Years could change what works in Trop site redevelopment

From this morning's paper:

ST. PETERSBURG — The proposal to remake Tropicana Field into an anchor for downtown's west end relies on a steady course of construction over 10 years, with each brick building on the next.

Starting at 10th Street S and moving west to the interstate, the three-phase $1.2-billion project would bring retail, then residences, then office space.

The plan is conceptual. City Council members first must agree on Thursday to pick a developer, then city voters must agree in November to build a new stadium on the waterfront.

But experts in the development industry, and those familiar with St. Petersburg, caution that the plan — if it comes to fruition — is likely to change. In fact, the proposal submitted by Archstone, one of the nation's leading apartment builders, and its partner Madison Marquette, may only be a template for the 86-acre site.

Shifting dynamics are typical of such a large scale development built over several years, developers say. What may seem like a good fit for office space today may end up working better as an apartment high-rise by 2015 or 2020.

"You have more variables to get right," said Steve Mauldin, senior vice president with Crosland, a mixed-use developer in Charlotte, N.C. "Or not get right. The difficulty of a project like this is exponential.

"It's tricky from a financing standpoint. It's tricky from an operational standpoint. It's tricky from a construction standpoint."

Retail comes first

As part of their so-called EcoVerde proposal, Archstone and Madison would guarantee to build at least 700,000 feet of retail space in the project's first phase. The work could start in 2010 and be completed by 2013, the developers say.

On tap could be a Whole Foods grocery store and a Bass Pro Shops, along with an upscale movie and entertainment complex, and eventually a department store.

"There's a great vacuum, a great desire for retail," said Ken Miller, a senior vice president with Archstone, the company primarily responsible for the redevelopment. "We see the retail as a way to re-energize that part of the downtown.

"Following that, it's (like playing with) Lego blocks."

Retail, Miller says, creates a need for residential.

A local expert says the developer would have no difficulties filling 1,935 new apartments. The plan also calls for 755 condominiums.

For rental units, "it's a very attractive area," said Michael Slater, president of Triad Research and Consulting, which studies housing trends across the Tampa Bay area.

Of the units, at least 387 would be classified as workforce housing. The rest would be market rate.

And residential creates the need for office and hotel space, Miller says.

"They aren't making any 86-acre sites that are vacant," said Michael J. Bayard, a senior research fellow with the Urban Land Institute, . "This is not something you find in a downtown location."

Archstone's proposal would increase the amount of office space downtown by 60 percent, says Alan Feldshue of commercial Realtor Colliers Arnold.

Feldshue said new office space is not currently needed, but access to the interstate could create new demand.

Key will be the timing of the projects, Feldshue said. The majority of the office space planned at the Tropicana site would not open until 2020.

"Yes, right now we're having a little problem, but that isn't going to last forever," said Tom Pizurie with NAI Tampa Bay, a commercial real estate firm.

'A major player'

With Archstone, City Council members on Thursday will be asked to endorse one of the nation's leading apartment builders.

The company, which recently sold for a record $22-billion, controls more than 92,000 residential units nationwide, including high-rises in Washington, D.C., New York, Boston, Los Angeles, and San Francisco.

It is owned by Tishman Speyer, a leading office and residential developer, and Lehman Bros., a publicly traded investment banking firm that said it lost $2.8-billion between April and June.

Archstone officials said this week that Lehman Brothers' financial losses will not affect its development of the Tropicana site. This year alone, the company financed $2-billion in new construction, officials said. The Tropicana project requires $1.2-billion over 10 years.

For all of its residential success, however, Archstone's track record in urban, mixed use projects is less distinctive.

The company turned to mixed-use projects five to six years ago, Miller said, and currently is working on at least three major redevelopments.

A review of Archstone's portfolio suggests that the Tropicana project would be the company's largest, though Archstone is already redeveloping a Major League Baseball parking lot.

In Anaheim, Calif., Archstone is planning a 50-acre, $625-million redevelopment in the parking lots adjacent to Angel Stadium, home of the Los Angeles Angels of Anaheim.

Archstone also is teaming with two developers to redevelop eight acres in Chevy Chase, Md., with a Whole Foods, Bloomingdale's, 432 apartments, and 305,000 square feet of office space.

And the company is partnering with Hines — the other finalist for the Tropicana site — on an $800-million redevelopment of Washington, D.C.'s old convention center.

The company's relative inexperience in major mixed-use development should not pose a significant concern, said Gary Dreher, the managing principal with TOLD Development Company, a mixed-use developer in Minnesota.

"They're a major player. They have a very strong reputation," Dreher said. "That's probably the most critical thing to a project the size you're talking about — finding a group that has the wherewithal to do it."

Madison Marquette, the second half of the development team, is a smaller retail and residential developer that has invested $1.6-billion in 33 properties since 1992.

It's partnering on a $500-million urban redevelopment of Emeryville, Calif., called Bay Street, and is the redeveloper of a section of beach front in Asbury Park, N.J.

Council decision

City Council members on Thursday will be asked to approve formal negotiations between Archstone and city officials, with hopes that the two sides can reach a preliminary agreement on a development program by Aug. 1.

Any deal is contingent on the approval of the Tampa Bay Rays moving to a new waterfront stadium.

Overall, the Archstone proposal boasts lofty claims: 5,574 new permanent jobs with an average salary of $40,000 a year; $7.5-million a year in new city taxes; and $37.5-million a year in total tax revenues.

"Archstone seems quite capable," City Council Chairman Jamie Bennett said.

Comments

[Wake up and smell the coffee]

Hello, What don't you understand about the current market in St. Pete? Read your coworker's article below:

http://www.tampabay.com/news/business/article629709.ece

[get-smart]

Archstone is owned by Lehman Brothers. Lehman is tanking right now as an investment bank. Archstone is loaded in debt and will go down with Lehman.

Madison Marquette is privately owned. They will never come clean with their financials and they are owned by a foreign investment group. How much debt are they facing. The same goes for Hines. How much debt do they have.

These companies will lie on paper and lie to your face. I wouldn't put my Christmas Club savings account with any of these companies!

The city, council and Times are talking to the respective companies salesmen! Gee, I wonder what "pretty picture" they will paint. "Don't Worry, Be Happy!"

My question is, "Why is the city allowing the Rays to drag us into the Mortgage/Credit Meltdown Crisis?"

I make a motion to cease and desist all activities that have been put forth by the Rays Proposal. We need to wait out the mortgage meltdown crisis. We need to decide how to fix-up and revamp our existing Trop site. We need to honor the promises that we made in the past! ... Can I get a second!

P.S. I am going to stop at Office Depot and buy "U B Architect" CAD software. I think I'll start making my own "pretty pictures." It's a whole lot cheaper.

Cheers

-

[smell the coffee]

Second. All in favor say ay!!!

[Archie the Architecht]

(needs to) get-smart,
you go right ahead and do that sugar britches - - - just be sure to put all of the drawings ON THE DOWNTWON WATERFRONT

[J]

So you want to be an Architect Get Smart. You might need for than AutoCad.

The Trop has been renovated multiple times. Remember the "under construction" signs. You can only do so much if the bones aren't there.

[Get Smarter]

Get Smart,
Your taking up too much room on the Blog copying and pasting your posts. We get it developers are investors. Could you also protest the national debt, thats the one that really bothers me.

[Colorado Snowbird]

This is the best written article so far in this entire seven or eight month's of public discussion of these proposals. Aaron did a superb job of inteviewing multiple experts in multiple fields, and included relevant quotes from many. This is exactly the type of reporting that will imrpove our community's ability to sift through the information and make a sound decision. Congrats to Aaron and the Times for another home run!

[Rick K]

I have to agree with CS...

Terrific job, Aaron.

[1962reR]

The Anaheim project sounds like a better fit but too much retail and not enough work force housing as repeatedly stressed by council today

[Jon McPhee]

Why does "workforce housing" sound so much like "company town" and "migrant worker trailer camp"?

How will us work-forcers coexist in such close proximity with all that upscale retail and housing? Maybe Green Zone-style walls and Blackwater-manned checkpoints and crossings? Hey, our very own Gaza Strip!

Man, this "deal" is looking more attractive every day we get closer to the Kool-Aid tub!

And I am comforted by the current economic condition of BayWalk, which Wednesday's "Neighborhood Times" article indicates is facing that wonderful euphemism for meltdown, "uncertainty." I really would like this community to "achieve victory," whatever that might mean in the spectrum between Yeshitela and Grooms and Baker.

But let's not put a down payment on the Mercedes CL65 if we're only going to end up being able to afford a new Malibu.

[Jon McPhee]

Especially if the vast majority of us will at best get to ogle the shiny new car from afar.

[Xenu]

Xenu loves the shiny new spaceships. Xenu is fond of old spaceships also. Xenu has no budget for new spaceship. Xenu will keep spaceship for now.
All Hail Xenu!!

[Xenu]

Xenu wants new spaceship.
Xenu likes old spaceship.
Xenu can't afford new spaceship.
Xenu keep maintenance up on old spaceship for now.
Xenu add new turbo booster and air freshener to old spaceship.
All Hail Xenu.

SUPPORT PLAN B

NOT NOW

NOT THIS LOCATION

LESS TAXPAYER MONEY

[Clear Direction]

The fact that Archston-Madison's Mr. Miller feel that the addition of retail space drives the need for residential units is a concern to me.

As a real estate professional, I can state unequivocally that the oposite is true. Growth in housing is what determines the need for additional retail.

I offer as support of the above statement, the following quote.

"There is no more 'build it and they will come' mentality. Retail development follows population growth." said Scott McIntosh, senior economist with the National Association of Realtors.

This quote is from the most recent Business Week Magazine and was quoted in today's St. Petersburg Times.