If you build it, will they come?

Every time downtown advocate Ernie Ritz passes Citrus Square, he can’t help but stop to admire the building.

For Ritz, the development on Orange Avenue in the Rosemary District is a model of what he would like to see downtown. With its café, bistro and shops on the first floor and a blend of condos ranging from 550 square feet to 1,250 square feet in two stories above, the building is a new-urbanist model.

“This belongs on our Main Street,” said Ritz.

But Ritz and other proponents of a plan to bring smaller rental apartments and condos — with lower prices — to downtown say the plan won’t work unless the city relaxes its limits on the number of residential units allowed per acre.

Because of high land values and small property parcels downtown, it’s nearly impossible, Ritz says, for developers to construct smaller residential units in the range of 500 to 1,250 square feet. Ritz wants to change that.

As part of his effort to build support for an overlay district downtown with increased residential density, Ritz met with Mayor Suzanne Atwell and Commissioner Paul Caragiulo last week. He is planning a community workshop to discuss what a density increase would mean for downtown.

“Right now, we have a lot of condos downtown for older people with lots of money,” Ritz said.

Currently on Downtown Core-zoned properties, 50 units per acre are allowed. A maximum of 25 units per acre is allowed on Downtown Edge-zoned properties.

Condos under $300,000 are a rarity, with the average downtown condo sale price in 2012 at $573,000. The average size of a downtown condo sold last year was 1,672 square feet.

The goal of Ritz’s proposal is to incentivize developers to build less-expensive units by offering a higher density, or number of units allowed per acre. For Ritz, one of the best ways to keep units affordable is to have compact apartments that rent for between $900 and $1,250 a month; condos would sell starting at $295,000.

“My idea is for a barista, bartenders and bank clerks to be able to work and live downtown,” Ritz said. “The key to a walkable city is density. It’s more eyes on the street, it’s safer, and there are more people shopping downtown.”

“$500,000 is not affordable,” Ritz said. “Who keeps $100,000 around to come up with for the down payment?”

The city had a previous, and sometimes controversial, overlay called the Downtown Residential Overlay District (DROD) that sunsetted in 2007. Some argued that an early version of the overlay, which allowed some developers to build four times more residential units than allowed, did not do enough to ensure that lower-priced units were built.

A discussion about a modified proposal for an overlay district that would allow increased density has been considered off and on since 2007, but the topic gets bogged down, in large part because slow-growth advocates and others are wary of the idea of a density increase.

Density has been considered by many to be a four-letter word that many people did not want to discuss, said Forrest Shaw, owner of Pastry Art Café, whom Ritz credits with inspiring him to take up the issue.

Shaw envisions people who live downtown going to work, dinner or to meeting over coffee 365 days a year. Right now, Shaw said, downtown is only vibrant half of the year.

Shaw said he thinks with a city-approved density increase that allows developers to build some units as small as 500 square feet, apartments renting for $700 could become a reality.

Shaw, an advocate of a proposed streetcar in Sarasota, believes the streetcar route, combined with a density increase, would encourage development and redevelopment in the heart of the city.

Downtown, he said, is already a place where people want to be out walking around — it just needs more year-round residents.

“The foundation is here; the fabric is here,” Shaw said.

Obtainable housing
Ritz thinks additional density should be allowed for certain projects in an overlay district that stretches from Ringling Boulevard north to Fruitville Road, and from Palm Avenue east to Orange Avenue.

After the meeting with Ritz Feb. 7, Atwell said she thought it was time to begin a serious conversation about a density overlay district.

“For so many years, (density) has been the elephant in the room,” Atwell said. “We need to look at density as an important tool. It has to be an honored guest at the table.”

Atwell wants to see more people living downtown, and Ritz’s proposal is one logical approach to consider, she said.

“If we want people to live, work and play downtown, we have to look at options to get people living above a store in attainable units,” Atwell said.

Atwell wants one question answered: “How do we do this so you don’t have to pay $1 million for a condo downtown?”

Atwell notes that people often associate “affordable housing” with low-income housing. The mayor thinks neither “workforce housing” or “attainable housing” are catchy terms.

“I wish we had a better term for that kind of housing, where people can live above a store, bike to work and maybe have one less car,” Atwell said.

Entrepreneur Jesse Biter said he calls smaller condos and apartments downtown “obtainable housing.”

Biter, who just purchased two buildings on Main Street, said he is interested in developing obtainable units on that property or other locations downtown.

Biter sees a development with studio apartments starting at $800 as a possibility on certain parcels of land if density caps are increased.

“If downtown is going to be a place where businesses open and people come to work, we need increased density,” said Biter, whose Main Street purchase marked his third major property investment downtown in the past two years.

On the agenda
Caragiulo, who said earlier this year at the City Commission’s strategic planning retreat that he would like to see an additional 1,000 residents move downtown in the next six years, was excited Ritz was championing a plan for increased density downtown.

“The growth should be here, not in the suburbs,” Caragiulo said.

The District 2 commissioner, who represents downtown, said the city is able to expand by 12,000 to 15,000 residential units citywide without any major changes to current utility infrastructure.

An increase in density doesn’t mean an increase in height, said Caragiulo. The commissioner would like to see projects that are six-to-seven stories in height with smaller, more affordable, units.

Caragiulo said he would bring up the topic at the City Commission’s Feb. 19 meeting.

As the concept of a density overlay is gaining attention, opponents are also forming their arguments.

“I just think it is crazy,” said Dan Lobeck, an attorney and president of Control Growth Now. “Sarasota is not a sardine can, and it should not be treated that way.”

Loebeck disputes the claim that more affordable housing is needed downtown.

“There is plenty of affordable housing wrapped in close to downtown,” Lobecksaid. “People are struggling to rent some of those homes now.”

How much is enough?
Pre-2007, during the time of the DROD overlay, developers of certain projects were allowed to build 200 units per acre.

Downtown real-estate broker Ian Black said he thinks a lower number of 100 units-per-acre would be a good number for a modified overlay. The increased density should he available for developers who come in “and present the right project,” Black said.

Ritz said the higher density of 200 units per acre in the downtown core should be available to developers who will build attainable units — especially rental apartments.

“Otherwise, developers will keep building condos downtown, and we will never get apartments for young professionals,” Ritz said.

Even if the city approved another density overlay similar to the DROD, it could be difficult to make costs meet if a developer wants to build obtainable units downtown, where land prices are high, said longtime downtown real-estate broker John Harshman.

After a developer buys the land and factors in construction costs, including structured parking for higher buildings, it would be a struggle to build a project, for example, with 100% affordable units.

“It is not a silver bullet. This is a very complicated issue,” Harshman said. “All these projects won’t happen overnight.”

Yet, Harshman is a proponent of bringing back an overlay that allows a density increase for certain developments. He said some developers will be able to build a portion of units that are smaller and less expensive than the average-sized condo or apartment on the market now.

As of January, there were 126 downtown condos actively listed for sale.

“We need to have tools like that in place so people can apply for it,” Harshman said. “They need to be able to apply for it knowing, if they meet A, B and C, they can get their density increase. There needs to be reason and logic.”

Like Black, Harshman also believes the Rosemary District, where vacant and less expensive land can be found, is another good place for the city to implement a density overlay district. With more land available, it would be more feasible for developers to build affordable units in five-story or smaller buildings, which are less expensive to construct.

“There is a lot of opportunity there,” Harshman said.

2012 DOWNTOWN CONDO SALES
Average size of sold condos: 1,672 square feet
Average price of sold condos: $573,065
Average price per square foot: $343