Almost one-third of residents in a 7.5-square-mile area south of downtown live below federal poverty levels, roughly twice the rate of the rest of the city.
The area, which includes Midtown and the Greater Childs Park area, has a high concentration of boarded-up or vacant homes and almost 550 properties in foreclosure. Property values there declined by 56 percent between 2007 and 2012, compared to the city average of 32 percent.
Anxious to turn around the neighborhood, city leaders are moving ahead with plans to make the area a community redevelopment area, or CRA, a designation they say will spur economic development, pay for infrastructure improvements and enable the city to buy up vacant homes and unused land.
The proposal received a green light from Pinellas County commissioners last week. If approved by the City Council in June, it would go back to the commission for final approval in December.
“I don’t think we ought to lose the momentum of using these CRAs for what they really were intended for, and that’s to address issues of long-standing poverty and slum and blight,” said County Commission Chairman Ken Welch.
The proposed new CRA would cover an area between Fourth Street South and 49th Street South running from 30th Avenue South to Fifth Avenue North.
That area already includes four smaller CRAs, including Tangerine Plaza, the 22nd Street South shopping center that was home to a Sweetbay grocery store until the chain closed the store in February. Those districts will be incorporated into the new CRA.
What’s different this time is that the new CRA will also generate tax revenue to pay for future infrastructure improvements or projects to spruce up neighborhoods.
That will be done through the creation of two Tax Increment Financing, or TIF, districts.
Once established, additional property taxes from new or renovated homes and businesses in that area do not go the city and county’s general funds but can be used for improvement projects in the neighborhood.
The special tax districts played a key role in spurring development in downtown St. Petersburg, said City Council Chairman Karl Nurse.
Typically, the districts raise only small amounts of money at first. But they provide a 20-year funding source that usually grows over time. For example, TIF money from a downtown district is earmarked to pay for the city’s $50-million pier replacement project.
“It creates an opportunity when somebody is considering investing in an area,” said Nurse. “We have a pot of money we can use to make improvement around their complex. That incentive has a real upside to it.”
Other benefits from the CRA designation are that the city can also sell land or property below market rate, providing the deal brings benefits to the district, such as jobs or more affordable housing. The city also can apply for more federal assistance.
Once the CRA district is established, city officials plan to reach out the community to identify what improvements residents would most like to see.
“We’ll get involved with neighborhood associations and residents over summer and fall,” said Rick Smith, the city’s CRA coordinator. “From that engagement, we take input and create a redevelopment plan including projects we intend to spend TIF money on.”