The Downtown Investment Authority board upheld a committee recommendation to terminate its term sheet with a New York City-based developer for The Ford on Bay and likely will put the riverfront property back on the market.
The board voted 7-0 on Aug. 18 to end negotiations with Spandrel Development Partners. The DIA likely will hold a vote on a new request for proposals for the Bay Street property in September or October.
The Ford on Bay is the former City Hall Annex and Duval County Courthouse site at 220 E. Bay St. and 330 E. Bay St.
DIA CEO Lori Boyer said Spandrel’s latest offer “departed enough” from its bid approved by the board in February 2020 that the city procurement department considered it a material change to the terms.
Spandrel won a competitive bid for The Ford on Bay with a two-phase proposal comprising 520 apartments and up to 74,000 square feet of retail space.
Boyer said for the Spandrel project to continue the DIA would have to renegotiate the property disposition or put it back on the market to accept bids from all interested developers.
On Aug. 6, Boyer said Spandrel wanted to reduce its capital investment and the retail space in what was a $136 million plan. Spandrel also wanted to include workforce housing instead of market-rate apartments.
Since the DIA board selected Spandrel 18 months ago, local and national developers have shown interest in building at the riverfront property, Boyer said.
“They (Spandrel) remain interested or at least indicated several weeks ago they continue to be interested in the property,” she said Aug. 18.
“I think my recommendation is … that we not do a negotiated disposition — we do have several interested parties — but that we put it back in the marketplace due to the level of interest.”
Spandrel co-founder Emanuel Neuman said Aug. 9 he was informed days earlier that the DIA would consider rebidding The Ford on Bay.
He said as Spandrel looked at “fine-tuning” its development plan, the DIA denied its request to increase the project’s Recapture Enhanced Value Grant.
Instead of a 50% tax refund over 20 years on the increased value of the property, Spandrel wanted 75%.
Neuman said he will not “close the door” on rebidding The Ford on Bay.
What’s next
Boyer said real estate firm CBRE would take 30 to 40 days premarketing the site before the board issues a 30-day notice of disposition to officially open the site for bids.
Board member Oliver Barakat said recent Downtown market data from CBRE will allow the DIA to refine the mix of residential and retail space that is needed in The Ford on Bay when the RFP is reissued.
“This site is so important,” said Barakat, who is a senior vice president at CBRE.
“It’s kind of serendipitous that it’s happened the way it’s happened.”
A workshop to develop criteria for the project is scheduled Sept. 2.
During the Retail Enhancement and Property Disposition Committee meeting Aug. 13, some of the changes to the request for proposals criteria include:
• Compliance with design standards and the Downtown view corridor requirement. The DIA would support a deviation from the view corridor requirement if the project is set back at least 100 feet from the waterfront instead of the previous 50-foot standard. The area 50 to 100 feet from the river can be used to create a plaza that would support resiliency and activation, Boyer said.
• Reduce the required Bay Street retail space from 80% to 35% and provide a scoring bonus for additional retail.
Ground-floor uses other than retail or restaurant would meet all transparency requirements. Tenant spaces such as gyms and community rooms or work-live units or offices could comprise the remainder of the frontage but bonus points will be awarded for additional retail or restaurants on Bay Street.
• Require a 10,000-square-foot restaurant on the riverfront with at least 7,500 square feet on the ground floor. The DIA wants a full-service restaurant that would provide a dining destination for boaters.
• Financial incentives from the city will be limited to a multifamily market rate Recapture Enhanced Value Grant equal to a refund of 50% of the additional property taxes generated by the development for a term of 20 years, the same terms for incentives that were in the original notice.
The Hyatt
The deal with Spandrel was designed to work around Hyatt Regency Jacksonville Riverfront parent company Westmont Hospitality Group Inc.’s first right of refusal for the former City Hall parcel at 220 E. Bay St. north of the hotel.
Westmont has no control over the 330 E. Bay St. parcel and the first phase of Spandrel’s development could have proceeded without the hotel’s approval.
Associate Editor Max Marbut contributed to this report.
