Progress Energy deal paves way for downtown growth

[multifamilyinvestor]

Progress Energy deal paves way for downtown growth

The city agrees to sell the site of the Florida International Museum, where the utility would build an office tower.

By CARRIE JOHNSON, Times Staff Writer

Published October 29, 2004

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ST. PETERSBURG - City Council members paved the way Thursday for a new office tower and luxury hotel to be built on the site now occupied by Florida International Museum.

In a unanimous vote, the council agreed to sell the prime downtown parcel to Progress Energy for $5-million. The utility giant plans to break ground next year and finish construction on the 200,000-square-foot office building by Dec. 31, 2006.

It would be the city's first new office tower in more than a decade.

The hotel, a 200-room Westin Grand Bohemian, would follow in August of 2007.

"We still have some things we need to work through," Mayor Rick Baker said. "But this is a large, significant step for our city."

The city is still trying to acquire a 16,000-square-foot strip in the middle of the site and one of the landowners is asking for nearly three times the property's appraised value.

The city has offered Progress Energy a contingency plan, said Ron Barton, director of economic development. If the city can't negotiate a deal for the remaining parcel by February, it will give the company the option of building its headquarters on the other half of the site.

That would mean the Progress Energy deal could go forward while giving the city more time to negotiate with the landowners, Barton said.

The property is between First Avenue N and Sunshine Lane and Second and Third streets.

Thursday's vote comes after months of negotiations between Progress Energy and the city. In June, the corporation submitted a bid for $1.5-million for half the parcel. Council members criticized the offer as too low and gave other developers 30 days to submit bids.

The city reviewed six offers, including a second bid by Progress Energy for the entire block for $4-million. Most of the bids included a mix of office, hotel and residential space.

In August, the council voted to reject the other bids and start negotiations with Progress Energy. But several members said they still wished the company would offer more money.

In addition to the $1-million increase in the offer for the land, Progress Energy also agreed to give up several subsidies it had requested. For example, the company originally asked the city to pay for parking on the site and to waive all development fees. Progress Energy also asked for a five-year property tax exemption for both projects.

Those requests were rejected.

Under the current deal, Progress Energy will pay $3.5-million at closing. The remaining $1.5-million will be paid to the city through a six-year loan with a 5 percent interest rate.

The city will commit $1-million toward demolishing the old Maas Brothers Department store building that houses the museum. Progress Energy will pay any additional costs and handle the demolition.

The move will allow the utility company to consolidate its approximately 600 employees and five locations in Pinellas County into one building.

"We're thrilled," said Aaron Perlut, a Progress Energy spokesman. "We're very fortunate to have a municipal partner like the city of St. Petersburg."

Council member Richard Kriseman said he was excited about the economic development the deal will bring to downtown.

"Is this the highest offer we got? No," Kriseman said. "Is it the lowest offer? No. But to me it's the best offer, because you have to look at more than just the dollar figure."

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Carrie Johnson can be reached at 727 892-2273 or [email protected]

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Here is the office tower that Progress Energy just built in Raleigh, NC:

[Brickell]

Not a bad tower.

What's going to happen to the museum though?

[multifamilyinvestor]

Not a bad tower. 

What's going to happen to the museum though?

<{POST_SNAPBACK}>

I'm not sure what is going to happen to the Florida International Museum. I would guess those details haven't been worked out. I read somewhere that it will relocate to a less expensive location. I think they are struggling financially, as I read the city forgave their late rent. Whatever happens I hope they survive and stay downtown.

[bobliocatt]

I'm very impressed by the progress of development in downtown St. Pete. Its vibrancy is clearly a leader in the state, as far as urban development in the CBD goes.

The redevelopment of this block will further energize that section of downtown. Hoepfully the museum can relocate somewhere near the Dali Museum.

[smiley]

The museum is going to a new location in the new St. PEte college building a bit to the west. Good thing, this lot will fill nicely with other projects.