(The following story was published in Shopping Centers Today in late 1990.)

Business Profile:
The Bay Plaza Companies

By Bob Andelman

Let's get right to the real burning question about the rejuvenation of downtown St. Petersburg: Is there a market for the Bay Plaza Company's proposed 1-million square feet of upscale retail department stores, shops and restaurants? Forget about whether or not Major League Baseball is coming to the city by the bay for the moment; most business people want to know if there are enough shoppers with good taste and deep pockets to form a gold card quorum.

For the answer, we leap across Tampa Bay to a small Tampa neighborhood known as Hyde Park and a man named John Stevelberg.

Stevelberg knows a thing or two about the viability of upscale retail in the Tampa Bay area. As project director for Old Hyde Park Village Center in Tampa he has overseen Hyde Park's five-year development of 250,000 square feet of high-end retail. Tenants include Jacobsen's, Polo By Ralph Lauren, Brooks Brothers, Doubleday Books, The Sharper Image and Banana Republic.

How's business? Hyde Park is 90 percent leased, filling only nooks and crannies and upgrading existing tenants.

"I have a couple stores that are up three digits over last year," says Stevelberg. "Stores that did 20 to 30 percent increases are down to 10 percent because the base has grown so big. People like The Gap and The Limited are burning it up here."

Could it work in St. Petersburg?

"I've heard rumors that they're very close to announcing a department store," says Stevelberg. "If they get the right one, there's no reason they can't build a helluva project. If you could put Macy's in downtown St. Petersburg, you get Maison Blanche and you put in a 500-room hotel, you've got a tremendous draw. Macy's is not on the west coast. It would offer something unique."

The first new retail center to be built in St. Petersburg's downtown waterfront district is now complete and the city's developer/master planner is hustling to sign a Macy's, Saks Fifth Avenue, Bonwit Teller or Maison Blanche to the dotted line.
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The Bay Plaza Companies have become synonymous with the words "future" and "progress" in quiet, stately old St. Petersburg.

Jackhammers broke the silence; cranes are rearranging the skyline. Marketing experts have linked city-owned attractions such as the Florida Suncoast Dome, The Pier and Bayfront Center with coral and teal patterns and snappy phrases; people have come by for a visit then returned with friends. Downtown St. Petersburg just ain't what it used to be.

Millions of dollars and a few hundred-thousand opinions have been lent to a renewal in the downtown community. Office, retail and parking spaces are being developed at an unprecedented rate in a part of St. Petersburg where excitement once meant watching green paint dry on a sidewalk bench.

"People and companies have confidence that downtown St. Petersburg can be rejuvenated," says Jack Critchfield, chief executive officer of Florida Progress. Progress is one of those optimistic corporations; its development subsidiary built the new 26-story, 330,000 square foot Barnett Tower and occupies eight floors. Fast-rising Barnett Tower, says Critchfield, "is a symbol that we believe this is a great place to live and work."

Barnett Tower is just one of many newly completed projects downtown. Across the street and east of the tower, construction is complete at Bay Plaza's South Core Retail/Parking Complex, which is intended to house a single 124,000-square foot tenant. The Sun Bank Financial Centre and 43,000-seat Florida Suncoast Dome opened in March. Downtown projects begun in 1990 include the long-awaited refurbishment of the city's pink jewel, the Stouffer Vinoy Resort, a four- or five-star, 275-room resort hotel being brought back to live after a long rest at a cost of $70 million. The Plaza, a 14-story retail and office project, is getting a $2 million facelift to open up more retail space and adapt a Mediterranean look. And the Women's Tennis Association has relocated to St. Petersburg from Miami. In addition to executive offices, the WTA will have a museum and retail shop downtown.

To develop a cohesive approach and fuel the further return of the downtown district, St. Petersburg turned to the Bay Plaza Companies in 1986. Founded by the J.C. Nichols Co. - which was responsible for creating the Country Club Plaza area of southern Kansas City - and led locally by 38-year-old Neil Elsey, Bay Plaza has a master plan for taking St. Petersburg's waterfront district into the next century.

J.C. Nichols provides the cash and assets that make the big projects associated with Bay Plaza possible. Bay Plaza is modeled after the retail district of Nichols's 8,000-acre Country Club Plaza. The company also has shopping centers in Kansas City, hotels in St. Louis, Chicago and San Francisco and apartment complexes and office parks in Des Moines, IA.

Elsey, the president of Elcor and the Bay Plaza Cos., learned property management and acquisition with J.C. Nichols before going off on his own. He bought, sold and built apartment and office complexes in Phoenix, New Mexico, Texas and Kansas City before turning his sights on St. Petersburg.

An agreement between the city and its downtown developer calls for St. Petersburg to invest an additional $40-million in the central business district, mostly for parking garages; Bay Plaza will spend $100-million. Thomas McKinnon Securities is a backer for the project.

The Bay Plaza project is the sum of three phases, South Core, Mid Core and North Core. They are a series of two-story, open-air Mediterranean style buildings intended to be built in succession (with some overlap) during the next 10 years. The completed waterfront retail district will consist of 1.4-million square feet of retail, office and restaurant space.

South Core and Mid Core are anticipated to open simultaneously in fall 1991. Elsey, who says six restaurants and virtually all available small retail positions in Mid Core have been lined up, expects to make specific lease announcements about Mid and South Core in the first quarter of the year. "There is a schedule. We're on it," he says. "It's a matter of keeping a steady hand. This project's life only begins when it's occupied. It's not the end, it's the beginning. (And) interest in this market is keen."

While no major tenants have yet been announced for any of the core projects, Bay Plaza has said publicly that AMC Theaters will likely anchor Mid Core with its largest multi-plex project to date: an 18- to 20-screen movie theater.

Phil Singleton, vice president of southeast operations for AMC, confirms the chain's keen interest in downtown St. Pete. "We've been negotiating with the Bay Plaza Companies to try and locate theaters downtown. We haven't come to terms yet but both sides are very positive. I think we'll work it out," he says.

"'Downtown' is kind of a misnomer for St. Petersburg," according to Singleton. "It's probably one of the most accessible areas serving the entire Tampa Bay area. It's so beautiful down there. Five years from now we could have another Newport Beach. We think - if they do what they say they're going to do - people are going to go there the way they go to Old Hyde Park (where AMC has a seven-plex). We think a world-class theater, similar to what we built in Pleasure Island (at Walt Disney World in Orlando) would work in downtown St. Petersburg. We're not building a neighborhood theater. We anticipate people coming from all over to Bay Plaza."
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When the principals behind Country Club Plaza were invited to look at St. Petersburg's waterfront in 1986 as a potential site for redevelopment, the first question they considered was whether Tampa Bay had a need for or an ability to support high-end specialty retail shops and department stores.

"As to St. Petersburg itself and the regional questions," says Elsey, "we looked at Tampa Bay and felt there wasn't one true focal point. Where was it in Tampa Bay there could be a true recreational, retail and entertainment focal point and how accessible would that be to the most people?

"St. Petersburg is on the waterfront and we think that's a huge amenity," he explains. "The interstate access is tremendous. It has an uncommon amount of feeders that serve the area. And St. Petersburg's downtown isn't a downtown the way most people think of downtowns. It's a waterfront community, a wonderful setting, centrally located.

"Pinellas County is totally in-filled. It has one of the highest per capita retail sales rates in the state. High-end specialty retail just didn't exist - we saw that void. Our conclusion was that between now and 2000, this market deserves high-end, specialty retail," says Elsey.

Former Peace Corps worker Elsey has become "Mr. Bay Plaza" to the Tampa Bay business community.

"Neil has tremendous vision and the ability to exercise that vision," credits restaurateur Phil Alessi, one of the first businessmen to sign on to do business with The Pier.

In taking responsibility for refueling the city's downtown district, Bay Plaza insisted on being given the marketing and management reigns for St. Petersburg's triple crown jewels as part of the deal. It saw potential few others did in linking the Florida Suncoast Dome, Bayfront Center and The Pier.

The city independently made the decision to build the stadium and rebuild the Pier and Bayfront Center before Bay Plaza came to town, notes Martin Normile of St. Petersburg Progress. "The city expected to run those facilities as independent enterprises," he says. "It wasn't until Bay Plaza that there was seen some inter-relationships and cross-marketing potential.

"I think that's the genius of Bay Plaza," says Normile. "We look at the plan to develop 1-million square feet of retail and say, 'That's ambitious.' But they say those facilities (Florida Suncoast Dome, The Pier and Bayfront Center) will generate 6 million people downtown."

Elsey simply calls the three facilities "engines." The Pier is pumping at full throttle, having attracted 2.4 million visitors in 1989, its first year following renovation; the Mahaffey Theater at the Bayfront Center, now ornately attired, has been less impressive and offers little immediate hope of improvement with a performance schedule of Broadway road shows, has-beens and novelty acts; and high hopes rest on the February opening of the Florida Suncoast Dome, where dreams of "Play ball!" keep the city fathers' fingers tightly crossed. The Dome attracted 400,000 people to the downtown area in its first six months of operation for events ranging from a home & garden show (19,000) to a New Kids on the Block concert (45,000). Besides being in the running for National League baseball and NHL hockey franchises, it is scheduled to host the Davis Cup Tennis Championships in December and is one of four sites being considered for the 1992 Republican National Convention.

To get to these three engines in the near future, people will have to drive through the Bay Plaza waterfront retail district, says the master planner. "These engines are going to attract people and will continuously introduce new people to the waterfront in St. Petersburg," says Elsey. "With that kind of activity, it's a marvelous location for retail and fine restaurants."

What's most important, he adds, is that The Pier has demonstrated that a downtown location can draw a crowd.

"It is easy to get here," he says. "That's good news for The Pier but it's also a good indication of the location and the reorientation of people to the waterfront. It's also a positive sign because The Pier doesn't have near the drawing power of a high-end retail center."

The next visible sign of downtown improvement will be Plaza Parkway, a $4 million streetscape enhancement that will brighten the look of the district from Interstate 275 east to the waterfront. Changes will include new sidewalks, street lights, traffic signals, signage, benches, drinking fountains, bike racks, trees, planters and banners.

"You're going to know, the minute you get off the freeway, that you're someplace special," says Elsey. "What we thought could be true of St. Petersburg is happening."

Remaking downtown St. Petersburg into Bay Plaza is far and away the most intricate project Neil Elsey has ever undertaken. "The key," he says, "is to figure out where St. Petersburg is going, not where it's been. We see opportunity. It's not just a 'downtown' project. St. Petersburg is preparing for the 21st Century and we just happen to be involved."

Will St. Petersburg's Central Business District, or CBD as Elsey refers to it, one day be rechristened as "Bay Plaza"?

"I don't know how it will end up being referred to," says Neil Elsey. "It just happens the name of the retail district is Bay Plaza, the name of the company is Bay Plaza. How that historically will sit, I can't project. But when you land in Kansas City and you get off the plane, you tell the taxi driver you want to go to the Plaza. You don't say 'mid-downtown Kansas City.'"
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Maas Brother is the only big retailer in downtown St. Petersburg. It has been a 260,000 square foot fixture for a long time. While the chain has no present plans to move to a new building or refurbish its old one, it would welcome the synergy the two department stores planned in Bay Plaza's core sites.

"We're aware of the project and are interested in whatever we can do to make it happen, short of any major changes to our store," confirms Maurice Fry, operating vice president of real estate for Federated Department Stores and Allied Stores Corp., parent to Maas. "We are waiting to see what other retail can be attracted, then we will focus on a strategy. We would consider improving our store if there was a better environment."

Stevelberg, project director for Old Hyde Park, says if St. Petersburg could reel in a Lord & Taylor or Saks, the smaller specialty stores would no doubt follow. Including new franchises of stores already succeeding at Hyde Park.

"I imagine some of them would probably be interested," he says. "I don't know why not. I'd like to say no, but if they're doing business here, why wouldn't they 25 miles away?"

Bay Plaza expects to start construction before the end of the year on Mid Core, which will offer 180,000 s.f. of retail space, less 57,000 s.f. for the AMC Theaters movie complex. "We're in good shape. The theater business is real good. The only difficulty is the 12-month construction process. After December, it's sit back and watch the bricks and mortar," says Glen Harrell, vice president and general manager of Bay Plaza Realty Co.

Shopping center developer Craig Sher, president of the St. Petersburg-based Sembler Company describes himself as a skeptic with regard to retail development in downtown St. Petersburg at a time when upscale stores can't rub two LBOs together to light a fire.

"I desperately hope it succeeds," he says, "but it's a bad retail market. That whole market is suspect now. Plus, I don't think St. Petersburg is a high-end market. It's a middle market."

Harrell says he has heard such concerns but that Bay Plaza hasn't lowered its sights one iota from bringing a single, high-end retailer to the master developer's 124,000 s.f. South Core building.

"If you look at who is prospering on the retail heap, it's only the upscale people," he says. "It's the only way to go for this type of project."

Profile (c) 1990 by Bob Andelman. All rights reserved.