purchase and a commercial space to revitalize a historic Black corridor, the council on Thursday approved a public subsidy of just less than half a million dollars for each home.

The council voted to spend $13 million to build 24 affordable and workforce townhomes on either side of Fairfield Avenue along 22nd Street South, known as the Deuces. Mayor Ken Welch’s administration decided to prioritize the residences over the commercial space but has had trouble securing a digestible guaranteed maximum price due to escalating costs and the availability of labor.

The council vote was 5-2, with members who voted no saying they couldn’t get past that dollar amount. Brandi Gabbard was absent. Even some board members who voted in favor of the project expressed sticker shock.

“The math with this deal is just so far out of the ballpark it’s not even in a gray area,” said council member Ed Montanari, one of the no votes. “In the private sector, this just would never be done.”

The other, Richie Floyd, said he felt the money could be put to more effective use and help more people.

“It looks like a subsidy, just on the cost of construction, is going to be potentially $500,000 per unit, and you know that could subsidize five other affordable housing units on a different project,” he said.

The total cost of the project, excluding the land, comes to $19.1 million. Some of that money has already been spent on utilities and infrastructure and could support the commercial venture should the city decide to build it later.

Council members on Thursday voted on a $13.1 million maximum guaranteed price to Black-owned and Tampa-based Horus Construction Services. That would go toward building 24 two-bedroom and three-bedroom townhomes: half for families making 120% of the area median income, the other half for families making 80% of the area median income. Homes would be priced from $223,000 to $317,000.

The city spent $2.2 million to buy the land in 2007.

Council members who voted for the project lamented how the property has lingered for years with no development. Lisset Hanewicz called the deal an anomaly and said that it is “unsustainable” but that $6.5 million in federal COVID-19 relief money helped buoy the deal.

“Everyone privately saw the numbers and were completely shocked,” Hanewicz said. “I’m going to support it. I want to see that area flourish.”

For some, it was the prospect of homeownership that made the deal worth it.

“To me, the juice is worth the squeeze there,” council member Copley Gerdes said. “I think we’d all love for the numbers to be better. This is tough from a money standpoint. Being down the road this far, where this location is, it would mean home ownership.”

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City Administrator Rob Gerdes said he understood council members’ concerns and called the project “a significant subsidy, more significant than what we typically do.

“We feel that it’s important enough for us to step in with taxpayer money to make this happen, and that this can be a real catalyst on the Deuces,” he said. “We think the subsidy is worth it.”

The $13 million approved for construction includes a $300,000 contingency for potentially remediating contaminated soil. Construction is expected to begin in March or April of this year with the all townhomes built by summer 2025.