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Quint Studer anticipates delivering the first apartments at the former site of the News Journal by May of next year after Gov. Rick Scott on Wednesday signed a bill clearing up confusion around property tax exemptions for the project.
Scott signed the bill Wednesday morning, paving the way for Studer to secure financing and begin construction on the apartment complex. The bill, House Bill 7099, was sponsored by state Rep. Matt Gaetz and will grandfather in all Economic Development Ad Valorem Tax Exemptions (EDATEs) approved under the state’s Enterprise Zone Program before the start of the new year, when the program expired.
EDATEs for the apartment complex project were approved by Escambia County and the city of Pensacola last year, but came into question when the Enterprise Zone program expired. Gaetz said letting the Enterprise Zone Program expire without providing clear direction to developers with projects that relied upon it was unfair.
“Government shouldn’t pull a bait and switch on people and that’s what had occurred,” Gaetz said. “Government had set out a program to encourage revitalization, and then they pulled the rug out from under people. It was wrong, so we fixed it.”
Now secured, the EDATEs from the city and the county will preclude Studer from having to pay $597,025 in annual property taxes until they expire in 2025. Studer will still continue to pay more than $500,000 in taxes to the Escambia County School Board, Downtown Improvement Board and others.
The EDATEs would allow for construction of a necessary parking garage, which will be used by residents, as well as visitors to the new Y and other businesses in the area. Without the EDATEs, the expense of building the parking garage would make the project cost-prohibitive.
Studer said he’s never viewed the EDATEs as a tax break, since, after a $50 million investment to build the apartments, his tax bill will go up from the current $40,000 a year to more than $500,000. The EDATEs, he said, make the project financially viable where it otherwise wouldn’t have been. Now, EDATEs in hand, Studer said the pieces of the project should begin falling into place soon.
“We believe that we can get the financing done in the next couple of weeks and I believe in 30 days you’ll see a lot of activity on that site,” Studer said.
Studer said he expects the first of the 260 apartments in the complex to be completed and available by next May, and the final units completed by November. He said the waiting list for units has grown to more than 550 people, though he expects many will be stuck in leases or have moved on to other housing options by the time the apartments become available.
The ground floor of the finished building will house 20,000 square feet of shops and restaurants to “activate the streets” around it. The complex will also include outdoor spaces and a roof deck on the sixth floor.
Studer’s intent for the apartment complex was to provide quality housing for young professionals who otherwise could not afford to live downtown. He vowed to keep rent in the range from $750 to $1,000 per month for one-, two- and three-bedroom units. Most units, however, will be one bedroom and less than $1,000 per month.
“You’ve go to have housing to have a vibrant downtown,” Studer said. “Research has shown there’s a shortage of 700 housing unit, and the fact that we can come in and start meeting that big gap I think is really exciting.”
House Bill 7099 was the final bill passed in the final hours of the Florida Legislative Session. Apart from settling the EDATE issue, the bill also creates or extends several tax exemptions, including a three-day, back-to-school tax holiday set for August 5-7 on clothes less than $60 and school supplies less than $15.
The bill also makes permanent the sales tax exemption for machinery and equipment used in manufacturing, and exempts veterans’ service organizations from paying taxes on concessions.
Gaetz said incorporating the EDATE provision into the bill was a no-brainer given the need for workforce housing and the potential of the Studer apartments to encourage similar projects.
“We’re just getting started,” Gaetz said. “I think that this project could prove the concept that redevelopment workforce housing can happen throughout northwest Florida.”