The Ocala City Council is scheduled to review and vote on a nearly $2.9 million incentive package for the revitalization of the historic Hotel Marion property in downtown Ocala this week.
The redevelopment agreement between the city and Marion Opportunity Zone Investment I, LLC, will be presented during the Council’s regular meeting on Tuesday, December 2, at 4 p.m. at Ocala City Hall.
The total proposed incentive package remains capped at approximately $2,896,670, representing 10 percent of the required development costs. The developer is required to invest a minimum of $28,966,695 in the project, which covers acquisition, construction, furnishing, and soft costs.
The incentive package includes:
- A CRA grant of $650,000, disbursed over five years.
- The donation of Parking Lot 6, valued at $1,254,000.
- Waiver of applicable building permits and impact fees, with a reimbursement of $79,460 to the developer.
- Tax Increment Financing (TIF) payments representing 100 percent of the realized tax increment for the duration of the Downtown CRA.
According to a memo, city staff collaborated with the developer to address the previous concerns regarding the donation of Lot 6 (1.15-acre paved facility). Amendments were made to the right of reverter clause, which governs the city’s ability to regain the property.
The revised clause removes language pertaining to the construction requirements of a parking garage, extends the reverter timeframe to a maximum of six years, and requires a new appraisal and an adjusted purchase price if the reverter is exercised in year five or year six.
City staff found that Lot 6 currently does not generate tax revenue, while a similar parking area generates an estimated $15,800 annually. Accordingly, the city anticipates that conveying Lot 6 will increase the site’s taxable value and support the hotel’s success.
The 46,775-square-foot Hotel Marion is located at 108 N Magnolia Avenue. The property is owned by Marion Opportunity Zone Investment I, LLC, a company registered to David Midgett.
The property owner has partnered with ARK Hospitality to create a 59-room boutique hotel under Hilton’s Tapestry Collection brand. The historic seven-story structure was constructed in 1927 and is listed on the National Register of Historic Places. The project is being developed by Collage Design and Construction Group, which is based in Lake Mary, Florida. The architect on record is Donahue Architecture.
City staff assert the project aligns with the Downtown CRA Plan by transforming the underutilized property into a full-service boutique hotel, which is expected to increase pedestrian activity, vibrancy, and the overall taxable value within the Downtown CRA. The project is expected to increase the property’s taxable value from $1.6 million to approximately $8.76 million upon completion.
Staff estimates the discounted payback period for the entire city investment is approximately five years.
What are your thoughts on the proposed incentives package for the project, or the new hotel in general? Share them in a comment below or, if you have more to say on the topic, write a letter to the editor.