Mayor D.C. Reeves said last week that he does not support, in its current form, a developer’s request for up to roughly $58 million in tax rebates tied to a proposed hotel-and-housing project at Pensacola’s Community Maritime Park.
The comments were Reeves’ clearest public position yet on the incentive request, which emerged last week as one of the most consequential redevelopment decisions now facing the city.
“I don’t support it in its current form,” Reeves said during his weekly press conference.
The request is tied to a roughly $250 million proposal for Lot 5, a waterfront parcel across from Blue Wahoos Stadium. Developers want to build a mixed-use project that includes a REVERB by Hard Rock hotel, rental apartments and for-sale condominiums. In an application filed with the city’s Community Redevelopment Agency, or CRA, the development team is seeking what could amount to nearly $60 million in tax rebates over 20 years. The incentive would be provided through an Area Reinvestment Agreement, a tool the CRA can use to return a portion of new property tax revenue generated by a project if officials determine it provides enough public benefit and would not move forward in the same form without assistance.
Reeves said his objection is not to the project itself, nor to redevelopment incentives in general, but to the scale of the request relative to what taxpayers would receive in return.
“I just need more information to understand a 58 million dollar potential request and what the public gets in return,” he said.
He returned repeatedly to that point, arguing that any subsidy of that size must be grounded in a clear public benefit.
“We just have to be able to say for this amount of money this is what you get,” Reeves said. “The math has to math to us.”
In applying for the rebate, developers argued the incentive was necessary to make the project feasible.
“Without the full 20-year ARA TIF Rebate, the Project as proposed is not financeable,” they wrote in the application. They cited several pressures, including construction financing, structured parking and environmental requirements tied to the property’s history as a former industrial site. They also said lender term sheets were contingent upon approval of the requested incentive.
At last week’s press conference, Reeves said he understood those challenges and did not fault the developers for seeking assistance.
“I have no issue with any type of request of this form,” he said, later adding that he understood “the complexity of a development of this size” and “all of the volatility and risk that it takes to take on a project of this size.”
Still, he said, the city has to evaluate more than the rebate request in isolation. Reeves pointed to the possibility of added public costs associated with a large project, including infrastructure and public-safety needs that would not necessarily appear in the subsidy calculation.
“That doesn’t take into consideration what the taxpayer is going to have to pay for,” he said.
As one example, Reeves said a building of that scale could require substantial fire-protection investment from the city. He said that kind of downstream cost should be part of the conversation when officials weigh whether to rebate future tax revenue.
He also questioned whether the city’s current incentive framework fully reflects changes in state housing policy. Part of the project relies on Florida’s Live Local Act, a state law that provides tax benefits for certain affordable and workforce housing developments. Reeves said that, when combined with the city’s ARA structure, the result may be overlap.
“That’s now potentially has a duplicative tax break in scenarios like this,” he said.
More broadly, Reeves said he has long been uneasy with the rigidity of the ARA model itself.
“I’m not a huge proponent of the ARA as a whole,” he said. “I just think it’s too rigid to say, this would work and would convey on every project.”
Even so, Reeves stopped well short of rejecting either the project or the possibility of some public incentive. He said his position could change if the city receives better information, revised terms or a clearer demonstration of public benefit.
“My door is always open,” Reeves said. “... We’re happy to entertain anything.”
He also said the administration was not involved early in structuring the current request, suggesting that earlier collaboration might have clarified expectations sooner.
“We were not part of the engineering of this request,” Reeves said. “We received the request in late February, we sent it to our outside analysts and here we are.”
That outside analysis is still underway. Under the city’s redevelopment policy, requests of this kind are supposed to undergo an independent financial review before any agreement is approved. City officials said last week that no final recommendation had yet been made.
Reeves also stressed that the final decision does not belong to him alone. The CRA board, made up of the same elected officials who serve on Pensacola’s City Council but acting in a separate legal role, will ultimately decide whether to approve any agreement.
“There is no legal requirement nor ARA requirement that this have the approval of the mayor of the city of Pensacola,” Reeves said. “Ultimately this is a financial decision that rests with the CRA.”
He added: “They don’t need my support if they have the votes.”
