DUNEDIN — Six years after it appeared a bad economy might doom the project, city commissioners have approved the Gateway, a $15 million retail and housing development that will anchor the east end of Dunedin's popular Main Street.
The three-story complex will have 124 apartments and 24,500 square feet of retail and restaurant space on the ground floor. It will sit at the junction of Main Street and Milwaukee Avenue on just over four acres owned by the city.
Construction will begin by August 2014 and finish in a year.
A consultant's analysis predicts the project will create 82 temporary jobs during construction and 120 permanent jobs.
City officials praised the developer, Pizzuti Builders Inc., for not abandoning the project during tough times and for its flexibility in modifying the plan to suit a changing market. The Gateway was originally envisioned as an office and retail complex.
Pizzuti also had faced residents' objections over traffic and parking. No one objected Thursday night when the City Commission approved the project through four separate votes.
Commissioners unanimously approved the project's architectural design, though it does not meet a requirement for a 10-foot step-back above the second floor, a standard instituted to avoid flat-faced buildings. City staff said the Gateway design employs other techniques, such as varied roof lines. The city intends to modify the requirement.
The commission also unanimously approved the development agreement between the city and Pizzuti, and a ground lease and purchase option. Pizzuti will lease the land for up to 25 years, with lease payments applied toward the purchase price of $998,000. Pizzuti also will pay the city 2.5 percent of the annual net operating income produced by the project.
Mayor Dave Eggers voted no on Pizzuti's plan to satisfy the city's requirement that builders donate parkland. Pizzuti could not provide the required 1.488 acres so is donating 0.619 acre and paying a $451,292 fee. Eggers argued that the requirement is too tough.
"We really want to keep charming, quaint development in downtown," he said, "and these kind of monetary pressures put pressures on the developers to make more intense development, and that's not what we want."
Pizzuti will receive more than $420,000 in incentives for constructing the project.
In other action Thursday, the commission narrowly approved the 2014 city budget and a property tax rate increase, but not before some spirited discussion.
Eggers and Vice Mayor Julie Ward Bujalski voted against the tax hike and the budget, though both acknowledged they support projects funded by the budget, and both voted for a 2 percent merit raise for city staff.
The proposed rate is 3.7345 mills, up from 3.3817 this year. A resident who paid $338 this year would pay $373 next year.
Bujalski said she has more questions than answers about how the budget was developed. She argued for waiting a year on the tax hike and using the year to develop a long-term strategy.
Eggers said the budget process this year was affected by bringing a new finance director onboard and a late audit. He suggested "pausing" on the tax hike and rethinking the budget process and spending decisions.
Commissioner Ron Barnette took their comments personally.
"I like for us to scrap a little up here, but the intimation that we've reached conclusions based on a lack of analytical judgment is not true," he said.
Barnette and Commissioners Julie Scales and Heather Gracy voted for the budget and increase. A second public hearing will be held Sept. 26.
Diane Steinle can be reached at (727) 445-4152.