City to subsidize stalled Deuces affordable townhome development
/Street level view of a 24-unit affordable townhome development planned for 22nd Street South in the Deuces | City of St. Pete
A dirt site the city promised to redevelop into a thriving live-work environment for the South St. Pete community has remained just that - an empty lot - but officials are headstrong on pushing the project forward with significant subsidies.
During a Thursday, January 18th city council meeting, the majority of councilmembers passed a string of resolutions to move the needle on the affordable 24-unit townhome development located on 22nd Street South between 6th and 7th Avenue in the Deuces, a historic African-American entertainment and business district in the 22nd Street South corridor.
The approved resolutions included a roughly $13.1 million maximum guaranteed price (GMP) to Tampa-based Horus Construction Services, which was hired as the design-build firm in 2019.
The councilmembers also approved a $5.98 million loan from the Economic Stability Fund, which will be transferred to the Housing Capital Improvement Fund to finance a portion of the construction.
The 24-unit affordable townhome community will be constructed on 22nd Street South between 6th and 7th Avenue in the Deuces, a historic African-American entertainment and business district in the 22nd Street South corridor | Google Maps
The project costs escalated due to the pandemic's chokehold on the labor and supply chain among other issues, city architect Raul Quintana said. To date, the team has spent roughly $4.5 million on the design work and infrastructure.
The original vision for the 2.7-acre area entailed building a commercial park and residential development; however, in 2023, the administration decided to pull back on the commercial component, making the townhomes the top priority.
"We all understand the affordable housing project, but the math with this deal is so far out of the ballpark. It's not even in a gray area. In the private sector, this just would never be done," said Councilmember Ed Montanari.
Councilmember Richie Floyd, who cast the other opposing vote alongside Montanari, also raised similar concerns about the heavy subsidies, which would break down to over $500,000 per unit.
A view of the affordable townhome community Looking east on Fairfield Avenue | City of St. Pete
The prices of the two-bedroom and three-bedroom townhomes would vary from $223,000 to $317,000.
In comparison, new-to-market luxury townhomes in St. Petersburg can start at the high $700,000 price point, such as the Grand Central Townhomes developed by home builder David Weekly.
"We think the subsidy is worth it," City Administrator Rob Gerdes said. "We feel that it’s important enough for us to step in with taxpayer money to make this happen and that this can be a real catalyst on the Deuces."
Councilmember Lisset Hanewicz acknowledged the team's effort of cutting the cost down from $33 million, which encompassed the commercial component, to $19 million - a figure she said is "something more digestible."
A view of the affordable townhome community Looking west on Fairfield Avenue | City of St. Pete
The $19 million project cost does not include the cost of land, which the city purchased in 2007 for $2.2 million.
The new $13.1 million GMP includes a $300,000 contingency to remediate contaminated soil, which is commonly found on industrial sites.
“We are going to haul away the contaminated soil and bring in new clean infill,” Quintana said. “All of that is going to be done before the contractor steps foot on the site.”
Hanewicz favored the project despite sharing a similar sentiment to Floyd about a large subsidy for a mere 24 units.
“The subsidy is even higher than $800,000 because it’s not even including the land costs,” Hanewicz said. “This is an anomaly… we are at the point where we have to do something with this.”
A view of the affordable townhome community from Fairfield Avenue | City of St. Pete
Quintana noted the net proceeds from the sale of the units, estimated to generate $6.2 million net proceeds after commissions, would help offset the loan from the Economic Stability Fund.
The homes will be sold to qualified first-time homebuyers based on their income and other factors. A dozen units will be reserved for households earning 80% or less of the Area Median Income (AMI). The remaining half will be slated for residents earning 120% or less of the AMI.
There will be downpayment assistance and a minimum 30-year affordability term.
According to city documents, a contracted realtor will market the units and prescreen buyers.
A Rear view of the affordable Housing community showing fenced backyards and parking associated with each unit | City of St. pete
There will be twelve 1,700-square-foot three-bedroom units and twelve two-bedroom units, approximately 1,600 square feet.
Each townhome will be sold fee-simple to include two parking spaces as the units will not feature garages.
Resale of the homes will be restricted by affordability conditions and/or an equity-sharing plan. However, St. Petersburg Housing Development Manager Mark Van Lue said the city has not fully worked out the sale agreement terms of units.
Horus Construction Services expects to commence construction on the residential development in March or April of this year and complete the project by the summer of 2025.
