GRU Amends Policy for UF and Developers

Some see change as favoritism. Others see it as modernizing to aid development.

GRU is helping bring University Avenue, stretching from South Main Street to the 13th Street intersection, into the 21st Century with a major policy change in the way it finances sewer and water lines.

The change allows the University of Florida and its affiliates (along with other “creditworthy” developers) to pay for new sewer and water mains over time—rather than at once, as has been the policy for all new developments. Allowing developers to pay for major sewer and water line upgrades over time, which could cost as much as $7 million, is something that’s never been available to developers of new subdivisions and shopping centers.

Whether this is good news or bad news depends upon who you ask.

It’s wonderful, in the opinion of John Fleming, a partner in Trimark Properties, a major landowner in the area that’s working closely with UF on Innovation Square. “I’m impressed with GRU’s willingness to not only review current policies and procedures but also make necessary changes that will allow future, high-quality redevelopment,” Fleming says.

Ed Braddy sees things differently. He says the city commission, which approved the new policy in December, is picking favorites by favoring central city development over development farther out. “Why don’t they extend the policy to other new development?” asks Braddy, who’s a former city commissioner and the director of the American Dream Coalition, a nationwide organization that fights what it sees as overreaching local government.

City Commissioner Thomas Hawkins says the new policy levels the playing field for redevelopment of Gainesville’s core. The city has favored “suburban” development until now, he says, by paying developers to install oversize sewer and water mains to pave the way for anticipated development. “The city assumes the risk for the oversizing,” he says.

Replacing Old with New

Hawkins says GRU needs to treat Innovation Square and the areas surrounding it differently than it treats “green” undeveloped land. “It’s hard to develop in the old part of the city because we’re replacing infrastructure that’s more than 100 years old.”

Through the new policy, GRU is paying upfront for the high costs of designing for the removal of old, undersized utility lines and installing large replacements, Hawkins says.

“In addition to the high level of design detail, closing down streets during construction is costly,” he says. “There are a lot of obstacles to redevelopment.”

Details of the Work

The new sewer and water lines are needed to increase building densities from an average of five units per acre to as much as 100 units per acre.

“We want to get in front of the curve in helping prepare the area for the development that’s planned,” says David Richardson, GRU’s assistant general manager for water and wastewater systems.

What’s coming is the build-out of Innovation Square and surrounding areas, which could total several million square feet of construction, along with the eventual development of University Corners, a long-delayed mixed-use planned development on the northwest corner of 13th and University.

Also benefiting will be development along South Main Street below Depot Avenue and the revitalization of the Porters neighborhood.

Richardson says that allowing developers to make time payments is important because the high-density planned development will be built over decades, unlike new subdivisions and shopping centers, which generally are built out rapidly.

“We need to oversize the sewer and water lines to meet future demand, but we’re going to receive payment for them as development occurs,” Richardson says.

GRU is still developing details of the new policy, including the repayment period, Richardson says. “In the end, this won’t cost existing ratepayers anything, and growth will continue to pay its way.”

Spurring Economic Development

Innovation Square and development north and south of it have great potential for economic development, potentially exceeding $1 billion in construction costs, Richardson says. The policy benefits more than UF and Shands. Beneficiaries include private businesses that will lease property for projects in the 40-acre Innovation Square, he says.

Also benefiting will be other property extending along 13th Street.

Trimark is leasing some UF/Shands property for projects including an office and laboratory building and a dormitory for entrepreneurial students. Trimark also owns considerable land in the area.

“GRU has recognized the need to modernize policies and procedures to reflect the needs of urban redevelopment,” says Fleming, the Trimark partner.

The new infrastructure is an important building block for Innovation Square, says Nick Banks, managing director of Front Street Commercial Real Estate Group.

“Innovation Square is the most exciting opportunity for job growth I’ve seen in Alachua County,” Banks says. “It’s the first time I’ve seen UF, the city and business leaders get on the same page to create office, retail and residential space that will bring real jobs.”

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