The city of Jacksonville is seeking to foreclose on the historic Laura Street Trio properties at Forsyth and Laura streets Downtown.
The city filed a complaint for foreclosure Aug. 19 in the 4th Circuit Court against property owner Laura Trio LLC.
The complaint states that Trio ownership owes the city more than $800,000 in unpaid fines for municipal code violations.
The complaint also lists Red Oak Capital Fund II LLC as a plaintiff. In its filing with the Securities and Exchange Commission, Red Oak says it acquires and manage commercial real estate loans and securities and other real estate-related debt instruments.
In a statement Aug. 23, Laura Street Trio developer Steve Atkins said he and his team were notified about the city's action through the media and that his legal counsel was reviewing the matter.
"Considering the substantial progress we have made during recent discussions in good faith with the Special Committee, it appears that the City’s decision to file this lawsuit is both premature and ill-advised, let alone in bad faith.
"Unfortunately, this is indicative of the way the DIA has acted for the last year and a half during our efforts towards the redevelopment of these most important historic properties and the revitalization of Downtown Jacksonville.
"I continue to hope we can find a positive path forward for this project."
Daily fines
A development company led by Atkins purchased the Trio from Illinois-based JDI Trio LLC in March 2013.
On Oct. 22, 2015, the city brought Laura Trio LLC before the Special Magistrate for Municipal Code Enforcement because of the properties’ continued violations of the Property Safety and Maintenance Code, Chapter 518, Jacksonville Ordinance Code.
On Oct. 29, 2015, the special magistrate entered an order assessing an administrative fine of $250 per day against Laura Trio LLC, beginning Oct. 27, 2015.
The complaint states that since the order was issued, the property has not been brought into compliance with the ordinance code and the violations have not been corrected as required by the order.
As of Aug. 19, the amount accrued and owing under the order calculated by the city is $805,250.
In addition, the city has incurred and will continue to incur fees and costs and asks the court to award attorney’s fees and costs for prosecuting the claim and the costs incurred in the recording of the lien under Section 162.10, Florida Statutes, according to the complaint.
The case is assigned to Circuit Judge Gilbert Feltel Jr.
“The owner of the Laura Street Trio buildings has been obligated to maintain the buildings and not allow them to deteriorate,” the mayor’s office said Aug. 23 in a statement to the Daily Record.
“By their own admission in public meetings, this has not happened, and we can no longer wait to preserve these historic buildings. Early negotiations have begun regarding the city purchasing the buildings. Prior to those discussions, a code compliance lien foreclosure action was filed on the $807,000 that is currently owed to the city.”
Trio history
Atkins, SouthEast Development Group LLC managing director, has been working for years to redevelop the long-vacant group of buildings.
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.
Atkins has proposed repurposing the Trio as a hotel, apartments, restaurant and bar.
Those plans, along with efforts to reach a city incentives deal for the project, have stalled several times.
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 stopped June 28, when the DIA board voted unanimously in favor of a resolution to end negotiations with SouthEast.
At the Aug. 12 meeting of the Special Committee on the Future of Downtown, 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.
The Aug. 12 meeting ended with the committee exploring whether it could negotiate directly with SouthEast as opposed to the developer and DIA going back to the table for another round of discussions. The committee chair, Kevin Carrico, said the city Office of General Counsel would research the issue and determine whether the Council as a whole, the committee or Carrico himself could conduct the negotiations.
Atkins said 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.
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.