ST. PETERSBURG — In September, developer James Landers said almost two dozen buyers had contracted for townhomes in the planned 801 Conway project in St. Petersburg's trendy Edge District.
But now the project is dead, a victim of permitting delays and rising prices sparked by the city's frenetic building boom.
"No doubt it's a hyperactive market, and the further we go in the cycle, the higher prices get," Landers, head of Aspen Venture Group, said Monday. "So certainly the core issue was delays in permitting but that leads to higher prices and makes the project more difficult from a financial standpoint."
As the permitting process dragged on with no firm construction date in sight, Landers said he decided to refund deposits rather than face the risk of buyers backing out if the 35 townhomes were not ready within the two years specified by the contract.
"We went through that scenario 10 years ago where people didn't close," he said.
The demise of 801 Conway — the first significant downtown St. Petersburg project to be cancelled during the current boom — has angered some buyers who thought they were getting a great deal on new homes in one of Tampa Bay's most sought after areas. When Landers first announced the project in March 2016, prices started in the upper $200s with monthly payments less than the rents for some luxury apartments.
"Honestly, trying to find anything close to downtown at that price felt like a little bit of Christmas," said real estate agent Nancy Alexander, who put $18,000 down a year ago May on a two-bedroom, two-bath home for $320,000.
Alexander, a former local radio and TV personalty who wants to downsize from her house in St. Petersburg, said she began to get nervous after noticing "there wasn't even a garden trowel in the dirt" when construction was due to start this spring on the corner of 8th Street N and Burlington Avenue.
"I must have placed five phone calls to the sales office over a matter of weeks with no response and in the meantime, I'm waiting to put my house on the market not knowing if I have a place to go if I do (sell)," Alexander said. She asked for and got a refund shortly before buyers received a letter July 6 notifying them that 801 Conway had been scrubbed due to "insurmountable difficulties."
Landers said his company submitted plans to the city around the first of the year. But, he said, there were long delays in the permitting process, which often entails a back-and-forth between city staffers and permit applicants over changes to a project.
"The initial round took 17 weeks," Landers said. "That's unprecedented."
St. Petersburg planning director David Goodwin has acknowledged that the pace of permitting has slowed due to the tremendous amount of construction activity. From Jan. 1 through May, 11 percent more permits had been issued than at the same time in 2016, which itself was a record year.
As of May, many of the 801 Conway buyers already had been under contract for more than a year.
"If permitting that should take three months now takes eight or nine, we're not going to be able to turn these homes over in two years," Landers said. "Let's say we move forward, finish and now we're on the hook for a massive construction loan and some of the buyers don't close because it's been more than two years. That's a scenario nobody wants to be in."
Both sales and construction prices have soared since Landers first billed 801 Conway as an affordable alternative for millennials who want to stay in downtown St. Petersburg but would prefer to buy instead of rent.
A block away from the 801 Conway site, six of the 10 homes in the Skye Townhomes project already have been sold at prices starting in the upper $400s although construction has just begun. And a few blocks north of that, planned condos in the shadow of an interstate exit ramp start at $450,000.
Landers' Aspen VG still has several residential projects underway in St. Petersburg, including nearby townhomes as well as large single family homes in Snell Isle and the Old Northeast.
Susan Taylor Martin can be contacted at [email protected] or (727) 893-8642. Follow @susanskate