A proposed $50 million redevelopment project in the heart of downtown Pensacola could change the idea of urban living in one of America’s oldest cities.

The project to turn the former Pensacola News Journal building site — a former industrial location that covers an entire city block — into high-density apartments, office space, retail, public parking, a public open space right across the street from a state-of-the art YMCA doesn’t have a peer in Pensacola.

John Myslak is vice president of design and construction for The Dawson Co., the Atlanta-based company that is handling the project for Daily Convo LLC. He says the project is similar in spirit to high-density mixed-use developments in places like Nashville.

Young, urban professionals there are mainly the target demographic for apartments with smaller units, larger common areas and high-level amenities. But empty-nesters also are attracted to them.

“This is the first of its kind in Pensacola,” Myslak said. “We will set the bar for this type of product in Pensacola.”

A comparable development in Nashville, for example, has rent rates set at $2.25 per square foot, he said.

“Pensacola won’t support $2.25 per square foot for workforce housing for young urban professionals,” Myslak said. “In Nashville, that’s the rate because the wages support that.”

Based on market studies of Pensacola, Myslak says rents will be targeted at an average of $1.50 per square foot.

The average unit will be 850 square feet, with a mix of studios, one-bedroom, two-bedroom and a limited number of three-bedroom units, Myslak said.

New YMCA

Daily Convo LLC is a company owned by Quint and Rishy Studer. The Studers bought the site in 2013 for $3.4 million.

The Studers donated property on the south side of Intendencia Street to the Northwest Florida YMCA, as well as a $5 million monetary donation. The Y’s board of directors hired Greenhut Construction to do the work to replace the aging, outdated Y on North Palafox Street.

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

Plans for the old PNJ site call for turning a stand of live oak trees in the south parking lot into an open plaza.

Developers hope the project is a bridge between the residential neighborhood to the east and the commercial core of Palafox Street.

Tax exemptions

Pensacola City Council on Sept. 11 approved 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.

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. See the project’s EDATE worksheet here.

The EDATE exempts the city and county millage rates from the increased assessed value up to $50 million from 2017- 2026. That means taxes will be paid to the city and county at the existing taxable value of the property — which for 2014 was $2,964,553. That assessment generated about $80,000 annually.

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

After the EDATE expires, taxes could be assessed on the full, post-investment value.

Reaching goals

The City of Pensacola and Mayor Ashton Hayward’s office said the project hits many marks that match their goals for development in the city.

It touches everything from increasing residential density to adding parking and commercial space in the city.

Tamara Fountain, the city’s chief operations officer, noted that the owners downgraded the zoning for the site voluntarily from manufacturing and industrial uses to commercial and residential uses.

“It will never be industrial again,” Fountain said. “That’s important to us because it aligns beautifully with our goals for our downtown area.

“The other thing I thought that was important is that they were going to do environmental cleanup on the site. Those are two real plusses in my book.”

Myslak said an architectural firm has been selected and design work will begin shortly. As that aspect comes together, more details about what the units will look like and how they will be priced will be known.

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