Jonathan Daou, Eastman Equity
Return on experience: Jonathan Daou talks experiential retail, district-building and diversity
On this episode of SPx, local real estate developer Jonathan Daou joins Joe in the studio. Daou, the man behind the revitalization and curation of the EDGE District, shares how 20 years in New York helped him craft the EDGE District experience. Daou shares the philosophy behind his retail investments, the vision behind district-building, and his aspirations for St. Petersburg as a whole.
- On this episode of SPx, St. Pete developer and placemaker Jonathan Daou joins the podcast. Daou is co-founder of Eastman Equity and owner/curator of much of St. Pete's EDGE district.
- Daou spent 20 years in New York City, cutting his teeth in the real estate world. Since 2013, he's taken those experiences and applied them to St. Peterburg's EDGE District.
- The inspiration for Daou's philosophy in the EDGE District comes from Confucius' famous quote: "I see and I remember. I do and I understand." Rather than a return on investment, Daou strives for a return on experience with his properties.
- On experience: "The investment is not going to return anything unless there's an experience because today experience is of the highest values since you can get everything else online... That requires being somewhere physically present and mentally present."
- On local versus national brand experiences: "When we arrive at local retail we expect to be part of the experiment, part of changing somebody else's life because our purchase is vital to them. Whereas with your Lululemon purchase, you don't feel in any way that you impacted the brand."
- In his time in New York, Daou experimented with a new method of retail: pop-ups. "I learned through pop-up that you don't just have to sell a product; you're selling an idea inside of a store and you've begun to sell content that is not exactly tangible...They're selling an idea, they're selling a concept, they're selling somebody's story."
- On St. Pete: "when I arrived here I looked at St. Pete and said wow, this has all the elements of what you need. You have a truly walkable city, right? You have buildings that have some history to them and there are people who appreciate them."
- On human behavior: "what I learned about people is that they live in communities and they like to stay tight knit, they like to stay in small spaces that they know, and then they want to be surprised and excited within them."
- On the EDGE District: "I put the better half of my chips, so to speak, in the EDGE District. I bought up all the land that I could, every piece of retail that I could. And since June of 2013, I have been buying and buying and buying all with an eye to create a district that is fully immersive. That you could spend two full days in that you're a tourist and maybe see all of it."
- Daou considers his work in the EDGE district as a kind of intentional curation. "I needed to have the power of a mall developer, even though I despise malls... I needed that facility of being able to control the content so that the content could be as exciting as it is today."
- Daou's ingredients of the EDGE District: 1) Retail - shops, restaurants, bars and other businesses. 2) Residential - Daou bought land and sold it to multi-family developers to increase the stock of small apartments. 3) Hotels - two major hotels have been announced in the EDGE District.
- Walkability: St. Pete is right on the cusp of being a truly walkable city...What I've done in the EDGE has contributed in large part to people becoming aware that St. Pete can be purely walkable, that has been my goal from day one is to create an immersive neighborhood where you never have to use a car unless you're going on a longer trip to the beach, or you could Uber there too."
- District-building: "The EDGE District now is going to spawn districts in St. Pete a lot faster then what would have happened organically because I threw fuel on the fire. I didn't create the district, it was there geographically. I didn't create the cool buildings, they were there. I just curated and accelerated what could happen in a much shorter period of time. And therefore, it created a much bigger buzz."
- On gentrification: Daou says that the term gentrification is often used incorrectly. He sees gentrification, by definition, as the displacement of a culture or racial segment of the population, not the displacement of a business or agency due to rising rents that could afford bottom floor retail while a corridor was depressed.
- On nontraditional investment - Intermezzo: "I left the Intermezzo space vacant for two years waiting for the right business. And when Jarrett Sabatini came who was a sommelier who studied at the USF who had his own idea of making a coffee roastery and came to me."
- Continued: "He really didn't have a resume that any other landlord other than me would have liked. And now Intermezzo is probably one of the great success stories of a meeting place where I see ex-mayors and current mayors, and you know, city council people, and big business leaders, and arts community leaders."
- On building the district with experiences like Intermezzo: "If you have $3.00 for an experience that's extraordinary, that's pretty accessible to everyone. So, to me that's not gentrification, that is neighborhood building in its sense."
- On vibrancy: "The kiss of death for the EDGE district will be when there is no more excitement when we don't have - sad as it may seem - turnover of stores."
- "A store that closes, as long as it doesn't close because of sickness, or death, or tragic circumstances, losing money and losing some time when doing something that you're inspired by is not a loss to the community, it's not a loss to the person who does it, it's not a loss to the landlord. This is part of the vibrancy of a neighborhood that's growing, of a city that's growing."
- "I love what I can do - Karma Cafe's store burned down and the next day she was open in my space. There's no other landlord who would be able to move that quickly or care that much about small businesses that to them it's a mission to move them in."
- On generic retail: "How boring is 4th Street in St. Pete? I own property there and I think I have an exciting property there, but for the most part 4th Street is extremely boring. It's CVS, and Trader Joe’s is great, but at the end of the day these are all stores that you go into any thoroughfare like 4th Street. In Jacksonville you'll see something that looks like 4th Street."
- On diversity: "For St. Pete to have real diversity, we need optionality. The South side of St. Pete could have a hell of a lot more retail. We could incentivize people to rip out and be able to create retail inside of neighborhoods."
- "From a diversity standpoint it is critically important to start to work our way into being a city where you cannot discern one neighborhood from another in the fact that it's depressed and one area successful. It's too small of a city for that to exist."
- "If you arrive here from a city like New York, you don't want to put your child in a place that's just racially homogeneous or financially homogeneous... And anywhere you live in New York you come to realize that that's the fun and flavor of New York is its diversity is different accents, different ethnicity, different cultures, all coming together and really enjoying each other in this sort of level playing field."
- On living where you develop: "It is critically important for this city if there is one idea for me to bring to this city is to embrace developers who are more willing to live and be here and give them more attention to do more of this because it will spawn an industry unto itself."
- On developing St. Pete further: "Central Avenue is not in a void, it's part of an ecosystem. So, if you start branching retail off onto Baum Avenue, or onto 11th Street, onto 9th Street, onto 6th Street, rents drop. That's how rents drop."
- Daou's biggest goal? To make St. Pete a place his daughter would like to stay in when she graduates, thanks to a diversity of good, high-paying jobs and a strong culture.
- On public art: "We have wonderful artists here, we need to attract a ton more art. One thing that I think that the city could force is public art with every new development. We need public art everywhere. You want to get people to go visit every part of the city, you make it a place where art exists everywhere."
"I don't want to say anything negative about Miami, but Miami is ostentatious, Miami is a peacock and St. Pete is a bird that you've got to search and look for to find with binoculars... One is out there in the open, you can't miss it, and the other one is a kind of secret that you want to discover."
"I'm looking at the district as if it were one event space, as if it were one hotel room, as if it was one boutique, or one page in a magazine. How well can I lay it out so that when you arrive there, you're seduced?"
Table of Contents
(00:00 to 1:35) Introduction
(01:35 to 6:00) Jonathan’s Philosophy on Community
(6:00 to 10:47) Consumer Brand Expectations
(10:47 to 13:00) Pop-Up Retail and Brand Value
(13:00 to 16:00) St. Pete and The EDGE District
(16:00 to 19:25) The Vision of The EDGE District
(19:25 to 24:08) Curating A District
(24:08 to 28:20) Gentrification
(28:20 to 31:43) Business Growth
(31:43 to 34:00) Preservation & Development
(34:00 to 35:45) Being A Landlord
(35:45 to 38:50) Anchor Tenants and Unique Stores
(38:50 to 39:57) The “Farm System”
(38:57 to 47:50) Diversity in St. Pete
(47:50 to 54:14) Why St. Pete Should Embrace Local Developers
(54:14 to 1:00:14) Investing in the Future
(1:00:14 to 1:03:39) Art in St. Pete
(1:03:39 to 1:04:30) Conclusion
Joe: Joining me on SPx is placemaker, real estate mogul and creator of action, Jonathan Daou, welcome.
Jonathan: Hey Joe.
Joe: So, we’ve already had about a half hour of good conversation, so we’re going to try and catch back up. I guess for people who don’t know you and what you’ve done for St. Pete’s and where that came from out of some similar things you were doing in New York, it’s way more than just placemaking, but at the heart of it all is understanding how people interact with their community. So, let’s just dig in there just for people who are getting to know you through this conversation talk a little bit about your philosophy on that and how you’ve exercised that philosophy in New York and here.
Jonathan: So, the most interesting thing for me in life is to see things that are inexplicable in a great way, right? People would do things that you just can’t believe can be done or people who produce products that are just so interesting. I used to love going into those – I’m forgetting the name of those stores, but you go in and there’s all kind of cool technology inside, Brookstone and –
Joe: Oh yeah.
Jonathan: Like gadget places I’d go and be like man, who buys this stuff? And it was really cool to look at, right? People are at heart – in my mind – children. They just never grow up in a certain sense. They grow up in so many different ways, they have all kinds of responsibilities, and all kinds of things in life that weigh them down. But in one sense, they remain children in the sense that they like to look at things that are like toys. They like to look at things that remind them of being children. They like to see people do things that remind them of that. They have a very strong affinity for being free again from all these chains of everything holding you down. Not in a negative way, some of these things are very rewarding, having a family, and having other stuff. But they constantly want and are super excited by things that will catch their interest. And I liken it to being the same way kids are. They just have a beginners mind; they look at stuff in that way. So, my experience with real estate has always been, and everything that I’ve done, is trying to do things in a way as if I was a child. And just playing with things in ways where I’ve always thought people say the early bird catches the worm. And I was always saying well, what about the early worm? What does he get to do?
Joe: That’s deep.
Jonathan: What’s he doing that’s cool that no one else is paying attention to? I’m not so into the idea of following habits that have been engrained so much that those are the burdens that become. Where we feel free is when we’re doing things that are non-habitual or when we remember stuff as we remember things that are non-habitual. So, for me everything that I’ve done whether investing in companies or in real estate is always with an eye towards creating things that are meaningful in a sense that they inspire people to just feel like god, I remember this, right? I saw it somewhere a saying that’s Confucius is like here I forget, I see, I understand, I do, I see – This has got to be over laced, but then I do, I understand, right? And so, the physical action of doing something, of participating in something that happens on the ground level of retail is something that is extremely memorable to people. They go and they meet somebody in a shop, and so the world of retail evolved for me.
And that’s where I began to get a sense that I knew how to monetize and create value in creating theater whether it’s selling something or showcasing something where people who are walking down a street who for the most part were not expecting to be surprised would then get a surprise. And I call it instead of return on investment, return on experience. Because at the end of the day people keep continuing to value things by return on investment. And to me the investment is not going to return anything unless there’s an experience because today experience is of the highest values since you can get everything else online. The only thing else you cannot really get online is that I do, I remember or I do, I understand. That requires being somewhere physically present and mentally present.
Joe: And we will get the exactly correct quote in the show notes that accompany the show. So, obviously that’s harder to do than it is to conceive because sort of by definition a child is seeing everything for the first time and with adults they have seen most everything. And so, you do have to go to a place to get to new things and get to new experiences. But what I think when you talk about meeting expectations I think therein lies a little of the secret. I think the possibility of anything is what ultimately really ties into a brand. You go to a place maybe with specific expectations of something you’re going to see, but more so with a feeling that you don’t know exactly is going to make you feel a certain way, but you know something is when you get there. And that to me a well-placed, you know, when I go to Haight-Ashbury in San Francisco I have an expectation of how I’m going to feel before I get there even though it’s just houses on a street. And they’ve done a good job, or it has happened maybe even organically, you know, that this magic is there that it just creates a feeling from me just by being there based on the stories and expectations that I had coming in. But you’ve actually found a way to do that formulaically and create it, which is pretty cool.
Jonathan: Yes, I can’t say that I can take credit for how awesome St. Pete is in the sense that it just had great bones and it has one thing that I would agree with you and disagree with you in a sense is I think expectations is one of the things that I’m talking about. A child really has no expectations. And when they have no expectations everything is new it can either get them really upset if you take their candy away or they see it for the first time, it’s amazing, and then they forget really quickly because everything is so new that they’re constantly mesmerized by everything. And so, the negative experience is quickly washed away by a new positive experience. Expectations are the killer of experience in my mind because blessed is he who expects nothing for you shall never be disappointed.
Jonathan: Right? And in my mind that’s one of the great philosophies of life is as soon as you start expecting stuff, that’s when you start getting disappointed. And I think that’s why I’m so interested in local retail and in inexplicable stuff. Very often local retail is inexplicable because it’s not financeable. And the person who goes and takes their job, they’re making x amount of dollars doing a job that they do 9:00 to 5:00 and then they come and they’re – I just saw a guy who just retired from being a head auto mechanic at Honda, and he now and his wife are creating these gourds, you know, the plants, just the gourd, and they’re using his technical skills of drilling and they’re drilling tiny holes and putting little pieces of glass inside them and putting the light inside really professionally well. And these gourds are turning into these night lamps that are just mind blowing. And I’m at a street fair and I’m seeing this for the first time because maybe I’ve seen a whole bunch of night lights, but I’ve never seen anything so mesmerizing as this. And I’m looking at that and I’m like that’s inexplicable, you don’t expect that to be sold anywhere except on Etsy, right? And which is why Etsy is such a strong and powerful platform is because it allows locals to get to be internationals in a sense, right? And so, for me that’s the thing is creating the lack of expectation.
Joe: Well, they had an expectation to get them to the market in the first place.
Jonathan: They have an expectation of seeing things that they don’t see so that’s the reference point here, and I agree with you entirely about expectations, is that they have an expectation of being surprised.
Jonathan: And hopefully that those surprises will live up to it, but when you got to an international mall, do you have any expectations of being surprised – today?
Jonathan: Not anymore, because these brands have been bombarding you with how excellent they are.
Jonathan: You know? The bubbles come out of Coca Cola and turn into a rainbow. You know, Lululemon you’re just going to be a yogi tomorrow. And at the end of the day they’re so powerful in all their marketing and their outreach is so powerful that they’re expectations now, the consumer is so elevated when they buy the product that when they start seeing a tear in their Lululemon leggings they’re like, well, this is really disappointing. You know, how often does Lululemon live up to the expectation of their advertising? And how often does any of these, Chipotle is the, you know, and then all of a sudden there is E-coli and all of a sudden your expectations of Chipotle have been dashed because now you’re like well, the food might not be clean even though it’s all organic. So, this elevated expectations of these huge national brands, while this is not a negative, I don’t have a negative against brands that do something really well to become national. The excitement and the lack of sort of standardization of local is what’s exciting about it is that you’re not sure what you’re going to get. And you’re part of the experiment as opposed to the Guinea pig on which Lululemon is experimenting to see if this size legging works, lemming works, I don’t want to call you a lemming. But that to me is the excitement of what I do is irregular. It’s unexpected frequently, and the expectation is that it’s unexpected. And Donald Rumsfeld said, “There are things that we know that we know and there are things that we don’t know that we don’t know.” And that’s the only quote that I like about anything that he said that these are things that we know that we know that we don’t know. And when we arrive at local retail we expect to be part of the experiment, part of changing somebody else’s life because our purchase is vital to them.
Jonathan: Whereas Lululemon your purchase, you don’t feel in any way that you impacted the brand. You could buy the whole shop and not impact the brand.
Jonathan: And so, I think I’d bring it back to what I do because I think this podcast is about that. And I think that the meaningful stuff here is what happens to the consumer when they walk in. How impactful that consumer is on the person whose life is changed when you buy two gourds from them who now their retirement is now supplemented by this new small business that they’ve created. There’s a whole lot of return on experience here and it sounds feel goody and fuzzy, but it is real. It’s totally tangible the backbone of this country is small businesses and there’s nothing more exciting being on the frontlines of where that happens, for me at least.
Joe: All right, so let’s dig into that. First, let’s kind of look at the EDGE District which you are largely responsible for making it what it is today and how you expressed this philosophy in the EDGE District. So, can you kind of talk about what your intentions were going in the way things worked and what you would have done differently?
Jonathan: Yes, I learned something vital 20 years in New York is like maybe a 100 years somewhere else. The amount of data that comes your way and the amount of super talented people who are pitted against other super talented people allows you to see what works and doesn’t work very quickly. That’s the city that spits out most people who cannot adapt and who cannot survive. I was lucky to be one that made it in a realm of real estate and got into a field which no one had experimented yet with which was experimental real estate in the form of pop-ups. And doing pop-up stores, the first pop-up I did was for Illy Cafe where they spent a million dollars on promoting their coffee brand. And I had seen brands work on stuff like that before like with Juan Valdez for Columbian coffee where they just have an esoteric brand that promotes a whole country’s coffee. And I was very interested in kind of branding and advertising that transcended a really goal of just selling a single product but selling ideas. And I learned through pop-up that you don’t just have to sell a product; you’re selling an idea inside of a store and you’ve begun to sell content that is not exactly tangible.
So, stores could sell content that was not tangible. They’re selling an idea, they’re selling a concept, they’re selling somebody’s story. You’re not really buying the gourd; you’re buying the story of the guy who retired from Honda who he and his wife are making these daily. That gourd is not $45 dollars because it has some intrinsic value that you can measure up on the internet. And so, that’s what I learned in New York in this field of doing pop-up retail and how exciting it was. And I realize that the rest of America was not seeing this and was not getting, except maybe when Target teamed up with a very fancy designer and brought you accessible designer clothing, that the rest of America was really regulated to having Circle K and Target, and just these brands that were just these big huge national brands that didn’t bring you any authenticity or any readiness. Did they have some local retail? Yes, but the bridge between what was trendy and cool happening in San Francisco, London, Paris, New York, was not coming to St. Pete really quickly.
So, for me when I arrived here I looked at St. Pete and said wow, this has all the elements of what you need. You have a truly walkable city, right? You have buildings that have some history to them and there are people who appreciate them. You have people who are not in the same way – And I don’t want to say anything negative about Miami, but Miami is ostentatious, Miami is a peacock and St. Pete is a bird that you’ve got to search and look for to find with binoculars and then when you catch it you’re like I saw it, right? One is out there in the open, you can’t miss it, and the other one is a kind of secret that you want to discover, right? So, for me St. Pete had all the trappings of a city where you could disappear in, but at the same time you could be – And so, the EDGE District was an opportunity for me to apply certain things that I learned. One, districts are defined very often geographically. And the EDGE district has MLK on one boundary which you don’t want to walk across MLK unless you really have the light, with not much due respect to Florida driving, it’s kind of scary, right? Especially now with texting driving.
And then you have 16th on the other end which is even more daunting then MLK to cross. And then on the other side you have 1st Ave North and you have 1st Ave South. And here you have four major high-speed traffic streets that are scary to cross. Scary I say in the sense that the average consumer if they’re inside of a district and they say, “Well, I could stay here and go to a coffee shop here or I’ve got to cross a major thoroughfare to get to the coffee shop on the other side.” They are most likely going to stay on the coffee shop that side. And that’s what I learned in New York of that people very often I had friends that lived in one little neighborhood and almost never left it. With all that New York had, they came out of work, came home, and they stayed in a 10-block radius. And they’d stay six years and then they’d leave. Did you ever go to Brooklyn? Well, once. Did you go to, I don’t know, yeah, once. Did you go to the Statue of Liberty? No. Did you go here? No. And they’re like wow, you lived there that long and you didn’t?
And what I learned about people is that they live in communities and they like to stay tight knit, they like to stay in small spaces that they know, and then they want to be surprised and excited within them. So, I took the EDGE District and it was an opportunity to buy something really close to downtown and know that it was a district that people were not paying attention to. It had just gotten its name, there was only Green Bench about to open. There was Bodega, more power to them for being a place maker. And there was Ricky P’s, and that was it, right? And so, I came in and I was fortunate enough to have enough money from having sold a property in business in New York to be able to buy. I put the better half of my chips so to speak in the EDGE District. I bought up all the land that I could, every piece of retail that I could. And since June of 2013, I have been buying and buying and buying all with an eye to create a district that is fully immersive. That you could spend two full days in that you’re a tourist and maybe see all of it.
Today, maybe it will take a whole day to spend in the EDGE District. You could shop in it, and then do everything else. So, it started with a mission of kind of hey, I live here and I want to live here, I want to live downtown. And my wife and I are used to having lived in New York. She lived there 12, I lived there almost 20. And we were really attracted to that. And so, we needed all these shops. And so, it was a project of need, it was a project of knowing that this succeeded of having done pop-ups and experiential knowing how much people were in wonderment of this new kind of exciting retail. And so, I took the EDGE District, I bought it as much as I could to have a critical impact because I knew if I created one good pizza shop, every guy was going to come and try and open up another pizza shop. They call it a stadium one person stands up, they have a good view, everyone stands up, no one sees anything. And you will notice now how many bike shops we have in St. Pete, how many taquerias we have and everyone is saying, “Another taqueria?”
Well, there’s a problem that is that people become very – I have a theory in my business which is -innovators are not afraid of imitators. But imitators are there and they can sometimes do stuff better than you can, they can find a property cheaper than you can, they can avoid all the mistakes that you made because you were the innovator. And we see this very often in tech, we see it in many places where good imitators do a better job than the first innovator. And so, I was worried that when I came and put in a pizza shop, that somebody could open right next door. So, I needed to have the power of a mall developer, even though I despise malls. Personally, I don’t ever go to them, I don’t enjoy being in them, but I needed that facility of being able to control the content so that the content could be as exciting as it is today and we’ve gotten all the press that we’ve gotten by virtue of being a curator. Galleries are exciting because they are curators, not because any artist can get inside of them, right? And so, I treated the entire district like one of my pop-up galleries or stores in New York and I said as good as the content is in this space, is as good as people are going to perceive this district if I have that control.
So, that’s really in a nutshell the vision for the EDGE District was to have an immersive neighborhood, which now the goal was to have a full day or two of walkability, all kinds of shops, dry use and food, not just food. There is a peril in becoming just bars and restaurants. People just perceive of you as a place to eat and drink. You need shops, you need cool stuff. Two, we needed the residential which is why I bought land and sold it to developers to have more apartments and smaller apartments. Three, we need hotels and now we’ve had two major hotels announced in the district. And four, we need office, we need people coming out of work and walking right into their favorite bar and feeling like they could walk out of an office, go into the bar, come out of the bar into their home, never get into that dreaded car and have a life of people, who like myself, 20 years in New York without a car. Which is a very liberating experience. And St. Pete is right on the cusp of being a truly walkable city. And I believe that what I’ve done in the EDGE has contributed to a large part in people becoming aware that St. Pete can be purely walkable, right? that has been my goal from day one is to create an immersive neighborhood where you never have to use a car unless you’re going on a longer trip to the beach, or you could Uber there too.
Jonathan: So, I think I spoke for a while there, but I needed to get the EDGE people to understand really the larger vision.
Joe: Yeah, so with that larger vision you have this insight into the psychology of the surprise and then this being delighted in ways that you hadn’t expected. And you talk about the return on experience with – you use the gourd example. So, to some percentage of the people they’re just going to go into Kalamazoo, all of them buy a jar of olives, and then they just think of it as a jar of olives. Some of them go, oh that gourd is kind of interesting, I’ll buy it. And they’re not fully getting the maximum return on experience that they could. So, as you build these, how intentional do you feel you have to be? Or how many mental resources do you have to put into educating people on how to get the full return of their experience? Or do you think that in the best of cases that if you just build it right that will happen naturally?
Jonathan: Excellent question, and one that over years of working in New York and in retail that I began to learn that if you were on Broadway and if you visited SoHo, people know if you walk on Broadway you see H&M you see Uniqlo, you see all these brands where there are thousands of like – I liken it to Ghostbusters, the pink ooze when it starts like really flowing. And when you see all these people walking down a street in a major thoroughfare in Manhattan you’re like I can’t escape this, just the flow of people it’s just bananas. But if you go one street over there’s almost no one on it and that’s where you’ll find Vera Wang and these crazy stores where they need just one customer to just walk in and buy a $20,000 dress. How do they do it? How is it possible just one street over in a city like Manhattan? You have a bazillion people and on the other street you only have five walking. And that’s the art of curation, right? And that’s when you build a good theater set people will get the story. When you make a good ad on TV people instantly remember, look how strong GEICO ads are now. Now everyone copies GEICO ads.
So, you see every ad now, every insurance company is trying to do the same kind of quirky, weird ads. When you design something well, it communicates a story. And so, for me having spent all the years thankfully everyone’s story the ark of their life is always, in my mind, applying everything that they’ve learned of all that time into the moment that they’re in. And for me all that time doing all that stuff in New York which I never knew that I would ever apply, all of a sudden I arrived in St. Pete and I had an opportunity to buy most of a district and now I was able to apply all of this. It couldn’t be more fated in a sense. The idea that I decided to do all of this stuff and I control my destiny, I’m a little bit of a person who believes we’re in a place in time and circumstances make you into a hero, or whatever else that you do. And I’m not saying that I’m a hero by any stretch of the imagination, but I’m saying that I’ve gotten this opportunity to apply all of this information so that when you walk into a district that’s cool and you see one store after the other kind of peak your interest and then you walk into Kalamazoo, you’re more primed to talk to Kalamazoo about what he does because you’re already primed to feel that you’re in an experiment and that you’re in an area that you can let your guard down, and you’re in a place where you feel safe, and you’re in a place where you need to feel adventurous.
I often talk in hospitality as people go to hotels for two reasons. They’re either on a business-minded and therefore they’re looking for budget and/or closest to the destination that they have to be in the convention center, the museum, or whatever it is that they have work. Or they’re going for seduction, right? So, when you pick a hotel, you’re going not only yourself to be seduced, but hopefully you’re seducing a person with you, or you’re not like the whole idea of a hotel is that it’s seductive, right? You’re not going there when you’re going to visit Milan, or you’re going to visit someplace and you’re not on business, you’re going for seduction. It’s not necessarily seduction in the sense that we think about it, but it’s seducing the senses. And so, that’s to me the EDGE District, it’s seductive to go there, right? And I’m looking at the district as if it were one event space, as if it were one hotel room, as if it was one boutique, or one page in a magazine. How well can I lay it out so that when you arrive there, you’re seduced?
Jonathan: Right? And thereby you want to live there, you want to work there, you’ll choose to rent. And does it contribute to rising rents? Yes, because whenever you have low supply, high demand, the instant metric is that things become more expensive because a lot more people demand it. That said, it is inspirational for others. And now we look at the warehouse arts district and we look at grand central to produce other innovators that are not afraid of imitators. Imitators happen organically and they happen much faster when like the EDGE District now is going to spawn districts in St. Pete a lot faster then what would have happened organically because I threw fuel on the fire, I didn’t create the district, it was there geographically. I didn’t create the cool buildings, they were there. I just curated and accelerated what could happen in a much shorter period of time. And therefore, it created a much bigger buzz because it happened so rapidly.
Joe: Right. So, we’ll say you pushed the EDGE District down a path in a direction that has all these attributes you’ve been talking about. Where does that path ultimately lead to? Does it lead to gentrification and you have to move to a new place and that’s just the nature of things? Or do you have a vision in your mind for something that can keep these attributes of seduction, continue to grow with the supply/demand principles, and still maintain that even as stuff gets more in the realm of International Plaza?
Jonathan: Right. I have a problem with the word gentrification because I believe it’s used in an incorrect way. Gentrification really by definition is when you have displacement of a culture and/or a racial segment of population from an area in which they were living for a certain amount of time that was recognized that they lived there and then they were moved from there. Downtown core of a downtown of a city that is designed and the code is designed for years and years and they have historical representations of tall buildings built a hundred years ago when there were no such designs, this was not meant to oppress anyone or displace anyone. The city was designed to have high rises between 5th Ave North and 5th Ave South between 16th Street and between Beach Drive, it is designed by the planners and forefathers of this city to have the core. And the fact that I’ve revitalized part of it is not gentrification. If we’re using gentrification as rising of rents that is displacing tenants that have been there because the area was depressed and they were able in a depressed area in the economy that existed at the time to be a title agency on the ground floor or to be a non-profit because the rents were so cheap and no one wanted to be there, is there a hardship for that company that had been there for a long time and then in the sense they made that neighborhood their own, as difficult as it was to be there, is there an emotional displacement? Yes. Is that gentrification the word to apply for that? I don’t believe that that’s the word.
I think that it’s too polarizing or loaded of a word, the word gentrification. Maybe I’m just saying this to defend what I’ve done. I like to think that I set my ego aside when looking at this stuff. So, I sense that people have left. People come to me with the rents are too high, what do I do? And I see that as a real concern. So, to me, the ultimate goal for the EDGE District is to be a showcase of all that is what makes St. Pete what we love about St. Pete or what I loved when I came here. And now what is the love of a place like Intermezzo. Which, I left the Intermezzo space vacant for two years waiting for the right business. And when Jarrett Sabatini came who was a sommelier who studied at the USF who had his own idea of making a coffee roastery and came to me. He had no money, that’s not fair to say no money, but no money compared to the people who had offered me to rent the space. His credit worthiness as it would relate to a bank was probably non-existent because he didn’t have a history, had come from Mandarin Hide and other bars and local market where he had spent some time.
So, he really didn’t have a resume that any other landlord other than me would have liked. And now Intermezzo is probably one of the great success stories of a meeting place where I see ex-mayors and current mayors, and you know, city council people, and big business leaders, and arts community leaders. My good friend Bob Devin Jones is always there. You know, it’s just everyone hangs out. It is a meeting space for every person who can afford, unfortunately, an expensive latte, right? Or a drip coffee. I guess that’s the filtration is that it is somewhat of a fancy coffee shop, but if you have $3.00 for an experience that’s extraordinary, that’s pretty accessible to everyone. So, to me that’s not gentrification, that is neighborhood building in its sense. And Intermezzo is still there. So, I gave them free rent for I don’t know how long. So, to me, gentrification is if I had an ultimate goal of getting rid of Intermezzo and putting Starbucks in there. To me, maybe you could use the word gentrification in an utter utmost goal is saying my bottom line is more important than the story of a business in there.
Joe: And that puts too much on you. Maybe a better word is International Plazification.
Jonathan: Or “Don’t Lauderdale St. Pete,” I’ve seen those stickers.
Joe: And to your point, this is just supply and demand, right? If there’s enough people that want to spend enough money, then the bigger shops it’s the same question, where does that end?
Jonathan: So, unfortunately we are facing, we will face, and there are going to be stories. I don’t own all the real estate in the EDGE District, there are others who own real estate. What I’ve done has raised awareness to brands that have wearwithall all and it’s very alluring to a landlord who only owns one piece of property and may not have the depth of pocket to wait for a Jarrett. Like I waited for Intermezzo and I got it and I knew that we needed a coffee shop there who would just say I’ll rent it to a Lululemon. And I think the fear of chains is real, they’re boring, they move slowly. The good news for all people who fear chains in that sense and I’ve seen a lot of it, I call keep St. Pete loco, not keep St. Pete local because it’s become loco in a sense that we are somewhat of a little bit on the crazier side of saying, “Hey, we don’t want any chains.” And I respect that, I totally respected it. As a landlord, other landlords look at me and think I’m out of my mind, but I think what keeps the EDGE cool is that we have no chains there, right? That said, I do believe that when you look at Kahwa Coffee being successful, or now we have Poppo’s Taqueria which started in Anna Maria and now has five locations and they’re purely really truly local and they’re local to the West Coast of Florida and they’re within an hour’s drive they started their first store. To me, they’re no longer chains, they’re success stories. Are they becoming formulated to a sense? Yes. Any successful business needs to be able to reproduce and install in that sense to get bigger, right?
And that’s why you have human resources and those companies then don’t have the same kinds of issues and their workers are more protected. So, there are benefits to growth, but is there boredom in it? Yes. And to me the kiss of death for the EDGE district will be when there is no more excitement when we don’t have – sad as it may seem – turnover of stores. Because I almost feel like it is not – And you’re in the start-up world and you surely know this, there is no such thing as a failure. There’s only a failure if you stop. Failures are the building blocks and the steps of success. In the world of other people, oh, his store failed. Everything that I did in New York is a failure compared to what I’ve done now in St. Pete, every single thing, even my successes there were failures as they compared to now the impact that I’m having. And who knows where I’ll go.
So, as far as I’m concerned a store that closes, as long as it doesn’t close because of sickness, or death, or tragic circumstances, losing money and losing some time when doing something that you’re inspired by is not a loss to the community, it’s not a loss to the person who does it, it’s not a loss to the landlord. This is part of the vibrancy of a neighborhood that’s growing, of a city that’s growing. Turnover of restaurants in New York you have nine out of 10 restaurants fail here. If we lose three out of 10 restaurants, we get really upset that the – Not the world is coming to an end – I’m dramatic in a sense that I’m a salesperson, but you spend some time on message boards and you see stuff as like oh, there’s a high rise, the neighborhood is gone. I would say that we need to be a little bit more patient with growth.
Joe: Sure, but as you process the question, right, it feels like you’re determined to keep the EDGE in that zone for as long as humanly possible.
Jonathan: As long as I own it.
Joe: Exactly. So then, you’re attached to doing that versus understanding the natural. At some point there’s a threshold where you’re like I’d rather just go to WADA, or go up Central a little more and do the same thing again versus trying to fight market forces and not rent places for two years and wait for the right coffee guy to come in. So, it just really comes down to how dug in you are to EDGE specifically versus whether you think it’s the process of building that you want to stretch up to Central or any other.
Jonathan: Yeah, and that’s about me really. The neighborhood and the city has its own trajectory. You know, St. Pete in the 20’s was roaring. Maybe it had terrible racial imbalances and issues, but it was a roaring town. Now we have so much wokeness and awareness, and we’re tackling all kinds of issues we hope. And I like to see that. To me the goal would be, and the EDGE is the most inclusive, the most diverse in business, in styles, in wealth. You know, it’s open to everyone. I try and keep shrinking spaces and shrinking apartments with the developers that I talk to because you need to, you know, when I was a rental agent in New York City this guy who was very successful who ran this business that I worked within as an agent he would say your apartment is your bedroom, New York is your living room. And I aspire to the same thing in St. Pete. In New York you have only four or five months where you can be outside really, the rest of the time you know you’re stuck inside a space. St. Pete is an open-air city. It’s 700+ days of sunshine. Everyday I’ve been here it’s been exceptional in the six years that I’ve been here.
I can remember a stretch of three days where it rained consecutively and I was like whoa, this is terrible. But when I lived in New York it was horrible the weather a lot of the time, even in the summer it rained like crazy. So, to me if you have tiny little shops you can do a hell of a lot of business today through Amazon, through Etsy. You can sell your products on eBay; you can have just a representation of a store and then have a hugely outside business by just having a little store front. The amount of business you can now do it used to be you had a huge business and you needed a little website and a business card. Now you can have a huge business and all you need is a little store inside of the website. Roles have been reversed. And I call them the toe holds in reality stores and pop-ups because we live our lives virtually.
We spend most of our time looking at our phone or our screen. And then we get to spend some time in the real world, and that real world to me is the EDGE District. So, for me, because that’s because where I live. And people see and are like wow, you see all of your tenants every day. You deal with all their problems. I am a rare bird in the real estate world in that I subject myself to the insults and the praise of the people’s lives who I have effected through either raising rents or raising revenues. And I see a lot of that. My wife sometimes tells me Jon, why do you want to do this? Because being a landlord is a very polarizing thing. You’re scary to your tenants in some ways you have a knife over their heads. It’s not a place that I enjoy being. I don’t like that position. I love what I can do to get Karma Cafe’s store burned down and the next day she was open in my space. There’s no other landlord who would be able to move that quickly or care that much about small businesses that to them it’s a mission to move them in. Landlords are not designed or trained that way. I’m not saying that they wouldn’t do it now that they see that, but for the most part I say landlords in a sense not like they’re not emotional and they don’t care, but their finger is not on the pulse.
The first-person Josie calls is me because she knows from six years ago when I was trying to do the food motel on 4th Street that I was ready to pop her up before she had a store. So, in her mind she’s cognizant that there’s a developer out there who really is excited by small business and is not so excited by a boring store that might have a lot of money. I make way more money, this doesn’t sound like I’m some wonderful angel here, far be it, right? I have all my flaws and they’re pretty much observable by all. It used to be that you needed Publix to be an anchor tenant. There’s something called an anchor tenant. So, if you have a shopping center it’s anchored by Publix. It’s anchored by Target; it’s anchored by Best Buy – not anymore. But today the anchor, which makes me really excited and really happy that anchor is when you have 40 local tenants. Now the nationals want to come be around the anchor, the anchor is the power of the crowd. And you’re well aware of that.
And you’re aware of the power of crowdfunding and crowdsourcing. The crowd is 40, 50 local tenants that create impossible to replicate like every snowflake is different, right? The EDGE District is not like any other district. Wynwood in Miami has now become nationally known because it’s not like any other district. However, 57th street in Manhattan, or Broadway, or pick a main street in any town that has enough population and you’re going to see Target, and Best Buy, and Chipotle, and all of the chains. And you know what? Every major thoroughfare or so-called institutional grade investment like 4th Street. How boring is 4th Street in St. Pete? I own property there and I think I have an exciting property there, but for the most part 4th Street is extremely boring. It’s CVS, and Trader Joe’s is great, but at the end of the day these are all stores that you go into any thoroughfare like 4th Street. In Jacksonville you’ll see something that looks like 4th Street.
It will be almost if I dropped you in different main streets where all of the cars pass, they will look almost eerily identical. If it wasn’t for different street names, you’d look and be like I don’t know where I am. There’s a CVS on the corner, there’s a Starbucks, there’s a Jimmy John’s, there’s this. However, if I drop you in the EDGE District it is completely different then somewhere in Austin, Texas, completely different then somewhere in Louisville, Kentucky. It’s completely different than Boulder, somewhere in Boulder, Colorado. And that is the value of local. It is that it is truly a place worth visiting, right? That’s what I’m after. For me as long as I own it, it’s going to be a unique place, unique in its content, not a duplicate of a Hyde Park Village, with all respect to the developer behind the Hyde Park Village and the Hyde Park Village has quite a few locals that they’ve now hoping to have more locals.
I’ve heard they’re moving in one of our businesses from St. Pete which is Steve’s Station House is now doing Hyde House there that’s opened. That’s exciting to see businesses from St. Pete are cool enough that they get opened up in Hyde Park Village arguably up until now that we have EDGE District and we have maybe Seminole Heights and some places in parts of South Tampa that stuff is cool enough to transport. Intermezzo gets calls all the time to be moved into new developer spaces. I think that’s a big vote of confidence in St. Pete as being innovators. And I hope that the EDGE District remains as a place where innovation is happening in sort of – I call it a farm system – because we have markets on Thursdays. Those markets, that’s where I bought the gourd. I’m looking at this gourd and I’m like man, they need to be in a store, but they’re not ready for a store yet.
So, they need to stay in markets. Twisted Indian was in the Saturday morning market, now he’s in our Baum Avenue market, and now he’s looking for a store. That’s the farm system I call it. You start out with super low rent doing markets where you have another job, your concept gets tested against the market, against consumers. You learn a lot, you iterate, you iterate, it’s very much like the tech world. You innovate, as you innovate you grow, then we find a more permanent space for you. Then you ultimately buy your own building or now like Jarrett from Intermezzo he’s talking about buying a building. It’s so exciting, he’s a young guy who just started a coffee shop, three years later he’s a success story. That in my mind is my biggest success is watching people go from wondering where their next paycheck comes from to becoming a person who is employing 10 people. I don’t know if most people have had that experience, but it is hugely rewarding, hugely rewarding.
Joe: When we were talking you mentioned the word diversity. Coming from New York and you understanding what makes a great neighborhood, how do you feel St. Pete is doing with diversity? What are your intentions when you think about the EDGE District? And you know, what is sort of your overview on that topic?
Jonathan: That’s a really important topic. If I was to list outside of climate change, one of the biggest problems that I see in St. Pete is certainly infrastructure is really important for the growth of the city. But more importantly is a place where everyone gets a fair shot and a chance to have a level playing field to get the same kind of rewards and the same kind of successes as everyone. You know, that’s really important. It can’t be, let’s say, that one side of the city’s infrastructure is messed up more than another, that’s infrastructure. It can’t be that, you know, we only have retail. And it’s been one of my biggest pet peeves is like we keep talking about preserving Central Avenue’s character. I mean, I’m the last person that anyone should talk to because I have restored so many old buildings. I don’t feel that in any way that it’s directed towards me. That I’ve just been restoring Central Avenue like crazy. And I’ve reaped huge rewards. I think the risk is having all our retail be on Central Avenue. How diverse is that?
If we want to talk about diversity, just take diversity purely as the word. Diversity means – And this is really there’s a real estate investor here in St. Pete who one day said Jon, let me explain business to you the way that I understand it. And he deserves to be quoted. It’s Phil Farley who’s invested a lot in the Warehouse District, right? And he said to me, and I hope that he hears it, he appreciates this. He said, “Jon, everything that we do in life is geared towards optionality.” Right? We get a degree because it gives us more options for jobs. We move to a place because it gives us more options to do things that we like. In every decision-making process we’re subconsciously and/or consciously if we’re aware – are constantly seeking optionality. And so, what I mean by diversity is diversity of options, right? That you’re not overly policing one side of the city than the other. You’re enforcing codes here, but there you’re not enforcing codes.
You can find a good school in this neighborhood; on the other side you can’t find a good school. There’s a nice park on this side, there isn’t a nice park on the other side. And I’m not saying that this is a problem that exists in St. Pete, what I’m saying is, that is diversity. Diversity is not just a racial measure. It’s a diversity of income, it’s a diversity of education, it’s diversity of outlook, right? We’re in a unique city that they call a purple city. And I think that needs to be cherished more than anything that we have in St. Pete is the diversity of opinion and political thought, and intellectual thought. That is far and away what makes St. Pete so successful. It is not progressive to ostracize segments of the population. That’s not progressiveness in my mind. Progression is diversity, it is success, is everyone being able to make money not saying hey, you’re too successful. I never want to tell my child, hey, you’re only going to be a middle manager, you’re not going to be the president of a company.
Or you should not strive to be a billionaire, you should only strive to be a millionaire because billionaires are bad. Whether or not you should be taxed more or less, that’s not a question – taxing is a different story. But the idea that every person has a chance to be everything that they want to be, right? And that we don’t tear down people how have become everything that they want to be, right? So, for me I look at St. Pete to really tackle it head on and I look at the South side of St. Pete and I see it’s really your options for food are limited. And I know that’s a big topic of conversation right now. Your options for a whole host of things are so limited. And that’s unfair, that’s patently unfair because it’s not strictly a black community that is being affected. It’s a whole host of people, it’s the most diverse part of the whole city is the South side of St. Pete – in my mind – if you want to talk about diversity.
Jonathan: So, I look at it and I see there is a problem, right? There is clearly a problem and that’s historic, you know, that’s not the fault of any administration or anybody can change that in a day. That’s stuff that takes decades probably to change. But one thing that I do that does affect that has been my – And now I believe a Council woman Rice, is an acquaintance of mine and we’ve talked extensively about these topics. And she’s put forth a plan about trying to make these neighborhoods have retail in places which before they didn’t. I lived in the old North East, I thought it would have been cool to have a few shops. And sure, enough down where Black Crow is there’s that one little strip of retail, it’s the most exciting thing in all of the old North East. But historically there were stores and there were hotels and there were things, and yet the neighborhood association in trying to preserve it have almost preserved them in amber and not in any flexibility which is the nature of our country and constitution is to be evolving, right? And if we come preserve Central Avenue in amber it’s just going to be just that.
If you go to Florence in Italy they don’t allow you to build a new building, everything is an old building. And you know what? At the end of the day you do get tired. I don’t care how beautiful those buildings are, I have friends who live in Florence and they’re so tired of all the restrictions of whether they can put something in their window or not, right? And so, every time you move towards regulation in the ground level in homes, in stores, you create problems that you did not foresee. And you could be the most well-intentioned administrator and the most well-intentioned code writer. As soon as you change a one to a zero, there’s a nature to this that shuts off one door, opens another door, and that one door that got shut off may have all this optionality that you didn’t know about. And so, for St. Pete to have real diversity, we need optionality. The South side of St. Pete could have a hell of a lot more retail. We could incentivize people to rip out and be able to create retail inside of neighborhoods.
We can bring more people to visit the South side. There’s so much more to see on the South side, it’s probably the most aesthetically beautiful part of the city. I belong to St. Pete Country Club; I’m astounded at how affordable it is. It’s a 100-year-old club, Sam Snead one of his 82 wins is in St. Pete Country Club it was called the St. Pete Cup. It’s a historic place. And homes around it are super affordable, now they’re starting to sell pretty quickly because people are waking up and being like this is a diverse neighborhood. If you arrive here from a city like New York, you don’t want to put your child in a place that’s just racially homogeneous or financially homogeneous. I don’t think that’s what you want to do. I came out of the Lower East Side. I had a housing project across the street from me, we had rent stabilization, we had fancy condos, we had you name it. And anywhere you live in New York you come to realize that that’s the fun and flavor of New York is its diversity is different accents, different ethnicity, different cultures, all coming together and really enjoying each other in this sort of level – People would say New York isn’t a level playing field – It’s probably the most level playing field that we have in the country where a person could walk in tomorrow and make a job tomorrow.
If you show up on the door and knock and say I’ll wash dishes, I’ll do whatever, you get a job and you can make it, right? And then you can climb from that spot to become the owner of the building or the corporation. Can you do that in St. Pete? I see a real disparity of job opportunity. A disparity of shopping opportunity. It is real, it’s tangible. Is it the fault of anybody? Absolutely not. Not anyone living today here has any magic wand that can change that. But I think that the city has the wherewithal to lead in this sense. And they have to because no one else can. They can lead in helping developers do more work that’s meaningful. And I make a distinction between developers. And I think that I’m going to really give myself as an example. I’m a developer who lives where they develop.
There’s a difference between developers who show up here from another state hundreds of miles away and invest. Their one concern is how safe is their investment and how much return are they going to get? The developer who lives here and who is local. And to me is as important as the person who is making the gourds and the person who is making the coffee is the person who restores the building because they want their building to look the best and raise the value of the rest of the neighborhood is the person who is going to live in that building or be right by it and talk to their attendant every day. It is critically important for this city if there is one idea for me to bring to this city is to embrace developers who are more willing to live and be here and give them more attention to do more of this because it will spawn an industry unto itself, right? And there’s a lot to learn from, we have the walkable city, you know, there’s so much that St. Pete has to offer in seminars and inviting the right people to talk here.
Talking to experts is so important. Something that I encourage any developer arriving here, I always tell them hey, call me up. Come let me tell you about all my experience. Let me tell you what I’ve experienced because I live here. My children live here. They’re growing up here. Does it help me that somebody else fails? Does it help me that the development in some part of the city that needs to succeed fails? Absolutely not. Does it help me if our water is polluted? Does it help me if any of this stuff happens? No. Real estate developers who live in the area in which they develop are critically and vitally attached to the infrastructure. You want to make sure when you flush your toilet or when you run your sink that water is not being wasted, that things are working efficiently. You want to make sure your power is coming from solar. You want to make sure that your climate is right so that you become an environmentalist by default because you live there.
And no one who lives in a place wants to soil or ruin the place that they’re in. You can never fault a person for doing that. Maybe, yes, there’s an exception or two where people look more in their interest and appear to not care about something, right? but usually when you dig deep and you ask them and maybe like this kind of podcast you ask them there’s usually a reasoning behind something that they’ve done or something that’s resulted. Like I can point to many stories which were negative about me, if somebody really were to inquire, they’d see that I really maybe had little power or that my intent was good, but I could do nothing else. And so, I think sometimes we get bad reps as developers because they appear to have so much resources. But my overhead is so scary that I would encourage anybody to come sit in my shoes and see the kind of bills that need to get paid. And then look and say that they wouldn’t take a Starbucks. They would probably take a Starbucks maybe before I would. I give myself credit for that is that I’m willing to take much higher risks financially for the well-being of the city because I think in the long run it gives a good example of what can be done.
So, when you restore a building, you give an example for somebody else. And this city is well aware of that. We’re all very smart. We’ve wisened up to the value of conservation, recycling. I think the citizens of St. Pete are clear about diversity too. I think it’s a topic that needs to be addressed fast. So, we need what’s going to drop rents is more supply of stores. What’s going to drop rents is more supply of apartments. Unfortunately, that’s incumbent upon the administration to work with experts to craft ways to lower rents, not to freeze development on a street because we believe rent has gone too high. Central Avenue is not in void. Central Avenue is not in a void, it’s part of an ecosystem. So, if you start branching retail off onto Baum Avenue, or onto 11th Street, onto 9th Street, onto 6th Street, rents drop. That’s how rents drop. And people feel like well, you could be in the middle of the ocean today, you’re not lost. You’ll open your phone, GPS find you within two feet and sometimes even more accurate than that, right?
So, there’s not a human on this planet who has a smart phone in their hand who gets lost. As a result, businesses don’t all need to be on main street anymore. Main street is an obsolete model which was reliant historically on people not knowing where anything was. And so, it all ended up on the main drag so that you knew, hey, if I get to the main drag, I’m going to find my coffee shop, I’m going to find my bank, I’m going to find this. The main drag still has those places, but it’s just a vestige. Today the overlay, the real-real estate is your phone. And so, you get on your phone and you’re like pizza near me. And you have all of the reviews instantly. Do you need to find the pizza spot beyond central avenue? Do they have to pay $30 or $40 a foot? They could be on the South side and you know how people that end up on the South side if the best pizzas there? A hell of a lot of people. To date, I got to the South side for Munch’s, because Munch’s is a 50-year-old landmark. But tell me a place that you go on the South side right now to eat.
The South East Market, the old South East Market. They are two bright spots. But if you cross Central Avenue North I can give you 700 examples. So, tell me there’s no issue there. There is, right? That’s a very simple metric right there. And not fair, there are other businesses on the South side, there are, but for every one there is 20 North of Central. So, that is your answer in diversity and in accessibility. And I think that’s where we have to work diligently. And I think the Warehouse Arts is a bright spot, but it has been causing some consternation I think from the Deuces and parts of who have not seen the same kind of growth. So, do I know how to fix it? I’d like to think that I have some ideas, and I don’t want to be critical, but I think this a group effort of local developers, and the city, and experts changing the perception of what the South side is. Like most people don’t know St. Pete County Club, they don’t know Boyd Hill. Boyd Hill is the coolest place in St. Pete. A lot of people don’t know Boyd Hill let me tell you. More people know about Intermezzo than they know about Boyd Hill, it’s a scary thought, right?
Joe: It is, yeah. Well, so there were some really good actionable answers in there, putting different retail in neighborhoods. And a lot of that is things the can really move the needle.
Jonathan: And it’s happening.
Joe: It’s happening, yeah. So, let’s finish with a few more of your aspirational. What else do you think if you could wave the proverbial wand and do some things in St. Pete what do you think we need to kind of complete where we’re going or help us get there in a better way?
Jonathan: So, my goal was when I arrived here my daughter was two years old. And I said we’re going to be here awhile as she grows up. And she is growing up here and she’s now almost nine. So, my goal was that when she gets of an age to think about where she would move to, that young people pick up and move because they seek excitement, and they seek jobs, and they seek that opportunity, and diversity of thought, and opportunity that I’m talking about. So, my goal with the EDGE District was if I can spur this neighborhood and it spawns all kinds of other people and inspires a whole bunch of other people to develop, 15,16 years from today when she’s ready to go to college somewhere she may be inspired to stay here. Today I think if you’re 18 years old and you’re aspirational you might think twice about staying in St. Pete. You’re like I’m going to go to San Francisco – I don’t know San Francisco right now. But I’m going to go to New York City or I’m going to go to Boston, I’m going to go to some city where I’m going to see stuff that I can’t see here. So, that was my goal. My goal was personal in a sense that hey, I’d love my kids to hang around and have the opportunity to hang around and be around their parents because I don’t think any kid really wants to leave home and go off. Yeah, some do, and it’s exciting, but it’s also fun to stay around and be around people you’ve known your whole life and have an opportunity to have a great job. So, that is the aspirational quality for me is can I help the city spur to be, have enough opportunity so, jobs, jobs, jobs, jobs, right?
And then to get jobs here because I’m the biggest believer in independence and to say look, we’re very polarized as a nation, but you have a huge percentage of independents. And for me independents are people who don’t need a party to tell them what to vote for, what to do. They decide what’s the best of here and what’s the best of there. And I like that, to me the goal is to make St. Pete a place of independent thought, of an ability to seek common ground. And for me, what would be hugely exciting to do would be to invest in stuff you’re starting to invest in and seed investing in companies that are growing very quickly. I do it right now on the real estate level. And guess what? All these guys that you work with in the Catalyst with Seedfunders and others that you are promoting, they live in the virtual. A lot of them work in tech and make huge impact, but they still need space. They need space to start out and they need pop-up to show people they need an auditorium or a convention center, they’re going to need stuff.
And St. Pete needs a lot of what I call private sector infrastructure. You know, we need great hotels, we need fantastic restaurants, we need a culinary school. We need a real huge open-air market maybe of wholesale foods. So, there are all kinds of projects that I feel that I could tackle that are going to have even more social impact that are going to be real estate, successful real estate investments. Because one of the things that I really stress in my day to day work is I need to be doing inspirational real estate that is also financially sound and that will make banks start to look and say well, we need to finance projects like this. And you know what? They would not lend me a dollar for the EDGE District when I first came and I had to borrow money from you know what we call unconventional financing, hard money lending, expensive interest rates because to them the EDGE District was a place that no one went to.
Today it’s almost the gold standard. So, that is what people on the South side will face. It’s like hey, I’m not investing here, no one invests here. No, but if you have successful projects there people start to look and say oh, I have comps, they call them comparable, right? Banks need to be able to feel comfortable lending. So, changing the landscape of St. Pete, we need an eco-resort. I’ve always thought down by Boyd Hill, would it be great if we had a resort with maybe a hundred rooms? And we had ayurvedic healing and we had meditation. We have so much holistic awareness in St. Pete. There are so many people who believe in alternative ways of health. We don’t have one hotel or let’s say digital detox space. There are ideas to be done in St. Pete because of its natural beauty and its population which is perfect for hiring. I mean, just every other person here is a yoga instructor it seems like, my wife included. We have a wealth of awareness in new age real estate, that’s what excites me is to work on projects that are going to be impactful health, socially, intellectually, and definitely from a diversity standpoint it is critically important to start to work our way into being a city where you cannot discern one neighborhood from another in the fact that it’s depressed and one area successful. It’s too small of a city for that to exist.
Joe: Heard. There are a lot of people that did a lot of monumental things for the city from securing the land that USF is on to protecting the areas by the water. And they were appreciated in their time, and then you know, generations later really the full impact of some of those efforts, and people had full appreciation of it. I think that there will be parallels to that in what you’ve done for St. Pete. I think people appreciate it now, but I certainly think when we’re 20, 30 years down the road looking back in the EDGE District and the districts in general are that the heartbeat and the personality of the city that you’ll be certainly near patient zero in the positive sense for having started that spread of goodness, so much appreciation for that and have enjoyed your thoughts, thank you.
Jonathan: Yeah, thank you. Before I leave this, one thing that I did not tackle is the arts, right?
Joe: Let’s do it.
Jonathan: The arts is one of the places where that’s true. It is one of the most level playing fields in the world. Artistic, every single human being has a streak of genius or artistry. It may be in crafting stuff, building stuff, telling a story. And so, St. Pete has the requisite environment to attract artists. We can’t just say hey, we just want local artists because I’m a person who moved here when I first came here. I always did the joke like I’d read the story; I knew it was going to be bad when it said New York Developer, right? I rarely now see the stories, it’s always now Local Developer, because I feel like one, I had moved into the stage where people recognize that I’ve lived here long enough that I’m local, but we need to attract artists to come move down here.
I remember going to Santa Fe, New Mexico and just it’s like an art destination because you’ll see just a piece of sculpture here and a piece of art hanging, you’re like wow, this city is all art, right? It’s small, but St. Pete is like that. And I think that I talk about real estate, real estate is my art, right? But art in the sense for art’s sake just for the aesthetic purpose sometimes is never given enough value. But I’m just going to just say this, I wish we had a 20-million-dollar piece of art on the pier, or a 40-million-dollar piece of art. You know why? Because it’s going to attract people from around the world to come to it. So, I think that no amount of money spent on art is too much in this city, right?
So, it pays dividends for every human in this city to have art because it inspires young kids, inspires the people who come here, inspires people to stay here, it inspires people to talk about here. Maybe that leads to too many people, then it raises rents, and I’m back to gentrifying. So, I don’t know. It could be a double-edged sword, but I think that art is one thing that is lost in the shuffle of affordable housing and talking about things that appear to be more pressing, because art is never given its due as a quintessential remedy for, this sounds esoteric, for your spirit, for your soul. I mean, without art, without music, our lives have soundtracks to them, or they have movies that we love, right? That’s all art. So, our life and everything that we define in our life is defined in some way by a large amount of art which we never define that, we never look at it as critical. But I as a real estate developer, I welcome what the city has done with murals, it’s been fantastic. I think that it’s one of the great things of St. Pete. And we could do way more to force in my world of development to force developers to spend more money on art because not only will they reap the reward of it and the success of their property, but the entire public gets it for free. And that’s something truly diverse and free which is seeing public art is a great fantastic gift to society, right? So, I leave it at that.
Joe: That’s return on experience.
Jonathan: In a nutshell.
Joe: Thank you.
Jonathan: Thank you.
Transcription Ends [1:03:43]
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About the host
Joe Hamilton is publisher of the St. Pete Catalyst, co-founder of The St. Petersburg Group, a partner at SeedFunders, fund director at the Catalyst Fund and host of St. Pete X.