City Hall received development proposals for its Municipal Services Center from Blake Investment Partners, Echelon, Lincoln Property Co., and Allen Morris. It asked for proposals after a fifth company, Property Management Group, made an unsolicited bid.
The city of St. Petersburg has received two offers for the Municipal Services Center on Central Avenue at Fourth Street N. (Google street view) [Google street view]
By Richard DanielsonPublished YesterdayUpdated Yesterday
ST. PETERSBURG — Five developers are now vying for the city’s old Municipal Services Center on Central Avenue.
As of Friday’s deadline, the city received proposals from Blake Investment Partners, Echelon, Lincoln Property Co. and Allen Morris. It already had an unsolicited bid for the property, located on the north side of Central at Fourth Street N, from Property Management Group.
The Property Management bid came in late last year and prompted the city to open the opportunity up to other developers as well. The building houses various city departments and lacks street-level retail, creating a block-long dead zone for pedestrian engagement on Central.
St. Petersburg developer Blake Whitney Thompson said his company, Blake Investment Partners, proposes to build the city a new Municipal Services Center on what is now a city-owned parking lot just north of City Hall, on Second Avenue N east of Fifth Street N.
Once city employees moved from the old 11-story building on Central into the new one, Blake Investment is offering to pay the city $10 million for the existing Municipal Services Center, which it would renovate as an office building with retail and other uses on the first floor.
Renovating the existing municipal services center could help the city attract new employers to down and activate Central Avenue, according to the proposal.
That makes Blake Investment’s plan “consistent with the administration’s goal of bringing jobs downtown,” said Thompson, whose local projects include buying a former Masonic temple, one of the most unusual buildings in downtown, and working on plans to redevelop it.
Blake Investment’s new municipal service center, a $43 million project, would include 120,000 square feet of office space, 100,000 for the city’s current needs and 20,000 to accommodate growth in city operations. It also would include a 600-space parking garage as part of the building for municipal service and City Hall employees.
Blake Investment proposes that the city convey the parking lot to the company for a “nominal” amount, and that once the new center was built and occupied, the city would pay the company $27 per square foot for the new space.
It’s proposing that it either hold the property for 20 years while the city continues to lease space there, or allow the city to buy it back in the third, fourth or fifth year after it opens. The proposed price ranges from $54 million in the third year to $56.7 million in the fifth year, assuming a capitalization rate of 6 percent, which would be based on the income the building would be producing and its value.
That’s a lower price than if the city sold the parking lot to Blake Investment for the new project and the company had to recoup the land cost in the sale of the new building, the company says.
Once the city moved its employees from the old municipal service center to the new Blake-constructed building, Blake proposes to pay the city $10 million for the existing building, which it would convert into offices with retail and other uses on the ground floor. The company says it would agree not to use the former city office building for anything but offices or retail for 10 years.
Blake Investment, which operates in eight states and says it’s completed more than 100 development projects, estimates it could renovate the office building within 12 months with little disruption to Central Avenue. By contrast, it says, building something new on the site would take two to three years and would bring significant disruption, noise and closures of sidewalks and the street to Central Avenue for two to three years.
In December, the city said it would take offers for the Municipal Services building, which is on the north side of Central Avenue between Third and Fourth streets, after getting an unsolicited bid from Property Management Group, a developer with offices in New York and Miami.RELATED: St. Petersburg entertains offer for prime downtown real estate
Property Management also proposes building the city a new municipal services center across from City Hall that would also include 500 parking spaces and 220 residential units, 33 of them being workforce units for residents who make no more than 120 percent of the area’s median income.
Property Management has offered $12 million for the Municipal Services Center property, where it proposes to build a 1.5 million-square-foot building with 100,000 square feet of offices, 100,000 square feet of retail, a hotel with at least 200 rooms, 500 residential units and 1,000 parking spots.
Source: The Tampa Bay Times