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The Rays hope that a proposed mixed-use project will pay half of the new stadium's cost.
By MARK ALBRIGHT, Times Staff Writer
Published November 29, 2007
ST. PETERSBURG - Most of the attention Wednesday was focused on a glitzy waterfront ballpark, topped with a soaring sail strung from a 320-foot-tall mast.
Several blocks to the west, in a far less glamorous setting, lay the key to the whole deal.
The Tampa Bay Rays' plans for an iconic downtown ballpark hinge on the redevelopment of the Tropicana Field site. The Rays hope more than half of the cost of a new $450-million waterfront ballpark will come from the city's sale of Tropicana to a developer, and property taxes generated by development.
A prominent Texas developer has the advantage in what promises to be a high-stakes bidding contest.
Hines Interests LP, known for developing the Galleria malls in Houston and Dallas and several trophy office buildings, on Wednesday unveiled part of its vision of a retail-driven, mixed-use project on roughly 86 acres.
The city of St. Petersburg intends to solicit bids from developers this winter to tear down Tropicana Field and invest $500-million to $700-million into the site, converting it into a work/live/play community.
The first phase would return streets and sidewalks to what is now paved parking lots. Nine hundred work force housing units, for sale and for rent, would be added in a Main Street-style development interwoven with a million-square-foot retail complex.
Restaurants, apparel stores typically found in malls and several big box stores would be probable tenants, filling a void of such stores in southeastern St. Petersburg.
The retail drawing card would be an anchor store capable of attracting shoppers from 30 miles away, such as a major outdoor merchandise chain.
But Bass Pro Shop and rival Cabela's have been courting Tampa Bay developers for a few years to house one of their giant hunting, fishing and boating emporiums. Bass is already in Orlando, Fort Lauderdale and Fort Myers.
Before any tenants are chosen, however, the city must pick a developer equipped to spend up to $15-million leveling the 17-year-old stadium.
To help pay for the new stadium, the Rays hope to persuade the city to borrow against the money developers pay for the 86 acres, along with millions in future property taxes as redeveloped land is returned to the tax rolls.
As raw vacant land, the property alone would be worth as little as $30-million, according to real estate experts. But the value leaps exponentially depending what development rights the city negotiates for a huge blank canvas near downtown with interstate access.
"The more density we're allowed to develop, the higher the price," said Mike Harrison, Hines' regional vice president.
The bidding for a developer would set in motion a noisy and time-consuming planning process that might span years.
Stuart Sternberg, the Rays principal owner, hopes the Tropicana redevelopment deal can be wrapped up in the summer so he can ask voters in November 2008 to approve the waterfront ballpark at what now is Al Lang Field.
Skeptics abound, including rival developers currently bidding to redevelop the abandoned 240-acre Toytown landfill north of downtown in the Gateway area.
Some think a ballpark might be better suited there. The county threw development rights up for bids two months ago after a Cincinnati developer offered to invest $870-million developing the old city dump.
"We'd be interested in being part of this as well as Toytown," said Craig Sher, president of St. Petersburg-based Sembler Co., which is bidding for Toytown. "But this is just the beginning of what's going to be a long chess match."
"Downtown St. Petersburg already is off and running," said David Conn, executive vice president of retail for CB Richard Ellis in Tampa. "Personally, it seems a shame to convert that beautiful waterfront for a subsidized baseball stadium when you don't need it to spur development. If you put it someplace like Toytown, it would be more convenient to Tampa."
With a credit squeeze starting to chill the commercial real estate environment and Florida's overbuilt condo market, this might seem an unfavorable time to be working on such deals.
But the Rays are banking on the continued growth of the Tampa Bay market and long-term development market trends.
"When the market turns, we firmly believe downtown St. Petersburg is poised for redevelopment," said Harrison.
Founded 50 years ago in Houston by Gerald Hines, now 72, the firm grew into one of the world's biggest real estate development companies. It manages four real estate investment funds with assets of $19.9-billion.
Its trophy office skyscrapers such as the Pennzoil Place in Houston, Dean Witter Morgan Stanley headquarters in Times Square and the so-called Lipstick Building in Manhattan have been designed by such architectural legends as Philip Johnson, I.M Pei and Frank Gehry.
In Florida, Hines developed the 55-floor Wachovia Financial Center in downtown Miami, a 2,000-acre residential community near St. Augustine called Palencia, and a 600-room addition to the Marco Island Marriott.
Hines also recently was named developer of the new $450-million Dr. PhillipsPerforming Arts Center in Orlando.
In sports, Hines was hired by the New York Yankees as co-developer of Legends Field in Tampa. It also played a big role in the development of Petco Park, the Padres home in San Diego, which also was partly financed by selling development rights to adjacent land
Hines' most recent retail work was a regional mall-sized center that's part of Diagonal Mar, a waterfront mixed-use project with three hotels and three office buildings in Barcelona, Spain.
While Hines has no formal relationship with the Rays' ownership group, the company does have an advantage. It has been involved since May in formative closed-door discussions about the project between the city and Rays.
The Rays solicited advice on the project from other potential bidders, but has not revealed them.
"They wouldn't tell us either," said Hines' Harrison.
However, if a firm other than Hines comes up with better deal that provides more money for a stadium, Sternberg says he is prepared to change developers.
Mark Albright can be reached at firstname.lastname@example.org or 727 893-8252.
Hines Interests LP is a family-owned real estate development company. Founded 50 years ago in Houston by Gerald Hines, now 72, it grew into one of the world's largest development companies. The University of Houston's architecture school is named for Gerald Hines. His son Jeffrey, 52, is president and chief executive.
How did they get started?
Shifted from a modest start developing warehouses and small office buildings to bold megaprojects like the Galleria mixed-use developments in Houston and Dallas and landmark office skyscrapers such as One Shell Plaza and Pennzoil Place in Houston. Hines has worked with architectural luminaries including Philip Johnson, Frank Gehry and I.M Pei.
Hines manages four real estate investment funds with assets of $19.9-billion and has built or manages more than 950 projects in 16 countries.
What else is on their plate?
A new 75-story tower that's part of the Museum of Modern Art expansion in New York. Developer of Orlando's$450-million Dr. Phillips Performing Arts Center. Recently won a juried competition to build the $350-million Transbay Transit Terminal in San Francisco that will be designed by Cesar Pelli.
[Last modified November 29, 2007, 00:07:39]