St. Pete agrees to sell prime real estate to Tampa developer
By Henry Queen
Tampa Bay Business Journal
Published: Sep 13, 2024

A mixed-use development will one day rise on a vacant surface parking lot near Tropicana Field.

St. Petersburg City Council on Thursday approved a resolution allowing Mayor Ken Welch to sell the parking lot directly west of the former UPC Insurance headquarters to Tampa-based Third Lake Partners for $10 million. The vote passed 6-2, with Richie Floyd and John Muhammad voting against the deal.

Third Lake, which already had a parking lease on the property, is expected to combine the lot with a neighboring parcel to build a mixed-use development. The company scooped up the actual UPC headquarters site for $10.5 million in late 2022.

The property — once part of a proposal from Moffitt Cancer Center that was rejected by Mayor Ken Welch — is roughly one block east from the new Tampa Bay Rays stadium scheduled to open in 2028. Projects like this will add to the vibrancy of the area.

Third Lake must begin construction within five years, or pay over $4,000 per month in damages. A site plan has yet to be filed. Third Lake Founder and Managing Partner Ken Jones said he doesn't have a timeline for its submittal but that discussions on what the mixed-use development will look like have been in the works for some time. The project will cost "hundreds of millions," he said.

"We don't have anything completely set in stone at this point, but we certainly have lots of optionality," Jones said. "[We've talked] with both Rays and Hines, and we're going to continue that dialogue. And the same thing with the city. This isn't the end of a transaction — this is the beginning of a very good economic development relationship."

Of the $10 million that the city will receive, almost $6 million will be used to help repay a short-term loan for the Deuces Rising townhome project. The other $4 million will be set aside for future housing capital projects.

"The administration's strategy on this property is a little different," City Administrator Rob Gerdes said during Thursday's meeting. "[We don't want to] prescribe that you have to build affordable housing on the property. What we're trying to do is maximize the revenue from the property — sell it for the highest price we can and then put that money into affordable housing."

Third Lake first offered $6 million for the parking lot in an unsolicited bid.

Fort Lauderdale-based Alexander Goshen also bid on the site. It offered an annual payment of $75,375 over the course of a 99-year lease, adjusted every five years for inflation. The company originally thought the property was unencumbered but backed out upon learning otherwise.

"Because the city could not legally enter into a lease as proposed, due to the property being subject to an existing lease, the company decided not to pursue the property," a city spokesperson said in a statement.

Several council members expressed frustration about how the city arrived here, including Welch's rejection of Moffitt Cancer Center's development on this same site.

"We didn't get Moffitt [because] of workforce and affordable housing," Floyd said. "A standard was set there — a standard that in the moment, I was quite optimistic about. But since then, it's not been brought up or met in many developments."

The city first acquired the parking lot in 1981. It received about $21,000 in rent payments from Third Lake last year but had to pay over $56,000 in property taxes itself. If the previous lease deal had been kept in place for its entire life until 2086, the city's rental income would have totaled about $1.6 million, while the property tax bill would have ballooned to $10.5 million.

As part of the upcoming development, the Second Avenue South corridor must be kept as a thoroughfare for the traffic coming in and out of the new Rays stadium.