Happy 20th birthday, TBO.com! Here is the logo at launch in 1994.
Thursday, Oct 23, 2014

Industrial land becoming a precious commodity

Tribune staff
Published:
ST. PETERSBURG -

Few drivers on a fast-moving stretch of Gandy Boulevard would give a second glance at the 5-acre plot overgrown with weeds and skirted by power lines from a neighboring Progress Energy substation.

But land like this — vacant and zoned for industrial development — could be key to growing Pinellas County’s economy during the next decade, county leaders say.

Large industrial tracts are increasingly scarce in built-out Pinellas, prompting worry the county will struggle to attract new employers and force residents to commute or move to neighboring counties.

During the last 12 years, about 320 acres of industrial land have been lost, mostly sold to developers who converted it to homes, apartment blocks and retail plazas. And that comes during a period when the county adopted new rules to protect existing industrial land and set a target of adding 4,000 more acres to provide an estimated 25,000 high-paying jobs.

Now, planning officials are looking to revamp development rules to ensure more land designated for factories and warehouses is not lost. The move comes after commissioners last month overrode a recommendation from the Safety Harbor City Commission and denied an application to convert a 15-acre former fragrance manufacturing plant in Safety Harbor into new apartments and offices.

The decision could prove to be a line in the sand drawn by county leaders who maintain Pinellas cannot afford to lose more land suitable for companies that can bring high-paying jobs to the area. The leaders rejected the proposed development despite hearing from county staff that the Firmenich site, one of the last sizeable plots of industrial land available in Pinellas, has been on the market for five years with no takers.

“If we keep chipping away at this, 10 years from now … we really are going to be a bedroom community,” said Commissioner Susan Latvala. “That’s not desirous, or a good balance of land use.”

Pinellas still has large concentrations of industrial employers in the center of the county. Hundreds of small manufacturing and service industries such as truck repair stores and sign manufacturers operate out of the Gateway area along both sides of Ulmerton Road and around Carillon. Dozens more line Bryan Dairy Road near Starkey and Belcher roads.

There are also smaller employment centers, like Hercules Industrial Park outside Clearwater, and industrial areas north of Oldsmar and close to Tyrone Square Mall and Tropicana Field.

The county has also been successful in attracting so-called clean industry, such as Jabil and L3 Communications.

But while industrial land provides high-paying jobs, it often offers the smallest return for landowners.

Current market rates for leasing warehouse or factory space means owners net only about $2.50 per square foot once they pay out taxes and insurance, said Mike Meidel, Pinellas County’s economic development director.

Compare that to an average of $16 per square foot for office space and likely even more for retail space, he said.

“Whatever they convert it to is going to make more money,” he said. “The problem is that’s happening all over the county.”

Industrial land is usually not only cheaper to buy or lease, it also is more attractive to developers because they typically can negotiate with a single property owner. A developer trying to redevelop a condominium, for example, would have to negotiate with dozens of property owners, Meidel said.

Often the loss of industrial land happens over years, a trickle that eventually transforms an area. That was the case with the 22nd Avenue North corridor in St. Petersburg, once a light industrial center.

It now is home to small businesses such as tile stores and a Lowe’s Home Improvement store, which provide employment but not necessarily as many high-paying jobs as county officials hoped to attract.

“It had high traffic volumes, easy access, the kind of things retail likes that drives up the cost of land,” said Dave Goodwin, St. Petersburg’s planning and economic development coordinator. “We were beating our head against a wall trying to get industrial in there, so let the retail happen.”

Few companies have looked to expand during the recession and long recovery, further dampening demand for industrial land. Saddled with such properties, some landowners are not waiting for the economy to pick up.

Wells Fargo Bank, which owns 23 acres in Dunedin that was once home to Nielsen Media Research, this year asked city leaders there to look into rezoning the land to make it more marketable.

Both Meidel and Mike Crawford, interim executive director of the Pinellas Planning Council, cautioned Dunedin officials that the loss of the industrial acreage would be scrutinized closely by county officials.

The rezoning would have to be approved by the County Commission. The county’s rules on preserving industrial land do allow land to be rezoned if there is overriding economic benefit for the county or planners deem the land is unlikely to attract employers in the foreseeable future.

Counties and cities already offer incentives such as tax credits and property tax waivers to companies that bring high-paying jobs to Pinellas.

The Pinellas Planning Council, which oversees changes to the county’s overall land-use plan, is proposing the county and city governments allow more and larger buildings on industrial land to help drive up its value. That would mean landowners can charge higher leases and the land would yield more jobs.

But if the county cannot stem the loss of industrial land, officials say its working-age population eventually will move elsewhere.

“People will go where the quality jobs are and they will leave the area gradually,” Meidel said. “Unless we do something to conserve and protect the land, we’re looking at a fairly bleak picture.”


codonnell@tampatrib.com

(727) 215-7654

Twitter: @codonnellTBO

Subscribe to The St. Petersburg Tribune

Comments