Finalists selected for the redevelopment of MSC building in downtown St. Pete

The redevelopment of St. Pete’s Municipal Services Center (MSC) has taken another step forward with the selection of two finalists – Allen Morris and a joint proposal by Echelon, LLC and Third Lake Capital.

Two finalists have been selected to redevelop two lots in downtown St. Petersburg, FL. These lots are outlined in red on the map above.

Last December, the City of St. Petersburg, FL received an unsolicited proposal from New York-based development firm Property Markets Group (PMG) to purchase and redevelop the MSC at 1 Fourth Street in downtown St. Pete. In order to redevelop the site, a new MSC building would be constructed on a city-owned parking lot on 2nd Avenue North. This unsolicited offer prompted the city to release a Notice of Intent to Sell, inviting any alternative proposals from private developers to purchase the existing MSC.

In February it was revealed that five groups had submitted proposals to redevelop the two sites. In addition to Property Markets Group, these groups included Miami-based developer Allen Morris, local private equity firm BLAKE Investment Partners, national developer Lincoln Property Company, and local real estate firm Echelon, LLC.

The Municipal Services Building, or MSC for short, is an 11-story city-owned office building at 1 Fourth Street North.

While all of the submissions varied in style, they were generally all mixed-use proposals that incorporated ground-level retail, speculative Class A office, and residential uses. Additionally, each of the submissions would also construct a new Municipal Services Center on 2nd Avenue North across from City Hall.

After the initial round of submissions, the City requested more information and detail from each of the five groups. All of the groups submitted best and final offers with the exception of Lincoln Property Group which decided not to continue pursuing the project. St. Pete Rising reported on these proposals in detail in July.

With these best and final submissions, two new groups entered the mix. Feldman Equities joined Property Markets Group’s in their proposal and Third Lake Capital joined Echelon, LLC. Both firms manage and own existing office buildings in downtown St. Pete.

Echelon’s proposal for a new MSC building features an adjacent 20-story residential tower.

The latest round of submissions were thoroughly vetted by the City with each judged on cost, timeline, and access to capital, among other factors. Accordingly, the City has narrowed down the redevelopment to proposals from Allen Morris and Echelon / Third Lake Capital.

Allen Morris’ new MSC building features a 30-story residential tower and a modern office building.

Both Allen Morris and Echelon / Third Lake are proposing new mixed-use developments on both the Central Avenue site as well as the 2nd Avenue North site. However the financial terms and other details vary.

Along 2nd Avenue, both groups propose 120,000 square feet of office space to replace the existing MSC building along with an adjacent residential building which includes between 15-20% of workforce housing units. In renderings, Allen Morris’ residential building appears to be nearly 30 stories while Echelon / Third Lake’s proposal appears closer to 20 stories. Both proposals also include ground floor retail.

Allen Morris’ Central Avenue redevelopment proposal featured a mixed-use building with residential, office, and retail.

The proposals diverge when it comes to the redeveloping the Central Avenue and 4th Street site. Allen Morris is proposing a new mixed-use building with 13,000 square feet of ground floor retail, 308 residential units, and 40,000 square feet of office space. The building has been designed in a neo-art deco design.

Echelon / Third Lake would utilize the remaining useful life of the existing MSC building by converting the ground floor office to retail and leasing the remaining office space on the upper floors. Then, when market warrants, the building would likely be scrapped and redeveloped, although the details of that were not discussed. The proposal could potentially be complimented by the synergies of redeveloping the parking lot adjacent to 200 Central, which is owned by Third Lake Capital.

With these two finalists, the City will likely have follow-up questions and could request additional information. A final decision on which group will be selected will likely occur in the coming weeks.

Once selected, the finalist would enter negotiations with the City on an agreement which includes specific required uses and financing terms. The agreement would then need to be approved by City Council. Both proposals will likely change during these negotiations.

Construction on a new MSC building is likely years at least a year away and completion would likely not occur until late 2023 or early 2024. Once a new MSC building is completed, a potential redevelopment of the Central Avenue site could begin.

More information on these proposals can be found on the City’s website.