St. Petersburg Council Backs Heavy Subsidy to Revive Stalled Deuces Townhome Project

St. Petersburg city council members voted Thursday, January 18, to push forward a stalled affordable housing development in the Deuces, the historic African-American entertainment and business district along the 22nd Street South corridor. The project calls for 24 townhomes on a lot that the city once pledged to turn into a live-work community but which remains empty dirt.

The site sits on 22nd Street South between 6th and 7th Avenues. A majority of the council passed a series of resolutions, including a maximum guaranteed price of roughly $13.1 million for Tampa-based Horus Construction Services, the design-build firm the city hired in 2019.

Council members also approved a $5.98 million loan from the Economic Stability Fund. The money will be moved into the Housing Capital Improvement Fund to pay for part of the construction.

City architect Raul Quintana said costs rose because of pandemic-related strain on labor and supply chains, among other issues. The team has so far spent about $4.5 million on design work and infrastructure. The original plan for the 2.7-acre property included a commercial park alongside housing, but the administration scaled back the commercial portion in 2023 and made the townhomes its priority. That change helped lower the estimated project cost from $33 million to $19 million, a figure that excludes the $2.2 million the city paid for the land in 2007. Council member Lisset Hanewicz called the lower number "something more digestible."

Council members Ed Montanari and Richie Floyd cast the dissenting votes. Montanari said the "math with this deal is so far out of the ballpark," adding that the private sector would never undertake it. Floyd raised similar worries about the subsidy, which works out to more than $500,000 per unit. Hanewicz voted in favor but shared some of those concerns, saying the subsidy exceeds $800,000 per unit once land costs are counted. "This is an anomaly… we are at the point where we have to do something with this," she said.

City Administrator Rob Gerdes defended the spending. "We think the subsidy is worth it," he said, arguing that the project is important enough to justify taxpayer money and could be "a real catalyst on the Deuces."

The new price includes a $300,000 contingency to address contaminated soil, which is common on industrial sites. Quintana said the soil will be hauled away and replaced with clean fill before the contractor begins work. He also said net proceeds from home sales, estimated at $6.2 million after commissions, would help offset the Economic Stability Fund loan.

The two- and three-bedroom townhomes are expected to be priced between $223,000 and $317,000. By comparison, new luxury townhomes in St. Petersburg, such as the Grand Central Townhomes built by David Weekly, can start in the high $700,000s. Twelve three-bedroom units of about 1,700 square feet and twelve two-bedroom units of roughly 1,600 square feet are planned. Each will be sold fee-simple with two parking spaces, since the homes will not have garages.

Qualified first-time homebuyers will be eligible based on income and other factors. Twelve units are reserved for households earning 80% or less of the Area Median Income, and the other twelve for those earning up to 120%. Buyers will receive down payment assistance, and the homes will carry an affordability term of at least 30 years. A contracted realtor will market the units and prescreen buyers, according to city documents.

Resale will be limited by affordability conditions, an equity-sharing plan, or both, though Housing Development Manager Mark Van Lue said the city has not yet finalized the sale agreement terms. Horus Construction Services expects to start building in March or April and finish by summer 2025.