When two organizations -- Tampa Bay Businesses for Culture & the Arts and the Arts Council of Hillsborough County -- set out in 2011 to honor non-artists who make significant contributions to the arts, both quickly honed in on the same project.
And the winners are?
Mercury Advisors led by Ken Stoltenberg and Frank Bombeeck, pioneer urban developers in the Channelside District of downtown Tampa. They earned top recognition from
TBBCA and the
Arts Council for donating 8,000 square feet of space valued at $2.5 million in Grand Central at Kennedy to house the new Stageworks Theatre.
Stoltenberg talks with
83 Degrees Media Publisher Diane Egner about what went into their decision and why he recommends that other developers do something similar to benefit urban neighborhoods.
83D: Tell us the story of Mercury Advisors? How did you get started?
KS: In the 1990s, my partner, Frank Bombeeck, a Dutch national, and I worked together at Euro American Advisors investing Dutch capital in American real estate. Our last project was in Orlando,
55 West. In 2003, we formed our own company because we felt we could go out and do it better. We carved out a niche for urban infill development. The market was great then. Everyone wanted to buy condos. We got our project (
Grand Central at Kennedy) built and sold out the East building in 2007. The West building didn't do as well. We closed 49 percent of the units, but 200 of 392 remained. When we got done closing that last unit, we stuck out the For Rent sign. We already knew that the condo market wasn't coming back. We figured it would take 4-5 years to sort out.
83D: What was the plan in terms of a residential/ retail / commercial mix?
KS: We planned for 70,000 square feet of office; 108,000 square feet of retail. We always wanted an active arts use too because it attracts people. We ran into
Stageworks in 2003 as they were looking for a home. We decided to donate space for the arts for 60 years. The commitment has to be honored.
83D: Why donate the space?
KS: If you look at any hip, urban neighborhood anywhere in the country, you're going to see theaters, restaurants, places where people can gather and enjoy the arts. We wanted to be an example to others that they too can do this and make it work. Grand Central is probably the only place to live in Tampa where you can go downstairs and see a show. We think that's pretty cool. We also thought having a theater would help attract restaurants and retail.
83D: Has it?
KS: Yes, 1120 East Kennedy already houses
The Pour House, serving beer and wine. It will be joined by
Eleventwenty Cafe Bistro, a coffee bar serving breakfast, lunch, light dinner, beer and wine; Sea Dog Cantina with a Mexican theme; and a new Ragin' Grill, a sports bar with a Southern theme.
83D: What other retail is at Grand Central?
KS: Paul Mitchell 1.0 hair salon. Be Seen Dry Cleaning.
Powerhouse Gym uses 30,000 square feet; it has expanded 4 times. Just added
Saint Leo University.
Urban Studio Architects. Lots of
others.
83D: Why does the mix matter? What makes it work well for everyone?
KS: One thing that's very important is to have enough parking. While it is an urban environment, it's not Manhattan. People do have cars. The mix of office and retail means parking is busy in the day as people visit the shops, the gym and other stuff. Residents come home at night to use parking. So basically we are able to double use the parking spaces.
83D: Why the Grand Central name?
KS: We believed the name should say what it is and where it is. It is the center of Channelside. And we knew it was going to be a grand place. So it became Grand Central.
83D: Is there anything you'd do differently if you were starting over?
KS: We built this as a condo when everyone (around the globe) was doing similar projects. Five years ago, nobody lived in downtown Tampa. Now we have thousands of people living in downtown. First wave development should be rental. If we had it to do over, we would have done rental from the beginning. We still have two pieces of land in Channelside that we're looking to develop. Those likely will be rental. In the next five years, we expect most if not all new construction in downtown Tampa to be multifamily or rental.
83D: What's missing in downtown Tampa? Anything that would make developing such projects easier?
KS: Obviously, the economy and the real estate crisis are a big thing. In the Channel District specifically, what's kind of hobbled development is the pace of the public realm. Infrastructure improvements did not keep pace -- sidewalks, streets, power lines underground, park space. In a perfect world, those improvements would have been made concurrently. The city is catching up. I'm certainly optimistic that doing so is now a priority.
83D: Is there anything more the city of Tampa could be doing differently to encourage infill?
KS: Not everyone can enter into development and it's not like the city can throw a bunch of money around to encourage others. From permitting to regulatory, the city could make the process less time consuming, less expensive and more certain. We had hoped in 2003 that the donation for Stageworks would act as a model for other developers and for the city. Nobody really followed behind us though. Now if you look at retail space in Channelside, they don't have enough parking. Under current requirements, parking is going to be problematic. As Stageworks thrives, other property owners may look to do similar projects for the arts.
83D: What is the total amount you have invested in Grand Central?
KS: The whole project? $170 million.
83D: How has it been financed?
KS: A Dutch bank originally. It was a good bank, but it got acquired. All the people we knew left. The Dutch bank then decided to leave Tampa. It gave us an opportunity to purchase.
83D: Any advice for other developers considering investments here?
KS: Florida is a challenging market right now. Historically, prices went up here more than other places. Right now, land and construction prices are down, way down. The rental side is a great investment.
83D: What's next for Mercury Advisors?
KS: We're still selling units in Grand Central. We're offering them at $170 a square foot. You can buy a nice 2-bedroom condo for just under $200,000. That's a good bit below replacement cost. We sold 15 last month (October). It was our best month for sales ever. So things are picking up. With interest rates low, really low, it's a great time to buy. If you look at fundamentals as opposed to how everybody feels, the fundamentals are pretty sound.
Diane Egner, 83 Degrees Media's publisher and managing editor, conducts interviews with key thought leaders in the Tampa Bay region. The Q&As are edited for succinctness. Comments? Contact 83 Degrees.