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Business Observer Friday, Sep. 10, 2004 18 years ago

University Corridor:Big Dream, Bigger Obstacles

Dear YPGers, Keep dreaming. And keep the chatter going. Something good will come of it. But this idea of creating an exciting university corridor between the Ringling School of Art & Design and the USF/New College campuses is a far-far-fetched dream

University Corridor:Big Dream, Bigger Obstacles

Dear YPGers,

Keep dreaming. And keep the chatter going. Something good will come of it.

But this idea of creating an exciting university corridor between the Ringling School of Art & Design and the USF/New College campuses is a far-far-fetched dream. There are too many government obstacles (yes, here we go again).

That's the truth.

Nearly a week ago, members of the Young Professionals Group of Sarasota, a subgroup of the Greater Sarasota Chamber of Commerce, gathered at College Hall at the University of South Florida Sarasota-Manatee campus to brainstorm about ideas that would help push forward the idea of creating a Sarasota University District.

While sipping Diet Cokes, beer and wine and munching on tuna ceviche and other hors d'oeuvres, the YPGers were urged to jot on big pads held up by easels their ideas of what they'd like to see in the university corridor. As you might expect from a group of 20somethings who haven't become 50something cynics yet, there were several who wrote the expected on their idealistic wish lists:

× "Save the bay!"

× Create bio-friendly communities

× Free transportation for students in the corridor

× Create a lively Main Street in the corridor

× No convention center downtown

Some were blatantly practical:

× "Make it safe to walk across Tamiami Trail."

There were pages and pages of ideas. But as the YPGers' ideas bubbled, there was one in the group, a restaurateur, who shared a practical reality during a conversation with Sarasota architect and thinker Frank Folsum-Smith. Smith asked this resturauteur why he didn't open a good, trendy restaurant on North Tamiami Trail.

The restaurateur responded with the obvious: "What are the demographics?"

Well, we all know the answer to that: They're not there.

The restaurateur's question spawned a bigger question: Then how do you get the demographics? Or better still: How do you transform the visual 1950s-1960s blight of North Tamiami Trail between the Ringling School and USF into a university district where people actually would want to hang out, live and go to college? As it is, most of us just try to drive through that gauntlet of scruffy motels and retailers as fast as we can.

Here's one suggestion: Hope for a big hurricane that makes a direct hit.

That would be the quickest way.

Except for that, the truth is, the whole idea doesn't stand much of a chance.

Here's why: Sarasotans are their own worst enemies.

With so many restrictions placed on building heights, residential densities and land use, there's not a developer in sight who would want to be the first to risk his and investors' capital on a "cool" project on that stretch of North Trail. As Folsum-Smith so aptly noted: "It's not economical."

Consider this: Home prices west of the Trail in the neighborhoods bordering Indian Beach have doubled in recent years, says Folsum-Smith, a resident of Indian Beach. Truth is, they are overpriced. These out-of-whack valuations discourage redevelopment - except in the higher price ranges. But those levels are not going to draw large-scale redevelopment because there is not enough waterfront property available.

Add to that the holdout mentality. As word spreads about the university corridor concept, existing landowners and motel owners on North Trail unrealistically will inflate their buyout prices, thinking they're going to get a big score when they finally sell their properties. They keep hoping to win the real estate lottery. That is, if they keep holding out, the valuations will keep rising and some fool will come along and pay the winning lottery ticket.

But most developers aren't fools. They won't overpay. The risk-reward ratio just doesn't work. One of the reasons it doesn't work is because of Sarasotans' attitude toward development. They don't want height. They don't want density. Just ask developer Charles Githler.

When Githler proposed 10- or 12-story condominiums for his property on North Trail, the neighbors had a cow. So the city commission turned him down. Scale it back, they said, we need to preserve the character of the neighborhood. (What neighborhood?)

Githler and his partners are scaling back the project, and the resulting construction price per unit will rise, resulting in a lower profit for those who are risking their capital as well as more unaffordable housing.

That's the story of North Trail. Think about it: What consumer in his right mind would want to buy a $400,000 or $500,000 non-waterfront condo that hugs North Tamiami Trail between Myrtle and the Ringling Museum of Art? But that's about what residential units would cost, thanks to all the government restrictions that drive up the cost of land and construction.

Suffice it to say, sorry, YPGers. The university corridor concept - complete with that lively Main Street - will remain a dream for a long time. Unless ¦

As Folsum-Smith put it: "You have to incentivize people."

As much as we disdain the idea of incentives and subsidies, unfortunately, Folsum-Smith is right. If our elected officials and other "leaders" want a new North Trail, they must be willing to be dramatic, to take a big risk.

Here are three ideas, in order of least to most dramatic:

× Declare a no-tax zone on North Tamiami Trail. Eliminate for a fixed period a developer's property taxes on parcels that are purchased and redeveloped. Perhaps even apply the property tax break to unit buyers for a fixed period. Surely some scheme can be devised to spur redevelopment and make it palatable for the city/county so everyone wins.

× Or try the suggestion we wrote on the YPG pads at USF last Thursday night: "Eliminate all height and density restrictions on North Trail to spur the development of affordable housing for young people." Yes, remove all zoning restrictions in a prescribed area known as the university corridor and let development take its course. Laissez-faire. We'd place bets in Vegas that the this idea would produce better results than anything that will come out of the city or county commissions.

× Finally, and most people will think this is absolutely nuts, the state should sell the USF campus to private owners. Then take the proceeds to buy up the deteriorating real estate surrounding the Ringling School of Art and create a side-by-side USF-New College-Ringling School campus that mushrooms into the critical mass that is needed for a true university corridor.

State bureaucrats, state university officials and environmentalists would never consider selling that property. It's too valuable, they say. And they're right. It's too valuable to leave that waterfront property in the hands of the government.

This much is sure: As the city and county zoning ordinances and development codes now stand, change on North Trail between the Ringling School and south of the USF campus will occur oh-so slowly over the next 10 to 15 years. Just think of South Miami Beach and downtown St. Petersburg. In both instances, these areas were not revived until the buildings that occupied the land became so dilapidated and decayed that the price of the land finally made sense to buy and redevelop.

Sorry to be so pessimistic. But don't give up hope. What's the saying: If you can dream it, you can do it.

Trans Air Grant: Imagine how Delta feels

Everyone in Greater Sarasota and Bradenton should be happy the Federal Aviation Administration awarded last week a $1.5 million tax subsidy to the Sarasota-Bradenton International Airport. This was the grant local airport officials said in May was needed to keep our airport from spiraling downward any further.

With this money in hand, and the $500,000 in taxpayer funds committed to the airport by the Manatee and Sarasota County commissions, the airport authority has set out to subsidize new service from airline discounter Air Tran.

This is all well and good on the surface. The residents of Sarasota and Manatee counties get to use $1.5 million of other people's federal tax dollars to pay an airline to operate out of our airport, offer customers below-market ticket pricing and increase the number of flight choices at Sarasota-Bradenton International. How could life get any better? Who could object to that?

But put yourself in the shoes of Delta, Continental, USAirways and Northwest, a few of the traditional airlines now serving Sarasota-Bradenton International.

Say you're the owner of Delta, and you've been risking your and your shareholders' own equity to provide air service to Sarasota-Bradenton. You invested in the planes, the parts, the fuel, the labor. You paid for the marketing and advertising campaigns to sell tickets. And you've been operating with the hope that this location would provide a fair return on your capital - just as any business hopes.

But you also find out after a while that this is a marginal location. It makes a low return vis-a-vis other destinations. That's one reason you charge consumers a higher price to fly in and out of Sarasota-Bradenton - to make up for the un-economies of scale and the seasonality of passengers.

So two Mondays ago, you learned that one of your competitors, who, day after day, is trying to win your customers, is going to receive a $2 million gift from the government to operate a ticket window and flights right next to you.

Any logical business owner would say: "Wait a minute. Why, Mr. Federal Government Bureaucrat, does my competitor get a public subsidy and I don't? What makes him more deserving than I? For one, haven't I already been risking my capital here to provide service to this marginal airport? What kind of thanks is that? What makes Air Tran more special than I? Shouldn't all of the airlines receive the same treatment? Shouldn't we all receive a subsidy? Why is it the government's business to decide who the winners and losers are?"

This happens every day in thousands of instances. And it's wrong.

Have nice flight.

- Matt Walsh

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