St. Petersburg Is Getting Major Redevelopment
Editor’s Correction: An earlier version of this story stated that First States Investors sold the land to the Pheil family. However this is incorrect as the land was given as part of a complex deal between the Pheil Family and First States Investors.
First States Investors gave its part of the 400 block of Central Avenue to members of the Pheil family, which ended a long-running disputed reported by the Tampa Bay Times.
“First States did not sell the property in downtown St. Pete; it gave the land to the Pheils. It is part of a complex deal to terminate a ground lease that would have kept the block frozen for another 40 years,” A PR representative told News Talk Florida in an email. “First States gave its share of the land to the Pheils plus cash in exchange for terminating the lease. This allows the Pheils to sell the entire block as a single parcel.”
With this deal completed family members, who own the rest of the block, can go ahead with the sale of the rest of the two-acre site to New York’s Red Apple Group. That sale could be one of the priciest purchases ever for a downtown parcel.
First States spent an estimated $2 million to demolish a garage and two old buildings. The aluminum grillwork on the buildings gave them a “cheese-grater like appearance,” said the Times. Landscape and fencing of the now-vacant block was also paid by the trust.
The Pheil family are descendants of a St. Petersburg mayor who originally developed the block. The family had no desire to sell the land until recently because they were assured a substantial amount from leases that didn’t expire until 2058. Those leases became property of First States, a California real estate investment trust, when it took over hundreds of properties, including the ones in St. Petersburg, after foreclosing on a loan.
Monday’s deed transfer was agreed upon last year after both sides saw advantages in settling their dispute in the midst of downtown’s real estate market heating up.
It is expected that the Pheils will now sell the entire block to New York’s Red Apple Group. John Catsimatidis, the head of Red Apple, announced tentative plans for a tower with shops, offices, residences and possibly a hotel.
In 2014, South Florida’s Kolter group paid Bill Edwards $17.25 million for a city block. Kolter is now building ONE St. Petersburg, a 41-story condo tower and adjacent Hyatt hotel. Since that transaction downtown’s popularity has grown and the 400 block of Central is perhaps the largest, most valuable property left for developers.