‘Untethered’ – how technology is shaping the new generation & what it means for commercial real estate and urban planning


Though generation X was the first generation to embrace the world wide web, the 90’s were a time of desktop computers, dial up connections and brick phones. Millenials, alternatively, are native users in the deepest sense- they were born into the age of the internet, molded by it and thus live a truly ‘connected’ life. They are using wi-fi, smartphones, tablets and laptops for both business and personal use. As the internet has become more accessible the line between work and play has blurred. Now, everyone is always potentially working and –the ‘office’ no longer refers to a physical space to do work but rather a platform for connectivity. Living in a post-industrial age – the innovation economy brought on by the creative class- they’re work is their life and their lives their work. This group of young professionals are tuned in and turned on 24/7.

This means that the old way of structuring time and space is no longer working for them. ‘9-5’ is a foreign concept. Instead, they would rather live ’18-hours’ –referencing the ’18 Hour City’ model for a live/work/play environment. What does this mean for commercial office leasing?  Tenants, in order to recruit and retain the next generation of talent, must follow the trend of becoming ‘untethered’ from traditional office space and its implied usage. There is a need then for space that converts easily, and is engaging and affordable to boot. Traditional office environments are structured for ‘me’ space- private offices and designated conference rooms come to mind. Instead the new generation of office users are looking for ‘we’ space- collaboration corners, kitchen space instead of a break room, dry erase walls that invite idea-building and a smaller footprint per person.

What are they looking for when choosing a city? It’s happening in cities big and small across the United States. Typically, they find themselves in places with great food, great bars, great transportation, dense urban cores, and job growth. They look for cities that have embraced public space as creative space. Activating streetscapes, scaled for walkability, a sense of place that embraces its own character and uniqueness in a world of cookie cutter places and things. Often they move to areas where there is an agglomeration of arts, foodie culture and entertainment nearby. They salivate for the genuine and organic- not just in the foods they eat and the clothes they wear but in the places they live and visit.

These young professionals are looking for a sense of community connectedness-they have it digitally and now they want it physically. This is a generation raised on collaboration and teamwork and therefore are looking for cities that embrace that ideology!

They are interested in the “REAL real”, that is, they aren’t interested in the sales pitch a city offers, but they are looking for depth and substance. Somewhere they can dig in and put roots. They are slow in their decisions – discerning and data focused and so far they have taken a long time to settle down.

So, how will you get them to your city? Downtowns need to focus on creating an urban outdoor living room- seating, safe pathways, entertainment zones and interesting street activations along the way. As people look to utilize space differently they will be looking to cities and developers to provide amenity rich avenues between walkable zones in 24/7 urban communities. Those millennials who will eventually move towards and into the suburbs will expect and demand similar amenities- bike paths, safe streets, coffee houses nearby, good schools, tech advanced homes and outdoor spaces and affordable living in a smaller footprint.

Millenials Don’t Live Downtown…At Least, Not Where We Think They Do


According to a recent ULI study, most Millenials are not living in the urban core- though the research shows that they would like to be. Millenials, that generation that bore the brunt of sluggish hiring cycles during the recession only a few short years ago, are not bringing home salaries comparable to what their parents did at their age. What this means for Millenials, then, is compromise. They rent instead of own condos in posh downtown settings, or – if they cannot afford that – they move to suburban rings that still fall within the general downtown areas of cities but which are more or less considered sub-urban (rather than entirely suburban). They live on the fringes of downtown, soaking in what they can of the live/work/play model while often struggling to pay for it.

Millenials in Tampa are no different. One needs only look to the towers that have been popping up in Downtown and Channel District the last few years to notice that while there are plenty of younger people living here, there is actually a large group of older residents who have filled the spaces. Especially the condos. Why? Many Millenials cannot afford the high prices of ownership in a downtown setting and worse, as developers cater to the multifamily market in recent years rents have begun to skyrocket as well- pushing many a young renter out of the downtown core of our city. The recent success of the Tampa Heights area or South Seminole Heights area is proof that these younger citizens are landing just outside the core of downtown.

While the vibrant resurrection of these historic  suburban neighborhoods is absolutely beneficial to the overall success of the Tampa real estate market, it is worth noting that perhaps the old neighborhoods would not be so attractive if financing and rents were attainable in the downtown core.

As with all real estate, and throughout history, balance is key- and an overpriced market will eventually correct and an overly saturated one will too. Millenials are finally able to access jobs that can afford them the ability to move out of their parents homes and survive on their own- leading to a dramatic increase in new households for our area. These salaried positions point to stability which will eventually allow for Millenials to choose how they want to live instead of their living situations being a product of necessity. What will they choose? Will they buy condos? Continue to rent? Or, like their predecessors, will suburban communities with fences and yards and space away from neighbors still draw them to the outer-ring? Only time will tell.

Developing Tampa’s Downtown How Media Coverage Leads to Distortions of Market Realities and What It Means For Small to Medium Sized Deals In The Downtown Core


Tampa’s downtown commercial real estate market has positioned itself, since the recession, in such a way that is has become increasingly attractive to investors and developers-both local and from outside the market area. Great press and significant media attention about proposed future projects have come to heighten both the draw and the expectations of a market with such high potential for return. Unfortunately, constant coverage by news outlets about such projects, many of which fail to come online, creates a distorted reality about the market itself.

With the exception of very few groups, speculative office and mixed use development in Tampa’s downtown and surrounding area is a risk that no one is able to take at the moment. Large gaps exist, currently, between ‘for sale’ prices and actual offers – price and value are not parallel, signaling to many would-be investors that the downtown Tampa economy is not currently as efficient as one might suppose. That is to say, in an efficient market buyers and sellers ‘freely and openly transact business in high volume at nearly identical prices’, which is not what is currently happening here.  (Source: William J. Bernstein, The Birth of Plenty: How the Prosperity of the Modern World was Created (New York: McGraw-Hill, 2004). See chapter four, Capital, p. 133.)

If distortions about market realities lead to enough disappointed sellers (and, for that matter, buyers), it could undermine the long-term goals of achieving a vibrant, livable downtown due to holdouts on both sides of deals. Sellers can easily become frustrated waiting to ‘hit it big’ due to an inaccurate perception of property values and buyers who are tired of bidding on over-priced parcels with little to no reasonable counter offers from sellers are likely to move on.

The media provides the public with streaming news and information about deals, projects and investor interest in our market because there is a thirst for real time information from their readers. During the recession years, negative coverage of the commercial real estate market by news and media outlets helped foster an environment that saw an artificial drag on pricing that lasted through the recovery period. Today, the coverage is positive and is amplifying price appreciation trends. Often, what occurs is a scenario where media outlets report on development news long before there is a signed contract, permit in place or ground-breaking. It’s good for business but it also helps to magnify price volatility by creating a situation where land holders in the downtown area feel their parcels are worth much more than is reasonable-simply due to proximity of nearby proposed projects.

To be clear, much of the hype around downtown today is around a few key players-with Jeff Vinik and his team at center stage. The concern of this article is to point out that third party investment and development is necessary to jumpstart areas around the downtown core that are not specifically aligned with Vinik’s master-planned project.

Outside of major office building sales (class A), the bulk of future real estate value in Tampa’s downtown is tied up in vacant, poorly-maintained properties and land parcels currently in the hands of long-term investors. These individuals and corporations often expect astronomical returns on their investments due, in part, to the media hype surrounding activity in the downtown market- activity that is projected and planned but has not yet actually materialized. This signals a market where pricing and value are bifurcated – proven by the constant listing of B and C-type product that does not move and yet sees no decrease in pricing strategy. Without a reality check ‘for sale’ signs will remain abundant but ‘sold’ signs will be difficult to find.

The community and media need to challenge these would-be sellers, investors and developers to aim for properly-scaled projects at price points that are sustainable in a second-tier downtown market. Most investors cannot pump billions of dollars into a project and therefore cannot afford to enter a market where they are bidding on properties well above what the actual value of the parcel is worth.

Despite the hype, Tampa is still just beginning its recovery in regards to the commercial market. Office rents have steadily increased in the downtown core over the last few years and sales of major properties (class A) are high. B and C-type product, however, is not moving at the same rate of increase due to the over-valuation of such vacant properties by their owners.

Vacancy has been falling, rents rising and few construction cranes have popped up over the last few years. But, a few things that are not (often) discussed include:

  • A lack of speculative building and a lack of new to the market tenants in downtown, which in turn would increase the likelihood of a speculative office project. While downtown has seen an overall increase in  lease signings the last few years, we are only now exceeding the pre-recession occupancy rates of our best buildings.
  • Job growth in the Tampa Bay MSA, while still positive, has decreased in the last 12 month period for which there are records available (source: US BLS, Current Employment Statistics). Job growth is imperative to the sustainability of downtown and the real estate market in general.
  • Downtown Tampa’s cranes have all been for apartment projects, not office buildings. It is office projects, historically speaking, that indicate a healthy downtown economy. One needs only to look to Tampa’s competitors- Raleigh, Nashville and Jacksonville to name a few- to see that the lag in office and mixed-use product development is real.

If Tampa is to be the destination city for millenials and corporations alike , we need significant and sustained job creation. That will start with opportunities to invest in a downtown that has a pricing scale in line with reality. Our restaurants, museums and apartment high rises are great amenities to a fledgling 18-hour city, but most of all what downtown needs is new office and mixed-use construction projects. With exception given to the Vinik project, this is only possible in places where developers can acquire land at a fair price in order to hold rents to a level that is affordable for small to medium sized companies to fill what will be speculative, vacant space.

When it comes to media relations, delivering good news will always make you more friends than delivering bad news- but when that good news is presumptive it can and does distort reality, leading to a false sense of security within the marketplace. To be clear, this is not a bet against Tampa’s future but rather a call for a reality check in assessing where we are currently. Too much emphasis on future development that has yet to result in concrete projects has begun to impact the market in terms of for-sale pricing. Such high prices based on speculation, not comparables, impedes the growth of our downtown.

The city cannot afford to shut out smaller investors and developers by creating an environment that thrives on projections and promises alone. A reality check on the media’s part would serve everyone well, helping to re-align market expectations with market realities and allowing for an adjustment in pricing that encourages sales and not just listings.

5 Places to Watch in Tampa in 2016


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West River District

The new kid on the block when it comes to downtown neighborhood revitalization efforts. The area to the west of the Hillsborough River is a place to keep your eye on moving into 2016. In summer 2015, the city council voted to create a new Community Redevelopment Area (CRA) here and the implications for development are immense. Already, development news has picked up in the area and expect more to come as this place finds itself in the middle of a river redesign that has stretched across the entirety of Mayor Buckhorn’s two terms in office.

Jeff Vinik’s Downtown Project

Everyone within earshot has been listening closely the past 18 months for news about this project. What’s different about 2016? Look to see groundbreakings on the site and a continued vigorous search for a national HQ partner here. With his rolodex, Jeff Vinik is sure to lure at least one major company to his downtown village.

Seminole Heights

This neighborhood will see a continued spike in property values in 2016 as more and more people find themselves enamored by the charm of this front porch community. New restaurants, many recognized on the national foodie scene, as well as local and creative retail should keep this neighborhood top of mind for anyone looking to buy a home near downtown.

Ybor City

Ybor City has been in the throws of its own revitalization efforts for a few years now. In 2016, look to the west end of 7th Avenue for new development news. As Downtown and Channel District grow and fill in the remaining spaces towards the northeast Ybor City, at the east edge of downtown, will see infill development on its west to meet construction in these other sections of the city. Already, there is news of new hotels and multifamily going in along this corridor. Expect the news of construction starts to increase over the next 12 months.

USF/ Innovation Alliance District

While most of the development news in Tampa is centralized in downtown, look north for news of growth in 2016. USF and its new partner, the Tampa Innovation Alliance, have formed a partnership that will bring investor dollars to the northern parts of the city. this multi-jurisdictional agency focuses on the benefits that come with investing in education, healthcare and tourism. With a goal of turning an historically transient part of town, often used a throughway, into a ‘destination’ it certainly has its work cut out. But, with partners like USF, Busch Gardens and Moffitt Cancer Center, this is one initiative that is already generating a lot of interest from investors, developers and real estate professionals.

Consumer Spending, Business Expansion and an Accelerated Market


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Stronger growth in business investment in 2015 will be directly linked to another economic driver- consumer spending. Over the past 4 quarters optimism has increased in regards to the state of the economy. Business inventories have been increasing- a sign that consumers are buying more products. During the recession an involuntary increase in inventories was attributed to a lack of consumer purchases but now the increase can be linked to gains in consumer confidence, increased wages, and  looser purse strings. All of this should lead to more jobs in 2015. In fact, not since before the recession has there been more job growth in a 12-month period.

How does this affect the commercial markets? More investment signals an increase in demand for equipment and space. Therefore, the commercial real estate market should feel the impact of the improving economy across all specialty types. An August 2014 survey done by Boston Consulting Group indicated, for example, that 54% of manufacturing executives surveyed were interested in exploring ‘re-shoring’ options for their companies. President Obama cited the survey in his recent State of The Union address in January 2015.

Tampa Bay should see a continued upswing in it’s  recovery in response to its current and (predicted) future positive economic growth and increased consumer spending. As more bay area residents find their financial footing consumer spending should continue to rise- bringing with it new interest from corporations who are looking to expand and meet the needs of customers in one of the countries largest mega-regions.


An Economic Look Forward: Tampa


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In past years, Tampa Bay has deviated from positive trends seen around the country. When national trends indicated negative growth, Tampa Bay was often times hit hardest and for longer than other cities. But 2014 has proven to be the year that Tampa Bay has climbed back from our recessionary woes and our business community is positive when looking forward to 2015. So what will the next 12 months bring? Finally, a look at the national economy should point to parallel trends in the Tampa Bay area. Here’s what people will be talking about.

Organic Business Growth

Natural business growth will be the most obvious proof that 2015 is going to be a great year. Already, optimism about future growth has pushed the economy up 2.5% in 2014. This continued growth is expected in 2015 when, according to the National Association for Business Economics, growth is expected to increase to 3.1%. Not since 2005 has our overall economy seen an increase over 3.0%.

Some may cite the pause in growth during Q4 2014 as an indication that 2015 may not be a great year. If, however, one looks back over time history shows that often, after multiple quarters of strong growth, the economy tends to pause and we see a slightly weaker quarter. Likely, this is not an indication that growth has stifled and is in fact most probably indicative of a health economy where strong quarters are balanced with opportunities to allow the market to breathe.

Organic growth will be born of the necessary improvements companies had made during the recession years (and the slow-growth years that followed). Efficient and cost-effective supply chains, sharp cuts in overhead and improvement of operating fundamentals have paid off. Streamlined and focused, these businesses are looking forward to 2015 with positivity as consumers indicate feelings of security about the economy.

Security & Spending

Feelings of consumer security with the markets should trigger more spending in 2015. Hiring is on the rise, as are wages-both from raises and from minimum wage increases. Layoffs have become scarce and job openings continue to increase as companies begin to hire in anticipation of more growth. Finally, lower gas prices and higher spending on healthcare should stimulate the economy in 2015-specifically in our area as healthcare is a major industry on both the office and retail side of the business. Finally, another positive indication of future spending trends is that American household debt is falling, indicating a rise in wages, in savings and in valuation of assets.

Housing Growth

Demand for housing will naturally increase as income and employment rise. the 25-34 year old demographic (millenials) will  begin to move out of their parents homes. Additionally, those that rent are feeling the pinch on finances as a recovering multi-family sector pushes apartment rates up.The constant rate increases felt over the last few years will push many to purchase their first homes-especially because with falling debt and improving job market fundamentals  these individuals are actually qualifying for mortgages for the first time.

Before, even if they wanted to, many could not afford the down payment for a home and did not have the necessary credit to get a mortgage. Now, with Fannie Mae and Freddie Mac reducing down payments to just 3%, and with less stringent credit requirements- this generation will begin to purchase rather than rent. Developers are likely to react with lower-priced homes, and homes that are in or near city centers. In re-sale homes, new first-time buyers will alleviate pressure on the bottom of the market and allow sellers the opportunity to ‘trade up’, increasing sales across residential real estate as a whole. Only the upper-most tier of homes will continue to be bifurcated from market norms and will likely continue to average a larger increase in price over the next 12-18 months compared to homes in the lower spectrum of the market.

Preparing Tampa For A Senior Housing Boom

in less than a decade baby boomers will begin to reach the age of 75. An important number, because this is statistically when many seniors begin to enter senior housing and care facilities. Additionally, those who do enter these facilities will find themselves there for longer periods of time than their predecessors as medical advances continue to prolong the life expectancies of our oldest citizens.

Across the country, senior care workers should expect and prepare for the explosion of growth in their industry. In Florida, our healthcare employees may be better prepared than in other areas of the US simply because Florida has always been a place that retirees have come to for retirement and senior care services. Tampa though, is a business community, unlike our neighbors to the south- such as Sarasota, Ft Myers and Naples- we have not specifically or singularly been sought out by the senior crowd.

So, how prepared are we for a rise in the need for care services? The city can claim an excellent University system that focuses on medical research and that is a big plus – both for healthcare workers and patients. But, how have we prepared our physical city? For a long time we had not prepared at all- but recently things are changing. The new Ella at Encore! project in north downtown has senior housing, and developers too are getting in on the trend. American Realty Development is almost finished with it’s project, Madison Heights, located behind the Marion transit center in downtown. Both projects, it seems, have taken into account affordability, location and access to public transit as well as ease of access to healthcare facilities such as hospitals, doctors groups and city services.

While our city has begun to prepare for the future needs of aging residents, the CRE community is still focused on multi-family projects that revolve solely around the needs of millenials. While I definitely agree that tapping into the millennial generation is both lucrative and necessary, I think that CRE professionals, investors and developers are placing a little too much emphasis on the sustainability of multi-family projects in the downtown core, when so many of them are cookie-cutter iterations of past projects.

The idea that ALL millenials will always want to reside in an apartment is absurd. If one truly looks at trends they would see that many millenials face purchasing traditional home later in life due to debt associated with education, lower starting salaries than their parents had (adjusting for inflation) and a lack of homes for sale in a price range they can afford.

What this means is that as millenials enter middle age, the downtown core may face an exodus of some of its residents that it so heavily relies upon for a sustained economy. The best way to ensure that doesn’t happen is to diversify the mix of residents which live downtown.

In order for our downtown to continue to thrive, and to continually meet the needs of all of our residents I believe that those developers who are most able to see future trends such as an increase in senior housing needs, will begin to focus on delivering sustainable and affordable alternatives to suburban senior facilities. This would give our oldest residents the opportunity to remain an active and vital part of our downtown core by placing housing and care facilities in the middle of our most populated shopping, dining, entertainment and business districts. Those millenials who choose to remain downtown even after starting families would add to the vital mix of residents necessary for our city to truly prosper.

S.T.E.M: The Impact of A Med School In Regards To Investment Strategy


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Recently, it has come out in local papers that Jeff Vinik, Lightning Owner and real estate investor, has offered USF a parcel of land at the corner of Channelside Drive & Meridien Avenue for use as a site for a proposed medical school. A medical school in our downtown area would do great things for Tampa. Not the least of which would be to bring STEM workers downtown. STEM stands for Science, Technology, Engineering and Math. A medical school would teach AND employ workers in all four of these fields- as USF is a research institute and work completed on the college campus would likely include new medical technology, and procedural innovations. With a move to downtown Tampa, it is likely that the school’s presence would attract additional STEM companies to the immediate area.

Additionally, a new university that had a STEM focus would draw investors to the area- as a recent trend in investment strategy has been to define the presence of technology firms and STEM workers in a metro area and screen acquisitions based on  proximity to these ‘hubs’. You can see the evidence of this in places like Atlanta, Austin and Raleigh-Durham where these cities place great emphasis on their technology parks, medical research labs and schools.

Investors are interested in acquiring properties near these cities for many reasons, but one that cannot be overlooked is the fact that they have a high concentration of well-educated workers who are readily willing to spend money on office space, retail, and entertainment for themselves and clients. Additionally, as the world becomes more technology-reliant these workers and the accompanying jobs they hold are seen as stable within the community.

As I described in a previous post, the influx of educated talent to the downtown area will likely be a draw for companies in the future, as we trend away from a lack of jobs in the market and instead anticipate a dip in available, educated employees to fill open positions. Companies will begin to move to areas with an educated workforce and moving a major university medical campus to downtown will only benefit Tampa as we compete with other Sunbelt cities for major employers.

The ’18 Hour City’: Catering to Urban Dwellers


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Tampa is moving towards becoming an ’18 Hour City’. The city’s live-work-play model is a great foundation for what should ultimately be a vibrant downtown full of life before, during, and after work hours. As Tampa increasingly focuses attention and investment dollars in the downtown core, it is important to cater to the new urban dweller. Already, businesses are successfully sprouting up around a once-vacant downtown.

Besides the obvious benefit to residents of the immediate area, why does this matter? Because vibrancy attracts investment capital and with that capital comes density. In turn density raises property values and allows the city to invest further in important assets such as transportation initiatives and infrastructure. These two, in particular, will be invaluable as assets to attract a younger generation moving forward.

Many millenials, and even those of the boomer generation, rent because they want to. They choose cities that have multi-modal transportation options, access to public spaces and unique and vibrant neighborhoods. They live, increasingly, in downtown neighborhoods with walkability. They choose to frequent neighborhood storefronts and work nearby.

The residents of Tampa have begun to talk transportation and infrastructure, but if the city wants to compete for jobs in coming years it will have to step up and begin to prove it can meet the expectations associated with being an ’18 Hour City’. Without the necessary improvements to move our city forward, we could be left in the dust- losing out to cities like Nashville and Charlotte.

Upward wage trends are on the horizon, as boomers retire. The current generation has already peaked in regards to entry into the job market. This means that instead of the trend experienced in recent years, where workers moved where the jobs were- companies will begin to relocate and expand to areas where there is an educated workforce. If residents and city government do not move towards a more transportation-friendly model of urbanization we stand to lose residents in this key demographic age group-making it difficult to attract and retain jobs.

Tampa has managed, thus far, to create an appealing urban space- now it needs to push  for a sense of place. Concepts that come to mind in order to construct an urban place include; quality of life advocacy, development initiatives- both local and tourism-specific, transportation, preservation of historically impactful assets and arts and cultural development.

CRA’s: What They Are and How They Mediate Public Funds & Private Development


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Community Redevelopment Areas, CRA’s for short (and sometimes interchanged with the term Community Devleopment District-CDD), are a special government framework set up to support development of a community. A quick look at a dictionary states that a CRA is “a dependent special district in which any future increases in property values are set aside to support economic development projects within that district.”

A set of qualifiers dictates what areas can be designated a CRA. Substandard or inadequate structures, shortage of affordable housing, inadequate infrastructure, insufficient roadways and inadequate parking are all factors in deciding to award a CRA designation.

It seems, from the outside, that a CRA district may be one in which not many individuals would want to purposely live or work in- but that is not necessarily the case. In Tampa, for example, our growing downtown and some of the surrounding neighborhoods have CRA designations. This allows for the leveraging of public funds, specifically Tax Incremental Funds (TIF), to promote private-sector activity in the targeted area. CRA’s, then, are a specifically focused financing tool for redevelopment.

Private sector development has too often been relied upon to be the sole driving force of redevelopment. A holistic approach towards renewal is a better bet, as unrestrained market-led development may have detrimental consequences for the economic fabric of our cities and quality of life for residents.Property-led development is highly dependent on the public sector and the process of property-led development has the capacity to undermine a range of local and community-wide interests in areas affected by redevelopment schemes, by way of prioritizing short-term development goals over long-term sustainability.

CRA districts are great at mediating short-term goals with long-term needs for a community. That’s why so many of them are successful. Many times a developer can find favor with local government to assist with costs associated with construction. The partial waiving of fees, assessments and taxes that come with new construction can lead to an overburdened system that lacks the funding to increase capacity for sewer, water, public utilities and general neighborhood aesthetic concerns. Community Redevelopment Agencies, who oversee each CRA district, are authorized to take the earned TIF monies and distribute them to special projects within the district to ease the burden of new development on systems that are shared by all.  This creates an environment that is friendly to private-sector business but also respects the public’s rights to safe, reliable and sustainable neighborhood facilities and utilities. In this way CRA’s impact real estate by finding solutions to issues that can either hinder public support of private development initiatives or that prevent future private development due to a taxed public utilities system where no additional projects can come online without major upfront investment by the developer to roads, utilities and the like.

If you live in Tampa, FL you can go here to find out if you live in a CRA district. I encourage those that do to start attending there local committee meetings that are held each month. These special committee meetings advise our City Council members, who are also our CRA representatives, on how to progress with projects and funding requests.