The Groveland City Council approved an economic agreement with Groveland Property Investments LLC March 20 for a fee permit waiver as the company proceeds with the redevelopment of two blighted motels on U.S. 27, promising at least $20 million in investments.
Groveland Property Investments, the developer, will convert 388 motel rooms into 214 apartments, including 96 studio apartments at 350 square feet, 62 one-bedroom apartments at 700 square feet and 56 two-bedroom apartments at 1,000 square feet. All will be rented at market rate.
The project is named Milestone Hills Apartments and has been on the drawing board since 2018. The apartments will be built inside the existing structures by combining rooms to create the larger units.
There will also be 6,900 square feet of retail, which will include a restaurant and bar, a gym, pool and coworking space, said Santiago Silva, one of the principals for Groveland Property Investments. He said the project will cost about $30 million.
City Council member Barbara Gaines cast the only dissenting vote after being told the project is not considered “affordable housing.”
The property is located at 20349 U.S. Highway 27. It consists of 9.8 acres. The owners acquired seven separate structures on three parcels comprising the former Jayma and Jay-Jin motels, originally built in 1971 and 1972. Two of the parcels were annexed into the city in 2019. Silva said the company paid $4 million for the land and structures.
According to a city staff report, this conversion will result in a major increase in taxable value of the property. The agreement waives $97,854 in building permit fees and pays to a third party on the owner’s behalf permit fees of $88,119 as an economic incentive. The owners will pay all Lake County impact fees. Increased ad valorem taxes are estimated at $98,000 annually. That is a payback of the fee waiver incentive within three years, according to the city staff report.
This economic incentive is considered a way to attract new businesses to the city. The total payout in incentives is not to exceed $479,472. It is also a way to remove what the city council sees as an eyesore in Groveland and to provide apartments in an area lacking in that type of housing.
“If we build this, others will come,” said City Council member Mike Radzik. He did ask that there be a stipulation that the developer get construction underway within six months.
Community Development Director Tim Maslow said the owners already had a building permit that has expired, but can be renewed quickly, and his team has approved building plans. “The developer is ready to take action and build.”
Mayor Evelyn Wilson agreed with Radzik that the project needs to begin as soon as possible. “It is a major eyesore. It just is not something we want to see left there,” she said of the blighted hotel units. “This is holding back the city.”
Silva said his company still needs to secure more equity for the project, which has proven difficult in this financial environment, due to more conservative banking practices. Still, he expects construction to begin within a few months.
In addition to requiring that construction begin within months, the city council also included a stipulation that the developer use 5 caliper trees on the project, which are larger than what the city typically requires.
Besh Halff, out of Tavares, is serving as the project engineer. Johnston’s Surveying, Inc., based in Kissimmee, is the surveyor.
The property is zoned Town Core.
Silva said his company saw this project as a great opportunity, considering all the growth in Groveland and surrounding Lake County.
“There are some big companies coming into the nearby industrial park, including some distributions centers that will be rented out, so that is going to bring in lots of workers who will need apartments.”
Have a tip about Central Florida development? Contact me at Newsroom@GrowthSpotter.com or (407) 420-6261. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.
