By: Joshua Klein
Like a phoenix rising out of the ashes, can the return of retail and entertainment areas within Tampa’s downtown core be sustainable? With the impending bankruptcy sale of Channelside Plaza to the Tampa Port Authority being delayed by legal proceedings, this is the question that many residents and investors are asking. Tampa is not alone in devoting downtown space to retail and entertainment complexes that are meant to drive economic activity. Roughly 200 miles southeast of Tampa, West Palm Beach provides an example of downtown retail revitalization that has seen its share of ups and downs since its development. Over the last 50 years the flight to the suburbs have driven both population and its correlating retail establishments to areas located on the city fringe. Tampa is no exception to this phenomenon. Like all retail locations, the proper mix of tenants is necessary to facilitate the consumer traffic necessary to make downtown projects viable. Examining population trends, the successful tenant mix, and looking at West Palm’s CityPlace, may provide the proper clues necessary to determine the future vitality of downtown Tampa. Recently, Mayor Bob Buckhorn released his InVision Tampa plan, which allocates state and federal funds to the redevelopment of a wide area of underutilized space. In creating a framework for his plan, Mayor Buckhorn enlisted the help of the Urban Land Institute to highlight opportunities and challenges facing the downtown core. This article will highlight some of the issues noted by ULI’s study.
According to a University of South Florida demographic report using 2010 census data, the city of Tampa had approximately 330,000 people within its borders and Hillsborough County had a population of 1,225,000 (“Population”). Comparing these numbers to the 2000 census data yields some interesting results. The population growth within the city of Tampa over this 10-year period increased 10%; the growth rate for Hillsborough County was over 20%. While the relatively sluggish growth of downtown population relative to Hillsborough County could be a major area for concern, one must consider the impact of tourism on downtown Tampa. Visit Tampa Bay (formerly Tampa Bay and Company) reports that in 2010, Tampa welcomed 13.9 million visitors with roughly $3 billion dollars worth of revenue generated (Claytor). Certainly, an increase in total number of visitors is likely in 2013 due to a more favorable economic climate. Will these visitors patronize retail areas in the CBD on a consistent basis? One can look to downtown events such as concerts or hockey games at Tampa Bay Times Forum or events at the convention center, but this is a relatively small and transient population to create continued support needed to create economic vitality of downtown retail establishments. A more promising sign that downtown population can support a healthy retail market is the increase in condo development. Channelside and downtown have seen a steady increase in residential development since the real estate boom of the early 2000’s and during the most recent economic recovery. One need look no further than Related Group’s, Pierhouse, a $55 million dollar Channelside project that will feature over 350 apartments. Population and retail success go hand-in-hand. All signs point to the increase in downtown population, which will lead to future success of retail establishments.
One of the issues highlighted by Urban Land Institute’s study is creating a mixture of tenants that support a variety of retail including locally owned boutiques, credit tenants, and new initiatives such as pop-up retail projects. A Tampa Bay Times article titled, “Vision for Tampa’s Future Connects Downtown, Channelside,” highlights the need for a mixture of tenants and one type of retail that might catch people by surprise: a grocery store. The authors conclude that bringing in a grocery store such as Publix into downtown would draw a large population from surrounding areas, and such a move could foster further retail development (Thalji, Harwell, and et al). Tampa has already taken steps to bolster innovative trends in retail. Karma, a yearly pop-up retail event featured at Channelside Plaza, hosts local business owners who sell fashion, jewelry, and other items. The event coincides with Tampa Bay Fashion Week. Such initiatives are the foundation for creating permanent, successful retail establishments. Creating the right blend of shops and restaurants is a crucial step in the right direction. Such exploratory measures will not be without cost and time. Nonetheless, creating an environment that draws people into the city as opposed to other areas such as WestShore will have positive ripple effects throughout downtown.
As a resident of Palm Beach County and a frequent visitor to both Tampa and West Palm’s downtown districts its hard not to notice similar problems and areas of opportunity. Once an underdeveloped, crime prone neighborhood on the west side of West Palm’s downtown, the development of a dedicated retail and entertainment complex that draws in residents from all over the county, CityPlace provides a real life example of downtown rejuvenation that has seen both initial failure and long-term success. A Collaboration amongst several developers including the aforementioned Related Group, CityPlace has created over 3,000 new jobs, increased taxable property value by $5 billion, and attracts nearly 7 million visitors a year since its creation around 2000 (“CityPlace Celebrates 10 Years as an Economic Engine in Palm Beach County”). CityPlace’s success from a retail perspective can be attributed to the right mix of tenants that took a better part of a decade to achieve. Anchored by Macy’s, a large movie theater, Barnes & Noble, Publix, and a host of well-known restaurants, residents and visitors alike frequent the area repeatedly. CityPlace works because of its repeat customer base and idyllic environment. Channelside must also take advantage of its beautiful weather, serene waterfront views, and creating a project that bolsters repeat patronization.
The secret to CityPlace’s success in light of early hurdles can be attributed to the support of Miami Dolphins owner Stephen Ross who pledged both time and money ensuring CityPlace’s vitality. A similar story is waiting to be written for Channelside, this time in the form of Tampa Bay Lightning owner Jeff Vinik. Mr. Vinik’s investment in the area surrounding Channelside Plaza makes him the key to downtown Tampa’s future success. John Romano of the Tampa Bay Times believes that while the prolonged sale of Channelside Plaza to the Port Authority prevents an opportunity for the Lightning owner to create a unified vision for Channelside’s success, there could be a window of opportunity for Mr. Vinik as he states:
[Vinik] has too much invested in the Tampa Bay Times Forum and 20 acres of surrounding property to not be intrigued by the Channelside complex. The Channelside property would allow that entire section of downtown to be developed with a unifying vision. And in a businessman’s sense of timing, Vinik is shutting down his hedge fund next month to devote his attention to hockey and real estate (Romano).
Clearly, the solution that worked for CityPlace could very well be the solution that works for Channelside. Creating a long-term vision and having a commitment from interested parties could be the common denominator for both cities.
The greatest lesson learned from CityPlace’s long-term success and highlighted by ULI’s study is the necessity for government to work alongside private development. The creation of a long term plan, strong political support, government incentive, and private imitative are the foundations for creating a project that will change the course of downtown Tampa’s future. It appears that at least some of these crucial factors have already been set in motion. One must realize that the creation of a successful Channelside retail project can only be one piece of a much larger puzzle that spans across residential, retail, and office property types. Creating an environment for inhabitants and visitors to enjoy should be the central focus of any new development. Whatever new project is implemented, it is the duty of Tampa’s government, developers, and citizens to realize that the success of such an endeavor will take time to implement. Only with collaboration and an eye towards the future can success be realized.
If you are interested in learning more about the results of Urban Land Institute’s Tampa study or if you want to know more about CityPlace in West Palm Beach, I have attached some informative links below.
About the Guest Author:
Joshua Klein is an aspiring commercial real estate attorney currently obtaining a Master of Science in Real Estate at the University of Florida, where he also received his Bachelor of Science in Economics. A resident of Boca Raton, FL, Joshua developed an interest in real estate from an early age as he watched and studied the development, population growth, and real estate cycles that have shaped Florida over the last 20+ years. Joshua’s recent work experience in the industry included being a commercial property manager of a private equity firm in Gainesville. Joshua can be reached via e-mail: JRKlein91@icloud.com.
“CityPlace Celebrates 10 Years as an Economic Engine in Palm Beach County.” CityPlace. Carey O’Donell PR Group, 01 OCT 2010. Web. 1 Dec 2013.
Claytor, Travis. “Media Advisory: Tampa Bay & Company Unveils 2010 Visitor Statistics.” Visit Tampa Bay. Tampa Bay & Company, 28 Apr 2011. Web. 24 Nov 2013.
“Population.” Hillsborough Community Atlas. University of South Florida, n.d. Web. 22 Nov 2013.
Romano, John. “Jeff Vinik is Key to Channelside Dilemma.” Tampa Bay Times. Tampa Bay Times, 22 MAY 2013. Web. 24 Nov 2013.
Thalji, Jamal, Drew Harwell, and et al. “Vision for Tampa’s Future Connects Downtown, Channelside.” Tampa Bay Times. Tampa Bay Times, 10 NOV 2012. Web. 24 Nov 2013.Contact us at 813.514.1070 for more information on Sales and Leasing Commercial Property in Greater Tampa Area