By Bob Andelman • bob@andelman.com

A YEAR AGO, the pace of new development announcements in St. Petersburg was absolutely torrid and the number of cranes rising over the city was truly breathtaking. From October 2005 through March 2006, permitted construction within the city limits totaled $368.9 million.

Today, there is still an impressive amount of construction under way, but the number of projects being announced has slowed, with some taking bank-ordered time-outs to reassess an overheated market and changing investor landscape.“There are so many projects that are approved and in various stages,” says Dave Goodwin, the city’s economic development director.

“There had to be a cooling in the parade. You couldn’t expect it to stay at that level forever. Everybody is so busy on things they already have going. The pace will be a little more sustainable and steady, which is fine.”

Several projects are complete or nearing completion as this is written, including: Opus South’s Parkshore Plaza condominium tower on the downtown water-front; the Courtyard by Marriott on 4th Street N; renovations to the Mahaffey Theater; the first campus residence hall at the University of South Florida St. Petersburg; and a parking garage, Barnes & Noble Cam-pus Bookstore and Starbucks, also at USF.

Continuing construction projects include: the new Progress Energy Florida office tower, Echelon Point; an all-new All Children’s Hospital; 400 Beach Drive, a block north of Park shore Plaza, also by Opus South; Miles Development’s The Sage condominium tower and low-rise 1010 Central; several low-rise residential projects being built by Walker-Whitney LLC; the enormous new corporate headquarters and production facility of Valpak; and the ongoing resurgence of Midtown.

Due to start soon: a new home for the Salvador Dalí Museum; Signature Plaza, which will be the tallest building in all of Pinellas County; and the 27-story Ovation, the city’s most expensive, exclusive waterfront tower announced yet, with starting prices at $1.6 million.

Of course, market conditions have changed somewhat dramatically in the last 12 months. What seemed like a good idea in 2005 may not hold up against the glare of late 2006.

“They’re all great projects,” says Craig Sher, president of The Sembler Company, which built BayWalk and University Village down-town and is now a partner with JMC Communities and Jimmy Aviram. “It’ll be interesting to see who builds. You’re not seeing a lot of cranes today. The market has softened. Construction costs are high; banks are requiring stiff presales. It leads to a weeding out.”Sher says Ovation will not be one of the casualties. “It will be the nicest residential building in the Tampa Bay area, nicer even than Trump’s Tampa Tower,”

Sher says. “Ours is different from what the others are doing, with only one or two residences to a floor. It’s a principal residence situation. The smallest is 3,000 square feet; there are no one bedrooms.”

With so much going on, second-term St. Petersburg Mayor Rick Baker isn’t losing sleep over the possibility of some projects not materializing. “There are a lot of projects; some will go, some won’t. But even if half of the ones on paper come out of the ground, it is still an extremely strong climate. The nice thing is that it’s a diversity of development. Not just condos. It’s hotels, offices, and even a new All Children’s Hospital is going up, plus the museums, the rebuilding of the Mahaffey Theater and the new waterfront park.”

School’s In

With so much happening in the city’s downtown core, it’s easy to overlook some-thing … like the influx of college students at new facilities recently built at the University of South Florida St. Petersburg and St. Petersburg College.

USF will open two massive new buildings this fall, the campus’ first residence hall – housing 350 students – and a parking garage with a Barnes & Noble Campus Bookstore and Starbucks on the ground floor.

Residence Hall One cost $18 million to build but will be considered a bargain if it sets the school on its way to being a 24-hour campus. “I think it’s going to make campus life much more vibrant,” says Dr. Charles Brown, USF’s regional vice chancellor for student affairs. “We’ll have students on campus all the time. It will help USF St. Petersburg become the institution most people want it to become.”

Meanwhile, St. Petersburg College, a more recent arrival in downtown, is a big hit in its new location.

“I think they’re up to 1,500 students,” Mayor Baker says. “And the college bought the strip center adjacent to its new building and it will do another expansion there.”

In May, SPC’s Board of Trustees gave the college the green light to purchase a string of 15 storefronts (most of them empty) on Third Street N down-town, between First and Second avenues – a hot block in an area already ablaze with redevelop-met. Around the corner, the new Progress Energy Florida headquarters is under construct-ion.

The purchase enables the college to plan for a new front door for its downtown center overlooking Williams Park.

Meanwhile, SPC Midtown is in the St. Petersburg Housing Authority’s Center for Achievement at 1048 22nd St. S and shares part of the space with WorkNet Pinellas’ One-Stop Centers. It has 300 students enrolled with an emphasis on entry-level courses.

“With St. Petersburg College coming down-town, the growth of USF, and the addition of Keiser College in Gateway – we are getting a younger demographic citywide,” says Teresa Brydon, the city’s economic development coordinator.

Wanted: Retail

If the mayor of St. Petersburg could get one wish fulfilled for Christmas this year, it would be the arrival of more upscale retail in his city’s downtown.

The city, which has hundreds of thousands of square feet en route at the base of every condominium and office building in the works, nonetheless hasn’t been able to generate a massive retail-only development since BayWalk opened six years ago. Most of the new retail planned is building-specific: service uses and restaurants, not necessarily destination-oriented.

“The biggest problem we have,” says Brydon, “is a lack of big box space. As we move forward with projects, we’re asking developers to give us a bigger footprint on the ground floor to bring in more exciting retailers.”

There is one location in the downtown core that was built for retail, was never used for that purpose, and is soon to be vacant again: the approximately 150,000 square feet over two floors for Progress Energy offices, which are at the base of the South Core parking garage.

“I think it should be retail,” Mayor Baker says. “It was built to be retail. If it’s office again, that’s fine, but it becomes a natural southern anchor for the area with retail.”

Unfortunately for the mayor, St. Peters-burg’s expert on retail development, Craig Sher, doesn’t think the building will work as retail. Sher, who built the only two retail developments in downtown, BayWalk and University Village, is pretty firm in his conviction.

“Some potential acquirers called me,” Sher says. “I think it’s got to stay office. Even though it was originally conceived as retail, I don’t think we’re in the department store world. I advised it should be a service center or office. I don’t see it as a sexy retail piece.”

Sher’s appraisal of the building’s retail potential is news to the mayor and his staff.

“I’M DISAPPOINTED TO HEAR THAT,” the mayor says. “A developer from Miami looked at making it two small, higher-end department store projects with an escalator inside. He was pretty bullish on it. But that’s been two years now.”

“I disagree with Craig 100 percent,” says Brydon.

“We think we’re ready for that retail,” adds Goodwin. “I think sometimes we get under-estimated. We have to do some arm-twisting. Our number one choice would be retail. Number two is office.”

Elsewhere in the city, another pedigreed local retail developer is turning his attention to St. Petersburg. Jay Miller, who ran the Florida operations of Steiner & Associates, which co-developed Centro Ybor in Tampa and CocoWalk in Coconut Grove – and is Sher’s brother-in-law – created his own St. Petersburg-based company in 2005. J Square Developers’ first project is redeveloping the historic Brown Nash Motors building on the corner of 4th Street and 16th Avenue North. In recent years, the 1939 building has been an antique mall.

“If you’ve never looked closely at the building, it has great Art Deco detailing, which I intend to restore as part of an overall renovation of the building for 7,500 square feet of new retail space,” Miller says. “I was motivated by the city’s investment in new landscaping and infrastructure in the 4th Street Garden District, which is scheduled for 2007, and the general demand for new retail locations along lower 4th Street.”

Miller will rename the building the Historic 4th Street Garden Shoppes. The building currently has 20 parking spaces; Miller is adding 10 and has another adjacent property under option that could become more parking.

“I’m looking to put contemporary retail and/or food uses in there,” Miller says. “I’ve made an effort to market it to home furnishings retailers. I think St. Petersburg is underserved by that category. They’re all in Clearwater and Tampa. With all the redevelopment activity all over town, particularly downtown and in the Northeast, there’s a market in south Pinellas County for furniture retailers.”

Fourth Street North has been a corridor of rampant restaurant and retail activity for the past few years, drawing Outback Steakhouse, Carrabba’s Ital-ian Grill, Panera Bread, Starbucks, Chipotle Mexican, Firehouse Subs, Sunshine City Grill, Einstein’s Bagels, and Carino’s and there are several new strip centers under construction.

“If you look at the food retailers that have oriented on 4th Street North, they all are performing above average,” says Miller. “What I’m hearing is that 4th Street, as a retail location, is reaching the upper tier in Tampa Bay. When a new concept is moving into Tampa Bay, 4th Street is in the first tier of locations that are considered. That would not have been true 10 years ago.”

Across town, the Tyrone area has been resurgent with new activity on the heels of Sembler’s redevelopment of Crossroads Shopping Center, which brought The Home Depot, Bennigan’s, Walgreens and, most recently, Fifth Third Bank. Simon Property Group joined the action by rebuilding a stretch of Tyrone Square Mall between Sears and Macy’s, adding several new tenants such as J. Jill, Jos. A. Banks, Bonefish Grill and Lee Roy Selmon’s.

The Royale/Shoppes at the Royale has been announced north of Tyrone Square Mall, featuring 160 residential units and 90,000 square feet of upscale retail. The project, which is the first of its kind in St. Petersburg, is a $70-million, mixed-use development on a 13-acre parcel. Royale will include a six-story, 65-foot tall condo complex with structured parking for more than 700 spaces, and 75,000 square feet of office space. Pricing of the condo units to range from $350,000 to $600,000.

Abundant Arts

St. Petersburg has always been home to a number of museums and enclaves for artists, but in recent years the sector became more organized and effective in marketing and making its cumulative presence known.

The Salvador Dalí Museum, long an international tourism draw on the city’s downtown waterfront, announced plans to co-anchor the Progress Energy Center for the Arts alongside the newly renovated Mahaffey Theater and the new home of the Florida Orchestra, which will build administrative offices on site. Progress Energy paid $6.3 million for a 20-year naming rights partnership.

Dalí received its second $4-mil-lion state appropriation to assist with construction, which is set to begin by January 2007 with an opening planned for early 2009. The new museum will incorporate themes from Dalí’s works, including a double helix staircase, a fountain shaped like Dalí’s signature and a glass dome resembling a loaf of bread. It will also protect its priceless collection from storm surges.

An outgrowth of the Dalí move will be development of a new two-acre waterfront park within the original footprint of the former Bayfront Center arena. Mayor Baker envisions a predominantly green open space with some landscape elements and infrastructure for outdoor events for up to 2,000 people seated.

Closer to the downtown core, one of the city’s most famous landmarks, The Pier, has been earmarked for $50 million in improvements. And the Museum of Fine Arts is moving forward on its own $21-million expansion, which includes a new 33,000-square-foot, two-level north wing addition, glass conservatory, cafe and renovations to the original building.

ALTHOUGH THE MUSEUM OF FINE ARTS has long existed in the Dalí’s shadow as a destination, it broke through in 2004 with its first world-class exhibition, Chihuly Across Florida: Masterworks in Glass, and again in 2005 with Monet’s London: Artists’ Reflections on the Thames, 1859-1914. The shows drew record crowds and raised the museum’s reputation significantly.

The display of Dale Chihuly’s glass art also had a spillover effect on The Arts Center, a downtown gallery that offers arts classes and community out-reach. Chihuly liked the city and The Arts Center so much he committed to opening a 6,000-square-foot gallery and glass-blowing facility adjacent to the center. That, in turn, opened the door to development of The Arts, two 31-story towers totaling 503 luxury residential units and 30,000 square feet of retail space that will adjoin the Chihuly gallery and an all-new Arts Center.

Jimmy Aviram, developer of The Arts, expects to be under construction on the first 224-unit tower by year’s end. Aviram says his Israeli-based investors are committed to breaking ground once the project goes over 100 contracts and “we are very close to this number. We already commit-ted to Chihuly; we put money on that deal. We are selling a lifestyle, an experience. We are getting to people who want to live close by and be in the neighborhood. Today, if you need to be successful, you need to be different. We created an attraction.”

Proceeding separately – although they are literally connected – is construction of a new $30-million facility for The Arts Center, which will be named the Morean Arts Center. The center will redesign and occupy the old Landmark Union Trust Bank building and add a multistory Bauhaus-inspired museum gallery and “Glass House” where the public can view master artists forming works of glass art and even participate.

It should break ground next summer. The center is in the process of raising money; it already has commitments of $12 million in grants and contributions toward the first phase total of $30 million. The new Morean Arts Center will be implemented in two phases

Phase 1 – The Arts Center will have 15,000 square feet of gallery space (triple the size of current exhibition space) and 16,500 square feet of studio classroom space, with a total of 86,000 square feet, including the Glass House.

Phase 2 – Five stories will be added above the three-story Glass House to accommodate the hands-on studio class programming. Ultimately, the facility will have 27,000 square feet of gallery space for a total of 123,000 square feet, including the Glass House.

THERE IS SOME CONFUSION about The Arts Center and The Arts towers. They will be entwined upon completion, but each project has its own architect and its own ownership.“Theirs will take longer than ours,” says Evelyn Craft, executive director of The Arts Center. “We will own our own land and run our own building.”

Craft isn’t the least bit concerned that market conditions might slow development of the towers despite assurances to the contrary from Aviram. “I don’t believe we have to worry about it but we have alternatives. One is that we could build independently or we could choose another site. But I’m not worried about it. If this were to take longer, it gives us more time to build our endowment. If the condos take a little longer, it would not end our deal. We already feel we’re running to keep pace with them.”

The time is apparently right for a city with a wealth of arts activities and facilities to build a residence attracting artists and their patrons.

“The economic benefits of a vital arts and cultural scene have been measured and validated,” Craft says. “The Dalí brings 200,000 people from other countries each year. A cultural tourist stays longer, spends more money. The Museum of Fine Arts had huge attendance with Chihuly and Monet. We found the same thing with the glass-blowing demonstrations we did at the same time the Chihuly exhibition was at the Fine Arts. Participation has increased dramatically; The Arts Center has grown exponentially. I think our time is here.”

A Signature Place

Signature Plaza will be the first of a new generation of striking architectural landmarks in St. Petersburg’s future.

Construction of the 35-story, sail-shaped, luxury waterfront condominium tower is scheduled to begin this fall with the first residents moving into the low-rise portion of the building in fourth quarter 2007 and with residents moving into the 35-story tower in fourth quarter 2008.

Tampa-based developer Joel Cantor says his building is already an unqualified success.

“We have over 70 percent of the units sold on nonrefundable contracts,” he says. “We’re going forward gangbusters. We have a unique, special project. It attracted a lot of interesting buyers from all over. Our average price is $735,000. That weeded out the investors. Our contracts are not reassignable and we had few, if any, multi-unit buyers. We had a lot of buy-ers tired of commuting, living in suburbs; they want to be in a city.

“St. Petersburg has come a long way,” he adds. “It’s like a European city. I lived in Copenhagen; I lived in New York City. Else-where in Florida you have to drive everywhere, but St. Petersburg has grown exponentially and there is so much going on. The lifestyle sold our property.”

The design of Signature is unlike anything in St. Petersburg, let alone the entire west coast of Florida.

“Most cities have some nice piece of architecture,” Cantor says. “St. Petersburg didn’t, in my mind, stand out. I only had two requirements of our architect. I wanted the best building ever built in Florida and all the residences had to have an unrestricted view of the water. I can’t see why you’d want to live in a tower that didn’t have a view. The ones in the so-called back have as good a view as those facing the water. And they have a city view, so they have an advantage.”

Ralph Johnson, the internationally renowned architect from Perkins + Will who designed Signature, supported Cantor’s vision.

“You have a chance to make a difference in that city,” Johnson told Cantor. “It gives you an opportunity to define the landscape and the town.”

And in keeping with modern trends, Signature is more than just a residential artifice. The building will include 203 high-end condo residences; 40 lofts; 19,313 square feet of ground-floor retail; 36,737 square feet of office space; as well as a separate parking facility with 505 designated spaces. The development will also feature the 35,000-square-foot Sky Garden Oasis, an urban plaza with a six-story waterfall and a spa. Fifth Third Bank, which is financing Signature, purchased space for a 5,000-square-foot ground-floor branch and an additional 5,000 square feet for bank offices.

Cantor is already developing his next residential project for the city, one for those of more modest means. He also plans to replicate it in other cities.

“We’re trying to get the price point down to $260,000 to $345,000,” he says, “a low-rise building that’s inexpensive to build but would appeal to buyers that are between the ages of 25 and 37. I’ve got a public company that’s my development partner for that one; they own 400 different sites. And we’ve got Perkins + Will working on the prototype.”

WHILE OTHER BUILDERS got all the attention for what they planned to do in downtown St. Petersburg, Atlanta-based Miles Development quietly came to town and got to work, building the 114-unit 1010 Central in the heart of the city and, even before construction there was completed, starting on The Sage, a mid-rise condominium tower at the city’s southernmost on-ramp to I-275. Miles also built the Box Fac- tory Lofts in Tampa.

“We’ll be finished with 1010 in December,” says developer Jason Perry. “We bought that two years ago and thought it was an awesome location. St. Petersburg has great infrastructure downtown, wide sidewalks, people and there are vacant lots.”

1010 adds 2,500 square feet of what Perry calls “true” retail to the corner of Central Avenue and 11th Street in the form of live/work units. New to St. Petersburg, these were sold as retail/office space on the ground floor with residential units directly above.

Prices at 1010 range from $159,000 to $450,000. “We tried to offer a price point nobody else had,” Perry says. “We saw an opportunity for people who couldn’t pay $1 million for a condo on Beach Drive but wanted to live downtown.” Ninety-five percent of 1010’s units were sold in the first 30 days they were available.

Miles bought the land for The Sage about six months after it acquired the land for 1010 and started construction there about six months after 1010. The Sage was sixty percent sold by June.“

The Sage is a little different from 1010, although we’re again trying to hit a niche,” Perry says. “Prices are in the mid-$300,000s to low $600,000s. The rationale was that across the expressway are All Children’s Hospital, Bayfront Medical Center and the University of South Florida, all doing extensive projects. It’s just a good neighborhood feel.”

But wait – there’s more.

“We have another block we bought from Verizon on Central Avenue at 17th Street in February that’s a two-acre site,” Perry says. “We’re going to develop 200 multifamily units there, although we haven’t decided whether it will be for rent or for sale.”

EVEN THE “BAD” NEWS may not be all that bad. In 2005, developer Frank Maggio announced a group of dramatic, ambitious condominium projects in both downtown and the southern tip of St. Petersburg: The Edge, The Tamarind and Nautico.

Of the three, The Edge was the most audacious and imaginative, promising that the structure’s outer skin would change colors with the rise and fall of temperatures outside the building.

“I think his building designs are beautiful,” says Joel Cantor, who is developing Signature Place. “I just don’t know if that’s the right location.”

Maggio, 44, also promised a Times Square-style news ribbon around the building and that it would eventually become home to a massive New Year’s Eve celebration.

“Ten years from now, St. Petersburg will be Park Avenue in New York City,” Maggio says. “It’s not going to be Miami. It won’t have the exotic, Mediterranean party atmosphere. A little more laid back than Manhattan, less snobby than Palm Beach. I believe St. Petersburg will be one of the top 10 cities in the world, like Sydney, Australia. You’re going to see the shops, the restaurants, the hotels.”

Maggio, you see, refuses to think small.“Frank’s a brilliant developer, a business man, very ambitious, very innovative,” says his friend, fellow developer Craig Sher. “He’s just into a lot of things. He’s cutting edge. I like guys like that. He’s frenetic; a guy you want to be around.”

But Maggio’s condo construction plans are at least temporarily on hold. “We’ve been hit by the real estate slowdown,” he says. “There’s a purging process that needs to take place. We’re lucky we don’t have a lot of construction in the ground. We’re pulling back on our marketing dollars to work through the summer. There is an old saying that you fish when the fish are biting. They’re not biting.”

That said, Maggio opened a city homes gallery in July, showing off the planned amenities at all of his properties. And with presales continuing, he still expects to break ground on Nautico and The Edge in 2007.

“I think both will come out of the ground next winter or early spring,” Maggio says. “There will be a lack of inventory built in the next 18 months. Whoever has inventory to sell will own this marketplace. You have a pretty substantial number of approved projects. But in terms of cranes, you have The Sage and 1010 Central. The Sage will be absorbed before they’re done. The Opus South projects – 400 Beach and Parkshore – will be done and off the market. And you’ve got Signature. The people buying at Signature – that’s such heady pricing, my suspicion is those are end-users. The speculators are gone. The people in this marketplace are at best speculators. I compare it to a day trader vs. people investing for the long-term. Our potential buyer is from St. Petersburg and Sarasota and they’re reading the papers and hearing the hype, which is negative. The investor market was there; they’re waiting to see where the dust settles.”

Maggio has a unique financing plan in the works intended to reignite sales.“We got into the minds of residential buy-ers and investors and tried to understand what would entice them enough not to wait on the sidelines,” he says.

The result is the “Concierge” financing program developed with Wells Fargo. “The core tenet of the product is we want buyers to not worry about a bump in the real estate market,” Maggio says. “We also want to address the concern people have when they buy a second home and have two mortgage payments. Last, rising interest rates. How do we lock people in at today’s rates?”

The Concierge program will be discontinued once each project hits the 50-per-cent sales level.

Not that Maggio is entirely quiet on the construction side. Dock sales at Nautico have been “robust,” Maggio says. “It covers our overhead. Boat dock sales are strong; residential sales are tepid.”

It would be easy to dismiss Maggio as a dreamer, but he’s hardly the new kid on the block.

“I HATE TO SAY IT BUT I was part of what was purged in the recession of 1991-92,” he says. “I was 29 years old and I had very ambitious plans to build three, 19-story towers on Isla Del Sol. I had the first building 75 percent sold and still couldn’t get financing because of RTC issues. We sold the land and got into single-family homes. We built $250-million worth of homes, docks, lots and condos. But I vowed to get back into condos. This time around, we have financing, land positions and entitlements.

“The only project I’m concerned about is The Tamarind and only because of construction costs. Under pricing of two years ago, it would have been very successful.

In some ways, the flatness in the condo market comes at a good time for Maggio, whose business interests include two television projects, ReacTV and erinMedia, that took off this summer.

“I’ve been taking money from real estate and investing in technology. That’s my true passion,” Maggio says. “ReacTV is a TV/Internetwork. It’s live on television and the Internet at the same time. It’s a game show channel built on two key premises: a lot of people watch game shows vicariously and we think they want to play. And we think if we reward people, they will pay attention for commercials. We call it CRAV – Consumer Rewarded Advertising Vehicles – and I have a patent on that.”

Maggio signed a deal with Bright-house Networks to launch ReacTV in the Tampa Bay area on channel 77 on August 1 – the 25th anniversary of MTV’s launch. “We picked that day to launch ours as homage to the last rebellious network to launch,” Maggio says. “The real disruption is not that it’s on cable; it’s that it’s simultaneously on the Internet (www.77.tv). Every broadband family in the U.S. can watch and win – 55-million broadband homes could watch us on day one.”

erinMedia is a TV ratings company intended to eventually compete with Oldsmar-based ACNielsen. Together, ReacTV and erinMedia have 34 employees; Maggio’s entire staff, including real estate marina operations and Crescendo, an executive management company, totals 75.

Maggio isn’t the only developer whose grand vision for St. Petersburg was sidelined or delayed in 2006. Orlando-based developer Richard Kessler’s condotel project stalled and he went back to the city in July for approval of a new approach that put greater emphasis on the hotel component and less on condominiums. The city approved the revised plan (for 260 hotel rooms and just 52 residences) and breathed a sigh of relief; with so many condo units already under construction, more hotel rooms were far more desirable, says Mayor Rick Baker.

“They restructured it and added almost 100 new hotel rooms,” Baker says. “I think that’s a positive for the city. We have lots of new condos; we need hotel rooms.”

Joel Cantor, who is developing near-by Signature Plaza, agrees.“I hope it gets built,” Cantor says. “It’s a beautiful building and the hotel would be beneficial for the city. I looked at the pitch that the condos are on top and that if you push a button your orange juice is delivered to your room. But it’s only worked in a few places. People that have money are not stupid. They don’t want to call room service for an $18 burger. It mostly works as a hotel. A lot of its views are obstructed; Progress Energy is right behind it. Locations dictate everything and the market is saying it’s a hotel.”

Groundbreaking is now scheduled for Spring 2007.

Unlike what happened in many cities during previous real estate whirlwinds, Teresa Brydon says none of the city’s major construction projects will start and stop.“There are not going to be any projects that get halfway and shut down,” she says.

“They’re too well-funded. And we’ll help them. Projects may evolve and morph; we have a history of that.”