A City Council committee is exploring whether Council can negotiate directly with the developer of the proposed Laura Street Trio redevelopment project on an agreement to bring the long-dormant property back to life.
During its Aug. 12 meeting, the Special Committee on the Future of Downtown asked for legal guidance on whether it could hire an independent attorney and negotiate with the developer, Steve Atkins and the SouthEast Development Group, on an incentives package to redevelop the group of historic buildings at Laura and Forsyth streets in the heart of Downtown.
Incentive requests for projects like the Trio normally go through the Downtown Investment Authority, where staff negotiates terms and the DIA board makes recommendations to Council on whether to approve the incentives. But talks between the DIA and Southeast have been dead since June 28, when the DIA board voted unanimously in favor of a resolution to end negotiations with SouthEast.
At the special committee meeting, Atkins and the DIA disputed which side was responsible for the fallout. Atkins lobbyist Jordan Elsbury accused the DIA of negotiating in bad faith, while DIA CEO Lori Boyer said Atkins presented a final offer that the board rejected on grounds that it put Jacksonville taxpayers at too much risk.
“I think it’s pretty clear from the developer that they don’t want to deal with the DIA process anymore,” committee chair Kevin Carrico said after the meeting. “So in an attempt to keep things moving, I’m going to figure out whatever avenue we have legally to try to take over and find something that we can put forth for legislation for the full Council to decide. So OGC (Office of General Counsel) is going to figure out whether I can do that as an individual, whether it can be done as a committee, or by the Council as a whole.”
Atkins' latest plan
Atkins, the owner of the Trio property since 2013, has proposed repurposing it as a hotel, apartments, restaurant and bar. His latest proposal includes a total of $85.77 million in city incentives comprising $18.3 million in loans and $67.47 million in development grants. The total development cost is $188.67 million.
Atkins included additional equity in his latest proposal to address city staff concerns, and Council member Matt Carlucci offered a structure that would further protect taxpayers by having the city directly administer its pay-as-you-go funds versus placing them in escrow with a private financial institution.
SouthEast says its proposal is backed by a 100% completion guarantee by project contractor Turner Construction Co. of Atlanta.
Atkins received Council-approved incentives in 2017 and 2021 but did not follow through with construction either time. Since then, the DIA board has rebuffed requests from SouthEast over various concerns, including that Atkins had amassed inadequate equity and had asked the city to provide a higher-than-average percentage of total costs.
If Council takes over negotiations, a sticking point to resolve will be whether to grant incentives while work is in progress as opposed to when construction is completed.
Completion grants are standard for the DIA, but SouthEast is seeking a public-private partnership in which the city provides a pool of money from which the developer can draw during construction.
Done with the DIA
When Council member Matt Carlucci, a nonmember of the committee, asked Elsbury if Atkins would consider going back to the table with the DIA, Elsbury said, “I appreciate the sentiment, but I’m not going to ask him, nor will he go back to the DIA for further consideration. Period.”
Later, he told Carrico that SouthEast “would be happy to take direction from you, but the DIA will not be an option.”
Council member Reggie Gaffney Jr. said he was frustrated over the impasse.
“We’ve been talking about this issue for the last year or so, and now we’re back on first base,” he said. “The developer mentioned today he’s not willing to budge, so now we’ve got to look at Plan B and see how we move forward.”
The committee also learned that demolishing a portion of the buildings would not make the redevelopment cheaper. Committee members asked at their last meeting whether partial demolition would reduce the cost and make the project more financially feasible, but Elsbury said tearing down and rebuilding posed its own high costs.
Selling it back to the city
Another possibility for the Trio emerged when committee member Joe Carlucci challenged Atkins to provide an offer to sell the property to the city.
In an interview afterward, Elsbury said that if Atkins were interested, he would recommend listing the property at $85 million.
The last large property sale Downtown was Wells Fargo Center and two parking garages in April for a combined $46.35 million.
The Trio comprises the First National Bank Building, Bisbee Building and Florida Life Building. The structures were built from 1902 to 1912 and are among the last remaining unrestored buildings constructed during the years immediately following the 1901 fire that destroyed much of Downtown Jacksonville.