Mayor Lenny Curry’s administration wants City Council to authorize borrowing $208.3 million of the city’s $218 million proposed investment in the Jacksonville Jaguars Lot J project.
Lot J is a $445 million proposed mixed-use development of offices, apartments, a hotel, retail and entertainment venues west of TIAA Bank Field Downtown.
The project is a joint venture of the city, Jacksonville Jaguars affiliate Gecko Investments and The Cordish Companies of Baltimore.
A draft version of Ordinance 2020-648 from Council President Tommy Hazouri’s Office would allow Curry’s staff to use fixed-rate debt and the city’s commercial paper program — a short-term liquidity loan option — to finance the city’s share.
Hazouri plans to introduce the bill at the Council’s Oct. 13 meeting.
City spending breakdown
The bill offers a more detailed breakdown of the Lot J deal Curry announced Oct. 5 and what the Council will be asked to consider.
If approved, the city debt will pay $50 million of the proposed $100 million Live! District entertainment venue that will be owned by the city. The bill says the Live! District will have 75,000 square feet of restaurant and retail space and 40,000 square feet of Class A office space.
The city would pay for $77.4 million in site infrastructure improvements including a 700-space surface parking lot built over an existing stormwater retention pond to the west of Lot J. It also would build parking garages totaling 700 spaces.
The city would be responsible for up to $15.1 million in cost overruns for the publicly owned portions of the Lot J project. That expense is factored into the debt financing in the bill.
The developer would pay for all other project cost overruns. Cost overruns could bring the total city investment to $233.1 million.
The legislation offers a 20-year, 75% market rate Recapture Enhanced Value Grant up to $12.5 million on two planned mid-rise residential buildings totaling 400 units.
The developer will not receive the final $12.5 million until construction is finished on Lot J’s proposed 150- to 250-room hotel. The completion grant is payable in installments over a five-year period, according to the legislation.
Jaguars President Mark Lamping said in an Oct. 7 email that he expects site work to begin in the first half of 2021, if the bill passes. He expects construction to take 36 months.
The term sheet released Oct. 5 states Lot J construction will finish within 48 months of vertical construction commencing. There are exceptions for “events and circumstances outside of the developer’s control,” including another pandemic, changing sea levels and climate change.
The deal allows for delaying construction of the hotel by up to 24 months if market conditions are not favorable.
If the developer asks for a schedule extension greater than one year, the bill requires a Council vote.
Cordish and the Jaguars will make a joint $226.8 million private investment in Lot J, according to a term sheet.
Curry and the Jaguars said Lot J would create 2,300 construction jobs and 1,000 permanent jobs.
Development loan
Public debt will be used to pay for a $65.5 million, no-interest loan to the developer promised in the incentive package.
However, the cost of the debt on the 50-year loan term will be offset by a $13.1 million trust owned by the city that will be funded by the Jaguars.
City spokesperson Nikki Kimbleton said in an email Oct. 6 that the loan would be repaid through earnings on that trust that the city cannot touch until the account reaches $65.5 million or after 50 years.
An economic development agreement that all parties will sign and dictates the parking terms and Live! District lease terms was not provided with the draft agreement.
Leases and the land
The legislation includes a 35-year lease for the Jaguars to use and operate the city-owned Live! District with four, 10-year extension options.
Parking at Lot J would be owned by the city but operated by the Jaguars or an affiliate. Details on rates and costs are not included in the bill.
The Lot J parcel’s value is not included in the city’s minimum $218 million investment, although the city would give the Jaguars the 9.24-acre site at 1406 Gator Bowl Blvd. at no cost if the bill is approved.
According to the Duval County Property Appraiser website, the land’s assessed value is $3.66 million. The value of the property will increase as it is developed.
Hazouri issued a memorandum Oct. 8 outlining the procedure and timeline for review of the proposed agreement.
After the bill is introduced Oct. 13, there will be a public hearing at the Oct. 27 Council meeting. The legislation will be heard by the Council Committee of the Whole the following week, tentatively scheduled Nov. 5.
Hazouri said a final vote could take place at the Nov. 10 council meeting unless the Council wants a further debate.
Gecko and Cordish are developing Lot J as Jacksonville I-C Parcel One Holding Company LLC.
