The City of St. Pete is in discussions to sell a 1.53-acre city-owned property near the future Historic Gas Plant District redevelopment in downtown St. Pete. 

Third Lake Partners, which was established by Ashley Furniture founder Ronald Wanek, is expected to purchase the property at 298 Dr. Martin Luther King Street South from the City of St. Petersburg for $10 million. 

The property is situated east of Tropicana Field and directly west of United Property Insurance's (UPC) former headquarters building, which Third Lake Partners bought in 2022 for $10.5 million. 

The deal will go before St. Petersburg City Council for approval on September 5th. City staff has recommended approval.

As a condition of the sale, Third Lake Partners will be required to grant an easement to the city on 2nd Avenue South, preventing it from being vacated and developed upon. This will allow the corridor to continue to be used as a public right-of-way as it is anticipated to be a main thoroughfare into the future Historic Gas Plant District site.

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

However, Mayor Ken Welch rejected the deal in 2022, citing inadequate affordable and workforce housing. 

Although specific details are not yet available, per the drafted agreement, Third Lake Partners is required to develop a mixed-use project on the property, which may include residential, office, retail, and hotel uses.

Affordable housing does not appear to be a requirement of the new project.

Construction on the new development must commence within five years.

Third Lake Partners initially submitted an unsolicited offer to the city in March 2023 to purchase the site for $6 million.

As a result of unsolicited offer, and pursuant to Florida Statutes, the city had to invite additional alternative proposals from private developers, or anyone interested in the lease or purchase of the site.

One alternative proposal was submitted within the 30-day period, however Mayor Ken Welch ultimately selected Third Lake Partners and started negotiations with the firm.

After negotiations with the City of St. Petersburg, Third Lake Partners’ offer was increased to $10 million.

Third Lake Partners has an existing long-term lease on the parking lot, which would end with approval of the sale agreement. Without the sale, the long-term lease would extend until 2086.

Tobias Realty Advisors, among other property appraisers, determined the market value of the property to be $17.94 million for the unencumbered fee simple interest and $15 million for the leased fee interest. 

The proposed $10 million sale to Third Lake Partners was determined to be fair value by the city administration due to several factors that lower the existing market value of the land including the the city’s existing obligation to provide 90 ground-level parking spaces at the site, the expectation that future property tax collections will surpass the rental income received under the existing land lease agreement, and that Third Lake Partners is granting an easement along Second Avenue.

Third Lake Partners is a major stakeholder and investor in St. Petersburg real estate.

In 2017, the firm purchased 200 Central, St. Petersburg’s tallest office tower, for $65.75 million.

Third Lake Partners was also an equity partner for the development of ONE St. Petersburg, a 41-story 253-unit condo tower that opened in 2018 in downtown St. Pete.

The company is also an equity partner in the 3rd & 3rd tower, a 33-story apartment building that is under construction at 235 3rd Street South. St. Pete-based real estate developer Echelon is leading the development of 3rd & 3rd.