On Thursday, February 27, 2014, the Tallahassee Community Redevelopment Agency (CRA) voted 6-1 to approve a property tax rebate in the amount of approximately $1.6 million to an out of town developer.
The rebate will go to CA Student Living, a developer from Chicago, Illinois that is proposing to develop 444 College Avenue, a mixed-use student residential development on approximately 2.6 acres of vacant land between College Avenue, Park Avenue and Macomb Street.
According to their website, CA Student Living is part of a real estate investment, development and management firm “focused exclusively on creating and maximizing value through real estate investments.” In September 2012, the company sold 15 student housing properties with 6,579 beds for a price of $627.0 million.
The CRA is composed of all City Commissioners and four County Commissioners. Those voting for the project included City Commissioners Nancy Miller, Andrew Gillum, and Gill Ziffer. County Commissioners voting for the project included Kristin Dozier, Mary Ann Lindley, and Nick Maddox. The lone vote against the tax rebate was County Commissioner Bill Proctor.
City Commissioner Scott Maddox and Mayor John Marks are on the CRA board but were not at the meeting.
County Commissioner Mary Ann Lindley started the discussion by saying that the project “is what the CRA is all about.” She recommended that the CRA add approximately $400,000 to the staff recommendation of $1.2 million to bring the total tax rebate for the developer to $1.6 million.
Under Florida law, local governments are able to designate areas as Community Redevelopment Areas when certain conditions exist. Examples of conditions that can support the creation of a CRA are the presence of substandard or inadequate structures, a shortage of affordable housing, inadequate infrastructure, insufficient roadways, and inadequate parking.
County Commissioner Bill Proctor followed Commissioner Lindley by saying “This is not what the CRA is all about. This is cherry picking and not fair to other property tax payers.”
The proposed project will consist of 219 residential units (a mix of studio; and one, two, three and four-bedroom units), with 583 beds, 11,903 square-feet of retail space, and a 309 space parking garage that will include 38 public/retail parking spaces.
Commissioner Proctor was concerned about the glut of student housing projects and how this project would effect other student housing property owners in the area.
Proctor asked CRA staff if they were aware of housing data that showed a decline in students at both FAMU and FSU coupled with a major increase in student housing over the lasts five years.
The staff said they were not aware of any such data.
Tallahassee Reports has been able to confirm that the current President of the Tallahassee Chamber of Commerce, Ed Murray, has been giving a presentation to business groups over the last three months that shows student enrollment at FAMU and FSU is down by 1,000 students over the last five years. During this same five year period, over 8,000 student housing beds have been added to existing stock.
Given these facts, why subsidize student housing?
The response from CRA staff and some elected leaders is that the goal is to move students closer to FSU to cut down on traffic issues. City Commissioner Gil Ziffer told Tallahassee Reports “we want students closer to the University.”
But at what cost to the taxpayer?
Shortly after the meeting, WCTV reporter Andy Alcock interviewed a local owner of 5 apartment complexes with 325 beds between downtown Tallahassee and the FSU campus.
Phoenix South owner Babara Bumgarner said that “in the last 4 or 5 years as all the new development has come in, it’s hurt all the local businesses. We’re paying our entire taxes and we’re not getting any kind of discount.”
The $1.6 million tax rebate for the developer is being subsidized by City and County property tax payers, this include Ms. Bumgarner, the developers competition.