Municipal services

City Extends Third Lake Accord Talks to Build New Municipal Service Center • St Pete Catalyst

Hanging up on details of the construction of a new municipal service center and plans to convert the old MSC site has caused the St. Petersburg city council to move the discussion on reaching a deal with Third Lake Partners LLC.

At its meeting on Thursday, the council debated for nearly three hours the details of the city’s approval of the first phase of reaching a framework agreement for the sale of the existing MSC. The board ultimately voted 6-2 to postpone the resolution to committee in the new year.

A rendering of the new MSC and residential / commercial tower planned on 2nd Avenue North, just north of City Hall.

As part of the Tampa-based Third Lake Partners deal, the company would purchase the current 11-story MSC building at 14th St. North for $ 12.5 million and build a new MSC at 429 Second Ave. North, across from City Hall. Additionally, Third Lake Partners would construct a new 280-unit apartment building adjacent to the site that would include 31% units for workforce housing as well as retail and shared parking.

City development administrator Alan DeLisle said the approval would have essentially given a nod at the start of the first phase of the $ 500,000 concept planning process, which would have enabled the city “to spend time going through the process and seeing what price she can get for the [existing] MSC.

DeLisle pointed out that Third Lake Partners’ bid of $ 12.5 million was the highest bid received, and a sale is essential as the city will use the proceeds from the sale to reduce the cost of the new MSC building. The sale would save the city about $ 37 million in deferred maintenance costs on the existing MSC, according to a 2018 estimate.

A new MSC building would also bring the municipal administration closer to the town hall.

The city would lease the existing MSC to Third Lake Partners until the new MSC is completed. Third Lake Partners would also purchase a city-owned property at 461 Second Ave. N. to build an apartment complex. The apartment site was valued at $ 5.85 million.

“We are potentially leaving $ 20 million or more on the table,” said board member Robert Blackmon, explaining the market influx and the need for fair market value.

Blackmon said he had the utmost respect for Darryl LeClair, president and CEO of Echelon, the development group that works with Third Lake Partners, calling LeClair one of the best builders he knows.

However, Blackmon said the deal requires further consideration.

Mayor Rick Kriseman’s administration is coming to an end and council wants to maximize the potential of the MSC sale.

“It’s like we’re pointing the ball,” said board member Darden Rice.

City council members also discussed the affordable housing component for the planned apartment complex. Third Lake Partners initially predicted that 20% of units would be affordable housing, but that figure rose to 31%.

As for the takeover of the existing MSC site, Third Lake Partners would lease it to the city while the new MSC of more than 120,000 square feet would be built. Third Lake Partners would then either keep the existing and deteriorating MSC building and renovate it to create Class B office space or tear it down and build a brand new development.

“In order to do that and factor in the efficiency gains, we are building it all in one fell swoop,” said LeClair, explaining how the construction of a new MSC and apartments would go together.

Before council’s decision to move the discussion, St. Pete Mayor Kriseman tweeted: “Today is our chance to move forward with a much needed new municipal service center for our people. employees and the public… It’s a chance for more affordable housing, and updated offices and businesses on the ground of the current MSC.

The process of creating a new MSC began in 2019 when the city received an unsolicited offer from the New York-based Property Markets Group for the construction of a new MSC and apartment complex on the plots owned. to the city on 2nd Avenue North, and the purchase of the existing MSC.

In response to the offer, the city requested alternative proposals and received several qualified alternative proposals. After review and consideration, Kriseman selected Third Lake Partners.

The city worked on a terms sheet and development agreement with a joint venture between Third Lake Partners and Echelon.

RELATED: New municipal service center would be a financial victory for the city, the administrator told the committee

The existing MSC was built in 1925 and houses municipal offices such as billing and collections administration, code compliance assistance, construction services, economic and development services, finance and law enforcement. real estate and property management.