For the second time in two months, the Downtown Investment Authority staff is recommending that the city end negotiations with the developer of the Laura Street Trio on the latest round of requests for public incentives to resurrect the historic buildings.
A staff report scheduled to be discussed at the June 28 DIA board meeting states that “staff cannot recommend continuing negotiations for approval of City funding in the Laura Street Trio redevelopment provided” by SouthEast Development Group LLC.
Steve Atkins, principal of SouthEast and owner of the buildings since 2013, said during a phone interview June 26 that he and his group had learned about the report in the media and were “caught off-guard” by it. He said the group had been negotiating in good faith and felt the talks were progressing.
He said the staff report, which SouthEast obtained late June 25, was “filled with errors and, frankly, falsehoods” about SouthEast’s proposal.
“We have a considerable amount of concern about this,” he said.
The DIA staff report says the funding structures in SouthEast’s final proposal, submitted June 17, “place the City at risk in multiple ways,” including by obligating the city to provide a higher-than-average share of the total development cost, removing a clawback provision of city funding in the event of a sale and producing a low return on investment.
The staff report lays out a history of incentive requests for the project dating to 2017, including packages that were granted to SouthEast in 2017 and 2021 but did not result in development of the buildings.
Although the DIA and city have been “resolute and responsive” to consider and approve funding requests from SouthEast, the report says, the requested funding from the city increased from 13% of the total development cost in 2017 to 45.8% in June 2024.
During that time, the report says, the “scope of the project has grown, construction costs have risen, and access to capital has become more challenging.”
SouthEast’s most recent proposal contains a project cost of $194.2 million and a request for $89.9 million in city incentives, according to DIA records. The incentives request comprises an $8.3 million forgivable loan, a $61.5 million closing grant, $12.03 million construction grant, $5.25 million completion grant and $1.85 million five-year Recapture Enhanced Value Grant. REV grants provide a refund on ad valorem tax revenue generated by redevelopment of property.
Atkins proposes a combination of restoration and new construction that would turn the Trio into a hotel, apartments and restaurants. The Trio was built from 1902-12 at Laura, Forsyth and Adams streets. It comprises the Florida National Bank, Bisbee and Florida Life Insurance buildings.
A table included with the DIA staff report compares the city’s equity percentage and return on investment in the Trio with metrics with three other major projects: the Related Group’s proposed Southbank high-rise, Gateway mixed-use project on the Southbank and Iguana Investments' Four Seasons hotel and office building in the Shipyards.
In April 2024, the DIA drafted a resolution recommending that the city end negotiations with Atkins and SouthEast after attempts at a compromise incentives agreement hit a dead end.
The DIA Strategic Implementation Committee voted to defer that resolution and revise it to emphasize that it applied only to an April proposal by Atkins and would not preclude further negotiations with him on the project.
That action came three months after City Council opted not to vote on a proposal from Council member Matt Carlucci to provide a $60.5 million incentive package to redevelop the Trio, and instead directed the DIA to work with Atkins and SouthEast on a new deal.
Carlucci’s proposal included $36.5 million in incentives that went before the DIA board in June 2023, plus a $2 million forgivable loan that had previously been approved and a $22 million city “participation” loan that would serve to guarantee a construction loan that Atkins had obtained from Capital One.
City administrators raised concerns that the $22 million guarantee would violate a state constitutional prohibition on cities lending money for private purposes and that the package could expose the city to $265 million in debt liability. Administrators said the liability could trigger a downgrading of the city’s credit rating.
According to the DIA, staff of the city authority then presented SouthEast with three alternatives, none of which included the city participation loan. The DIA said SouthEast rejected them and instead offered a deal that included the Capital One loan.
At the DIA SIC meeting, Carlucci urged committee members not to close the door with SouthEast.
“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.
On April 17, the full DIA board approved an amended resolution rejecting the April proposal but allowing SouthEast to return with another proposal.