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Tuesday, Sep 16, 2014

Clearwater hopes project sparks more development


Published:   |   Updated: August 9, 2014 at 09:41 PM

— There’s a correlation between a long-vacant parcel on Cleveland Street and downtown’s vacant streets and storefronts, city officials say.

Young professionals who have moved into the city’s office towers have options for lunch and for entertainment at the restored Capitol Theater, but there are few places to live.

For more than decade, the city waited for the right company to build rental housing on a 6.6-acre plot on Cleveland between South Prospect Avenue and Martin Luther King Jr. Avenue.

Now, as a developer prepares to buy the property for $2.5 million this week and begin construction on 257 upscale apartments by the fall, city leaders are cautiously optimistic about prospects for their struggling city center.

There is hope that the Prospect Park Apartments, Clearwater’s first downtown apartment complex, will spark other dormant redevelopment projects, including the half-completed Strand tower.

It also would be a boon to restaurateurs and retailers who would have several hundred potential customers within walking distance.

“I’m sure somebody has a bottle of champagne that’s been set aside,” Mayor George Cretekos said at a workshop meeting on Prospect Park Apartments last week.

He suggested waiting to pop the cork, though, until the apartments are built, “and we’ll do a ship-christening when it comes time to do a ribbon-cutting for the project,” he said.

Redevelopment has been a challenge in downtown Clearwater.

A large portion of land is owned by the Church of Scientology, which has undertaken significant construction projects, such as the seven-story Flag Building that opened in the fall, but these primarily serve Scientology members.

The few restaurateurs and store owners who persevere in the core get virtually no foot traffic from tourists flocking to the beach, who can completely bypass Cleveland Street and downtown.

There have been gradual signs of change, though, especially as the economy has begun to recover.

Cleveland Street’s two condominium towers, Water’s Edge and Station Square, are filling up, as a third, called SkyView, is being planned at a converted bank building across from the Capitol Theater.

The renovated theater has reported strong business since reopening at the end of 2013, bringing consistent crowds to once-empty streets in the evenings.

Autoloop is among two dozen software companies that have located in downtown high rises, hiring young, tech-savvy professionals to serve high-profile clients such as Japanese automakers Subaru and Toyota.

Some of these workers would prefer to live in or near downtown rather than commuting 30 minutes or an hour from other parts of Clearwater, South Tampa and St. Petersburg, said Jason Bennick, Autoloop’s chief operating officer.

“There’s nothing downtown,” said Bennick, who has worked with the Clearwater Technology Alliance to increase his industry’s presence in Clearwater. “Guys are living way out on the other side of Countryside, just so they can go shopping.”

The 800 employees who make up downtown’s emerging tech industry would be a target audience of the new Prospect Park Apartments, a few blocks east on Cleveland Street.

Longwood-based Prospect Property Group is teaming with Forge Capital Partners to build the residential complex with apartments above shops and an outdoor plaza fronting the nearby Prospect Lake retention pond.

The project will fulfill a vision for the site that dates to the late 1990s.

The 15 town homes west of the Prospect Park site originally were meant to be expanded into a much larger housing development that never came to fruition.

A second development scheme for the site several years later was derailed by the economic downturn.

The market today appears strong for the multifamily, mixed-use complex proposed by Prospect.

Apartments in central Pinellas County are 95 percent occupied, indicating a strong demand for more housing, and only a tiny percentage of the rental properties around Clearwater’s downtown were built within the past decade, a study earlier this summer by the Urban Land Institute consulting group showed.

Downtown could accommodate 400 to 600 new rental units in the next five years based on demand, but the city will be competing for investment with other large cities that already have a flourishing rental market, such as downtown St. Petersburg, the institute reported.

Prospect has a history of successful residential developments in the Tampa Bay area and expects the Clearwater project to continue that trend, company executives say.

“The market is great. There’s been a lot of interest in the community,” said Frank Tetel, the company’s vice president of underwriting and acquisitions.

After Prospect was selected in a request-for-proposal process last year, the project was expected to break ground by this spring. The city and the developer had to cut through several layers of red tape before closing the deal.

Part of a grant the city obtained to expand the retention pond more than a decade ago has to be repaid to the U.S. Department of Housing and Urban Development because the city did not need as much land as originally anticipated.

Contractors also found muck — soft, mushy ground — beneath the surface of the site and had to work out a deal with the city to mitigate additional costs for laying the foundation.

But the apartments got site plan approval in July and the ground breaking is expected by the end of the year.

Advocates for downtown revitalization expect Prospect Park’s momentum to bring more developers to the local market.

“It is critical,” said Bill Sturtevant, chairman of the Clearwater Downtown Partnership. “I think the multifamily sector is the strongest sector in real estate today, and I think there will be other developers looking at other parcels downtown to develop.”

An unknown company apparently has made an offer on The Strand, a towering shell just down the street that abruptly halted midway through construction during the recession, Sturtevant said.

The building, at 1100 Cleveland St., could be used for several hundred more rental apartments, as well as office and commercial space.

Tampa-based real estate firm Marcus & Millichap is marketing the building for $12 million.

As with the long process at the Prospect Park site, Sturtevant is optimistic that, in time, the market will push The Strand and other development projects to completion.

“Like anything, the market has got to move to the price and the price has got to move to the market and, when that happens, a deal will be made,” he said.

 

jboatwright@tampatrib.com

(727) 215-1277

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