By Hannah Wallace March 31, 2004

It's Sunday afternoon, the rain has stopped and the sun is breaking through, leaving the quiet, shady streets off Cocoanut and Central avenues in north Sarasota fresh and green. Neighbors are opening screen doors to let their dogs out and children are riding their bikes again, whooping and shrieking as if they'd been housebound for months.

The homes off these streets range from the loved and well-tended to the sadly rundown-everything from Spanish Mediterranean to tin-roofed Florida clapboard, Northern-style brick homes with gables and the cookie-cutter 1970s concrete block ranch. A smattering have been remodeled and painted sherbet colors, giving some streets the unmistakable aura of gentrification. New Urbanists would be happy here: Almost all of the homes have front porches, streets have sidewalks and lawns are covered with mature slash pines, live oak and sprawling banyans.

These are the streets and homes of Newtown, Sarasota's historically black and lowest-income community. Most Sarasotans never come here, partly because there's no reason-few shops, offices or restaurants in the area-and also because it carries the reputation of being one of the county's most crime-ridden neighborhoods. Consequently, these lovely streets and vintage Sarasota homes have been some of the region's best-kept real estate secrets.

All of that is about to change. Location, growth, government programs, a nonprofit and recent private enterprise have converged to remake Newtown. Bordered loosely by the Seminole Gulf Railway to the east and U.S. 41 to the west, and 17th Street and Myrtle to the south and north, Newtown is less than a mile from the sizzling real estate market of downtown Sarasota and only blocks to Sarasota Bay. New development is creeping north, and the pressure to open new parcels for condominiums, apartments and single-family homes is enormous.

"You have inexpensive land costs, an area close to downtown and the catalyst of critical mass," says Charles Githler III, co-owner of the Hyatt Sarasota, who has been looking at properties in Newtown. "There's enough redevelopment in the area that the big jump is about to happen. You see all this property that can be improved."

Mark Famiglio, a successful local developer who owns property in Newtown, says, "I believe Newtown is going to affect Sarasota like no other development in 30 or 40 years."

That development is creeping north is obvious: The Rosemary District on Central, between Fruitville and 10th, has been revitalized. Atlanta-based Khason Development is building the $59-million condo-retail complex The Boulevard at Cocoanut Avenue and Boulevard of the Arts. On North Tamiami Trail, Ft. Lauderdale's RAM Development, is planning a $30-million condo-retail project featuring a boutique Publix and a new 10th and Cocoanut location for the popular Broadway Bar. Just north of the RAM project on the Trail, Jim Moynihan of JM Communities bought the dilapidated Economy Inn and is planning San Marco, a mixed-use residential/commercial project where upscale condominium units start at $469,000 and go to $1 million-plus.

At the same time, a number of government programs are making Newtown more attractive and providing incentives to developers and business owners. Two years ago, the city of Sarasota finally agreed upon the Newtown Comprehensive Redevelopment Plan to revitalize the commercial corridor of Martin Luther King Jr. Way. That same year, Newtown's Enterprise Zone (EZ) was established. This state program offers financial incentives in the form of tax refunds or credits of state sales taxes to businesses that want to expand or relocate within EZ boundaries. Newtown also received Front Porch status in 2003, which means it receives state funding-$100,000 a year-for improvements. And Newtown was designated a HUBZone (Historically Underutilized Business Zone, under the auspices of the U.S. Small Business Administration), which gives small businesses preferential consideration for federal contracting opportunities. Two have qualified: Pedro's Ironworks and The Winsulator.

A nonprofit group, the Greater Newtown Community Redevelopment Corporation, formed seven years ago and now has a board of activists and heavy hitters, including Jetson Grimes, owner of Jetson's Unisex Salon, and Lt. Gen. Ron Heiser, former president of the New College Foundation. Heiser pulled in Famiglio; Sarasota entrepreneur Brad Baker, founder of Tech:Time and now a developer of large affordable housing projects in Kansas; and Marty Rauch Jr., a Sarasota sports agent and Baker's partner in Bramar Developers, Inc., their affordable housing development company.

And then, of course, there's the $16.6-million Hope VI grant the Sarasota Housing Authority applied for in January, a federal grant that would replace the 128-unit Janie Poe public housing complex on Central and Martin Luther King Jr. Way with 281 brand-new units of mixed-income housing dispersed throughout Newtown. The idea behind Hope VI is to prevent the poor from congregating in one huge project, since, say the experts, over time, projects become crime-ridden dead ends, places where kids are never exposed to middle-class life and values and poverty perpetuates itself. Hope VI will include subsidized housing for those who qualify, affordable rentals and market-value middle-income housing. (The New-Orleans-style Bradenton Village in Manatee County is a Hope VI project.)

The city has tried and failed to get this grant four times in the last seven years. But this year, there's reason for optimism. U.S. Rep. Katherine Harris has taken a great deal of interest in the grant-in fact, she helped keep Hope VI alive last year, when President Bush tried to eliminate it. Locally, she brought civic leaders together to create a Hope VI taskforce. In addition, the city hired professional consultants (Perkins Eastman Architects and the Harkin Group LLC) to write the grant. Awards should be announced as early as this month. Hope VI has a reputation for being an apolitical program-that is, awards are based on merit, not political influence-still, many people feel buoyed by Harris' interest. "It never hurts to have advocates," says Bill Hill, a Newtown developer.

While everyone views Hope VI as a catalyst for redevelopment, most are quick to say Newtown's revitalization does not depend on receiving it. "Hope VI is part of the redevelopment of Newtown, not the opposite," says John Hawthorne, redevelopment specialist at the city's Newtown Redevelopment Office. "Newtown redevelopment will happen whether we get the Hope VI grant or not."

Hill, the charismatic 57-year-old executive officer of Greater Sarasota DreamBuilders, LLC, is an example of the new interest in the area. A product of public housing and a former executive of companies such as NCR and OAO Technology Solutions in Washington, D.C., Hill retired early and bought a house in exclusive Sanderling on Siesta Key about five years ago. He was getting his hair cut at Grimes' salon when the two of them began to talk about Newtown's future and its need for new investment. It's been three years in the planning, but Hill-who says he's dedicated to improving the area-broke ground in January on upscale Mediterranean Revival townhomes on Martin Luther King-yes, the Sarasota street most synonymous (fairly or not) with crime.

The development, called Asante, or "strength" in Swahili, would be at home in Lakewood Ranch or any upscale community, with tile roofs, granite counter tops, master bedroom lofts and optional hot tubs. The units are priced from $168,000 to $190,000, double what real estate broker Michael Saunders counseled Hill to build when he met with her and some of her associates. "Some people thought he was throwing his money away," says Ed James, vice chair of Newtown's Coalition of African-American Leadership, who's a big fan of Hill's. So far Hill says he has sold three of the seven units (one for himself, which he insists he's going to live in), has contracts on the others and plans to build a similar project across the street as well as other ambitious plans along MLK.

At the Asante groundbreaking, new owners Carol Ruble and Shirley McKenzie say they didn't see the area as a risk; both view Newtown as a community in transition. And, adds Rubel, where else can you find a brand-new home with all the amenities, only blocks from downtown for less than $200,000?

"You can't," says developer Baker, who's looking for at least five acres in Newtown to develop a large complex of apartments that would rent for $500 to $650 a month for low-income earners and beginning teachers, firemen and policemen. "Things sell for a pittance of what is five blocks away."

All of this interest means property values are rising. A three-bedroom home that sold for $40,000 a year ago, for example, recently changed hands for $83,000. Dru Jones, economic development coordinator in the Newtown Redevelopment Office, says there's been a flurry of real estate activity, with investors buying multiple properties. Building permits of more than $15,000 totaled about $3.6 million in 2003, she says.

Sarasota resident Merry Berger began to buy Newtown property a few years ago. She owns a five-plex, a warehouse and four properties near Janie Poe. She says investor interest is moving north "like spitfire." "The boundary was 10th and it's moving up to 27th," she says. She was recently offered double for a property at 22nd and Central that she bought in January 2003 for $184,000.

But before Newtown yuppifies, some hurdles must be cleared. The current average income of Newtown's 8,700 residents is $12,000. Many perceive the area as a place where crime is common and drugs are sold on the street. No national chains or banks are located here; the most flourishing businesses along Martin Luther King Jr. Way are a funeral home, a laundromat and a grocery not much larger than a convenience store. (New Urbanists, however, also view MLK as perfectly located to become a thriving commercial center for the neighborhood, which includes close to 1,000 Ringling School of Art and Design students and faculty.)

Longtime Sarasota commercial realtor Bob Richardson says changing Newtown's image will be difficult. "Until there's a perception of safety in that neighborhood, I don't think it's going to change," he says. "Somebody from outside can't do that for them. It has to come from internal pride. The city could put 20 million bucks there, but if the residents don't clean it up and don't police themselves it's not going to change."

It won't be easy for residents to finance new improvements and businesses, either. Jody Hudgins of First National Bank of Sarasota, chairman of the Sarasota Housing Authority, says, "There is not enough capital in the African-American community to redevelop Newtown or even sustain it." And without some evidence of sustainable business and residential growth-and all developers have now is an ambitious set of plans on paper, he adds-banks will have a hard time justifying loans. To get Newtown redeveloped, he says, it will have to attract outside investors.

That's what Hill and developer Famiglio say they want to do. Right now, Famiglio is considering moving some of his businesses to the area and is looking at five blocks along U.S. 301 on either side of Martin Luther King Jr. Way. U.S. 301 will be widened to six lanes in three or four years; and Famiglio, Hill, Baker and others are eyeing the area as a possible commercial/residential project.

But what's good for investors and developers worries some residents and renters. Whenever property values rise, people are displaced. And Newtown, perceived as Sarasota's ghetto by outsiders, is home to those who live there, full of history, family and friends. Families have lived in this area for generations. Van Wezel's box office manager Loreda Williams, who was born and raised in Newtown, lives on 16th Street. She and her neighbors have been receiving postcards from realtors-a sure sign of a hot market-asking if they're interested in selling. "It kind of surprised me," she says. "Our neighborhood is pretty close and we know if someone's going to move. These are neighborhood homes, family homes." And although Williams is remodeling her home, she's a bit "tempted" by the postcards.

The temptation to sell is a serious concern. Not only will selling rip apart the fabric of an established community, but it also leaves the seller in a vulnerable position if there's no comparable housing to buy anywhere else. Even more vulnerable are the renters. Fifty percent of all single-family homes in Newtown are rentals, according to Hawthorne of Newtown's redevelopment office. When values rise, people often sell to investors, who then raise the rents.

"There are predators out there," admits Grimes.

Grimes, James and Hawthorne say they're informally talking to residents about holding onto their properties rather than grabbing the first good offer that comes by. James insists that if people hold on, "The rising tide will lift all the boats. I feel better about Newtown than I've felt in the last 20 years."

The answer, says Hill, is the free market. "The liberal approach has failed. We need to break the cycle, get the kids out of the projects. We need to get the middle- and upper-middle-income people back. Don't make the rules different for us. Give us a choice. In 10 years, this will be the most vibrant and economically and ethnically diverse community in the county." 

Not So EZ.

In 2002, Jesse White opened Sarasota Architectural Salvage, which sells unique and antique building materials. He located it in Newtown, for lower lands costs and its Enterprise Zone (EZ) advantages. The state program refunded his $1,200 sales tax when he bought a forklift. He also gets a tax break on his electric bill-a savings of $10 to $50 a month; and hopes to get a sales tax refund for building materials on a new roof.

But the EZ program is "not perfect," he says. "We've purchased $100,000 in capital equipment, but because of exclusions in EZ, we can't collect tax refunds on these items." Each piece of capital equipment must cost more than $5,000 and be used 100 percent in the Enterprise Zone, he explains, so trucks trailers and mobile equipment are, therefore, not allowable. And though he's hired new employees who live in the zone-a program goal-he says it's tricky qualifying for a tax credit on their wages.

The city's Dru Jones, who runs the Sarasota EZ program, says tax incentives work best for big or brand-new businesses. The new Publix opening on the North Trail, for example, qualifies for tax rebates for building materials, equipment and the wages of employees who live in an EZ-a savings worth hundreds of thousands of dollars. Publix could also receive a waiver of impact fees.

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