The developer for the lot near the Jesse Jewell Parkway pedestrian bridge is set to purchase the property from the city of Gainesville on Monday, Aug. 31, after a judge approved bonds for the project on Thursday.
The approval was the last step before Terwilliger Pappas, an Atlanta-based developer, could close on the 6.8-acre lot on the southern end of the bridge and begin work on a planned multi-use development with apartments, restaurants and retail.
The plans were announced in September 2019, and the Gainesville City Council has approved the sale of the land to Terwilliger for $5 million. The city purchased the lot from another developer in 2018 for $10 million after that developer’s plans for the property never came to fruition.
Hall County Superior Court Judge Clint Bearden signed the validation order for the $50 million in bonds Thursday morning.
The Gainesville Redevelopment Authority will issue the 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.
Although Gainesville Development LLC will be the lessee rather than Terwilliger itself, that won’t affect dealings with the redevelopment authority.
“For our purposes, it’s one and the same entity. … The documents that were prepared on the front end address the issue of an assignment by Terwilliger Pappas,” Joey Homans, attorney for the redevelopment authority, said.
In most cases, funding options are better for developers if they have received bonds, Homans said.
Greg Power, executive vice president of Terwilliger Pappas, said construction is expected to start the week after Labor Day and take about 22 months.
Terwilliger will still pay taxes on the property but will receive an abatement, which the Council approved last year.
Starting when the final certificate of occupancy for the project is issued, the developer will not have to pay property taxes for five years. For the sixth year, the developer 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 rate.
Homans said in order for the property to qualify for an abatement, it needed to be in the hands of a government entity.
The lease and bonds do not include the former Hall County Jail site, a four-acre lot at Main and Parker streets in midtown.
Terwilliger Pappas also has plans for that property and will have the option to buy it for $3.6 million within 60 days of when the last certificate of occupancy for the first phase of the project is issued — or essentially, when the first phase on the land closest to the bridge is complete.