The 4.1-acre Gateway tract is located at Milwaukee Avenue, Main Street and Skinner Boulevard in Dunedin.
DUNEDIN – At long last, the Dunedin Gateway project has been given the final OK to truly start moving forward.
The Dunedin City Commission approved the final reading for the development agreement, final design, parkland dedication and ground lease agreement for the Pizzuti mixed-use development on Sept. 12.
The 4.1-acre Gateway tract at Milwaukee Avenue, Main Street and Skinner Boulevard has been vacant for a long time, as it was sold for $2.1 million in the fall of 2003 to become the location for the consolidated Municipal Service Center, according to a staff memo to the commission. However, the city later agreed that it could be better used for a “signature urban development project that complemented the downtown,” so the city issued a request for proposals in fall 2006. Pizzuti Builders LLC was selected as the developer in February 2007. When the economy and real estate market crashed, Pizzuti proposed acquiring the tract in two phases, which was given the OK in 2008.
“While the real estate market has begun to move in a positive direction, the values of real estate in general remain lower and more in correlation to pre-2007 prices,” the memo said.
“Taking this into consideration, staff has obtained more current appraisals of Phase II of the Gateway tract and the Jernigan property. These appraisal amounts are $746,000 for Phase II of the Gateway in April 2012 and $252,000 for the Jernigan tract in the fall of 2011.”
The project has undergone some transformations throughout the process, getting it in line with current market conditions, but the final product is to be 124 higher-end residential apartments on top of about 24,450 square feet of retail and restaurant space that will be on the street level. The project is estimated to cost $15 million.
According to a memo to the commission from Bob Ironsmith, CRA director, city staff consulted an economic consultant to perform an economic analysis of the project.
“During construction of the planned Gateway, 82 temporary construction jobs will be crated,” the memo said. “Labor income as a result of the 82 jobs is estimated at $4.08 million. After completion, the project is expected to create 120 permanent jobs, which are estimated to generate almost $3.1 million in permanent wages. Retail sales tax accruing to the city of Dunedin is estimated at $49,900. Potential annual property tax receipts to all taxing authorities as a result of the Gateway project are expected to equal $300,800.”
The city has provided various incentives for the project, including waiving the $37,000 building permit fees; reducing the law enforcement and fire impact fees by 55 percent, or $25,000; crediting the transportation impact fee for deeding the right-of-way for Milwaukee Avenue, which would be $134,000; and giving a 25 percent rebate of TIF revenue for 12 years. Despite this, it is projected that the returns from the project will far outweigh the money the city would have been receiving had it not given these incentives.
Additionally, the Dunedin CRA should yield $125,500 per year in property tax revenue, and the gross leverage ratio analysis for the city regarding the gateway should equal $1 to $12.32.
“The ratio means for every dollar the city gives as an incentive, it returns $12.32,” the memo said.
The jobs that it will create from the housing component could also include property and real estate managers, installation and repair, residential advisors, security guards, janitors and cleaners, and maids and housekeeping cleaners, according to the economic study. The study estimated that about 41 permanent jobs could be associated to the housing units, and about 41 additional jobs generated by the general retail, food and beverage units.
The project includes 207 surface parking spaces. Initially, it included more parking spots, but built into the city code is requirements for developers to donate a certain percentage of green space for every project or else pay a hefty fee. Therefore, some of the land that would have served for parking had to go for parkland dedication.
To meet these requirements, Pizzuti is dedicating 0.619 acres of land for green space and paying $451,292 in land development ordinance fees.
Mayor Dave Eggers was unhappy that there was no way around the parkland dedication fees because although it was well-intended when it was created decades ago, now Dunedin has so much green space that the requirement instead simply serves as disincentive for larger projects.
“We’re close to 12- to 13-acres per thousand (people,) and as a percentage of our total fees charged in the city, the LDO is off the roof,” Eggers said. “It’s extremely high. Real high. And as it relates to other parkland dedication fees in the county and other cities, it’s very high as well. To the extent that it is very detrimental to bringing what we consider as good developments to the city. I think it’s something we need to be looking at a little more closely. I feel that if we’d had more control of it, this project would have come a little more quicker.”
Because of these objections, Eggers voted “nay” for the parkland dedication portion of the ordinance, though it still passed 4-1.
Other than that one issue, both the commission and city staff spoke highly of the project and what it will bring to the city.
“The project supports the economic development need to increase the CRA tax increment tax revenue by placing a high value project in an area that’s been vacant for over five years,” said Greg Rice, city planning and development director. “The Gateway project will also be an excellent example of a mixed-use development to be emulated in all the cities’ redevelopment corridors.”
Commissioner Ron Barnette said it is a very creative, wonderful plan. Eggers said he is excited for this project to get up and running.
“I just wanted to take the opportunity to say congratulations,” Eggers said. “We’ve been at this for a long time. As the market was starting to slow down, and the bad market came, these folks weathered the storm. We had the relationship with these folks, we established a comfort level with these folks, and things change sometimes. But they stayed with it, the market changed a little bit, and their plan changed a little, from office and retail to the residential side. And I think it’s certainly something that our downtown is needing and looking for, and I’m looking forward to it. I’m excited about it. It’s a beautiful looking project.”
The commission unanimously voted to approve the final design, the development agreement and the ground lease and option to purchase agreement.
The official construction is scheduled to begin by August 2014, with completion of the project set for August 2015.