A Downtown Investment Authority committee opted not to recommend closing the door on conversations with the developer of a project to resurrect the Laura Street Trio.
The Strategic Implementation Committee voted 5-0 on April 12 to defer a resolution aimed at ending negotiations with Steve Atkins, principal of SouthEast Development Group, on his most recent proposal to redevelop the cluster of historic buildings in the heart of Downtown Jacksonville.
Instead, the committee directed DIA staff to amend the resolution to emphasize that it applied only to the current proposal and would not preclude further negotiations with Atkins on the project. The full DIA board will consider the revised resolution at its next monthly meeting, scheduled for April 17.
City Council member Matt Carlucci, who introduced legislation last year aimed at providing city incentives to the project, urged the SIC committee not to create the perception that it is permanently ending talks with Atkins. Although the Council set an April deadline for the DIA to bring back a new package, Carlucci said the project’s historic value made it worthy of additional discussion.
“I think everybody needs to take a deep breath,” he said. “Pass the resolution if you want, but it needs to be plainly stated that the DIA hopes that the discussions that are yet to come produce a breakthrough,” he said.
In January, Council chose not to vote on Carlucci’s legislation, which included a package of incentives and a $22 million “city participation loan” that served to guarantee a 25-year construction loan Atkins had obtained from Capital One Public Funding.
Instead, Council sent the legislation back to the DIA with instructions to work on a new agreement. City administrators and Council members raised concerns about the deal, saying the city participation loan could violate a state constitutional prohibition on cities lending money for private purposes. Council also heard warnings that the loan could expose the city to upward of $265 million in debt liability and trigger a downgrading of the city’s credit rating.
After Council deflected the legislation, the DIA presented Atkins with three options. None of them contained the city participation loan.
According to the resolution, Atkins rejected them and offered a deal that included the Capital One loan with an unconditional guarantee by the city, which the Office of General Counsel said was unconstitutional.
Atkins told the committee that his attorney, former city chief general counsel Jason Gabriel, had a Florida Attorney General’s opinion stating that the loan would pass constitutional muster. He said he had requested meetings with the general counsel’s office several times but had not heard back.
He also said he was not trying to force the Capital One loan guarantee option but could discuss other structures that would address the question of constitutionality.
He said he and his attorney were planning to meet with an attorney for the city and Anna Brosche, the city’s chief financial officer, to go over his proposal.
Patrick Krechowski, a DIA board member who attended the committee meeting in a nonvoting status, said he would not support any proposal with an unconditional guarantee but did not believe the situation called for immediate action by the DIA.
“I know we need to report to the council in April. But it’s April 12th, it’s not April 30th,” he said.
Carlucci told the committee he hoped the DIA and city would “look at every avenue” to resurrect the Trio, but he raised concerns about the city using eminent domain to take the property from Atkins and offer it to another developer. Council member Jimmy Peluso raised that possibility, saying the city needs to find “serious people who want to do serious work.”
Carlucci called any action that could end in a lawsuit as a “nuclear option.”
“I’m not sure we’re ready to push a nuclear button at this point,” he said.
Atkins is seeking DIA incentives for the Trio for a third time. Two previous proposals were executed, but construction plans fizzled.
Carlucci’s legislation included $36.5 million in forgivable loans, property tax breaks and a $2 million forgivable loan in addition to the city participation loan.
It was designed to support a $171.5 million combination of restoration and new construction that would turn the cluster of buildings into a hotel, apartments and restaurant. The Trio was built from 1902-1912 at Laura, Forsyth and Adams streets. It comprises the Florida National Bank, Bisbee and Florida Life Insurance buildings.