The deal will go before the St. Petersburg City Council for approval on Sept. 5. City staff recommended approval.

As a condition of the sale, Third Lake Partners must grant the city an easement on 2nd Avenue South that prevents it from being cleared and developed. This will allow the corridor to continue to be used as a public right of way, as it is expected to be a major thoroughfare to the future site of the Historic Gas Plant District.

The property was once part of a $200 million mixed-use project that included a 75,000-square-foot Moffitt Cancer Center, a 30-story residential tower and a 14-story hotel.

However, Mayor Ken Welch rejected the deal in 2022, arguing there was not enough affordable and workforce housing.

Although specific details are not yet available, the draft agreement requires Third Lake Partners to develop a mixed-use project on the property that could include residential, office, retail and hotel uses.

Affordable housing does not seem to be a prerequisite for the new project.

Construction of the new building must begin within five years.

Third Lake Partners initially submitted an unsolicited offer to the city in March 2023 to purchase the site for $6 million.

As a result of these unsolicited proposals and in accordance with Florida state law, the City was required to solicit additional alternative proposals from private developers or others interested in leasing or purchasing the site.

An alternative proposal was submitted within the 30-day deadline, but Mayor Ken Welch ultimately chose Third Lake Partners and began negotiations with the company.

After negotiations with the city of St. Petersburg, Third Lake Partners’ offer was increased to $10 million.

Third Lake Partners has an existing long-term lease for the parking lot that would terminate upon approval of the sale agreement. Without the sale, the long-term lease would extend to 2086.

Tobias Realty Advisors and other real estate appraisers determined the market value of the property to be $17.94 million for the unencumbered title and $15 million for the leased title.

The proposed $10 million sale to Third Lake Partners was deemed by the City to be a fair value because several factors reduce the current market value of the property, including the City’s existing obligation to provide 90 ground-level parking spaces on the site, the expectation that future property tax revenues will exceed rental income from the existing lease, and the fact that Third Lake Partners is granting an easement along Second Avenue.

Third Lake Partners is a major shareholder and investor in St. Petersburg real estate.

In 2017, the company purchased 200 Central, St. Petersburg’s tallest office tower, for $65.75 million.

Third Lake Partners was also an equity partner in the development of ONE St. Petersburg, a 41-story, 253-unit condominium tower that opened in downtown St. Pete in 2018.

The company is also an equity investor in the 3rd & 3rd Tower, a 33-story apartment building currently under construction at 235 3rd Street South. St. Pete-based real estate developer Echelon is leading the development of 3rd & 3rd.