Tallahassee Reports has learned that the $1.4 million in public funds provided to the owners of the Gateway Building, home to Walgreens until February 21st, will not be completely recovered through property taxes until approximately 2040.
This finding is based on financial information provided to TR by officials at the Community Redevelopment Agency (CRA).
To date, approximately $980, 576 has been given to the owner of the building. This amount includes $537,600 in a construction grant, $328,364 in vacancy guarantees, and $114,612 in scheduled refunds of property taxes for 2016 and 2017.
However, CRA officials told TR that the owner is still owed refunds of property taxes through 2022. This means the owner of the building will not pay any property taxes until 2022.
After 2022, assuming a $60,000 property tax bill and a 2% annual increase in property taxes, the $1.4 million of tax funds allocated to the project will not be collected by the CRA until approximately 2040, about 23 years from now.
CRA Executive Director Roxanne Manning told the Tallahassee Democrat that despite the loss of Walgreens the CRA investment was a good deal.
Ms. Manning did not cite any financials as support for her conclusion. Instead, she said it was previously an eyesore and the CRA board, governed by city and county commissioners, wanted a viable downtown building.
In addition, County Commissioner Mary Ann Lindley at a recent Village Square forum, when asked about the project, said “it’s an investment in increased property tax receipts.”
However, it appears the benefit of any increased tax receipts will not occur until 2040.
The financial information provided by the CRA to Tallahassee Reports raises significant policy questions about public officials spending $1.4 million that will not be recovered for approximately 25 years.
Did elected officials understand the financial model?
Was there a more efficient way to spend the $1.4 million so benefits would be realized by the current generation of taxpayers?
Would increased tax receipts have been realized before 2040 without CRA intervention?
TR will continue to investigate.