Red dirt was broken by heavy machinery on the site of a new mixed-use development in Gainesville hours after the controversial deal between the city and the developer was finalized Aug. 31. On Oct. 6, those stakeholders gathered at the site on the midtown side of the pedestrian bridge across Jesse Jewell Parkway to celebrate the move forward on a long-term vision.
That vision was worth a $10 million purchase price for city leaders, who voted to buy the 6.8-acre lot in 2018, requested proposals from developers and then sold it to Terwilliger Pappas in 2019 for $5 million.
The first phase of Solis Gainesville, closest to the pedestrian bridge, will house 220 apartments and 10,000 square feet of retail or restaurant space. The city has long sought downtown residential options, as noted in its 2015 downtown master plan developed with the Carl Vinson Institute of Government at the University of Georgia.
“One of the most voiced needs was increased downtown housing: This would keep young professionals and Empty Nesters in the area around the clock,” according to the plan, which included focus groups and interviews. “Having residential areas Downtown might also encourage shops to stay open later and operate on weekends.”
According to the plan, “people are the key to a vibrant downtown.”
The pedestrian bridge is now closed for construction, but city officials and developers crossed it one more time Tuesday morning before it becomes the “bridge to somewhere.” It earned the nickname “bridge to nowhere” after years of leading to an empty lot.
“I’d just like to take a moment to tell the naysayers, ‘I told you so,’” Mayor Danny Dunagan said at the ceremony. “The bridge to nowhere will soon be a bridge to somewhere, and what a somewhere it will be.”
Developers Lee Caswell and Wendell Starke had previously tried to sell the property to the city for $15 million before approaching leaders with the city and Northeast Georgia Health System about a “reduced” price of $10 million in 2018, city manager Bryan Lackey told The Times in a meeting at city offices on Tuesday. The Hall County Tax Assessor’s Office has it valued at about $2 million, according to tax records.
The city lost money in the transaction, but officials said they saw the decision as a long-term investment.
“I don’t believe either of those City Councils (at the time of sale and purchase) believed they could get ($10 million) in return,” Lackey said last year. “I believe they both knew that the investment in the community to make sure that we could get a quality redevelopment like what was shown, at its highest and best use, and I believe that is the case for both of these sites.”
Greg Power, executive vice president of Terwilliger, said the first apartments and restaurant spots were scheduled to be ready in January 2022, with construction set to be done in May 2022. Pre-leasing for the apartments, which will average $1,500 a month, will start in fall 2021, he said.
No tenants have signed on for the restaurant or retail spaces yet, Power said, although he said there has been some interest in the site and Terwilliger is especially interested in recruiting restaurants for the space.
Gainesville officials have long seen the lot closest to the bridge as crucial to downtown and midtown development.
In 2018, Northeast Georgia Health System had a $10 million contract on the property. NGHS ultimately decided to not move forward with purchasing the property but approached the city about it, knowing the city saw potential there, The Times has previously reported.
Terwilliger also has the option to purchase additional land from the city for a second phase of the project at the former Hall County Jail site, a 4-acre lot at Parker and Main streets in midtown. The second phase at the former jail site would have 180 apartments and 5,000 square feet for restaurants or retail. Terwilliger has the option to buy that land for $3.6 million within 60 days of the first phase of Solis being complete. The city paid Hall County $7.2 million for the land in 2012. The jail was demolished in 2017.
The Gainesville Redevelopment Authority will issue $50 million in bonds to Gainesville Development LLC, a limited liability company created by Terwilliger. The redevelopment authority will then lease the property back to Gainesville Development LLC.
The bond will mature in December 2036, and until then, the lease payments should be “sufficient to pay the issuer for all payments on the bond,” according to the agreement. The developer will pay the lease payments to its own lender, not the redevelopment authority.
Terwilliger will also receive a tax abatement on the property. Starting when the final certificate of occupancy for the project is issued, the developer will not owe property taxes for five years. For the sixth year, they will have a 90% abatement, and the abatement will decrease by 10% for the next eight years. By the fifteenth year, Terwilliger Pappas will be paying the full tax rate.