ST. PETERSBURG — The city will end its budget season with a surplus for the first time in years, despite months of projections about a possible deficit.

That was the good news budget director Tom Greene delivered to City Council members on Monday. The bad?

That surplus could have been much greater if it wasn't for a large looming payment the city must make to the federal government early next year for failing to create jobs with grant money it received for that purpose.

Officials revealed on Monday that the U.S. Department of Housing and Urban Development wants the city to repay $2.2 million. The money was part of a larger grant intended to jump-start redevelopment in the Dome Industrial Park that, despite years of trying, didn't result in promised job creation.

The city used the money several years ago to buy and assemble about 12-14 acres on 22nd Street S across from the Manhattan Casino and Sylvia's restaurant. But it came with the requirement that at least one job was created for every $35,000 the city got — or about 64 total.

The deadline to do that passed "well beyond where we are now," said Dave Goodwin, the city's chief planner. "We haven't been successful to this point attracting an end-user that would build a facility to create those jobs."

Administration officials have asked HUD for a reprieve, but so far have not heard back. So unless something changes, the city must return the money by Jan. 31.

"It's the worst of all worlds," council member Karl Nurse said after the meeting, "where you spent local money, you spent federal money and you created no jobs."

Nurse and others are hoping HUD will change its mind and give the city more time to figure things out.

For too many years, Nurse said, city officials held out hope that a big investor would create all the jobs with one project. One of the biggest suggestions was that Jabil would move a manufacturing plant there. The recession and sluggish economy haven't helped, either, officials said.

"The problem is we've always gone for a home run, and we've never hit that," Nurse said. "Rather than give the money back to HUD, I would prefer investing some of that money and creating jobs. That's a lot of money to give back to not accomplish anything."

Nurse said he recently met with a company willing to move its manufacturing operation to the site and create 45 jobs, if there was a building there. He said that could be enough of a carrot to entice a commercial developer to build a flexible industrial space that could then attract other businesses to help reach the job target.

City Administrator Gary Cornwell said the city would like another year to find someone to develop the site, and two years after that for the jobs to be created.

Even if the grant money is repaid, the city would still try to develop the site, council member Wengay Newton said, noting that jobs were created at the nearby Job Corps site, which also was tied to the grant.

"We keep the land," Newton said. "It's not all bad."

Goodwin said efforts are ongoing to market the property.

"The city's commitment to that area remains strong," he said.

Angst about the HUD grant repayment was tempered somewhat on Monday by Greene's celebratory news about the budget surplus. Higher-than-expected revenues and savings from streamlining mean the 2014 fiscal year that ended Sept. 30 actually will close out with about $1.3 million extra, he said.

Just months ago, city officials thought they would end the year with a shortage of more than $1 million. Instead, the city ended up with a little more than $214 million in its general fund, compared with just under $213 million in expenditures.

This is the first time since 2010 that the city will end a budget year in the black, said Greene, who jokingly played a clip of AC/DC's Back in Black during a budget committee hearing.

"We've been cut loose from the red-ink noose," Greene said.

Contact Kameel Stanley at kstanley@tampabay.com or (727) 893-8643. Follow @cornandpotatoes.