The apartments at Solis in midtown Gainesville are expected to revitalize the area.
But renewal has come at a price.
The city has dished out nearly $13 million in tax incentives and taken a $10.4 million loss in land sales to bring it to town. The developer is planning to invest $101 million across two phases of apartments and retail developments. Hundreds of new residents in the walkable downtown area are expected to bring more spending to Gainesville.
“Eventually with what’s happening there and around there, we will get our money back,” said Councilman Danny Dunagan, who was the mayor at the time of the deal. “It’s just going to take a little while to get that done.”
Solis Gainesville, which was constructed and is owned by Atlanta developer Terwilliger Pappas, contains 223 apartments with about 10,000 square feet of retail space at 1000 Everly Way at one end of the pedestrian bridge that crosses Jesse Jewell Parkway.
The first phase of Solis has leased as quickly as any project Terwilliger Pappas has done, Vice President Derek Hutchison has said. City officials have said they are confident that the luxury apartments will stay well maintained and at a high value.
“These apartment complexes, new ones, are really selling for top dollar,” Dunagan said. “If Terwilliger turns around and sells Solis one and Solis two, it will be at such a dollar that anybody that buys them, is going to have to keep them up to keep the rents up to recoup their investment.”
This fall, phase two of Solis with 184 apartments and 5,000 square feet of retail space will start construction in midtown at the site of the old Hall County Jail.
“We wanted that property, Solis phase two, to keep a prison out of downtown Gainesville, and that is what was fixing to happen,” Dunagan said.
Solis is expected to bring an increase in additional sales tax revenue for the city with more people around downtown and a retail component for both phases.
Gainesville owned and sold the land for both Solis sites at a loss and gave the developer tax breaks for both phases.
The first phase will receive a tax abatement, while the second phase will receive reimbursements from the city’s midtown tax allocation district. The district allows developers who make improvements on a piece of property to be reimbursed for eligible expenses.
The Times crunched the numbers and here’s a breakdown on what it cost to bring Solis to Gainesville.
$5.1M in tax breaks
Developer will pay no property taxes for the first five years thanks to a property tax abatement awarded by Gainesville City Council
Developer will save 90% on its tax bill in the sixth year, savings that will decrease by 10 percentage points for the next eight years. It will pay its full property tax bill in its 15th year.
$5M loss in land sale
In 2018, Gainesville bought land at Solis phase one site for $10 million. In 2019, Gainesville sold the land to Terwilliger Pappas for $5 million.
Terwilliger Pappas invested about $49 million to construct phase one, which contains 223 apartments with about 10,000 square feet of retail space.
$7.8M in tax breaks
In June, the city agreed to reimburse $7.8 million in midtown Tax Allocation District funds to the developer over 15 years.
The project is projected to generate about $11.5 million for the TAD fund due to its property value over a 15 year period.
The city could recoup up to $5.4 million in TAD funds.
In the TAD agreement, the city stipulated it would receive $2.7 million while Solis phase two is reimbursed for its TAD funds, because Solis will generate more money for the TAD than it requested.
Any additional money Solis generates after it is reimbursed can also be collected by the city up to another $2.7 million.
$5.4M loss on land
Gainesville bought the jail site for $7.2 million from Hall County in 2012. It cost the city about $9 million total, including carrying costs and demolition.
The city gave Terwilliger Pappas the option to buy the old jail site for $3.6 million after phase one was completed.
Terwilliger Pappas plans to invest about $52 million for phase two, which will include 184 apartments and 5,000 square feet of retail space.