GAINESVILLE – Developers whose projects include improvements that enhance public property such as sidewalks and sewer lines and curbing, as well as demolition costs to remove unwanted structures, are eligible to recapture some of their costs if the project is in a Tax Allocation District.
That is precisely the case along a highly visible stretch of E.E. Butler Parkway, between Spring and Washington Streets, and near the Gainesville Square, where the former First National Bank building and parking garage have been demolished, and a Courtyard by Marriott hotel and a multi-family apartment complex are under construction.
“Their total investment in the project is about $71.5-million,” Assistant City Manager Angela Sheppard told members of the Gainesville City Council during their work session on Thursday.
Sheppard was referring to capital being invested by Capstone Property Group, LLC, to construct the 130-room hotel, underground parking garage and 143-unit apartment building. “It’s really impressive to have an investment at that level right in our downtown on a piece of property that we have all felt like, for a long time, needed to be redeveloped,” Sheppard added.
TAD programs encourage developer investment in areas that might otherwise be ignored.
When Capstone’s project, known as “The National”, was considered last month for TAD reimbursement, the TAD Advisory Committee recommended approval of up to $10.973-million, an amount to be paid out over a fifteen year period.
That represents the largest property tax reimbursement under the city’s TAD program since its inception in 2006.
Funding for the TAD reimbursement to the developer from the city will come from the property taxes collected by the city on the buildings within the completed development.
City Manager Bryan Lackey explained it this way: “Each of those (15) years they have to pay the tax bill, the check has to clear, and once we have that we turn around and refund a portion, if not all…back to them.”
“The reimbursement would begin the calendar year after their first Certificate of Occupancy,” Sheppard explained. City officials believe that could happen as early as the first quarter of 2023.
The resolution creating the project-specific TAD, the $10.973-million limitation and the 15-year term is expected to be approved when the city council meets Tuesday, September 21.
