The City of St. Petersburg has received an unsolicited proposal to purchase and redevelop a city-owned lot at 800 1st Avenue South in downtown St. Pete.

The property, which is currently a surface parking lot, was once part of a $200 million mixed-use proposal that would have included a 75,000-square-foot Moffitt Cancer Center, a 30-story residential tower, and a 14-story hotel.

That proposal was ultimately rejected after St. Petersburg Mayor Ken Welch was unsatisfied with the amount of affordable housing provided in the development.

The latest offer to redevelop the block is from a joint venture by Property Markets Group (PMG) and Feldman Equities. The offer is a separate parcel from an unsolicited offer by Third Lake Capital for 1.5 acres fronting Dr. M.L.K. Jr. Street and 3rd Avenue South.

PMG is a national real estate development firm with offices in Miami and Manhattan while Feldman Equities owns and operates office buildings, including three in downtown St. Petersburg: First Central Tower at 360 Central Avenue, Morgan Stanley Tower at 150 2nd Avenue North, and City Center at 100 2nd Avenue South. 

PMG/Feldman’s proposal calls for a two-phase development with the first phase prioritizing affordable housing with the delivery of a six-story affordable housing building with 111 apartments. 

The building would be located along 8th Street and would be income restricted for those earning 80% of Area Median Income (AMI) or below. The first phase of the development would be built by general contractor DuCon Construction.

A second phase would include a minimum of 110,000 square feet of Class A office space and 259 market-rate apartments. In addition, the development would also have 14,000 square feet of ground floor retail space. A parking garage would also be built.

The proposal states: “We’re delivering a minimum of 110,000 square feet of needed office space, which will support approximately 300 new jobs after construction. This could be St. Pete’s first major multi-tenanted office since 1992.”

The second phase would be built by Suffolk Construction. Place Architecture is expected to design the buildings.

The proposed market-rate apartment building would be 29 stories and would front 1st Avenue South while the proposed office building would be 11 stories and would front Dr. M.L.K. Jr. Street.

In total, 30% of the residential units in the PMG/Feldman proposal would be affordable for households making at or below 80% of AMI which was the affordable housing goal Mayor Welch stated when evaluating the prior proposal that included Moffitt Cancer Center. In that proposal only 17.5% affordable units were deemed affordable.  

The project would be structured where the developers would construct the affordable housing building and then convey the building to the City of St. Petersburg upon closing of the land for the second phase.This would ensure the building remains affordable in perpetuity. 

The group’s offer for the land is $8 million.

The development does not include vacating 2nd Avenue South between 8th Street and Dr. M.L.K. Jr. Street, which was envisioned in the Moffitt proposal.  

“We are not proposing to close 2nd Avenue South – we believe that should be a right of way that provides a front door to the Historic Gas Plant development. This is especially important in light of the significant increase in traffic that is expected to occur from the Historic Gas Plant development,” states the proposal.

If awarded the project, the group hopes to immediately begin the development process for the affordable housing building with the second phase to begin at completion and when office leasing allows. 

As a result of unsolicited offer, and pursuant to Florida Statutes, the city must invite additional alternative proposals from private developers, or anyone interested in the lease or purchase of the site. The city will decide whether to move forward once all proposals have been reviewed.