A City Council committee voted 7-0 on Oct. 4 to support a $114 million taxpayer incentives deal for Jacksonville Jaguars owner Shad Khan to build a Four Seasons Hotel and Residences-anchored development on the Downtown riverfront near TIAA Bank Field.
It is the first of three Council committee votes on the deal.
The Neighborhoods, Community Services, Public Health and Safety Committee voted to advance public financing for developer Iguana Investments Florida LLC’s estimated $321 million plan to develop the city-owned former Kids Kampus Park.
The committee added 16 amendments to Ordinance 2021-0673, including a change that allows the city a financial clawback for the Four Seasons parcel’s land value should Khan’s company sell or transfer the controlling interest of the hotel within five years of it being completed.
The legislation heads to the Council Finance and Rules committee Oct. 5 for two more votes.
If approved, the full Council could make a final decision on the incentives package at its Oct. 12 meeting. After the Neighborhoods committee vote, Jaguars President Mark Lamping said the size of the tax dollar investment will be a policy decision for Council members, but he said the unanimous committee vote makes Iguana optimistic.
“There’s still time left on the clock. The game isn’t over yet,” Lamping said.
“I’m optimistic that the process we went through is very thorough. We had great feedback from the community as we started on this journey.”
The legislation commits Khan to a minimum $301,057,548 development. Iguana says the project will comprise a 176-room Four Seasons with 25 for-sale luxury condominiums, a full-service spa and restaurant and a 157,027-square-foot, six-story, Class A office building.
The bulk of the city incentives package would comprise a 20-year, 75% Recapture Enhanced Value Grant up to $47,683,955 for the hotel and a $25,834,887 project completion grant.
The deal also gives Iguana the option to build a support building and with a ship store and restaurant for the Metropolitan Park marina, events lawn and Northbank Riverwalk improvements.
The estimated $17.273 million in construction costs would be funded by the city with Iguana responsible for cost overruns.
The DIA estimated in its term sheet it will cost the city $8.72 million to relocate the Marine Fire Station, dock and historic Fire Museum on the property.
The remaining $2 million comes from easements granted to the developer and projected loss of land value from leasing the office building parcel.
The city will retain ownership of the 1.05-acre office parcel and lease it to Iguana for $36,000 per year for 40 years.
The DIA board voted in July to recommend Council approve the agreement with the Jaguars’ affiliate.
“It’s a very big, very complex project but I think it’s going to really change that part of Downtown Jacksonville for generations to come,” Lamping said.
Council member Ron Salem worked with the Council Auditor’s Office to add financial protections for the 4.77 acres of Kids Kampus property the city would sell to Iguana for $100.
The land is appraised at $12.45 million.
Jaguars attorney Paul Harden told the committee that Khan agreed to the amendment because there is no intent to sell the Four Seasons during that five-year clawback period, which Harden noted falls within the NFL team’s remaining stadium lease that expires in 2030.
Salem said without language in the agreement dealing with future stadium lease extensions, the amendment “increases the stickiness between Iguana, the Jaguars and the city of Jacksonville.”
The Council Auditor’s Office and DIA split on what the overall financial benefit the deal will be for the city.
In its report, the Council auditor estimates the tax dollars invested will net slight loss for the city — a 99 cents return for every $1 spent.
This differs from the DIA’s analysis which calculated a $1.01 return for every $1 invested.
According to the auditor’s report, the difference is that the DIA used the 176 hotel rooms Iguana intends to build when calculating how much money the city will collect from the room surcharge while the auditor uses the 170-room minimum the deal requires.
Park progress
DIA CEO Lori Boyer said the city and Florida Department of Environmental Protection are “working together very well” to resolve a restriction on the Kids Kampus land from a 36-year-old, $1.5 million grant.
The city has to reach an agreement with the state on a park replacement plan before Iguana can break ground and build at Kid Kampus.
The grant intended to preserve the property and nearby submerged land for access to the St. Johns River.
“They’ve asked us to prepare the form of release and the form of dedication for the new park,” Boyer said.
“Of course, they won’t take a position until the legislation passes because they want to be sure the legislation has passed.”
Boyer said the state could make a decision on the city park replacement within two months of the Council passing the bill.
“I would not anticipate that it would drag out,” Boyer said.
DIA documents show Iguana expects to close on the Kids Kampus land between January and April. The deal can be terminated if the grant issue is not resolved.
Iguana could choose to pay off the grant debt, which state officials told DIA has compounded over time to $21 million.
The Jessie Ball duPont Fund is creating a Downtown riverfront parks master plan that includes using 10.3 acres on the adjacent Shipyards west of Hogans Creek as a replacement for the Kids Kampus.
Timeline
Depending on bill’s fate next week, Lamping said Iguana will start the project in the first quarter of 2022.
The agreement with the city says the developer construction of the hotel and office building has to start no later than June 1, and the project must be complete by Dec. 31, 2025.
The project also needs design approval from the Downtown Development Review Board and will require city permit approvals.
Boyer said she expects a faster turnaround and the hotel could be up within 2 to 2½ years.
“Barring some undiscovered soil condition or something else, I know that the developer wants to move as quickly as possible,” she said.
