St. Pete city council to vote on Municipal Services Center redevelopment agreement
By Breanne Williams
Tampa Bay Business Journal
Published: Dec 9, 2021

An agreement that paves the way for the redevelopment of a prime city-owned property will go before the St. Petersburg City Council on Dec.16.

The council will vote on whether to approve a finalized master agreement with Third Lake Partners LLC for the redevelopment of the Municipal Services Center. If the deal is approved, Third Lake Partners will purchase the current MSC at 1 Fourth St. N. and move forward with the construction of a new MSC at 429 Second Ave. N., near city hall.

The city will lease the existing MSC from Third Lake during construction; when the new MSC facility is complete, Third Lake will redevelop the property into a multifamily development. The city will also sell its property at 461 Second Ave. N. to the developer to build an apartment complex.

Third Lake, controlled by Ashley Furniture Industries CEO Todd Wanek, was chosen by Mayor Rick Kriseman to redevelop the MSC property after an unsolicited offer on the property from New York-based Property Markets Group triggered an open-bid process.

Here are the four main parts of the agreement council will consider:

Sale of existing MSC: The developer will buy the existing MSC site for $12.25 million and pay the closing costs, except for $50,000 which will be paid by the city. The deed for the property will have limitations and restrictions on future development. Among the requirements are a stipulation that the redevelopment will include at least 50,000 square feet of office space if Third Lake demolishes the existing MSC building in the first 10 years of the agreement. If they demolish it in 11 to 30 years of the agreement, the requirement is reduced to 25,000 square feet of office space.

Lease of existing MSC: Until the new MSC building is complete, the city will lease the current MSC from Third Lake. The lease term will begin at closing and continue for 36 months. After that, the terms of the lease can be extended on a month-to-month basis at the city’s discretion. The rent will be $10 total for the first 36 months and at the beginning of month 37, the city would have to pay the developer $1.35 million per year, plus applicable tax on that amount. The city will pay all the operating costs and has maintenance obligations.

Sale of new apartment site and design of new apartments: Third Lake will buy the city-owned land at 461 Second Ave. N., adjacent to the lot proposed for the new MSC building. There are restrictions in the agreement that ensures the developer builds a minimum of 240 units and 31% of them must be for workforce housing. The city will also have limited rights regarding the design.

Design and construction of new MSC: Third Lake will oversee the planning, design, permitting and construction of the new MSC, which includes the portion of the parking garage for city use. The city will pay the developer a lump sum fee to oversee the conceptual planning phase services that won’t exceed $500,000. If the agreement is approved the council will vote to move $500,000 from the unappropriated balance of the General Fund to the General Capital Improvement Fund for the deal.