Update, Jan. 18: Gainesville City Council unanimously approved a $5.4 million tax rebate for a 214-unit apartment complex to be built in the midtown area that would tie into the Midland Greenway.
Gainesville City Schools officials opposed giving a 214-unit midtown apartment complex a $5.4 million tax rebate, saying they worried about the long-term impact of the project on their schools that are already struggling to catch up to the city’s population growth.
Superintendent Jeremy Williams said the school district could not support a residential development getting tax allocation district funding.
“If one kid winds up showing up in one of these 214 units that’s money — revenue — that has to come from somewhere else to support that kid,” Williams said at the TAD advisory committee meeting Friday, Dec. 17. “It’s just hard for us to support a residential TAD when it comes forward.”
Williams, Board of Education Chairman Andy Stewart and the school district’s chief financial officer, Kathy Pethel, voted against the project, but the motion to recommend approval passed in a 6-3 decision.
Gainesville City Council will make a final decision on the project at its first meeting in January.
The city’s midtown TAD was created in 2006 to inspire new development in the midtown area of Gainesville.
The TAD program allows developers and property owners to use property tax payments they pay each year 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.
Until a project receives its approved TAD funding, which can be up to 15 years, the school district does not receive the additional tax revenue that the project generates. This means that if a residential project adds any students to the district, the district must accommodate that child without additional property tax revenue.
The project from McNeal Development, which will be constructed at the intersection of Queen City Parkway and Banks Street, was approved by the Gainesville City Council in August, clearing the way for a TAD request. The project will include a series of pedestrian and bicycle paths that connect to the Highlands to Islands trail network and rooftop amenities on its three apartment buildings.
Stewart agreed with Williams, saying the school district will take care of any additional child, but he couldn’t support the project.
“The construction that we’re doing now really is catching up with the last 10-20 years,” Stewart said. “If the next 10-20 years are looking like it’s looking now, we’ve got some other conversations we’ve got to start having with the board and with the community.”
Committee member Rob Fowler argued the project would likely not bring in many families.
“If they decide to start having children, they’re going to be like a lot of professional people here, and they’re going to move into the community,” Fowler said.
About 65% of the 214 units will be studio or one-bedroom apartments, said William Norris of McNeal, and it will not include apartments bigger than two bedrooms. Studios will have a starting price range of $1,275-1,335, with upscale two-bedroom units costing as much as $2,000 per month. Their target demographic is largely young professionals, Norris said, such as workers at Northeast Georgia Health System.
“We haven’t had projects like this in the city,” Williams said, referencing both the Midland apartments and The National downtown, which was recently approved for $11 million in TAD funding. “Part of our fear that we’ve seen in the city is how something was built or intended to be built 10 years later turns into a different purpose. … while for the next 10 years there may not be students from a certain facility, all of a sudden now we’re getting 200-300 because they’re going to want rent.”
Mayor Danny Dunagan, who is also on the committee, said the city will likely move to set a sunset date for the midtown TAD soon. “It’s done its job,” Dunagan said.
The approval came with conditions requiring McNeal to construct a dog park in the midland greenway area and its TAD would be completed in a maximum of 12 years, though it is expected to generate the necessary property tax dollars in about eight years.
The project is expected to finish construction in 2023, and it will have an expected appraised value of about $62 million, said Hall County Tax Assessor Steve Watson. According to its appraisal, the project would be eligible for up to $11.3 million in TAD funds, and city officials said it was rare for an applicant to ask for less money than it was eligible for.