WestShore Plaza's major redevelopment plans are approved. Now what?
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Apr 26, 2024

WestShore Plaza’s ambitious redevelopment plans have received final approval from Tampa officials — but a wrecking ball likely isn’t in the property’s immediate future.

Tampa City Council on April 18 approved the redevelopment plans for the mall, which sits on land that’s among some of the best infill locations in the Southeast. Mall owner WPG, a privately held real estate investment trust, says it envisions an open-air, mixed-use development of up to 3.5 million square feet on the property: “entertainment, retail, dining, office, wellness, medical, hotel and residential components.”

WPG controls over 50 acres at the intersection of Westshore and Kennedy boulevards, between the existing mall and surrounding properties it has assembled, including the former Sears box, a Bank of America branch and Seasons 52. A redevelopment of the Sears box was rumored as early as 2015. The first iteration of redevelopment plans went public in 2018; plans were withdrawn and resubmitted; the most recent approval makes it possible to add medical uses to the property. Macy’s Inc. owns its department store at WestShore Plaza and has announced no plans to close or sell the property, even with more than 100 store closures in the works nationwide.

By comparison, the WestShore Plaza property is roughly the same size as Water Street Tampa and more than twice the size of Midtown Tampa.

“It’s a huge project,” said Jim Michalak, founder and president of Plaza Advisors in Tampa. “It’s going to take a long time between putting a shovel in the ground and the ultimate opening of the different components.”

The approval comes at a challenging time in the commercial real estate market, when developers are facing high interest rates and materials costs. Multifamily real estate, the longtime darling of construction and development in Tampa Bay, is seeing rents plateau as more buildings open to residents. Office properties are also challenged, with companies seeking smaller spaces in the age of remote and hybrid work.

WestShore Plaza’s location, smack-dab between the urban cores of Tampa and St. Petersburg in the Westshore business district, makes the redevelopment a more attractive proposition to lenders, investors and development partners even in a tough market, real estate experts say. But it is a complex undertaking, particularly when it comes to unraveling the leases in the enclosed mall, which could take years. Experts say WPG will likely partner with at least one other developer, or it could act as a master developer, selling off or partnering on individual parcels.

“Anywhere else, I’d question something of this scale,” said Patrick Berman, managing director and retail specialist at Cushman & Wakefield Inc. in Tampa. “I really believe that you can get this done because it’s such a good location. The rents justify the cost.”

‘Likely completed in phases’

A spokesperson for WPG provided no new information on the project, responding to questions with a statement first released in August 2023. The project team includes legal representatives Truett Gardner and Tyler Hudson of Gardner Brewer Hudson PA; arborist Dark Moss; civil engineer Kimley-Horn; architect Nelson Worldwide; and traffic engineer Randy Coen.

“The redevelopment project will likely be completed in phases,” WPG’s 2023 statement said. “There is no definitive timeline for construction as of yet.”

WPG emerged from bankruptcy proceedings in 2021, shedding nearly $1 billion in debt. But it’s unlikely the REIT would pursue the WestShore Plaza redevelopment on its own, said Tyler McRae, senior vice president and Tampa market leader for SRS Real Estate Partners.

“I really foresee this as either a large institutional capital partner coming in and partnering with WPG,” McRae said, “or WPG ultimately selling to a group that’s going to come in and execute the development.”

Plans filed with the city hint at one potential partner: Dallas-based Lincoln Property Co., whose logo appears on site plans of the redevelopment. Neither WPG nor Lincoln representatives responded to questions about Lincoln’s possible involvement in the project. Lincoln’s portfolio features several glitzy mixed-use urban projects across the U.S. that are similar in nature to the WestShore Plaza plans.

While the capital markets remain challenging, McRae believes WestShore Plaza is such an attractive redevelopment play that it will land a partner that’s largely unaffected by market conditions.

“The quality or sophistication of a group that’s going to be able to step in and do this — they aren’t going to be affected by capital markets as much as some of the smaller regional players are,” McRae said. “There’s an overabundance of capital sitting on the sidelines from very large institutions, so I don’t think that’s really going to be a factor in this specific scenario.”

Also in the project’s favor: Tampa’s ongoing job and population growth as well as a dearth of new retail development, which has created pent-up demand for new storefronts.

“Despite all of these economic headwinds that we’re experiencing right now with inflation and capital costs and construction costs, the demand for retail in the Tampa market is as strong as it’s ever been,” McRae said.

Michalak agrees, particularly on the residential and hotel components.

“South Tampa is just so hot,” he said.