Asking tough questions: Is Sugar Hill proposal for the Trop just another bait-and-switch?

Deciding who will be the City of St. Petersburg’s partner in a generational, $3 billion redevelopment of the Tropicana Field site is an enormous responsibility.

It certainly requires asking tough questions, intense scrutiny, and a thorough review of the top proposals. But the more St. Petersburg Mayor Ken Welch reviews the finalists, the more apparent it will be that Midtown is by far the best choice and the only choice.

Sugar Hill, the other finalist, has little experience, a spotty track record, and an unrealistic proposal for the Trop that appears to be a massive bailout waiting to happen.

The Sugar Hill group is primarily made up of individuals and groups that have never worked together or completed a project of this size. But even JMA Ventures, the lead master developer on the Sugar Hill team, has a history littered with bait and switches, including a very recent scandal in Homewood, Lake Tahoe, failed projects and last-minute changes.

Sugar Hill’s local partners, DDA Development, Backstreets Capital, and J Square, have also been involved in retreading deliverables. Most recently, they reduced the promised deliverables of office space at the Orange Station mixed-use project, replacing office space with 12 workforce housing units, and decreased from 90% to 20% workforce building Sixty90 on Central Ave after the project was approved.

These examples should be massive warning signs for the Mayor.

In Homewood, California, just last month, JMA promised to transform a folksy 60-year-old ski resort into a “pedestrian-friendly village” with public ski facilities. That’s what was promised in 2011 when residents and the Tahoe Regional Planning Agency unanimously signed off on JMA’s proposal. The problem is that JMA secretly changed its plans to a private, exclusive, gated community.

According to the San Francisco Chronicle, JMA Venture’s CEO’s “phone has been ringing off the hook” with outraged callers who feel misled after the developer’s true plans “were accidentally leaked online” for all to see.  Renee Koijane, a local resident who initially wrote a letter of support for JMA’s project, told one California news outlet just a few weeks ago. “I never would have signed up for this. I don’t think the community would come out in droves for this plan. It feels like a bait and switch.”

One Homewood resident describes JMA’s negligence and broken promises as “an insult to the community.”

But this isn’t an isolated incident for JMA, which has a history of over-promising and under-delivering. That track record ranges from backing out of a $70 million cash offer to Cedar Fair in Santa Clara at the very last minute to budget overruns and chaos in their development surrounding the Sacramento King’s basketball arena.

That project was such a mess that it resulted in JMA being sued for not paying contractors millions of dollars, and it left others holding the bag. JMA, for its part, claims such litigation is commonplace and notes that the matter has since been settled and that all contractors have been paid.

It’s worth noting that JMA chases big development proposals around the country. One is in Richmond’s Diamond District, and the other is in Hawaii’s Aloha Stadium. Each time, JMA reinvents itself with a hyperlocal name, as they are doing with Richmond Community Partners in Virginia and Waiola Mixed-use Partners in Hawaii.

Each time they also offer pie in the sky promises to land the project.

That’s what Sugar Hill has done in St. Petersburg, where it essentially submitted a brand-new proposal on April 20 for the Trop site while responding to Welch’s 15 questions about the original submission.

They made more promises, like increasing their total affordable housing units, stating that they plan to execute the increased number by partnering with DDA Development and Backstreets Capital, the Tampa-based group currently developing the Sixty90 building in St. Pete.

The Sixty90 project, approved in October 2021, planned a 90% workforce housing building. However, last week they announced that it has substantially scaled back the plans, dwindling to only 20% workforce housing, citing construction cost challenges due to the removal of an $8.5 million public subsidy.

Is this what will happen at the Trop, too?

Those same members of the Sugar Hill group are also behind the Orange Station project, which promised 100,000 square feet of office space. Now that they have cleared the site, they cut that number in half.

And they also want millions in Penny for Pinellas money to make the project work.

As Sugar Hill seeks to overtake Midtown as the city’s top choice for redeveloping the Trop site, the group essentially submitted a new proposal, lacking substance and credibility.

— It gave up on its original proposal for a convention center, which was never realistic.

— It proposes a record number of affordable housing units, which is not realistic, financially possible, or what St. Petersburg residents envision for the site.

— It abruptly pivots from asking for more than $800 million in its original proposal to suggesting it could buy the Trop site for more than $100 million.

Yeah, right.

Look at what happened to the California ski resort.

Look at what happened around the Sacramento area.

Look at what happened in St. Petersburg to the Orange Station project at the site of the former police headquarters, or the Sixty90 building, also in St. Petersburg.

Bottom line, Midtown has been straightforward with their proposal to St. Petersburg and continued a refreshing level of consistency in their answers to Welch’s questions.

Since the beginning, Midtown has been the only developer that has capped the City’s contribution to the already allocated $75 million TIF. Midtown is on the hook for the rest, totaling over $230 million in community benefits.

For those reasons, Welch’s questions yield the same answer as his predecessor discovered after reviewing all the plans, that Midtown is the clear choice to redevelop Tropicana Field.