After months of discussion, the City has reached a preliminary agreement with Third Lake Partners and Echelon to purchase the existing Municipal Services Center (MSC) located at 1 Fourth Street North and construct a new facility on 2nd Avenue North. The joint venture has proposed purchasing the existing MSC for $12.25 million, which the City will use to fund the construction of the new MSC building.

The Municipal Services Center is an 11-story city-owned office building that houses local government services such as the planning department, code enforcement, and parking management, among others.

The City began exploring the redevelopment of the MSC back in December 2019 after receiving an unsolicited proposal to purchase the property from New York-based development firm Property Markets Group (PMG). The idea to redevelop the site had previously been discussed by St. Pete Mayor Rick Kriseman, who envisioned building a new MSC building closer to City Hall to create a ‘campus-like’ feel among municipal services. The existing MSC is three blocks from City Hall.

“Our Municipal Services Center, which is where many of our City of St. Petersburg team members work, is in need of considerable upgrades and takes up prime real estate in the heart of the city’s downtown,” says Mayor Kriseman. “We are now one step closer to moving our employees closer to City Hall and activating a vital corner in our downtown. I am excited about the opportunity to work with Third Lake and Echelon on this project.”

Property Markets Group’s offer to redevelop the site triggered an open bidding process which closed in February 2020. In addition to PMG, four other firms submitted bids to redevelop the site: Allen Morris, BLAKE Investment Partners, Lincoln Property Company, and a joint bid from Third Lake Partners and Echelon.

Each of the submissions conceptualized the redevelopment of the existing MSC property as well as the construction of a new MSC building on a city-owned lot on 2nd Avenue North.

Tampa-based Third Lake and St. Pete-based Echelon plan to build a new 120,000 square foot office building on 2nd Avenue North to replace the existing MSC along with an adjacent 20-story multifamily building of which 20% will be workforce housing units.

The multifamily building could be built simultaneously with the new MSC or as a later phase of the project. The multifamily building will include ground-floor retail with a shared parking garage. The facade of both buildings is expected to be in the same architectural style as City Hall – which was designed in a Mediterranean Revival style.

“It’s a three-for-one project. New MSC for the City, significant new private sector office space at the old MSC site, and a substantial amount of new downtown workforce housing,” says Alan Delisle, St. Petersburg’s City Development Administrator. “We are so happy to be making such good progress with a top local development team.”

After completion of the new MSC building, and once City staff has been relocated, the joint venture would renovate the existing MSC and activate Central Avenue by reorienting the ground floor of the building from office space to retail space. Currently, the block is void of retail space which creates a dead zone along Central Avenue.

The renovated office space in the building would be offered as a more affordable alternative compared to Class A office space in the market. Adding new office space to the downtown market has been a primary goal in the City’s economic development efforts.

“As an organization, and as part of the community, Third Lake is very excited to work with City Council and the Mayor, as well as stakeholders in the City of St. Pete, to develop a new MSC in conjunction with a redevelopment or rehab of the old MSC site,” says Ken Jones, founder and CEO of Third Lake.

Third Lake notes that the existing MSC building will likely be razed at some point in the future, when the market warrants, and redeveloped in conjunction with the development of a surface parking at the corner of Central Avenue and 3rd Street, which the company also owns and is used for tenants at 200 Central.  Redeveloping both sites would maximize the potential of both properties.

“We want this project to be developed in a concerted way so as to create continuity between the two sites,” Jones adds. “By doing this you create a consistent sense of place, which is great for the urban core. This development will be transformational for the downtown St. Pete.”

Both Third Lake and Echelon have considerable development experience as well as experience developing as partners. The team is currently developing Waterview, a 15-story apartment building in St. Pete’s Carillon office parking in the Gateway area. Carillon was spearheaded by Echelon. The new MSC and redevelopment of the existing MSC site is just the latest development by the two firms.

Now that a preliminary term sheet has been agreed upon, both parties will begin negotiations on a development agreement. The term sheet will be presented to City Council and a development agreement must be approved for the sale and development to move forward.

Given the timing of negotiations, design, and permitting, groundbreaking on a new Municipal Services Center is not likely to occur until 2022 at the earliest.