Owners of the Berkman Plaza II structure along East Bay Street are seeking $36 million in incentives from the city ahead of a proposed $122 million redevelopment of the property.
The project is one of several the Downtown Investment Authority is scheduled to consider during its monthly board meeting at 2 p.m. Wednesday.
According to the redevelopment agreement, MVJFL LLC, developer of the 500 E. Bay St. property, wants to build a 340-room hotel, family entertainment center, water park and parking garage.
The group seeks a $20 million Recapture Enhanced Value Grant paid out over 20 years. The grant is a rebate worth 75 percent of the ad valorem taxes generated over that period.
The grant will be reduced to $15 million if the capital investment does not exceed $92 million and is not completed within 60 months after the redevelopment agreement is signed.
The property owners also want an $8.2 million Operational Performance Subsidy, a contractual payment based on the operational success of the hotel portion of the development. The annual payments would represent 5 percent of the lodging revenues over 15 years.
Upon receiving a certificate of occupancy, MVJFL LLC would receive a $3.25 million Redevelopment Completion Grant to offset costs of the hotel and family entertainment center.
There also is the issue of space.
The 500 E. Bay St. property, at 2.2 acres, likely is not large enough for the planned project.
A term sheet states the city will convey up to 3 acres from the neighboring Shipyards property for $1.635 million, or about $584,000 per acre. The per-acre price equates to 2.8 acres.
The developers also could receive $1 million to offset known or perceived environmental issues on the Shipyards land.
To ensure that the project provides public access to the Riverwalk along the Northbank, the garage would have 200 spaces reserved for short-term public parking.
That is paid for with a grant worth up to $3.5 million. However, the final amount disbursed will likely be less. The term sheet states that the grant will be “less any subsidy or reduction in price from the market value of land conveyed for the garage.”
For example, if 1 acre is used for the garage, the grant will be worth only $2.916 million and so on.
MVJFL LLC was registered with the state June 22 and based in Niles, Michigan. David L. Roos is the authorized representative.
Roos is real estate development and project manager with American Investor Immigration Funds LLC.
According to aiifunds.com, AII Funds has undertaken more than $1 billion in projects that will use more than $250 million in EB-5 investor funds. All are real estate development-oriented and include new construction and historic rehabilitation.
Projects include construction or renovation of hotels, multifamily residential properties, senior living communities, hospitals and a casino.
Atlanta-based Choate Construction Co. sold the vacant and unfinished Berkman Plaza II property to 500 East Bay LLC in July for $4.75 million
The LLC is based in Rhinelander, Wisconsin, and registered with the state Feb. 26. Robert Odhe of Daytona Beach is the registered agent according to state records.
While details of the project have not been disclosed, Odhe said previously said the entertainment portion of the project “will be like a Dave & Buster’s on steroids.”
No hotel flag or other operational details are available.
Brian Hughes, chief of staff for Mayor Lenny Curry, said in a statement that the administration will await the DIA’s evaluation of the redevelopment agreement.
“But the administration has advised DIA — as always — to ensure that the consideration include a solid economic analysis that ensures any incentives demonstrate a return on any investment of taxpayer dollars,” Hughes said.
“DIA has a strong record of working with the Curry Administration and with City Council to protect taxpayers.”
The building was designed as the second phase of high-rise residences next to The Plaza Condominium at Berkman Plaza and Marina.
In December 2007, the parking garage under construction next to the Berkman Plaza II collapsed, killing one construction worker and injuring several others. A lawsuit and other court action caused construction to stop.
Choate secured the property through a settlement in a lawsuit against the building’s original owners.
City Council member Reginald Gaffney, whose District 7 includes Downtown, said he has not met with the developers, but that he was happy to see a proposal.
“Anytime you can take a property like that and turn it into a development, that’s a good thing,” said Gaffney.
He said he did not have any details not already reported.
“I will say I support the project and I hope the DIA does, too,” he said.
The DIA meets at 2 p.m. Wednesday on the eighth floor of the Ed Ball Building at 214 N. Hogan St.