The city of St. Pete could be forced to return $2.2 million in grant money to the department of Housing and Urban Development. HUD is asking the city to return funds because provisions of the grant were not met.
St. Pete used the funds to purchase more than 12 acres of land on 22 Street South across from the Manhattan Casino. The HUD grant required the city to create one job for every $35,000 it received. That amounts to 64 jobs. Not one has been created since the grant was awarded in 1999.
The city had hoped to attract Jabil to the spot, but that never happened. St. Pete City Council member Karl Nurse said that tech company has moved a lot of its business to China.
“The challenge really has been, we have always gone for the home run,” Nurse said.
Now that the pressure is on, the city is looking for something a little less ambitious. They hope to build a 35,000-square-foot building that would likely create about 45 jobs. Nurse said the hope is that would be enough to appease HUD and allow the city more time to meet the terms of its grant without having to return the funding.
“The new mayor has been in touch with HUD and has asked for an extension,” Nurse said.
If the city is forced to return the funds it would put a damper on a bit of good news coming out of City Hall yesterday. For the first time since 2010, the city is ending its fiscal year with a surplus instead of being in the red. That surplus would be negated, and then some, by the refund to HUD.
HUD does have the authority to give the city an extension, but officials will have to have something on the table if they stand a chance at convincing the agency to grant it.
“One of our challenges has been, if you don’t actually have any buildings, it doesn’t happen,” Nurse said of the empty lot.
If the city is successful in securing a developer for the property, the proposed space would likely be used for industrial development and would leave about 80 percent of the land left for redevelopment. The plot of city-owned land is just south of the growing Warehouse Arts District. Nurse hopes that could be an incentive for artists or investors to build on.
Another challenge city officials have faced in trying to drum up development on the plot of land is the neighborhood. It’s just a hop, skip and a jump away from Midtown, one of St. Pete’s poorest neighborhoods and it butts up to Palmetto Park neighborhood, which also has had its fair share of negative stigma. Nurse said the city is working hard to improve those neighborhoods and boost chances of economic development in the area.
“There are obvious signs that the area is on the upswing,” he said.