A Downtown Investment Authority committee voted 5-0 on June 25 to advance a development agreement with $114 million in city incentives for Jacksonville Jaguars owner Shad Khan’s plan to build a Four Seasons Hotel and office building and rebuild the marina on the riverfront Shipyards property.
The deal now will be considered by the DIA board before the authority can send it to the Mayor’s Budget Review Committee and then to City Council.
Khan’s development company, Iguana Investments Florida LLC, agreed to a minimum $301,057,548 private investment.
The largest taxpayer contributions in the proposed incentives package are a 20-year, 75% Recapture Enhanced Value Grant up to $47,683,955; a $25,834,887 project completion grant; and transfer of a 4.77-acre portion of the Kids Kampus park parcel appraised by the DIA at $12,466,772.
The remaining $28 million includes $7.526 million to relocate the Kids Kampus park; $4.89 million for a city-owned marina services building that Iguana will provide; $7.18 million to rebuild docks; and other easements and marina facility relocation expenses.
After the vote, Jaguars President Mark Lamping praised the DIA staff report and analysis.
“A grueling process and a very thorough review. I think it’s made it easier for the board to really get their hands around what can be a complicated real estate transaction,” Lamping said.
“We’re obviously pleased. We cleared this hurdle but there are still more to go.”
Several Council members criticized the Jaguars, former development partner The Cordish Companies and Mayor Lenny Curry’s administration in January for not putting Khan’s previous development proposal — the $450 million Lot J entertainment complex — through the DIA negotiation process.
At the Shipyards, Khan wants to build a 176-room Four Seasons hotel with 25 for-sale luxury condominiums, a full-service spa, a restaurant and meeting space on the former Kids Kampus and Shipyards site southwest of TIAA Bank Field.
The proposed 157,027-square-foot, six-story Class-A office building will comprise 22,307 square feet of ground-floor retail space with a coffee shop and amenity area, the term sheet states.
The agreement says the hotel will have 39,100 square feet of retail and restaurant space as well as 10,600 square feet of meeting space.
There will be 259 parking spaces in a garage under the hotel, according to Lamping.
The term sheet allows the Jaguars the right of first offer on an option parcel west of the office building where Khan wants to build a 42,000-square-foot sports medicine campus to be operated by Baptist Health.
That phase also could include 15,000 square feet of street-level retail, a more than 200-space parking structure and a residential component, according to Lamping.
Khan pledges to donate $4 million over 20 years for the maintenance of the adjacent Metropolitan Park, and a 2% hotel room fee will provide additional revenue for the public park.
The deal is contingent on the DIA and city negotiating with the Florida Department of Environmental Protection to release its 35-year-old hold on the Kids Kampus property in exchange for a 10-acre park further west of the vacant Shipyards property.
The land is encumbered as part of a $1.5 million state grant the city received in 1985 intended to pay for marina work on the St. Johns River. The term sheet gives Iguana and Khan the option to reimburse the state for the Kids Kampus grant. The payoff now is $21 million.
DIA CEO Lori Boyer said the grant payoff compounded over time under the terms of the 1985 agreement.
However, she said she is confident the city can negotiate a lower payoff with the state.
According to the agreement approved June 25, the hotel must be a Four Seasons during the terms of the REV grant.
Khan and the Jaguars could change the hotel to another flag but that will be subject to DIA board approval “to ensure that the hotel continues to be operated by a luxury brand,” the deal states.
If the DIA doesn’t approve it, the owner can change the brand but would lose the right to collect any future REV payments.
Since the Shipyards term sheet was released last week, the DIA increased its estimated taxpayer return on investment. Boyer and DIA Director of Downtown Real Estate Development Steve Kelley said the project would collect $684,695 more in property taxes than previously calculated.
That pushes the ROI from a $1 return for every $1 of taxpayer investment to a $1.01 return for every $1, Kelley said.
The DIA resolution approved June 25 includes a mandatory 30-day notice of disposition on the city-owned property. The board’s approval of the deal is contingent on the city receiving no additional bids for the property.
The deal will head to the DIA board July 7 where it is likely to be approved and then moved to the Mayor’s Budget Review Committee and then to Council.
DIA committee Chair Carol Worsham and members David Ward, Oliver Barakat, Craig Gibbs and Jim Citrano voted yes at the meeting. Board member Ron Moody said via Zoom he will support the deal in July.
