In a special meeting held this morning, Pensacola city council members voted to approve a tax incentive for a much-anticipated $50 million redevelopment project in downtown Pensacola. The action won’t be final until approved on a second reading in December.
The incentive was approved on a 6-2 vote, with council president Charles Bare and councilwoman Sherri Myers dissenting.
Quint and Rishy Studer, under Daily Convo LLC, the Studer-owned company managing the redevelopment, are seeking an Economic Development Ad Valorem Tax Exemption, or EDATE, for their planned redevelopment of the former Pensacola News Journal site. The couple purchased the 3.4 acre downtown property in 2013. The much-anticipated project is expected to add more than 250 residential units in downtown Pensacola, along with retail space, offices, and a public/private parking garage. EDATE incentives — which exempt a property owner from paying taxes on the value of improvements to a property — are typically used to help companies which are expanding and creating jobs. In the case of the Daily Convo project, the incentive could be worth between $2-3 million over ten years.
Though requests for EDATE incentives are typically considered once property improvements have been completed, Studer’s Daily Convo LLC made the request now because the criteria by which it qualifies for the incentive is going away at the end of the year.
Daily Convo doesn’t meet the state’s qualifications for the EDATE incentive, but the project is located within a so-called “enterprise zone,” under which cities and counties have had great latitude in awarding incentives. However, enterprise zones are set to be eliminated on December 31 after the Florida Legislature chose not to extend legislation on the issue earlier this year.
Most, if not all of the council spoke in support of the project, but amid several council members’ questions surrounding the request’s timing and legality, Councilman Larry B. Johnson moved to table the issue until the council’s December 9 meeting. That motion failed on a 3-5 vote, with Johnson joined by council members Charles Bare and Sherri Myers.
Myers cited the city’s past troubles with EDATE incentives, which came under scrutiny last year after it was discovered that the city had processed a number of the incentives without seeking approval from the Escambia County Property Appraiser’s office, as required by state law. While Myers and several other council members raised questions about process, others said that the project was too important and valuable to risk. “Some things are more important than process,” said Councilman Andy Terhaar.
Daily Convo representative Andrew Rothfeder said that the project would not be financially viable unless the tax break was granted. Rothfeder said it would be “unfair” for the council not to approve the incentive because Daily Convo only moved forward with the project based on the presumption that the council would do so. Council members voted in January to approve a non-binding resolution of support for the project.
Johnson disagreed, saying he felt that the project would move forward with or without an incentive, and that if the Studers chose to put the property up for sale, someone else would be interested in developing the site. Johnson pointed to the council’s recent decision to reject multiple development proposals at the city-owned Hawkshaw site as evidence that developers are interested in building residential and mixed-use projects in the downtown area.
While the council approved the incentive Tuesday, it’s unclear whether this incentive — and all current EDATE incentives issued by the city — will continue to be in effect after December 31. Property Appraiser Chris Jones has requested an opinion from the Florida Attorney General on the issue, which Jones told The Pulse on Monday would likely not come before the end of the year.
A second reading on the incentive will likely take place at the council’s regularly scheduled meeting on December 9.