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Rays' timetable a concern for developers

Redevelopment of Tropicana Field comes with pitfalls, experts say.

By AARON SHAROCKMAN, Times Staff Writer
Published February 9, 2008

The Tampa Bay Rays are banking on the Tropicana redevelopment to fund a new $450-million stadium. For all the potential of the 86-acre St. Petersburg site, such as the one proposed by the Rays, developers see several significant and possibly crippling pitfalls. Special report: Ballpark by the bay
	[Tampa Bay Rays]

ST. PETERSBURG - Just three months ago, Sembler Co. president Craig Sher was saying that the redevelopment of Tropicana Field would be a developer's dream.

Now that the city is asking for proposals, would the builder of the popular BayWalk complex want the job?

"We don't know," Sher said this week. "We're still evaluating our options."

Sher's answer underscores the complex reality facing the Tampa Bay Rays, who are banking on the Tropicana redevelopment to fund a new $450-million stadium.

For all the potential of the 86-acre St. Petersburg site, developers see several significant and possibly crippling pitfalls.

The Rays' open courtship of a particular developer, the team's aggressive timetable to begin construction, and the prospect of a citywide referendum could deter a developer's interest, say planning and land-use experts.

That, in turn, could hinder or doom the Rays' bigger plans for a billion-dollar downtown remake.

"The challenge isn't identifying the opportunity. Every tract of land has opportunity," said Lee Arnold, founder of the Clearwater commercial real estate firm Colliers Arnold. "The more impediments, the more risk is added to the development process. The more risk, the smaller the returns."

Few could do the job

The city is hoping to identify a developer through a common government bidding process called request for proposals.

Last month it created a wish list for the Tropicana site - affordable housing, retail, parks, a connection to transportation. Developers have been asked to make their best pitch before a March 18 deadline.

The development notice has been sent to 43,000 members of the American Planning Association, the 34,000 members of the Urban Land Institute and dozens of other targeted developers.

Practically speaking, however, as few as two dozen companies would be considered for the job, real estate experts say.

Several developers reached by the St. Petersburg Times this week were unwilling to speak openly about the project.

"We were aware of it," said Jeff Linton, a spokesman for Forest City Enterprises, a publicly traded real estate company with a history of building large, mixed-use developments. "But we're not going to have any further comment whether we're still interested or still involved."

Hines Interests of Houston, the company working with the Rays on one proposal, did not return a call seeking comment.

Hines' role

Rays officials say they expect a bid from Hines, a company known for developing the Galleria malls in Houston and Dallas. But that's not enough.

Since the Times broke the story of the Rays' plan, city and neighborhood leaders have raised concerns that the process may be unfair to other developers because Hines had a seven-month head start.

If Hines is the lone bidder, it only would heighten those fears.

"It would be a major concern," said Will Michaels, a member of the Council of Neighborhood Associations. "There would be no competition. There would be no other proposal to compare it with."

On Friday, about 25 developers, architects and engineers met with city officials to discuss the Tropicana redevelopment. Most said they were evaluating the site. Some were there looking to partner. Others were just looking.

None was willing to say it was preparing to bid.

Other developers

"I wouldn't read too much into it," said Rick Mussett, the city's senior development administrator. "A lot of the big players like to keep their cards close to the vest."

Hines, which attended Friday's meeting, could scare off other large developers who may be unwilling to spend $100,000 or more on a bid, Michaels said.

But its presence also could have the opposite effect.

"If Hines is looking at it, it's going to add credibility to other developers," said Steven Ekovich, regional director for Marcus & Millichap, an Atlanta retail real estate firm. "I would say people would be scared away if they knew the location and knew the dynamics ... not because Hines is involved."

The deal, if it's ever made, will come down to timing.

The financing for the $450-million stadium depends on the property tax revenues generated by the successful redevelopment of Tropicana Field. And that cannot begin without an agreement for a new ballpark.

Under the Rays' proposal, the first phase of Tropicana redevelopment would start in 2009 as work simultaneously begins on the new waterfront stadium.

Any hiccup could delay the construction of the stadium, drive up building costs and push back the scheduled 2012 opening.

Hiccups might have to be expected.

Timetable laughable

Michael Beyard, an urban planner, economist and senior fellow at the Urban Land Institute, laughed when told of the Rays' timetable.

"I don't see how that can possibly happen," said Beyard, who specializes in retail projects and has written a series of books on the subject. "These things go on for months and years."

For example, take the old Washington Convention Center. District of Columbia officials first began thinking of redeveloping the four-square-block site in 2002.

Like St. Petersburg, D.C. officials started a competitive bidding process soon after. And like St. Petersburg, D.C. officials found interest from some of the country's leading companies, including Hines.

But D.C.'s project - which ultimately was awarded to Hines and valued at $850-million - was stalled by a series of routine planning problems. Six years after talks began, work has not yet begun. Construction is now on track to begin in January.

Referendum worries

St. Petersburg officials say they would not even begin to obtain the regulatory approvals for the Tropicana redevelopment until after the November referendum. That process alone could take a year to 18 months, Beyard said.

And the developer selected for the site is unlikely to finish detailed schematics for the site before November, since the development is contingent on the referendum being approved.

Sher, whose company could consider teaming with another developer on a bid, said it means the development that people talk about this summer may not be what ultimately gets built.

"Is it going to be the best design by November? No," Sher said. "You're going to do preliminary drawings. You're not going to do construction drawings. You're playing Russian roulette if you do. That's risky."

Simple arithmetic displays the reality the Rays and the city are up against.

"Calling it aggressive is an understatement," Beyard said.

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

[Last modified February 9, 2008, 00:01:05]