The redevelopment of a prime block in downtown St. Petersburg has taken a major step forward.
Ending a long-running dispute, First States Investors has transferred its part of the 400 block of Central Avenue to members of the Pheil family in a $10 million transaction, newly recorded deeds show. Family members, who own the rest of the block, can now proceed with the sale of the entire two-acre site to New York’s Red Apple Group for what could be one of the priciest transactions ever for a downtown parcel.
In addition to the $10 million, First States spent an estimated $2 million to demolish a garage and two old buildings, whose aluminum grillwork gave them a cheese-grater like appearance. The trust also paid to landscape and fence the now-vacant block.
The Pheil family, descendants of a St. Petersburg mayor who originally developed the block, had little incentive to sell until recently because they were assured of substantial income from land leases that didn’t expire until 2058. First States, a California real estate investment trust, got stuck with the leases when it took over hundreds of properties, including those in St. Petersburg, after foreclosing on a loan.
As downtown’s real estate market heated up, both sides saw advantages in settling their dispute. Early last year, they reached an agreement that culminated with what Jeff Waldvogel, chief financial officer of First States’ parent company, called an “historic transaction” in which First States gave the Pheils its land and paid them $10 million to get out of its land leases.
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