Downtown developments raise Tampa’s prospects

Lakshmi Shenoy was hesitant when she was contacted two years ago about a job in Tampa, Florida. Then the vice-president of strategy and business development of 1871, a tech start-up incubator in Chicago, she was accustomed to big cities and Tampa was not on her radar.

“I was quite sceptical,” she says. “One visit converted me. There was a buzz of energy; this community is on the precipice of change. It is a place of amazing potential and has the willingness to transform.”

Ms Shenoy accepted the job as the first chief executive of Embarc Collective, an “innovation hub” set up by the hedge fund manager Jeff Vinik. Its goal is to help Tampa’s start-ups by providing advice and office space, and by linking them to venture capital and finance.

Ms Shenoy is one of a growing number of executives Mr Vinik has recruited from around the country to help transform the city, a place he has poured time and money into since buying the Tampa Bay Lightning hockey team in 2010.

Mr Vinik, who was born in New Jersey, spent most of his career as a fund manager in the north-east. An avid hockey fan, he bought the team when it was struggling and saddled with debt, and picked up unused land around the downtown arena, mostly parking lots.

The city was hit hard by the financial crisis and land was cheap, even in the centre. Mr Vinik had few plans for the land besides parking. But he began some master planning of the then-derelict locality and realised he could help build up the area around the stadium, despite having no real estate experience.

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TAMPA, FL - JANUARY 26: Tampa Bay Lightning owner Jeff Vinik speaks to attendees during the NHL All-Star Legacy event at the Jeff and Penny Vinik Family Boys & Girls Club on January 26, 2018 in Tampa, Florida. (Photo by Jeff Vinnick/NHLI via Getty Images)
Jeff Vinik, the fund manager, set out to build up the derelict area around his hockey team’s stadium © Getty Images

He teamed up with Michael Larson, the chief investment officer for Cascade Investment — which manages Microsoft founder and philanthropist Bill Gates’ fortune — to start what has become a $3bn, 56-acre development: Water Street Tampa. It is reshaping downtown and its skyline with luxury hotels and homes, office towers, retail stores and a revamped waterfront leisure space.

The project — one of several large developments under way downtown — will include the city’s first five-star hotel, the Tampa Edition; 1m sq ft each of office, retail and cultural spaces; and 3,500 new rental and condominium homes with rooftop patios.

Already built is Sparkman Wharf, an outdoor food hall and beer garden with chefs selling food from stalls in shipping containers facing the waterfront.

At least part of the Water Street Tampa project, including a refurbishment of the existing Marriott hotel and the creation of an upmarket JW Marriott, is due to open in 2020, in time for the city to host the Super Bowl in 2021.

The success of the project will hinge on whether it can attract enough tenants to occupy the office and residential space, which will be among the most expensive in the city. Florida, which has no state income tax, has seen an influx of residents from higher-tax states, and Tampa is welcoming a share.

Many of the jobs that are being created are back- and middle-office roles, albeit from large companies such as Amgen, Bristol-Myers Squibb, JPMorgan and Citigroup, which are looking to staff centres in lower-cost cities, says James Nozar, another of Mr Vinik’s recruits. He left his role as a senior vice-president at JBG in Washington DC in 2016 to become chief executive of Strategic Property Partners, the development company formed by Mr Vinik and Cascade.

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“We’re talking to a lot of employers, especially in the north-east, who are looking to expand their workforce,” says Mr Nozar. “It’s very business friendly in Florida, and there’s a wonderful quality of life, and a great airport with great access. The biggest challenge for Tampa is that there wasn’t any space. So obviously we’re a big part of that. We’re seeing that if you build it, they will come.”

While Mr Nozar admits the real estate market in the US is softening, he says Mr Vinik and Mr Gates are long-term investors and have committed the funds for the project. “In a lot of ways it actually benefits us; maybe we’ll get some [drop] in construction costs,” he adds.

Another Washington DC property veteran, David Bevirt, who worked for Brookfield, was lured to Tampa by SPP in March last year to head leasing at the Water Street development.

When he took a call from a recruiter in December 2017 wanting to know if he would consider going to Tampa, “I asked where that was,” he says.

He quickly became a convert, he adds. “We made more friends here in Tampa than we ever did in 30 years in DC.”

For inspiration he has looked to Nashville in Tennessee, Austin in Texas and Raleigh-Durham in North Carolina as examples of second-tier cities that have had economic booms in recent years. But, he admits, there are problems to tackle in Tampa such as traffic and a lack of public transport.

“We see ourselves as Austin 15 years ago,” he says. “We’re just now poised for all that economic growth.”

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Embarc Collective is another part of Mr Vinik’s plan to spur economic growth by attracting start-ups to Tampa in the hopes of anchoring fast-growing companies in the city, and to attract a younger, millennial workforce to fill the office and residential space he is building.

“We’re a place that’s building,” Ms Shenoy says of Tampa. “People who want to be part of it get to be builders. It’s not a saturated community.”


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