Condo boom with high price
And it's a high one. New residences climb against the skyline and soar beyond the reach of most who work downtown.
By BILL VARIAN, Times Staff Writer
Published March 21, 2005
TAMPA - David Hey and his wife lived in a cramped apartment in downtown Boston before they moved South six years ago. He still misses the urban lifestyle there: walking to restaurants and the supermarket, giving up their cars and meeting a wide assortment of people.
With condos at last sprouting around downtown Tampa and more promised, you might think the Heys would be looking at moving from their Gandy Boulevard digs.
"Of course, we kind of look at them," said Hey, 34, who works as a city planner downtown. "But when you see prices starting at $280,000 and know that's probably for a one-bedroom ... that's just over the threshold. We don't even bother going to the sales office."
The Heys are hardly alone in their sticker shock.
Each month seems to bring another announcement of a new condominium proposal in or near downtown. Tampa appears finally to be on its way to getting the residential construction city leaders have long coveted as the missing piece needed to make downtown the place to be.
But just as Tampa looks to shed its downtown dormancy, a new shadow is emerging. Much of what is being built is priced beyond the means of many downtown office workers and young professionals.
From the northern edge of downtown to the Channel District to Harbour Island, more than two dozen new residential projects are proposed. The entry price: at least $200,000 in most cases, with top prices soaring into the millions.
And would-be downtown denizens often show up at sales centers to find those least expensive units already gone. Cheaper places are getting gobbled up by preconstruction investors who lease them out once they're built or flip them to other buyers, sometimes at steep markups.
Getting people to live downtown is supposed to be the elixir that spurs investment, sidewalk dining and culture, all the things that make a city cool.
The challenge for Mayor Pam Iorio then, as she seeks to capitalize on the newfound interest in downtown, is ensuring Tampa's newest neighborhood doesn't become exclusive and unattainable, like one more gated community out in the suburbs.
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From new towers popping up on Beach Drive in St. Petersburg to pricey mid- and high-rises replacing motels of yesteryear on Clearwater Beach, the Tampa Bay area is enjoying a bit of a condo boom. And Tampa is getting in on the act.
The Tampa Downtown Partnership, a private, not-for-profit group that promotes downtown revitalization efforts, is tracking 27 proposed projects in or near the city center. Of those, 13 have prices starting at more than $200,000. Nine have some units for less, two are proposed as rentals and the others have yet to determine prices.
Mike Griffin, executive co-chairman of Emerge Tampa, a volunteer group that tries to attract young professionals to the city, says many come here from places where they're accustomed to urban living. They just can't afford it here.
"We're creating residential dwellings (downtown)," said Griffin, who works for an startup commercial real estate company. "But are we creating neighborhoods?"
Blame land prices, says Paul Ayres, director of marketing and business development for the partnership. "We do know the (housing) prices are high," he said. "Right now, what's influencing many of the prices is that developers are buying land at higher prices."
The channel district, a burgeoning entertainment hub with a cruise ship terminal, aquarium, the St. Pete Times Forum and the Channelside mall of restaurants, shops and movie theaters, is seeing much of the early action. The future condos carry names like Ventana, 02 at Pinnacle Place and the Arlington.
The Place at Channelside promises two eight-story towers with 244 dwellings. One-bedroom, 600-square-foot units start just under $190,000, while a perch in the penthouse tops out at more than $1-million.
Plans include a fitness center, pool with cabanas, spa, clubhouse and landscaped greenspace on the fifth level when it opens next summer.
Dale Hunter, 24, a Realtor with Century 21 Beggins Enterprises, signed a contract on a two-bedroom unit with about 1,500 square feet at the Place last August. He liked the floor plans and amenities, including granite counter tops, wood floors, a breakfast bar island and stainless steel appliances.
Going in with a friend, he was able to swing the nearly $400,000 price.
"I wanted to be part of Tampa's downtown transformation from a 9-to-5 workplace to a vibrant urban residential area," Hunter said through an e-mail.
But many of his clients can't afford the entry fee. So he has been showing them places such as SkyPoint, a proposed 31-story condo that would include 400 units on Ashley Drive, in the heart of what the city wants one day to be a cultural arts district.
SkyPoint is billed as an affordable alternative to Trump Tower Tampa, the planned 52-story condo up the street backed by business tycoon and Apprentice reality show star Donald Trump. Trump Tower represents the height of opulence among downtown's proposed residences, with prices expected to start at about $700,000 and climb to $6.5-million.
By contrast, city officials are touting SkyPoint's potential for what they see as "attainable" housing, a euphemism for something between affordable and pricey.
At SkyPoint, attainable means $170,000 for a small 725-square-foot, one-bedroom home.
The condo's developer isn't saying how many they're offering at that price, but says most of the units will cost less than $200,000. Top prices run to $330,000.
At $170,000, with 20 percent down, a buyer is looking at monthly payments on a 30-year mortgage at 6 percent interest of about $815. Add about $200 monthly in property taxes, plus insurance, plus maintenance fees.
SkyPoint is where Katie Vickers is pinning her hopes. The 24-year-old Carrollwood financial adviser wants to be part of downtown's rebirth and figures she can spend somewhere south of $200,000. She initially hoped to pay less than $150,000.
"I have looked at a few places," she said. "Some have offered things in my price range, but they might not be available by the time I get there."
As Vickers has experienced, many of the lowest-priced units are getting scooped up by investors who plan to lease them or resell them at a markup.
At SkyPoint, one person offered to buy 75 units while another has sought to buy an entire floor. The competition among buyers is surprisingly intense for a town that for decades had few downtown living options, seemingly for lack of interest.
At Art Center Lofts, tucked next to Interstate 275 on the northwest corner of downtown, Suzanne Soliman is one of the lucky ones. With the help of parents looking for an investment, she scored a one-bedroom loft overlooking the Hillsborough River, built last year. Price: $179,900 for 928 square feet.
"I've noticed in the time I've been (in Tampa), there's always been the talk of things happening," Soliman said. "Now it's actually happening."
But owners of 29 of the 42 units at Art Center Lofts don't receive their property tax bills at that address, meaning it's likely they are investors. Four have already sold their stake, netting profits from $24,300 to $112,000.
Even some who are involved in Tampa's downtown condo construction seem a little surprised at the prices.
"I'm concerned that a lot of the product that we're seeing is too heavily loaded on the luxury side of the equation," said Mickey Jacob, an architect and principal with Urban Studio Architects, which is helping design Grand Central at Kennedy. At $142,000, Grand Central is offering the lowest entry-level units in the downtown condo market.
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As cities from San Diego to Baltimore have enjoyed a return to downtown living over the past decade, Tampa largely sat on the sidelines.
The number of residences in downtown Tampa through the 1990s typically ranged in the low hundreds, excluding the Central Park Village subsidized housing complex. The number would swell to 6,000 if all that is proposed is built.
For years, the few downtown dwellers took up residence at the mid-rise One Laurel Place. A few artist s converted channel district warehouses into places to work and live. But overall, downtown was a ghost town come quitting time.
So city leaders are eager for a long-awaited coming-out.
"What we're hoping to have is an affordable housing problem (downtown)," said Mark Huey, the city's economic development administrator. "Right now, we have a housing problem."
The price of living downtown presents a challenge to Mayor Iorio, already grappling with plans for a riverwalk and rising costs for a new art museum across from SkyPoint.
Huey said the city isn't taking the availability of affordable housing lightly. As in other cities, Tampa's government is looking to provide incentives for developers to offer lower-cost homes.
"It's very much a part of our mission," Huey said.
This is particularly true just north of downtown, where one proposal, the Heights, would add some 2,000 new residential dwellings. In exchange for creating a special taxing district for the area to pay for infrastructure, the city may ask developers to set aside 10 percent of what they build as "permanently attainable." That would keep investors from buying and quickly selling the properties.
The city is also exploring ways to waive height restrictions and density limits for builders who create affordable homes, particularly in the channel district. The city has crafted agreements that let revenue from a special taxing district there get spent on affordable housing initiatives.
And the mayor has created a task force to work with the Tampa Housing Authority as it redevelops Central Park Village, the dilapidated, air-conditionless public housing complex that connects downtown, the channel district and Ybor City. The goal is to entice a developer to redevelop the property so that people of varying means can live there together.
The city planner who passed on trying to get a home of his own downtown said such efforts are important. As part of his profession, he supports having residential development downtown instead of adding to sprawl.
But not if it's exclusive.
"Downtown should be everyone's neighborhood," he said.