A gaping divide has opened this year between the retail industries in downtown Tampa and St. Petersburg.

The recession has hurt Tampa's restaurant-dominated retail community, but there are few empty storefronts and average rent is down only 5 percent.

Channelside kept 10 of its 12 restaurants filled and is about to sign up an eleventh. Meantime new eateries are drawing night time crowds to the ground floor of recently opened condos in a downtown where many restaurants previously only served lunch.

Contrast that to downtown St. Petersburg where the retail vacancy rate doubled to 20 percent and the average rent nosedived - 48 percent by one estimate - since January.

What's going on? The recession spreading from housing to retail real estate is aggravating weakened markets like downtown St. Petersburg, an area hit by the financial collapse of half-empty BayWalk, rent relief the City Council gave to a dozen struggling Pier retailers, and an overbuilding hangover from the condo boom.

The glut left downtown St. Petersburg with more retail space than demand to support it.

"Once BayWalk fell, so did the synergies downtown, and retail went in the toilet," said George Rahdert, an attorney who owns a dozen downtown St. Petersburg buildings.

"We hit a plateau where higher rents could not be sustained," said Ken Heretick, president of Vector Realty and Chairman of the St. Petersburg Downtown Partnership. "We'll work out of it. People forget our downtown comeback was built over 30 years, not just the last few."

"We've got more retail space leased than a year ago," said Mayor Rick Baker. "But we also have quite a bit more space overall."

With less than 1 million square feet of retail space combined, downtown St. Petersburg and Tampa are comparative pipsqueaks in the Tampa Bay area's inventory of 92 million square feet. But they're examples of the volatile big picture in retail real estate: sharply higher vacancy rates are starting to spread to weak retail centers as more store closings, shrinking property values and tight credit markets take a toll.

To be sure, downtowns Tampa and St. Petersburg are in different stages of maturity.

St. Petersburg has enjoyed the benefits of big league baseball, an influx of condo dwellers and an established nightlife scene for years. Until recently downtown Tampa's nascent retail backbone was little more than restaurants serving office workers lunch, a few bars like the Hub that stayed open late and a CVS drug store.

But in recent years, Channelside has made a comeback. It emerged from foreclosure in 2006 and boasts a location central to taxpayers' massive investment in downtown drawing cards. Bracketed by the St. Pete Times Forum, Florida Aquarium, convention center, a new history museum and Florida's fourth busiest cruise ship port, Channelside is prosperous enough in its eighth year for the city to add a 270-space parking garage that opens next year.

"Some of our business optimism is driven by demand, some of it's buzz of what's coming," said Bob McDonaugh, city urban redevelopment manager.

"We've been fortunate to have entrepreneurial restaurant owners at Channelside who adjust to changing tastes, play off events or stage their own," said Christine Burdick, president of the Tampa Downtown Partnership.

It's not just Channelside leading the way.

With people moving into empty condo towers that are switching to rentals, a handful of restaurants, including Malio's, Spain and in SkyPoint condo, Taps and Rawbar, offer evening dining in an area of central downtown once largely barren after the work crowd went home.

City officials think the 2010 opening of a new Tampa Art Museum and Children's Museum and the shift of Stageworks, a live theater, into the Grand Central condo will lure diners to other parts of downtown.

In contrast, downtown St. Petersburg is suffering fallout that started at BayWalk, the failed $50 million entertainment center, which was the first test for luring apparel chains downtown. Many of the stores left, then most BayWalk restaurants.

But other signs of overbuilding - sweetheart deals to fill newly built space and news that some merchants are not paying full rent - helped drag the average rental rate from about $20 a square foot to $11, according to CoStar Property. Indeed, St. Petersburg Times restaurant critic Laura Reiley counted more than 100 downtown eateries east of Eighth Street between Second Avenue S and Fourth Avenue N.

To be fair, rental rate averages can be deceiving. The downtown market stretches from a new high-rent district on Beach Drive to some derelict blocks a half-mile away bought for condos that never achieved lift off. And the City Council granted $100,000 in rent reductions to struggling retailers at the Pier.

Now a court-appointed receiver is trying to reload Baywalk with $6 million in improvement money as even more new ground floor retail space competes for similar tenants in Beach Drive luxury condo towers a block away.

Bob Churuti, a director of Beach Drive Retail, which is trying to fill the ground floors of two Beach Drive luxury condos, concedes not all his tenants are current in rent. But he hopes the recent opening of a 300-seat restaurant - 400 Beach Seafood and Tap House - will lure more traffic. Meanwhile, other Beach Drive Retail tenants struggle. Davis Anthony, a home decor store, will shrink from 7,000 square feet to 1,700.

"It's just a down cycle that will last a year or two," Churuti said. "We're in for the long haul."

Also distorting the rent decline is a half-block assembled for an abandoned condo at 600 Central Avenue. It's being rented as an artists colony at $5 a square foot, a fraction of the $22 going rate downtown in January.

Tierra Verde investor Tom Gaffney bought the distressed property for $2.3 million. He was going to flatten it until the real estate market recovered. But city leaders approached him about creating the artists colony, as long as the buildings can be cheaply brought up to code and centrally air conditioned.

"If we can bring more people downtown, I'm all for it," Gaffney said. "If it's not viable in five years, we'll see what's next."

Low rent for two dozen artists, import shops and vintage clothing stores riled other landlords.

"I've been accused of bringing average rent down," said Leslie Curran, City Council member, art gallery owner and a promoter of the project as part of a campaign to save the 82-year-old Crislip Arcade. "But times are tough, and this is certainly better than leaving a half-block deteriorating. If other landlords lowered rents, maybe they would fill up. We have a waiting list of 120."

Staff Writer Mark Albright can be reached at albright@sptimes.com or (727)-893-8252.