Tampa Yard Sale Moving Forward. The Tampa City Council approved the first reading of the zoning change from heavy industrial to mixed use on the West Tyson property in Tampa that is under contract to be sold. The buyer, a developer, had asked for a continuance at the February 11th meeting after one council member expressed concerns about the density of the proposed development plan. The original development plan was scaled back and now includes fewer units (495 versus 649), lower density (26.7 units/acre versus 34.9 units/acre), fewer multi-family buildings (three versus five), and more restaurant/retail space (14k square feet versus 5k square feet). While there were lingering safety concerns about the proximity of the development site to a chlorine plant, the City Council approved the modified plan, with four affirmative votes, two negative votes and one abstentation due to a potential conflict of interest. Sale Likely to Close in mid-2Q2021. The next step to finalize the zoning change is a second reading and adoption, which should happen at the April 22nd City Council meeting. Once that step is completed, the sale should close. Combined with the pending sale of the Port Lavaca property, asset sales could generate more than $25 million and capital allocation should shift from deleveraging to growth. Absent an acquisition, we believe that a stock buyback and/or special dividend should be the priority next year.What next? We'll be looking for 1Q2021 numbers to show continued solid execution and progress improving Concrete profitability. The ERP system is moving forward, and it should improve operating efficiency, in addition to building upon the ISG restructuring success.Maintain Outperform and price target of $8.25/share. While the stock is off to a very good start and is up 19% this year, we believe that the current stock price doesn't fairly reflect the structural improvement in execution and profitability triggered by the ISG restructuring. A combination of firming backlog, improving profitability, declining financial leverage and attractive valuation (4.6x 2021E EBITDA) supports our view that the risk/reward profile remains compelling. Potential catalysts include added awards, 1Q2021 operating results, infrastructure focused legislation and asset sales in 2Q2021.Read More >>