With the stroke of a pen, Florida governor Rick Scott gave the greenlight this morning to a $50 million mixed-use development in downtown Pensacola, allowing its developer to take advantage of millions of dollars in tax breaks to incentivize economic development.
Scott signed HB 7099, which clears the way for the stalled Quint Studer-led redevelopment at the site of the former Pensacola News Journal headquarters.
The move approves the revision of an economic development ad valorem tax exemption, or EDATE, for certain enterprise zone businesses. Studer’s project, under development by his company Daily Convo, is located in a former enterprise zone in downtown Pensacola.
With the EDATE now ensured, Daily Convo will be exempted from paying nearly $600,000 a year in property taxes through 2025, when the EDATE is set to expire.
“We appreciate the legislature passing HB 7099 and Governor Scott signing the bill,” said Studer. “We look forward to the tremendous positive benefit the 260 residential units will have on the area. This project will create additional dollars for schools, jobs, supports businesses and starts to address a large shortage of downtown living space.”
An aerial of the mixed-use development is seen from the perspective of Jefferson and Intendencia streets in downtown Pensacola. (Daily Convo/Special to The Pulse)
Reached Wednesday, Travis Peterson, a spokesman for Studer, said the economic investment created by the $50 million project will more than outweigh the incentive of the tax break.
“Property taxes on that vacant lot now are about $40,000,” Peterson said, referring to the site of the development. “When complete, even with the EDATE, the property taxes on that property will be 10-15 times that — around $500,000 per year.”
Peterson said when the EDATE sunsets in 2025, the property taxes on the development “will be in the $1 million neighborhood.”
If built, the entire project is expected to add 260 residential apartments in the downtown core, along with retail space, offices, and a public/private parking garage. Quint and Rishy Studer purchased the property in 2013.
In December, when Daily Convo’s tax incentive/tax break went before the city council for approval, Studer warned that without approval, the project would have to “start over” with lenders, suffer delays, and likely see an increase in proposed rental rates. Eventually, both the Pensacola City Council and Escambia County Commission granted the project the EDATE.
However, the fate of the more than $5 million incentive has been uncertain due to questions about the tax exemption’s legality. The state enterprise zone program, under which the incentive was awarded, expired at the end of 2015. The development only qualified for the EDATEs under the enterprise zone program, and when the program expired there was uncertainty as to whether they were still viable. Daily Convo sought the legal opinion of Attorney General Pam Bondi, who deferred the decision to the courts.
To get the project back on track, it took a bill sponsored by Florida State Rep. Matt Gaetz to get the enterprise zone EDATE for the project grandfathered into law. The provision is part of a $129 million statewide tax cut package that was one of the final bills pushed to the governor’s desk before the legislative session ended this month.
“We are very grateful to local legislative Representatives Clay Ingram and Mike Hill, as well as State Senator Greg Evers,” Studer said Wednesday. “We especially are grateful to Representative Matt Gaetz whose leadership in writing the language and support was crucial.”
Last month, the city of Pensacola’s Architectural Review Board approved the final design of the development.
The final design, which includes renderings of the development from Romana, Jefferson, Tarragona, and Intendencia streets, is shown in the images below. The design of the building, which was undertaken by a community focus group, features inspiration from historic Pensacola architectural landmarks, such as the Blount Building, the T.T. Wentworth, Jr. Florida State Museum, and the San Carlos Hotel.
The development will include more than 250 studio, one, two, and three bedroom rental residences, of which more than 600 people have expressed interest in renting. Also included in the mixed-use project will be a more than 500 space parking garage, along with several retail shops, restaurants and offices on the first floor of the development.
Residential amenities within the project include a roof-top patio and event area, a swimming pool and courtyard, and dedicated parking within the interior parking garage.
Last month, Studer said he wasn’t positive of when the project would finally break ground, which was initially planned in January. “I believe right now [the groundbreaking] would be an end of April start date, however like any date, it’s very subject to change,” Studer said.
In January, Birmingham-based Doster Construction was hired on as the general contractor. Atlanta-based Niles Bolton Associates is the architect.
Since demolition began last year of the former Pensacola News Journal headquarters, Studer Properties, along with the Gannett Company, spent over $1 million to clean up and remove pollution from the site.
Adjacent to the development south of Intendencia Street, a new 51,000 square foot YMCA is under construction, set for an opening in late 2016. The YMCA will utilize spaces in the parking garage within the mixed-used development.
This story has been updated with statements from developer Quint Studer.