Downtown St. Petersburg residential growth: It's all about the boom
City Center Orlando loader
11 / 20 / 14
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Downtown St. Petersburg residential growth: It's all about the boom

Downtown's residential development boom is in full swing. Three apartment buildings are completed, four more are in various stages of construction and six condo projects are under way. • By the time they are all finished, 2,031 new homes will be added within less than a mile of downtown's waterfront.

The developers hail from Largo to Miami, Dallas to Cleveland. But with so many of them in the mix, how do they know they haven't overestimated the demand?

"No bank is going to let you build something without a feasibility study. But the biggest problem with a feasibility study is they don't consider who else is doing a feasibility study at the same time," chuckled Jack Bowman, veteran St. Petersburg real estate agent and a developer of the Cloisters, the project that started downtown's first condo building boom in 2000.

"When other condos started going up right after ours, somebody asked me how we will know if we've overbuilt. I said, 'When people quit buying.' That's why real estate is boom or bust."

The city's economic development director, Dave Goodwin, agrees there is no way to perfectly project supply and demand, but he says all signs point to a pent-up need for downtown housing in various price ranges.

"I don't have a crystal ball," he said. "But demand has been really strong for the ones that have opened up."

Goodwin pointed out that developers still have flexibility to adjust to a changing market, even after ground has been broken and certificates of occupancy are issued. Apartments can be converted to condos, as the Madison at 190 Fourth Ave. S did. Condos can be converted to apartments as the Sage at 400 Fourth Ave. S did during the recession. Sage now is converting those apartments back to condos as leases end.

And if condos aren't selling, they can be auctioned off at discounted prices, as was the case with Signature Place in 2010.

But Goodwin said he doesn't expect fire sales this time around.

"The market for downtown urban living, being able to walk instead of drive, is strong everywhere. It's the strongest I've ever seen," he said. "More and more folks — young folks, empty nesters, retirees — want to be living in a walk-able, urban environment."

The city forefathers' mandate that St. Petersburg's waterfront parks never be developed is a big lure for downtown residents, as well as the growing number of stores, restaurants and cultural offerings.

But what's missing from that list of attractions is big employers. Though Jabil has been flirting for more than a year with moving its world headquarters downtown, there still are no national or regional headquarters to employ everyone who wants to live in urban St. Petersburg. Still, there are big employers in All Children's Hospital Johns Hopkins Medicine, Bayfront Health St. Petersburg, USF St. Petersburg, and the city and county governments.

Goodwin points to smaller companies with the potential to grow, which is what Jabil, Raymond James and HSN once were.

"Downtown office buildings are leasing up to IT companies, Internet companies and high-tech operations," he said. "We have homegrown companies that can expand."

The vacancy rate for downtown commercial space was 14 percent for the second quarter of 2014, the most recent rate available, compared to 14 percent in all of 2013, 12 percent for 2012 and 17 percent for 2011.

But even with a healthy number of small to midsize employers, Goodwin acknowledged many of the coming urban dwellers will commute to jobs in Tampa or Clearwater.

"And Greenlight didn't pass," he said, referring to the sales tax increase that would have funded light rail between St. Petersburg and Clearwater. "I don't think any of (the residential developments) came here counting on Greenlight. But we're going to have to find out how to make (mass transit) work better."

ONE, Kolter Group's proposed 41-story residential tower at First Street and First Avenue N will be the biggest and the last completed condo project of any currently in the works. It isn't expected to break ground until 2016.

But Brian Van Slyke, the development executive with Kolter who's overseeing the project, doesn't think the thirst for St. Petersburg urban living will be quenched before his 253 condos are done. They will be priced at $600,000 and up.

"We believe the market shows a strong demand and that's going to continue," he said. "What supply has recently been put on the market has been quickly absorbed."

Kolter's project is awaiting permitting while it works with the FAA to get the height of its building approved.

And apparently "one" isn't the loneliest number, because Kolter's ONE tower will share a name with another tower four blocks away. Developer John Shine is planning a 16-story tower named O.N.E. with 72 condos ranging from $400,000 to $600,000. He's naming his for Old Northeast. Kolter's name is because the project consumes "one" whole block at the corner of First Street and First Avenue N.

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