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Roundup 1-13-2017

January 13, 2017

Contents

Transportation – HART/PSTA Revisited

Transportation – TBX Questions

Transportation – Ferry Numbers

Built Environment – More on Walking

Economic Development – Venture Capital

Economy – Housing Costs

— The Developers Speak

Downtown/Hyde Park – The Tribune Lot Project Move Forward

Downtown – How Do You Solve a Problem Like the Library?

Transportation – The Other Airport

Rowdies – Chamber on Board

Meanwhile, In the Rest of the Country

___________________________________

The College Football Playoff National Championship Game (which is a flowing name if there ever was one) has finished, and the area came off looking pretty good (especially on SportsCenter).  Thankfully, in a sign of what may be maturity, there generally was a lack of stories about how this was a big milestone showing the nation (or world) what we are really about (except this).   While we are all for such events and they do provide exposure, you have accomplished something when they become routine (think New Orleans or Miami), and hopefully they are becoming so for us.  So, good job, and on to other things.

Transportation – HART/PSTA Revisited

Back in 2012 and 2013 there were some attempts to get HART and PSTA to work together and move towards merger.  Local politics, largely in Hillsborough County, and local officials killed that, though there was still some talk of working together on a limited basis. That was before Greenlight Pinellas lost and Go Hillsborough went nowhere. Now, HART and PSTA are working on an agreement, from Stpetersblog:

The agreement sets out areas in which the two agencies already collaborate, such as a regional fare collection that uses one informational app that applies whether the customer is in Pinellas or Hillsborough. The regional fare collection app includes not only PSTA and HART, the Hillsborough transit authority, but Sarasota, Pasco and Hernando counties as well.

PSTA and HART are also partnering on such items as the purchase of some equipment and on goal-setting and legislative priorities.

The two would continue collaborating on those items and would research areas that could benefit from joint ventures. That could eventually mean the merger of some departments, Miller said.

We are not going to complain about something that should have been done long ago.  But we are not there yet:

The proposed agreement, which still has to be approved by both the PSTA and HART boards, comes at a time when the state Legislature and federal government are urging local transportation agencies to merge or otherwise create regional transportation priorities.

Funny how the Legislature can get local officials to focus (see PTC).

It also comes at a time when Pinellas County Commissioner Janet Long has proposed consolidation of many of the Tampa Bay area’s transportation agencies into one regional group.

Long’s “regional council of governments” would be responsible for finding regional answers to transportation, affordable housing, economic development, and land use and redevelopment issues that face Pinellas, Hillsborough and Pasco counties.

Once again, that would be great, though there are regional bodies that are supposed to do that work on transportation (see, for instance, TBARTA).  We are all for regionalism, but we are also a little hesitant to add another level of bureaucracy before there is some evidence that anyone is serious.  The last thing we need is another powerless talking-shop to give the appearance of doing something while not doing much.

On the other hand, if we could get things streamlined – like one transportation agency for Hillsborough and Pinellas – we would be all for that.  That is already the way it is in many places and seems to be the direction other areas, like Atlanta, are moving:

Georgia lawmakers stopped short Thursday of proposing legislation establishing a regional transit system for metro Atlanta.

But a state Senate study committee approved a report recommending the General Assembly begin a “path forward” during the upcoming 2017 legislative session that could lead to a transit governance bill in 2018.

* * *

Political and business leaders, transit agency officials and Georgians who use public transit have long complained that metro Atlanta’s hodge-podge of bus and rail systems are inefficient. While MARTA and local bus systems have taken steps to work together, including letting passengers use MARTA Breeze cards to pay for bus rides on other systems, efforts to form a regional transit system have fizzled.

The committee’s report recommends the legislature set aside funding this winter the State Road and Tollway Authority (SRTA) would use to develop transit governance legislation to introduce in 2018. SRTA would hire an independent consultant for the work.

Sounds like a plan for us as well.  It remains to be seen if local officials are serious.

Transportation – TBX Questions

With TBX in flux, there was an interesting development in the Legislature:

The Tampa Bay Express project could face even more problems if Florida Sen. Frank Artiles (R-Miami) gets his way.

Artiles filed a bill this month that would bar the Florida Department of Transportation from including tolled express lanes in some of its projects.

* * *

Artiles’ bill would limit toll or express lanes to spans of road that still carry debt. Once debt payment on bonds to those sections is relieved, tolls would have to be removed.

That provision would also only apply to projects bonded prior to July 1. After that date, express lanes or carpool lanes would be blocked regardless of debt.

Artiles’ bill wouldn’t cancel all toll roads. It would not apply to Florida’s Turnpike system, which includes the Veterans Expressway, Polk Parkway, Suncoast Parkway and the Interstate 4 Connector, among other areas outside the Tampa Bay region.

We are not sure why carpool lanes would be targeted, but we have no problem with the other part.  The question is how likely is it to go anywhere:

Artiles’ bill does not yet have a companion bill in the Florida House of Representatives. Bills would have to be passed in both chambers and then signed by Gov. Rick Scott to become law. The effort faces an uphill battle. Scott has made tolls a key part of his transportation plan throughout his administration. So even if Artiles’ bill gained support in the Legislature, a pro-tolls Scott would still have to be convinced.

We actually doubt it would pass as described, but it makes a point that FDOT might consider.  We shall see, just like we shall see what the new TBX will be (though we suspect, especially given the silence of local officials after the Howard Frankland issue, it will be the same thing, just without taking a lane from the Howard Frankland).

Transportation – Ferry Numbers

We finally have some numbers from the ferry test program, from Stpetersblog.

More than 5,400 tickets were sold for the Cross-Bay Ferry between Tampa and St. Petersburg in December, organizers said on Wednesday. That’s up from the 4,700 tickets sold in its inaugural month of November.

* * *

Officials say that weekday ticket sales (Monday – Thursday) started out slow in December, but ticket sales doubled in the third week of the month and tripled during the fourth week, with more than 1,700 weekday tickets sold.  Weekend ticket sales totaled 3,734.

“Those results show strong community interest in the ferry, especially given the ferry did not run during two holiday ‘blackout’ days, and during several days when weather closed Port Tampa Bay to all commercial vessel traffic, including cruise ships,” officials said on Wednesday.

Setting aside that we don’t know the quoted officials, we would expect December to be busier, especially for the service provided, because it is for recreation and people have more days off and visitors in December – especially the last two weeks. From the Business Journal:

More than 1,700 tickets were sold for weekday service in December, which is less than half of weekend sales. However, the trajectory is positive. Weekday passes doubled in the third week of December and tripled in the fourth week.

Also, it is not clear from the first quote if the ferry service did not run the days the Port was closed to commercial traffic. Simply not having cruises would seem to be unimportant because it is doubtful that many people would take the ferry when they are going on a cruise. Moreover, if that many people are taking it from cruises, it just emphasizes the limited, tourist focused nature of the test.

In any event, those numbers are ok (averaging about 175 people a day on ferries with 149 seats usually making four trips (two round-trips) a day.  However,

Despite what Kriseman describes as positive ridership, there are still a lot of unknowns when it comes to the future of waterborne travel in Tampa Bay.

Current ridership levels would require a continued government subsidy for a permanent program to be put in place. The pilot project was paid for by a four-way buy in from St. Pete, Tampa and Pinellas and Hillsborough counties. Tampa Mayor Bob Buckhorn has said he doesn’t want to do that again.

And, in addition to the fact that the schedule and pricing (and, for the most part, the lack of good transit connections) make it more of a novelty than a real service, there is the rub: will full service need subsidy and will anyone give it such a subsidy?  In any event, the test continues.

Built Environment – More on Walking

Last week, we discussed walking (and biking) safety in this area.  Our main point was that, while some progress is being made in some parts of the area, overall we are not progressing that much and that to really progress we need to change the way we plan and build the area.  This week, the Times had another article on walking safety.

Florida remains the nation’s most deadly state for those who journey on foot, a new report has found.

The seven most dangerous metropolitan communities for pedestrians are all in the Sunshine State, according to the Dangerous by Design report released by Smart Growth America today.

That includes the Tampa-St. Petersburg-Clearwater area, which was ranked seventh with 821 pedestrians killed over a 10-year period through 2014.

The Cape Coral-Fort Myers area topped the ranking, which is based on population size, number of people who commute on foot and number of fatalities.

Florida’s bad record actually represents an improvement over an earlier version of the study, reflecting state and local government efforts to make streets more bike- and pedestrian- friendly. For example, the state’s “Complete Streets” initiative requires that road planners focus not only on drivers but walkers and bicyclists, too.

Actually, the worst seven and eight of the worst ten were in Florida (Miami-Ft. Lauderdale was 11th), so, while there may be some improvement, it would be nice if someone else would take the top (bottom) spot.

The Tampa Bay metropolitan area’s seventh-place ranking represents an improvement over its second-place finish in a study conducted two years ago.

Both Tampa and St. Petersburg have formally adopted plans to improve street safety, including better lighting, beacon crossings and separated bike lanes.

Examples include the addition of roundabouts and more crossings on N 34th Street in Tampa and sidewalk extensions in St. Petersburg known as “bulbouts” that slow traffic and shorten the distance to cross the road.

“We don’t like getting on these bad lists, but we know what we’re doing here and we think we’re making progress and going in the right direction,” said Jean Duncan, director of Tampa’s Transportation and Stormwater Services Department.

Maybe, but, as we said last week, without a real change in planning and how areas are built, we will continue to have problems.  (We are all for truly separated bike lanes, with an actual buffer from traffic rather than simply a painted line on a really busy street)

Many fatalities are the result of decades of car-focused design that created fast-moving multilane highways with few safe crossing areas, the report states.

* * *

“This is a sobering report by any measure,” he said. “We have a big job to do in Florida, and people at state level in the transportation field recognized that several years and are starting to make progress, but it takes a long time.”

It is a big job.  It requires a change of mentality that does not see an 18 or 24 lane highway or the sprawl of Wesley Chapel and South County as the key to better transportation and safety.  We are making progress (at least in some areas), but without that change in mentality expect to be high on this particular list (though not necessarily the top 10) for a while.

Economic Development – Venture Capital

Time to check in with the venture capital scene, again.

In Florida, 2016 was a solid year for venture capital with $1.2 billion of investments in startups. That sum, the best since 2001 in Florida, was inflated by a single $793.5 million investment in a South Florida company called Magic Leap. Otherwise, the remaining $406 million or so was spread among all the remaining Florida VC deals in the state for the year.

In the fourth quarter of 2016, no significant VC deals were reported for Tampa Bay area startups by the PwC/CB Insights MoneyTree Report, which tracks venture capital investing nationwide. For all of 2016, Tampa Bay saw VC deals amounting to $47.7 million, including $30 million in funding earlier in the year with Tampa cybersecurity firm Reliaquest.

Tampa Bay’s biggest year of VC funding of area startups of the past 20-plus years was in 2000 when nearly $548 million was committed. That’s 11 times what was invested in this metro area in 2016.

None of that news is very encouraging.  While there is always the chance of a big breakout at any time, it would be nice to have a more steady stream of investment coming in.  And, yes, you do not need to be developing start-ups to have a healthy economy or job growth, but it helps.  Hopefully, 2017 will be better.

Economy – Housing Costs

One of the major measures of the economy is housing prices (including rents).  There has been a lot of news regarding local prices, including a recent Times article:

In the year just ended, the total value of the bay area’s housing stock soared 10.3 percent, nearly twice as much than the nation as a whole, according to a new report from Zillow.

Dollar-wise, bay-area homes collectively exceed the market value of such giants as Bank of America, Procter & Gamble, Disney and Coca-Cola. If they all sold tomorrow, they’d bring in more money than the annual revenues of every Fortune 500 company except Walmart.

On the downside, Tampa Bay housing values still haven’t returned to pre-crash levels. And in another sign of the lingering effects of the foreclosure crisis, the large number of bay area residents who lease rather than own is spurring a hefty increase in rental rates.

* * *

While several U.S. markets are now more valuable than they were at the height of the housing bubble, about 60 percent including Tampa Bay are still below their peaks, Zillow found. Chicago, for example, remains about $134 billion shy of its all-time high.

* * *

Meanwhile, Tampa Bay renters spent far more than renters in several other major metro areas. Total bay area rents rose to $5 billion last year, an 11 percent increase compared to less than 4 percent nationally.

While 2017 is forecast as the year when more millennials and first-time buyers enter Florida’s housing market, the high rents they now pay can make it hard to come up with down payments and closing costs. One new apartment complex in downtown St. Petersburg charges as much as $2,885 for a one-bedroom unit.

You can get a lot of fine interactive information from Case Shiller about housing prices over time here. From the third chart you can find that through October, local house prices are still only 79% (let’s just say 80%) of their peak value.  Which is also clear here, which also gives a comparison to other areas making up some of the usual suspects:

From seattlebubble.com - click on chart for article

From seattlebubble.com – click on chart for article

As for rents, here is a chart ranking the metros by rent.

From Curbed.com - click on chart for article

From Curbed.com – click on chart for article

As you can see, it starts with number 26.  Tampa is 38th. The one bedroom year over year increase is healthy, though if you look at the numbers and the top of the list:

From Curbed.com - click on chart for article

From Curbed.com – click on chart for article

Our rent growth is a bit off the top slots, like Houston, Charlotte, Raleigh, Philadelphia and some others.  The two bedrooms are rent growth is larger.  One truly notable thing is that the prices are relatively low, averaging under $1000, and well below most of the higher profile projects being built in this area.

So, even with the increase, our housing prices are rising though relatively low.  However, as we keep saying, that is offset to a large degree by lower wages.

Another big concern is whether the need for new houses will be met by the standard sprawling mess that will just exacerbate our transportation and other infrastructure issues or another way that shows that we have learned from our past mistakes and actually plan properly.  Another is who will fill all the much higher than average priced rental units that are getting built.

— The Developers Speak

That last question intersects nicely with another Times article on South Florida developers getting active in this area.

Drive around Tampa and St. Petersburg and it’s obvious that the bay area’s two biggest cities are in the midst of an apartment and condo building boom. What’s not so obvious is that many of the projects — including some of the biggest — are the work of South Florida developers.

* * *

As the new year starts, at least 15 multi-family housing projects totalling more than $1 billion are underway or planned in the bay area by South Florida developers. If all come to fruition, they will add more than 5,000 rental and condo units — most of them high-end — to a market that already enjoys a reputation as one of the best places to build in Florida.

So what brings them here?

The bay area’s lure was readily apparent to the Related Group, a Miami company involved in five of the projects.

“The prices in South Florida, specifically Miami-Dade County, are very high and there is a high demand for land so it’s a little more difficult to make the economics work locally,” said Albert Milo, a Related vice president.

By comparison, he continues, “Tampa and St. Pete have a growing population, steady job growth and land prices are a little bit more affordable for developers. They also have a friendly business climate for developers to obtain their entitlements and permits and financing.” 

So, first is land prices.  Second, probably, is that there are so many projects under way in South Florida. Then there is unmet demand in the sense that the urban living market is under-developed in this area. And, of course, they think they can rent the units (or at least sell them for a profit and move on). Because they are in the business of selling their product, it is no surprise that the article is filled with quotes like this:

“We believe there is more than enough demand for these high-end projects,” said Patterson of Related.

And that may be true.  But it also may be true that we are fast approaching a point where, like many more built up and/or larger areas, rents actually begin to plateau or even slide. (A situation highlighted in a Wall Street Journal article entitled “Luxury Apartment Boom Looks Set to Fizzle in 2017”  Which was rapidly followed by a Business Journal article. ) As noted in the Times article:

For now at least, he is right. Buoyed by young professionals who prefer to rent than own, Tampa Bay’s apartment market is among the nation’s hottest and thus of great appeal to developers. According to the research firm MPF, average rents in the bay area grew 5.8 percent in 2016 compared to 3.8 percent nationally.

As new apartments are built, “virtually everything is going to be higher end and priced at that level just to make the deal work economically from the developer’s perspective,” said Greg Willett, MPF’s chief economist. “At some point you can run out of those renter households that want that sort of product but there’s not really any indication it’s hitting the wall yet.”

The real question is when that wall is hit. Though, there is always this:

Willett also notes that while rents for many new Tampa Bay apartments might seem ridiculously high to locals, they’re not bad for those moving into the area.

Really, it is hard to say.  We hope all the units get filled and demand keeps growing.  What is more likely is that the market will become saturated (at least for a while) and development will slow down. That could actually be a good thing if, and it is a big if, the market reaches a healthy, steady pace and avoids our normal boom and bust situation.  That would really be a truly welcome change.

Downtown/Hyde Park – The Tribune Lot Project Move Forward

The Related project on the Tribune lot is moving forward, if slowly.

Miami-based Related Group has secured a construction loan for the redevelopment of the Tampa Tribune site on the Hillsborough River, according to property records.

* * *

Bank of the Ozarks provided a $76 million loan for the project in a deal that closed Dec. 28, according to a mortgage filed in Hillsborough County on Jan. 6.

From the Business Journal - click on picture for article

From the Business Journal – click on picture for article

We are not really fans of this project, but it is nice they could get financing – though given the developer, it is not surprising.  Is there a timetable?

The demolition of the Tribune‘s waterfront office building was to begin shortly after the newspaper was shuttered but was delayed by environmental concerns, a Related executive told the Tampa Bay Business Journal in late 2016.

The demolition process is expected to take several months and wrap up in April or May 2017.

We shall see.

Downtown – How Do You Solve a Problem Like the Library?

We have said that we would like to see a new library in a different location and something done with the prime library property (though we are fully aware of the funding issues).  The City is considering doing a half move – tearing down the library annex and auditorium between the main library and what is supposed to be the AER apartment tower.  Recently, the Times had an editorial about it.

For all its new parks, bars and residential towers, downtown Tampa lacks one amenity that has become a signature draw in other progressive cities nationwide: an exciting library. The John F. Germany Public Library has all the basics — size, location, decent parking — but no presence, charm or functional public space. The city, though, is exploring an idea that could work: demolishing the library’s annex and auditorium and replacing the two aging and ugly structures with something that could draw more visitors. A park could reinvent the library as a marquee setting in a growing downtown.

* * *

A park would be a fitting and attractive use of the publicly owned land. Nestled beside the main library, it could be a quiet and peaceful location to read, a gathering spot for library events and a green oasis between an otherwise busy grid of streets surrounded by parking garages and offices. To the west, the park would overlook the river and the David A. Straz Jr. Center for the Performing Arts, a perfect spot to gather before plays, shows and concerts. It would give the main library a much-needed splash of color and warmth, and bring a rich and fresh environment to a part of downtown that the city bills as the arts district.

We agree with pretty much everything in the first paragraph, until the last sentence.  A park on that lot is not necessarily a good idea.

The second paragraph tries to explain while a park is good.  It makes some sense IF the AER building never gets built.  However, if that building does get built, a park on the land in question would not really have any view of the river (ok, maybe a very small sliver of view from a small part of the park).  In the afternoon, it would sit in the shadow of the building and have a good view of its parking garage and the back of the building.  To the south, the view would be the Poe Garage.  To the east, any view would be blocked by the rest of the library.

We are all for some public green space, and one could argue that a park would create a small reading nook.  That is possible.  But it is not necessarily the best use of the land.  The truth is that the small amount of land that is likely to be in the shadow (literally) of a quite tall apartment buildings without any real openness to the surrounding area.  While be like parks that are framed by buildings with active streetscapes, this particular park would have no building actually facing it.  And that makes it a hard place to find a good use for generally.  Could it be a nice quiet space? Maybe, but it is definitely not clear.

The City should not rush to do anything with that land.  Let’s see what it looks like when/if the AER building gets built before we spend any money on it.

Transportation – The Other Airport

St. Pete-Clearwater International Airport had a good year in 2016:

The St. Pete-Clearwater International Airport broke a record in passenger traffic in 2016, with a 12 percent spike over 2015.

A total of 1,837,035 passengers passed through St. Pete-Clearwater Airport in 2016, the Pinellas County airport’s second consecutive record year and the fourth year in a row of double-digit passenger increases, according to a press release.

Which is very good for that airport.  But there is a problem:

The bump in traffic is credited mostly to Allegiant Air, which continues to grow as the airport’s dominant carrier despite a slew of emergency landings both at the St. Pete-Clearwater airport and from flights leaving or headed to the region.

Setting aside the well-publicized Allegiant incidents, the reliance on one major carrier for the vast majority of traffic is a definite weakness in the numbers.  But, for now, well done.

Rowdies – Chamber on Board

The Rowdies effort to get an MLS team got another endorsement this week.

The St. Petersburg Area Chamber of Commerce is launching a Rowdies Council to promote the city as a winning destination for Major League Soccer.

The council will serve as a business-backed group of community leaders supporting Rowdies owner Bill Edwards in his effort to win an MLS expansion team.

* * *

Holden is co-chairing the group with Tash Elwyn, president of the Raymond James & Associates Private Client Group. They plan to announce leadership roles in three subcommittees in the coming days. Those committees will address sponsorship, season tickets and a referendum allowing Edwards to start an $80 million stadium improvement plan needed to entice MLS to St. Petersburg.

That is not surprising.  The Rowdies ownership is well-connected in St. Pete, but it is good, especially considering what happened with the Rays plan for a stadium in the same spot.

Meanwhile, In the Rest of the Country

There was news about Apple in Phoenix:

Apple has requested to make finished products in its facility in Mesa, Arizona, according to the document, first reported by Business Insider. Right now, it has permissions to make consumer electronics components there, the filing said.

Mesa first announced the Apple manufacturing facility in 2013, when there were expected to be 2,000 jobs created there. In 2015, Apple said it would invest $2 billion to expand “a command center for the company’s global networks.” The company currently has job postings for “data center site services technicians” in Mesa.

Apple has reportedly been looking to expand its cloud services to compete with rivals like Amazon and Google, The Information reported last year. Meanwhile, president-elect Donald Trump has said as president he would “create the incentives” to get Apple to “build a big plant in the United States.” 

One day, hopefully, we will be reading news about something like this here.

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