OCALA, FL (352today.com) – The Ocala City Council unanimously approved the redevelopment agreement for Project Hometown-Downtown Ocala Marriott AC between the City of Ocala and Domach, LLC, with total city incentives not to exceed $5,619,644 at the Community Redevelopment Area meeting on Aug. 19.
The City Council then went onto unanimously approve the same redevelopment agreement during its city council meeting that followed the CRA meeting and unanimously approved the parking agreement for Project Hometown-Downtown Ocala Marriott AC for dedicated parking spaces in Parking Garage No. 2, following that vote.
Staff had reviewed the proposal and was in favor of it, said Aubrey Hale, City of Ocala urban design coordinator.
Currently, there is no Parking Garage No. 2, so the city isn’t realizing any of the incentives. Those are annual charges that the city adds based off of the internal structure and the external structure rates that comes out to approximately $72,000 a year, said Hale.
“That’s revenue that we wouldn’t be realizing at this point, and we’re not receiving any of that at this time either,” said Hale.
Park Place
There are going to be 225 parking spaces dedicated for the hotel use. The parking garage is creating roughly a little over 800 parking spaces.
“They’re going to run a valet service on the top floor,” said Hale. ‘Their parking will be generally on the top floor.”
The developer has estimated 183 parking spaces will be on the sixth floor of the parking garage, the remainder will be about 42 parking spaces on the fifth floor, and they will be gated off. The fifth floor will still be accessible to the public.
During large scale events, the city would have access to those parking spaces, and the city would have to coordinate with the developer and the hotel at that time.
Funding Mechanisms
The city’s funding sources for the project such as the city’s infrastructure part, some of that is going to be out of the engineering strip fund for the road improvements, said Hale. The streetscape enhancements will be coming out of the Downtown CRA. The city used American Rescue Plan Act funds and sales tax for the parking garage.
Dollars and Sense
The economic impact of a hotel this size would be significant for downtown Ocala. The purpose of the Redevelopment Community Area is to revitalize the blighted, deteriorated and under and undeveloped portions of the urban area, said Pete Lee, City of Ocala city manager. The Downtown Ocala Marriott AC is a 176-room hotel, and at 60% occupancy it will produce about $950.4 in taxes a day, the bed tax which is 4%, that’s $346,896 a year at 60% occupancy. The one cent sales tax, just on room rentals, would be $86,724 a year at 60% occupancy. The half-cent sales tax would be about $43,362 at 60% 0ccupancy.
“In this case, downtown,” said Lee. “There was a lot of development historically. A lot of it was torn down. We have a lot of vacant lots, unproductive lots. We try to leverage public funds to stimulate private investment in those CRAs. TIF (Tax Increment Financing), the money that’s collected, you freeze the first year of the CRA, everything that was collected prior goes to the taxing authority. Everything that’s collected after that goes into the CRA Trust fund. The CRA generates money, and it increases year over year.”
The money in the CRA Trust Fund is then used for financing projects incentives. A municipality will start out smaller because there’s far less money, starting out with something like a facade grant. Most of the buildings in Ocala’s downtown CRA have had some type of facade grant or interior grant, second floor enhancement grants, retail enhancement grants, said Lee.
The highest taxable values per acre in the city and Marion County are in downtown Ocala, said Lee.
“It’s the most productive area in either one of the entities,” said Lee. “The most productive use is multi-story mixed use buildings in our downtown. The most productive building per acre downtown is the Marion Block Building, where Harry’s is, $16.7 million per acre. This investment is larger than that on a per acre basis.”
Putting a Price on the Future
Downtown Ocala represents the most valuable opportunity the City of Ocala has in the city or county for revitalization and growth, especially economic growth through really targeted infield projects on these blocks that are either parking lots or are still grass for buildings that have gone beyond their practical use, said Lee. The City of Ocala has to make some of these public realm improvements to attract development into these urban blocks.
“We can’t stress enough how vital it is that we have a thriving downtown to our economic health,” said Lee. “It’s been something that we’ve continually through the decade reiterated. It’s about timing. It’s about getting to that point where we can attract this type of development. I see this as a lasting investment. It enhances the character of downtown. A lot of these developments that we hope to see in the next few years that really enhance and create a donor district for a lot of our other areas because we do produce more money per acre downtown.”