A Tampa-based real estate firm with student housing properties in CollegeTown wants to purchase two blocks of city-owned, downtown real estate previously proposed for a luxury hotel that never happened.
In 2024, the city was forced to pivot and put the 2.41-acre Chevron and 2.68-acre Johns parcels back on the market after an $8-million deal to build Hotel Valencia flopped.
The developer, Valencia Development Corp., allowed an extension within the Purchase Sale Agreement to expire, making it no longer valid.
The parcels hit the market last year and drew six offers ranging from $5 to $11 million, along with a “unrealistic outlier” bid of $25 million, city documents said. The 908 Group’s bid was deemed the top and recommended offer coming in at $11 million.
The company has built several student housing projects in Tallahassee, including The Nine at Tallahassee on West Pensacola Street, and The Hall on West Gaines Street at The Tribe on Madison and Gaines streets.
According to its company profile, it’s “delivered over $1.25 billion in purpose-built student housing consisting of 21 projects and 10,000-plus beds.”
What does 908 Group want to build on Chevron, Johns blocks?
The city hired Tallahassee-based TLG Real Estate Services to help facilitate the sale and Request For Proposal process that was reinstated last year. A request for comment is pending with the firm.
Compared to the 225-room Hotel Valencia, the 908 Group is proposing a down-sized hotel development with 144 rooms on the east block and a 239-unit apartment building on the west block.
The company wants to start construction by second quarter 2027 and finish by the fall of 2029, if the city sells the parcels in its favor. The apartment building is projected to cost $125 million, and the hotel would be approximately $45 million.
“The 908 Group and its hotel development partner, Mountain Shore Properties, are well-known entities along the W. Gaines Street corridor, with multiple mixed-use and hotel projects completed and under construction,” city documents said.
Since 2017, the 908 Group has backed 11 residential projects in Tallahassee and made a total investment of more than $550 million, city documents said.
It also built and sold the 120-room Hyatt House Tallahassee Capital and the 124-room Hampton Inn and Suites, both on Railroad Avenue.
The possible sale continues a recent trend of the city selling off long-held public assets and property.
On the same day the hotel proposal comes before the City Commission, elected leaders will take a final vote on effectively selling Tallahassee Memorial HealthCare to Florida State University – the culmination of a controversial process that supporters say will improve patient access to specialists.
Late last year, the city also sold the Capital City Country Club land back to the club for $1.255 million dollars. Going as far back as the 1950s, the city had leased the land to the club through a 99-year, $1-a-year deal.
Contact Economic Development Reporter TaMaryn Waters at tlwaters@tallahassee.com and follow @TaMarynWaters on X.
This article originally appeared on Tallahassee Democrat: City moves to sell prime downtown land to developer. Here’s the plan.
Reporting by TaMaryn Waters, Tallahassee Democrat / Tallahassee Democrat
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