Businesses and city leaders push for redevelopment in the Skyway Marina District
By Margie Manning
Tampa Bay Business Journal
Published: May 8, 2015

There's a $1 million bounty for the developer who buys into the vision for the Skyway Marina District.

The district - a 1.5 mile corridor spanning both sides of 34th Street in south St. Petersburg - was once a thriving business area but in the last 20 years has become the city's "forgotten place,” said Linda Bowler, executive director of the Skyway Marina Business Association. About one-third of the property in the district is vacant or underused, said Jack Dougherty, association president.

Compounding business flight are perceptions about crime and poverty in the district, although demographics prove those notions incorrect, said City Councilman Steve Kornell.

A city-approved plan aims to turn that around, filling the vacant land and abandoned buildings with new shops, restaurants and offices, complementing existing retailers, and giving office workers and neighborhood residents more places to spend their money.

New businesses would patch a $57 million retail trade gap - or $157,000 in spending power that leaves the district every day because nearby residents currently shop in other areas of St. Petersburg or outside the city. They also would draw young professionals, sought by many corporate interests, to the surrounding neighborhoods, which offer the diversity millennials often are seeking. An improved Skyway Marina District also would help distinguish what's unique about St. Petersburg from other areas.

"It's compatible with our vision of what we want to be as a city, a city of opportunity, where the sun shines on all,” said Mayor Rick Kriseman. "We're not there yet. If you live in south St. Pete, you don't have opportunities.”

Bowler is inviting 750 commercial real estate professionals, architects, engineers, shopping center operators, investors and bankers to a June 24 event to show off the district. The sweeteners include a $50,000 incentive, already in the city budget, for a sit-down restaurant, and a $1 million incentive that would reimburse developers for any public improvements and/or fees for a "significant” mixed-use development having residential or hotel units, office or conference space, and retail stores. The mixed-use incentive needs formal approval from the St. Petersburg City Council, but has Kriseman's backing.

At least one very big name is in the mix. Magic Johnson Enterprises, the former NBA star's conglomerate that engages in business development and expansion in urban areas, has had general discussions with city officials, Kornell said, although it's unclear how far those discussions have progressed.

"Magic Johnson's company is a good example of a developer who hasn't done as much in our city that we want to bring in,” Kornell said.

The company did not respond to a request for comment.

Waterfront homes

The challenges are obvious during a drive through the area with Kriseman and other city leaders. At the north end of the district is a vacant nine-acre parcel, the spot Home Depot bought just before the recession hit, then dropped plans to use it as the company's strategy shifted. A few blocks south, a former Kmart, closed in 2009, occupies 11 acres in a boarded-up shopping mall.

Yet Kriseman, Deputy Mayor Kanika Tomalin and Community Development Administrator Alan DeLisle are quick to point out positives:

• Ceridian, a human capital management firm, has 750 workers in an office across 34th Street from the vacant Home Depot lot

• The adjacent St. Petersburg College Allstate campus has 500 employees and students

• St. Petersburg Kidney Care South, a medical office facility, opened a 7,500-square-foot building at 4050 34th Street S.

• Grand Villas, at 3600 34th Street S., underwent a $3 million renovation, transforming it into a resort-style assisted living and memory center with 150 units

• Maximo Marina - the largest covered wet slip marina in the state - is undergoing a $25 million facelift To start with that many assets is a real strength, DeLisle said, citing existing retailers and restaurants, ranging from Walmart and Publix to Beef ‘O' Brady's and Dunkin' Donuts. "They clearly understand the demographics here, which increases our potential for success.”

Close to the marina, Kriseman drives through the Maximo Moorings and Broadwater neighborhoods, pointing out waterfront homes with values approaching $1 million, as well as more modest dwellings. "This is a cradle of opportunity for the emerging class of young professionals looking for housing beyond downtown condos, but they expect that the resources they need for the quality of life they want will be nearby,” Tomalin said.

It's rare to have a development opportunity so close to the beaches and the water, said DeLisle. "In development, water is gold, and there's a lot of gold there,” he said.

Breaking through perceptions

Still, there's a perception that the area is poor and lacks buying power, said Dougherty, who owns the Flamingo Resort.

"Retailers typically draw a circle and say within this circle we're looking for certain demographics. If you do that in our area, there's a challenge because there's water and the interstate,” he said.

The retail circle doesn't take into account the nearby residents of upscale Tierra Verde and Isla De Sol, who have no restaurants or retail near their homes, so in pitching the Skyway Marina District to developers, "we have to talk them through why this traditional retail circle does not work,” Dougherty said.

Unkempt properties make the area look questionable, so the business association has been actively working with city code enforcement to make sure properties are cleaned up. "That not only gives the perception of a better area, but it also keeps crime down,” he said.

Fear of crime in the area is overblown, Dougherty said. "Our area is safer than a lot of areas of St. Pete.”

St. Petersburg uniform crime statistics bear that out for the section of the district that is south of 38th Avenue South. The census tract north of there has a much higher crime rate.

Improvements to the Skyway Marina District will have a spillover impact on the surrounding areas, Kriseman said.

"Part of our challenge is to break through these perceptions,” said Kriseman, adding that he sometimes feels like he's on the "Mythbusters” TV show. "Once we get that first business that says I believe in this area, the floodgates will open.”

Finding a spark

Dougherty, the head of the district's business association, looks to a different part of St. Petersburg for inspiration.

"Ten or 15 years ago, 4th Street North was like our area now, underutilized with small mom-and-pop hotels,” he said. "It took one spark - an Outback Steakhouse - to spark redevelopment. We're looking to get a spark into the 34th Street South district that will serve as a pump primer to get additional investment and development in there.”

The business showcase event is designed to raise the profile of the district, and get the word out more broadly about the city incentives, Bowler said. "It will take someone with vision, someone who likes a challenge. I believe there are people who don't know we are here, who will be interested.”

Kriseman believes the district, with its amount of developable land, poses the greatest opportunities of anywhere in the city. "By the end of 2015, I want us to sign an agreement or have permitting underway for the first project in the district.”