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Urban Oasis
By David R. Corder
Associate Editor
It's the first impression that counts. Imagine what Ed Oelschlaeger saw when he first explored the 53 acres of industrial-commercial property he began assembling earlier this year at the eastern edge of the Gandy Bridge.
Yachts and other boats bobbed amid the slips at the Imperial Yacht Basin. Next door, Jimmy Mac's Waterfront served up the catch of the day in a tropical flavor.
A little farther south, however, it is much more industrial. Nearby, Hendry Corp. workers repair ships. Across Rattlesnake Channel to the west, neighboring large chemical storage tanks dot the landscape. Then there are acres of overgrown vegetation that obscure traces of a homeless population. Several vacant, rusted metal buildings add to the blight.
Oelschlaeger, the president of Tampa's EcoGroup Inc., saw an urban oasis he's dubbed the New Port Tampa. It's an ambitious project that has required considerable creative deal making.
Once he's finished, however, Oelschlaeger envisions a thriving residential community with about 1,000 condominiums, 750 townhomes, around 225,000 square feet of retail-commercial space, 13,750 square feet of office space and a 250-slip marina. There even are land-use entitlements for a 200-room hotel, though that's low on the priority list.
"When we were first approached by the sellers of the Imperial Yacht Basin property, I began to see the potential of the adjacent (Hendry) site," Oelschlaeger recalls. "I just saw a half mile of waterfront property in an area that has been terribly underutilized. More importantly, what I saw was an opportunity to build an urban village that would be the gateway to South Tampa."
Except for some technical zoning issues, EcoGroup appears well on the way to creating a product that possesses what Oelschlaeger thinks is a unique selling point.
"It's the revitalization of the waterfront," he says. "We'll be inviting the public back to the waterfront, where there has virtually been no access there for about 60 years. There isn't anything like this (in the Tampa Bay area) in terms of a deep-water marina where you can live next to your vessel."
This is an expensive venture. Since March, EcoGroup has paid out almost $74 million dollars for the 53 acres. That averages out to almost $1.4 million an acre, though he purchased the 32-acre Hendry property for about $465,625 an acre.
To get this far, Oelschlaeger and his staff had to negotiate deals with three different property owners, including two of the Tampa Bay area's most astute real estate investors - St. Petersburg's Grady Pridgen and Tampa's Carl Lindell Jr.
It's taken nearly $115 million in total financing to get the project this far. That's not counting the proceeds EcoGroup will need later to begin construction.
Earlier this year, Bank of America financed EcoGroup's $14.9 million acquisition of the 32-acre Hendry property with a $10 million loan. Late last month, the bank loaned the developer another $69 million to finance the $54.3 million acquisition of Imperial Yacht Basin marina from a Pridgen-Lindell joint venture.
The project's opportunity for profitable returns even has gained the confidence of some well-heeled individual investors. As part of the deal last month, Lindell loaned EcoGroup nearly $9.3 million through Lindell Gandy LLC. Lance Ringhaver, chairman emeritus of Jacksonville's RPC Inc, Ring Power Corp.'s holding company, personally financed $16.5 million of last month's acquisitions.
Tampa real estate investor Ron Bailey, co-owner of St. Petersburg's Bank of America Tower, also has contributed to the New Port Tampa effort. Through his Battleview Enterprises II LLC, Bailey backed the developer's acquisitions in March with a $10 million loan.
"The financing goes for acquisition and some infrastructure construction," Oelschlaeger says. "It's an important first step that enables us to go ahead and build part of the infrastructure, with the rest coming through a community development district (CDD) petition. Then financing the vertical construction will be separate, building by building."
Oelschlaeger anticipates the condos and townhomes will sell from $350,000 to $2 million each. Sales of 1,750 units at just $350,000 would produce nearly $613 million. The developer would need to average only $571,429 per unit to produce total sales of $1 billion.
The project's central location, just minutes from downtown Tampa and St. Petersburg, should easily bolster the project's marketing opportunities, Oelschlaeger says. "We expect some of the market certainly will come from Pinellas County as well."
EcoGroup has begun required environmental remediation work on the Hendry property. "As far as environmental abatement work, a great deal has already been done," Oelschlaeger says. "There's not much that remains."
It appears EcoGroup has encountered relatively few obstacles in its bid to redevelop the property.
The Hillsborough City-County Planning Commission, an independent agency that governs land use issues in Tampa and the county, offered no objections to the EcoGroup proposal. Planning commission staff considers the development consistent with long-term policy objectives that promote urban infill and redevelopment.
The city's Development Review Committee objected to the developer's petition to rezone the Hendry property to a planned development from commercial-industrial and commercial-general. It cited objections from the city's land development, transportation and stormwater departments.
Those objections don't appear to be too severe, however. For instance, land development officials wanted the petition to clearly state that the city has not granted the developer any code exemptions. They also want the developer to clearly identify any expected waivers.
City transportation officials took exception to the developer's plan to redesignate the north-south Bridge Street as a private road. Officials say that's not possible because the Hillsborough Metropolitan Planning Organization lists the road as an essential component to the region's long-term transportation planning objectives.
Those are some of the concerns also voiced by groups such as the Sun Bay South and Gandy civic associations.
To date, EcoGroup faces about $1.2 million in transportation mitigation costs. That figure does not include the possible need for two traffic signals at Tyson Avenue and West Shore Boulevard and at Tyson and the proposed Bridge Street extension. However, the city may allow the developer to use mitigation payments to offset transportation impact fees.
However, Oelschlaeger is confident he can negotiate those obstacles.
"We anticipate starting infrastructure improvements in mid-fall," he says. "Vertical construction should begin in the first quarter next year. It depends on the market, but (total build out) will be within a six- to eight-year time frame."
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