6 years later, southern St. Petersburg still without a grocery store

ST. PETERSBURG — Southern St. Petersburg hasn’t had a grocery store for six years and won’t have one anytime soon. Some City Council members and a local resident recently expressed frustration at the lack of progress.

In a city where luxury condos dominate the development landscape, southern St. Petersburg is considered a food desert — a federal term for an area where people have limited access to a variety of healthy and affordable food. The property called Tangerine Plaza, where a Walmart Neighborhood Market operated until 2017 as the sole grocer for the area, is owned by the city and has been vacant ever since.

According to an update given to the City Council and two community members who were present at a meeting late Thursday, the city is trying to get their preferred developer to prove they have the financial wherewithal to redevelop the property at 1794 22nd Street S before putting together a term sheet.

The developer, Sugar Hill Group, says they need to have “site control” of the property. Walmart still has an active lease until 2026, though city officials say that has no impact on negotiations.

“This has been slow walked to the point where I wonder what’s really going on,” said council member Gina Driscoll.

Years in the making

The Sugar Hill Group, headed by Roy Binger, Rev. Louis Murphy and Oliver Gross, has been vying to develop the property since former Mayor Rick Kriseman’s administration. But after about two years of negotiations, a deal never came together before the end of Kriseman’s term.

The Sugar Hill Group is not the same development group as Sugar Hill Community Partners, who vied to redevelop Tropicana Field and the Historic Gas Plant District.

Upon taking office, Mayor Ken Welch decided to end those talks “for competitive fairness and other reasons,” city spokesperson Erica Riggins wrote in an email.

In May 2022, Sugar Hill Group submitted an unsolicited offer to redevelop Tangerine Plaza. They proposed demolishing the existing 40,000-square-foot space and building a retail space a quarter of the size, along with building two buildings for 115 affordable apartments — the economic driver of the project.

Instead of issuing a request for proposals where the city lays out what it wants, the city issued a 30-day notice for other proposals “in the interest of efficiency to not delay the process longer than necessary,” Riggins said. Only one other proposal was submitted, but the city selected Sugar Hill.

Negotiations have started to take shape. City Development Administrator James Corbett sent a letter to the Sugar Hill Group May 9 asking for an updated outline of the proposed project, including the area median income levels for the affordable apartments and identified financing sources.

Corbett added that the project did not qualify for 9% tax credits, but could try to compete for 4% credits by an August deadline. He wrote that the city is planning to solicit proposals for a 4% deal.

Ahmad Zachary, a senior development manager at New Urban Development, the real estate development affiliate of the Urban League of Greater Miami, is a partner of Sugar Hill Group. On May 18, Zachary replied that they would move forward with the 4% deal, but “we are unable to pursue any other potential financing opportunities without the proper site control.”

“If I try to show you a rental home, but yet didn’t have access, it’s kind of challenging. You want to make sure you have it,” Binger told the Tampa Bay Times. “There’s a limit of how far you can go without access.”

‘Time to get real’

Steve Morrison, one of the two members of the South St. Petersburg Community Redevelopment Area’s Citizen Advisory Committee who showed up Thursday, asked why the city can’t subsidize a grocery store like it subsidizes its prized parks system.

“I think it’s the city’s job not to allow food deserts, and we own a property that has a grocery store,” he said.

Driscoll wanted to know the city’s “compelling reason” for continuing talks with the Sugar Hill Group.

“At some point, you have to acknowledge that this just might not be the right thing for them,” she said.

Corbett said development deals that require financing are slow in the current economy.

“I would agree this is taking longer than I would like to see, but several deals that actually predate this are having the same issues as it relates to financing,” he said.

Council member Richie Floyd said he had been holding off on requesting a solution for the food desert because he was waiting on city administration.

“I’ve been waiting patiently for some action on the community or corner store food program. It’s been slow going,” he said. “I think it’s possible that we step in and fill that hole.”

Council chairperson Brandi Gabbard said there are solutions for food deserts like community co-ops.

“It has been proven time and time again to work. And when it works, it works in collaboration with government incentives,” she said. “And so I think it’s time to get real about talking about that. We’ve kind of danced around it and it continues to be an idea in our community, but an idea that is never going to get off its feet if we don’t support it, and we need a creative solution.”