Developers for The National, a hotel and apartment development in downtown Gainesville, are set to receive the largest property tax reimbursement the city has approved since setting up the Midtown Tax Allocation District in 2006.
The city’s TAD advisory committee recommended approval last month for nearly $11 million to be reimbursed over 15 years as part of the project’s TAD increment, and the city council is expected to approve the resolution at its Sept. 21 meeting.
The TAD program allows developers and property owners to use property tax payments they pay toward improvements at the property that fit eligibility requirements and may have some public use such as infrastructure, streetscaping or public amenities.
Once approved, developers can use increments from the fund for site improvements. Essentially, the developer pays their full property tax bill each year and receives a reimbursement annually for TAD eligible expenses.
The National project at 111 Green Street will include a 130-room Courtyard by Marriott hotel, a 143-unit multi-family development across two buildings and a public plaza. It is expected to cost about $71.5 million, said Angela Sheppard, the city’s assistant city manager, which means its TAD increment would apply to about 15.3% of the project’s cost.
The developer, Capstone Property Group, LLC, initially requested $11.8 million, but the committee brought that number down just below $11 million.
Jonathan Collins, Capstone’s president, said the TAD funds were “critical” for the project, and they were happy with the agreement.
“The plaza is going to be not only an amenity feature for the hotel or for the apartment buildings but for the community,” Collins said.
All aspects of the project are expected to be completed in the first quarter of 2023, he said.
The development’s TAD eligible expenses include demolition, sidewalks, utilities, stormwater, and landscaping among other expenses, according to the resolution presented to the city council at their Sept. 16 work session. The project will include new sidewalks, landscaping and curb and gutter improvements along Washington, Green and Spring streets, according to the resolution.
TAD reimbursements would begin the calendar year after the project’s first certificate of occupancy, Sheppard said, and it would continue to be reimbursed for its property tax payments on an annual basis until it hits its $11 million cap or after 15 years, whichever comes first.
A few other expensive developments downtown have been approved for TAD. The Gainesville Renaissance, which will include restaurants, retail, office space and condominiums on the Gainesville Square, was approved for nearly $3 million over 13 years in TAD funds in January 2020.
A new restaurant and event center from B-Entertainment to be built at what was previously the Engine 209 Park on Jesse Jewell Parkway is expected to apply for about $1.4 million in TAD eligible expenses.