Southpinellas: Mall specialist turns eye toward Pier

Mall specialist turns eye toward Pier

The company, which manages three major bay area malls, is one of four bidders seeking control of the waterfront attraction.

By BRYAN GILMER

The company, which manages three major bay area malls, is one of four bidders seeking control of the waterfront attraction.

ST. PETERSBURG -- The company that runs Citrus Park Town Center, Brandon TownCenter and Countryside Mall is interested in taking over The Pier, St. Petersburg's upside-down pyramid on pilings in Tampa Bay.

Urban Retail Properties Co. is one of four companies that want to manage the attraction for the next five years. The company is a national heavy hitter in retail real estate: It manages some 65-million square feet of space nationally, including Water Tower Place in downtown Chicago.

Urban's book-length proposal to the city criticizes seemingly everything about how The Pier is now run by local operator WHG Management.

The Pier hosts "too many events with minimal impact," "the color scheme needs refreshing," "the interior common area finishes are tired and dated," and there are too many local businesses and not enough regional or national tenants.

In fact, the businesses depend on The Pier's distinctive architecture and scenic location to generate one-time business from tourists, it says.

"The unique nature of The Pier allows for some stores to succeed when neither their merchandise nor appearance merit success," the proposal says.

Urban suggests moving the food court to an expanded second level and courting new tenants such as Dunkin Donuts, Cinnabon, Sbarro's and a Wolf or Ritz camera store.

WHG, wholly owned by Pier general manager Bill Griffith, has run the attraction since 1994, when Griffith started the company and got the management contract without competitive bidding.

St. Petersburg's downtown was moribund then; the Bay Plaza scheme was falling apart. Griffith had run the attraction as a Bay Plaza Cos. employee.

Now St. Petersburg's downtown is on an upswing by comparison, with BayWalk, restaurants and new luxury condominiums. And WHG's contract expires in September.

Last year, city staffers planned simply to negotiate an extension. They decided to seek proposals on the open market only after elected officials questioned the annual subsidy, which is in excess of $1-million, that taxpayers have had to inject.

The subsidy is budgeted to be $1.37-million this year. The contract contains no incentive for WHG to reduce the subsidy, and neither does Griffith's proposed extension.

In his proposal to continue managing the attraction, Griffith seeks to raise his management fee from $178,000 per year to $208,000 per year. He proposes more than $3-million in renovations for the building, including the food court. But he would not reduce the subsidy because, he says, that would mean gutting essential services.

"The building itself makes money," Griffith said, adding that maintaining the bridge, landscaping and the trolley service are extraordinary expenses.

The other bidders say they can cut the subsidy.

Besides Urban, Parkside Mall management company Divaris Real Estate and a newly formed local partnership called St. Petersburg Pier Partners Limited have filed bids to compete with Griffith.

Peter C. Fischbach, manager of Pier Partners, owns the Snell Arcade building downtown and would team up with a specialty leasing company called Hill Partners Inc. to seek better tenants for The Pier, and with the local Iam group for marketing.

Fischbach says he can increase the rent the city gets and hopes to cut the subsidy to nothing within five years. He proposes that his firm receive 7.5 percent of any savings as an incentive and a $160,000 per year management fee.

Like Fischbach's plan, Divaris' proposal also pledges to "focus its marketing strategy on this single purpose: making The Pier a revenue-generating asset for the city of St. Petersburg."

Divaris would capitalize on the success of BayWalk and the city's investment in the BayWalk parking garage by running trolleys between the Pier and the garage.

Divaris also proposes to get 10 to 20 percent of the subsidy savings it can generate, with the higher percentage kicking in if it can save more than $200,000 per year. Its base fee would be a percentage of gross sales at Pier businesses.

Urban's proposal says it could reduce the city subsidy but not by how much. It proposes an incentive of half of the first $200,000 in annual savings.

A bid committee of five city staffers will begin discussing the proposals today. The City Council will make the final decision in several weeks.