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Graham-Rogall fate remains up in air

The developer now worries over a use restriction clause.

By AARON SHAROCKMAN
Published June 22, 2007


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ST. PETERSBURG -- The proposed sale of the city's largest public housing complex remained in limbo Thursday, with neither the would-be buyer nor the city's Housing Authority sure of what will happen next.

And now it's the developer who's getting cold feet.

Meeting in a special workshop to address the proposed sale, the Housing Authority and condominium developer KEGB had few answers for residents of the 486-unit Graham-Rogall.

After being criticized for allowing the public housing to become condominiums, the Housing Authority had agreed to put the sale on hold as it examined its options. But now, when the Housing Authority board seemed more receptive to the sale, the developer has recoiled.

The latest issue: a use restriction placed on part of the building during a 1994 bond refinancing.

Under the terms of that restriction, which affects Rogall's 150 units, the apartments must remain affordable rental housing until 2017. KEGB wants to redevelop the property into condos sooner.

The restriction can be rescinded only if the authority can demonstrate to the federal government that Rogall is economically unsustainable, Housing Authority executive director Darrell Irions said. But Rogall, unlike the larger Graham portion of the complex, is making money.

Irions said the U.S. Department of Housing and Urban Development has so far refused to lift the restriction.

Irions and KEGB said they would appeal to HUD for a special exemption.

"These particular buyers, what there position is, if they can't get the use agreement modified or removed, they are not interested in moving forward," Irions said. "They need the entire package."

Thursday's meeting, which lasted 90 minutes in the common room of the more than 30-year-old high rise, illustrates the at times discordant negotiations that have dragged on for three years.

"There's about 15 different ways this thing could go," Housing Authority commissioner Deveron Gibbons said near the end of the discussion. "I hate to see them Graham-Rogall's residents waffling back and forth on what's going to happen."

The Housing Authority originally decided to sell Graham-Rogall to developer Vector Realty in June 2004 with the idea the property would remain affordable rentals.

But Vector sold most of its interest in the property after the deal was challenged by a rival developer. Once that challenge was settled last year, KEGB announced altered plans for the building.

The developers say they cannot make a profit running Graham-Rogall as apartments even if given the property for free.

Instead, the developers have agreed to pay about $11.4-million, with about $1-million up front, to aid in the relocation of Graham-Rogall's current residents.

Housing Authority board members also discussed renovating the building.

Financing officials said finding the money to complete the renovations was possible, but difficult.

Officials also said the job could be made easier if part of the current structure was demolished.

"Rehabbing it is one of the issues we have to consider," said board member David Welch, the lone board member who expressed a hope to save the building. "Everything is a risk. Life is a risk in itself. Somehow the board has to decide whether they want to take a risk."

Aaron Sharockman can be reached at asharockman@sptimes.com or (727) 892-2273.

FAST FACTS: Hurdles remain

What happened Thursday?
The St. Petersburg Housing Authority will attempt to lift a restriction on part of Graham-Rogall that requires 150 units remain for-rent, affordable housing until 2017.

What does it mean for residents?
It's unclear. Getting the Department of Housing and Urban Development to lift the restriction may be difficult, officials say. Without the change, the developers say they may pull out of the deal.

 

[Last modified June 22, 2007, 03:40:06]


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