TAMPA, Fla.— As a former hedge-fund owner and manager of the Fidelity Magellan Fund, Jeffrey Vinik is used to making giant bets in financial markets. Now he is part of a $3 billion wager to revive Tampa’s once-moribund downtown.

Mr. Vinik is teaming with Cascade Investment LLC, the investment firm of Microsoft Corp. co-founder Bill Gates, in the city’s biggest-ever development, known as Water Street Tampa.

The 50-acre project includes two luxury hotels, office towers and apartment buildings with amenities such as roof gardens and fitness centers. The first element opened last week: Sparkman Wharf is a waterfront entertainment venue with a beer garden and a collection of shipping containers housing eateries by some of the city’s best-known chefs. Office space will come online in 2020.

Food options at the Sparkman Wharf project are housed in converted shipping containers. Photo: Eve Edelheit for The Wall Street Journal

“It’s going to transform this market,” said James Nozar, chief executive of developer Strategic Property Partners LLC, a partnership of Mr. Vinik and Cascade.

The population of the Tampa metro area grew to nearly 3.1 million at the end of 2017, making it one of the biggest-gaining regions in the U.S. Steady job growth sent the unemployment rate to 2.9% in October.

Mr. Vinik and other developers are now trying to cash in with a flurry of new projects, aiming to remake Tampa as a more vibrant and pedestrian-friendly city that can lure more young professionals.

Ben Eng, left, and Katelyn Glass eat oysters from a vendor at Sparkman Wharf. Photo: Eve Edelheit for The Wall Street Journal

The Heights, a mixed-use development, has a 314-unit apartment complex and a 73,000-square-foot former streetcar facility that now is home to a food hall and co-working space. Construction is set to begin this month on an office building for the project.

Midtown Tampa is to offer office towers, apartments, hotels and a Whole Foods supermarket—with a public plaza at the center. The 20-acre development is scheduled to break ground next year.

On the residential side, a luxury condo tower on the Hillsborough River downtown will be the tallest building on Florida’s west coast. The units at Riverwalk Place sell for up to more than $2 million.

The mixed-use developments are the first high-end office space built in Tampa in more than two decades, said Tim Rivers, Florida market director for real-estate firm JLL, who is based in Tampa. The numbers “did not pencil out, up until now,” he added.

The vacancy rate in Tampa for class A office space fell to 8.7% in the third quarter of 2018, according to Cushman & Wakefield, a real-estate-services firm. Rents climbed to $30.29 a square foot, the first time above $30 in the market’s history, the firm said.

Another project, called The Heights, has a food a hall in a 73,000 square-foot former streetcar facility. Photo: Eve Edelheit for The Wall Street Journal

Some worry that the city won’t be able to absorb all the supply coming on the market in the next few years, especially if economic growth slows. “The biggest risk is…the overall condition of the economy,” said Mr. Rivers, who added that the city’s low living costs and high caliber of its planned office space could give it an edge.

Tampa’s downtown was once a desolate area at night. But over the past decade, development of the Channel District, adjacent to the Water Street project, drew residents to new apartments and restaurants. Public and private investment added attractions, including museums, parks and a walkway along the river.

Now, Mr. Vinik is trying to take it to the next level.

The former money manager, 59 years old, ran Fidelity’s flagship Magellan Fund in the 1990s starting at the precocious age of 33. With about $50 billion in assets under management, he was one of the world’s most powerful stock-market investors and regularly chalked up double-digit gains. He had a 17% annualized return during his 4-year tenure running Magellan.bought the Tampa Bay Lightning National Hockey League team in 2010, and soon began acquiring land around Amalie Arena, where the Lightning play. He eventually amassed 50 acres.

After he left Fidelity, he started his own hedge fund that had even bigger gains, but he closed it down in 2013 after a run of poor performance and restructuring.

Mr. Vinik wasn’t sure at first what to do with the growing portfolio, Mr. Nozar said. But after reading books on urban planning and smart growth, he envisioned a lively, walkable neighborhood that would attract companies and workers. Mr. Vinik teamed up with Cascade, and together they hired high-end architects and designers.The project, fully backed by equity, is scheduled to conclude its first phase in 2021 and its second in 2027.

A tower that will house the University of South Florida medical college recently topped out, and the builders have broken ground on one of the apartment buildings and a hotel, a JW Marriott. By next fall, the developers say, the area is expected to be teeming with 20 cranes and 2,800 construction workers.

Write to Arian Campo-Flores at arian.campo-flores@wsj.com