A proposed $50 million project to transform an entire city block in the urban heart of Pensacola could get the go-ahead on Thursday.

The project proposes to develop the former Pensacola News Journal property, at 101 E. Romana St., into a mixed-use project adjacent to a new downtown YMCA, with office space, retail, apartments, public open space and public parking.

The developers, Quint and Rishy Studer, bought the property in 2013 for $3.4 million through their company Daily Convo LLC.

The development includes 48,000 square feet of class A office space, 33,000 square feet of ground floor retail space and up to 300 apartments at various sizes.

“We are very excited about this project,” said Tamara Fountain, the city’s chief of operations. “This is going to give us commercial, retail, parking, housing density downtown. We are so excited to have a project of this quality with capital investment. We are so happy to support it.”

To make the project work, the Pensacola City Council will be asked to approve an Economic Development Ad Valorem Property Tax Exemption for the project. EDATEs are tax exemptions for economic development projects that allow up to 100 percent of the assessed value of real property improvements and new tangible property acquisitions for up to 10 years.

A parking structure of about 500 spaces will be constructed within the confines of the site. About half of the spaces would be allotted for residents of the building’s apartments.

The other half would be available for YMCA members, shoppers at the retail stores in the development, Saenger Theatre events and other public uses.

“Our goal is to improve the quality of life for people in Pensacola,” said Quint Studer. “When you look at research, one of the key things to get a downtown vibrant is residential housing. For us, making the pricing more affordable to a wider audience means you can create 268 apartments versus building another Aragon. You can probably do better financially building another Aragon.”

EDATE rebates

EDATEs are rated on an evaluation system that includes: industry type, amount of capital investment, number of current and proposed employees, project location and design. The Daily Convo project earned 125 out of 175 possible points on the EDATE scoring scale.

If approved, the EDATE would exempt some $214,500 in annual ad valorem taxes to the city.

Without the EDATE, the project won’t be financially feasible.

The project would cover the entire block bordered by Romana, Intendencia, Tarragona and Jefferson streets.

The 2014 taxable value of the property is $2,964,553. The tax bill on the PNJ property generated about $80,000.

The EDATE would exempt the increased assessed value of the city and county millage rates from the tax bill from 2017- 2026. That means those taxes would not be assessed on the new assessed value of the property — up to $50 million.

Property taxes for the city and county millages will continue to be paid at the rate they currently are paid.

However, the millage rates for the Escambia County School District, West Florida Regional Public Library System and the Escambia County Sheriff’s Office would be levied on the higher, post-investment appraised value.

After the EDATE expires, property taxes will be levied on all millages at the post-investment rate.

“We believe when you look at the long-term strength of the city it’s one, education, and two, safety,” Studer said of why he and his wife, Rishy, felt it was important to allow those entities to receive the benefit of the increased assessed value of the property.

The Studers donated property on the south side of Intendencia Street to the Northwest Florida YMCA, as well as a $5 million monetary gift. The Y board of directors has hired Greenhut Construction to build the new facility to replace the aging, outdated Y on North Palafox Street.

The new Y will encompass about 52,000 square feet and will include an aquatic center, a gymnasium, a wellness center, group exercise space, a KidZone, a demo kitchen, and multi-purpose rooms that can be used for a variety of programs and events.

The Y expects to triple the number of people it can serve with this new facility. This additional membership growth will help fund health, wellness, aquatic, after-school and sports programs at other outlying YMCA facilities across the Pensacola area.

Northwest Florida is served by the Downtown, Northeast, and Pullum branches of the Y.

Annually, the local Y reaches more than 12,000 children and adults in wellness, childcare, sports, camp, aquatics and community outreach programs.

Linking Seville Park to commercial core

The project will redevelop one of the last large tracts of industrial-use property in what is transforming into a more livable urban center.

“By linking the historic Seville Park core to the Historical Palafox commercial core, this development will unlock the neighborhood’s fullest potential to become a large scale sustainable district with the greatest economic and social impact,” the proposal reads.

Studer said the redevelopment plan will improve the handicapped and pedestrian accessibility of that area of the city. He also said it will remediate some soil on the property site that has environmental issues.

The plan, created by urban planners Lord Aeck Sargent, will include an open public space built around a group of mature live oak trees that now stand outside a parking lot.

The Live Oak plaza will be framed by an apartment block, the first new rental property in the downtown core in decades.

“The potential for workforce housing and expanded employment opportunities in the downtown market has already attracted a great deal of support from public officials at the city and county,” the proposal reads.

With this project, the return on investment is about 7 percent and that is if it is 90 percent occupied, Studer said. This is a project that has not been able to attract outside investors, because those folks are looking for a return on investment of 9 or 10 percent or higher, he said.

Because the cost of building here is higher due to hurricanes and a lower wage index, the interest by outside investors was limited, Studer said.

The idea that local investment needs to stand in to significantly improve a city, fits into research done on what makes cities vibrant, especially research by Gallup, Studer said.

“Any money we make on any of our downtown projects, we put right back into something else or into philanthropy,” he said.

If the project happens it will fuel population growth that will help the bottom line for many downtown businesses improve, Studer said.

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