A New Drawing Board

A New Drawing Board

DEVELOPMENT by Mark Gordon | Managing Editor

An ambitious condo project erases high-priced units for less expensive, smaller ones. Will buyers respond?

When a market takes a dive, such as the Gulf Coast condo market has over the last six months, it's common to see developers and builders look to hide out or hunker down until things pick up. Some will go down the scale-back path, while trying to stay low.

But it's pretty tough, if not downright impossible, to lay low if you're behind one of downtown St. Petersburg's most watched and recognizable redevelopment projects, one where even the mayor attended the opening of the sales center.

That's the situation the group behind the project known as The Arts, a $250 million mixed-use development on Central Avenue and Eighth Street North, found themselves in late in 2006: The project they anticipated building, which included an initial phase of 224 condos at average prices of $800,000, had virtually no chance of selling out. The condo glut took care of that.

"We were left with a building that was no longer attractive to the average condo buyer," says Yaron David, point man for The Arts' developers, a partnership between Israel-based the B.S.R Group and St. Petersburg developer Jimmy Aviram's ANB Enterprises. "People are a whole lot more price-sensitive."

So the developers swallowed a dose of humility. They scrapped a large portion of the project. And they spent more than $50,000 coming up with a new plan, consulting with engineers, architects and planners. "Everybody would love it if it was one and a half years ago," David tells Coffee Talk. "But it's not. You have to work with what you have."

So now, instead of an average price of just under $1 million, the middle ground is $600,000, with several others in the $300,000 range and a rock bottom low of $224,000 for the smallest units. Instead of 2,000 square feet residences, the new plan calls for 700-square foot studios and 800 square foot one-bedrooms. And instead of 224 condos, the first phase of the project calls for 292 units, so the developers could have higher volume in return for cutting the prices.

While downsizing condo projects has been common in the Gulf Coast the last six months, The Arts stands out, as the finished product, still projected at two 31-story towers reaching 397 feet, would be two of the tallest residential buildings in St. Petersburg, as well as the highest points above sea level in the city. It also can legitimately carry a unique tag, as the project will be connected to the city's popular nonprofit Arts Center, as well as home to a permanent collection of glasswork and drawings from artist Dale Chihuly.

What's more, the developers didn't hide from the abrupt changes, as others developers have done. Aviram admits it was disappointing to switch up like that, especially after having 100 cash reservations from the first plan, but he'd "rather have a project that would sell, then a project that would sit."

While the condo prices and sizes have been cut, David says many of the upscale features in the first plan remain. That includes lighted tennis courts on an acre-long amenity deck overlooking the city, an infinity edge pool on the deck and "exotic landscaping." Plus, in addition to the permanent Chihuly collection, residents will have access to an art studio, for classes and demonstrations.

David says construction could begin as early as next month, with some parts ready to be open by early 2009.

-Mark Gordon

REVIEW SUMMARY

Project. The Arts, downtown St. Petersburg, Central Avenue and Eighth Street North

Developers. St. Petersburg-based ANB Enterprises and the B.S.R. Group, based in Israel.

Key: In response to the slumping condo market, the developers scrapped plans for million dollar-plus condos, with an average price of $800,000, for smaller condos that start as low as $224,000.