The partnership pushing to redevelop the historic Laura Street Trio and Barnett Bank building has been asking for $8 million in grants from the city to make that happen.
That’s not all they want.
The developers actually are asking for two more financial components that could cost the city millions more. The additional money was first discussed at a Downtown Investment Authority workshop Friday.
SouthEast Group and The Molasky Group of Cos. are requesting 300 parking spaces within a new parking structure and a Recapture Enhanced Value grant. Neither was part of pitch made about the $8 million in taxpayer funds needed to start the project.
The parking structure and who would be responsible for building and owning it will be part of the next wave of discussions on the project.
SouthEast principal Steve Atkins said he prefers to build a structure at 28 W. Forsyth St. The city-owned surface lot there has an assessed value of $940,000, according to the Duval County Property Appraiser’s website.
Atkins said a proposal he’s preparing to provide the DIA would be for a design-build done entirely by his team that would cost $12.5 million to $15 million. It would include 600-700 spots and have ground-level retail. Revenue sharing is a possibility, Atkins said.
A deal structured that way would require the city to give the site to the developer.
The developers also want an incentive commonly offered to new construction projects. REV grants allow developers to recoup a portion of the incremental increase in value on the property.
The grant being discussed for the Laura Street Trio/Barnett Bank project would cover 75 percent of the increased value over 20 years. A waiver by City Council is required because it goes above the 50 percent, 10-year mark.
The grant would come to about $2.6 million, according to project documents.
The new information pushes the public-side investment higher than the $8 million initially pitched, but the total for the three components isn’t yet finalized.
“It’s a big number,” said Bailey, who is publisher of the Daily Record.
The workshop served as an informational session for members to become better acquainted with the latest pitch for the long-discussed project. With the financial backing of Las Vegas-based Molasky and the tenant agreements in place, there seemed to be a newfound sense of optimism for the future of the historic structures.
DIA CEO Aundra Wallace said this proposal had tenant and financial capacity to warrant discussions about moving forward.
City Council member Lori Boyer heard the first part of the discussion and said it seemed “substantially more filled out” than previous proposals.
“It really seems at this point it’s finally ready to take off and be evaluated,” she said.
Board member Oliver Barakat said he was excited about the design, tenants and concept.
Still, he and board members wanted to know more.
• On what “wiggle room” Molasky might have to walk away from the partnership, a company official said that would only happen should the city not commit to its side of the deal.
• Board members also wanted more information about what’s happening within the courts. There is litigation over the properties between Atkins’ Barnett Tower group and Jacksonville Jaguars owner Shad Khan’s Stache Investments. Khan provided more than $3.1 million to the group to purchase the buildings in 2013 and foreclosed this year after no payments had been made.
Atkins’ attorney, Wyman Duggan of Rogers Towers, told board members a settlement offer above the $3.1 million has been offered. Atkins after the workshop declined to say how much or what the status was of the settlement.
• A board member’s question on who covered cost overruns wasn’t answered directly. Instead, Atkins said it was expected the side “with the deepest pockets” could handle the overruns. The deepest pockets belong to Molasky.
• Historic renovation projects often exceed their budgets and timelines, said board member Jack Meeks, but Atkins said such overruns have been incorporated into the $77 million budget. How much wasn’t indicated in the financials provided to DIA.
Documents provided to board members also gleaned a little more information about how the project is financially being structured.
Of the $77 million, SouthEast and Molasky would put up $9.9 million. Another $47 million would come from senior debt. Federal Historic Tax credits contribute $9.5 million and the public grants would be $8 million.
More than $2 million would come from tenants, including $1.4 million from JPMorgan Chase. The international financial services company would be the anchor tenant of the Barnett Bank building and open its local flagship branch with 30 to 40 employees.
The banking giant has purchased naming rights and rooftop signage for the 18-story building, according to project documents.
The next step has to come from the private side. Bailey requested the parking proposals be delivered to board members, which Atkins said he would do in the next week.
The DIA would need funding help even if it signed off on the project. The authority’s historic preservation trust fund has about $4 million in it, meaning another source would need to be found.
Ultimately, the project will end up in the hands of council, Wallace said.
For now, though, it needs more time for review at the DIA level.
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