The owner of the long-vacant Laura Street Trio of buildings in Downtown Jacksonville is interested in selling the property to its partnering developer, prompting a possible new way forward to preserving and reanimating the historic structures.
During a Nov. 25 meeting of the City Council Special Committee on the Future of Downtown, Paul Bertozzi of Downtown-based Live Oak Contracting said his company was working on a purchase-and-sale agreement with the current owner, Steve Atkins of SouthEast Development Group.
SouthEast has for years proposed renovating the former First National Bank Building, Bisbee Building and Florida Life Building at Laura, Forsyth and Adams streets into a hotel, restaurant, bar and apartments.
Bertozzi said that if the deal comes together, Live Oak would become the lead developer of the project and would work with the city on a new redevelopment agreement and incentive package to revive the buildings. Live Oak announced in September it had become a partner with SouthEast in the project.
Terms of the potential sale were not discussed.
Kevin Carrico, the committee’s chair, said Live Oak hoped to close on the transaction in December.
To facilitate the sale on that timeline, he said, it would be necessary for the city to waive code compliance liens and fees on the property so that the title of the property would be clean upon closing. Carrico said he had filed legislation that, if approved by Council on an emergency basis, would facilitate that timeline.
Council concerns
As with other points in the years-long, off-and-on saga of the Trio, the potential deal and Carrico’s legislation prompted questions and concerns among Council members and city officials.
Among them, Council members sought assurance that Atkins, the owner of the Trio since 2013, and SouthEast would no longer be part of the development team.
Bertozzi said Atkins “will not be part of our development team as of right now,” prompting concerns from some committee members that he could later be included and that negotiations would go back to square one.
In addition, Mayor Donna Deegan’s chief of staff, Mike Weinstein, said the administration opposed waiving the liens and fees. Weinstein said Deegan would likely not sign Carrico’s bill or could possibly veto it, depending on its form and content.
The special committee’s meeting was called after the city declared Nov. 12 that it had hit loggerheads with the SouthEast development team. The city announced it was permanently cutting off talks with SouthEast, which followed with a statement that it would no longer negotiate with the city administration and would instead speak only with Council on the project.
SouthEast claimed it worked diligently on an agreement but was abruptly cut off by the city after negotiations that started in 2017 or earlier, and it criticized the city for “citing incidents of graffiti and vandalism on the Laura Street Trio property as grounds for foreclosure.”
On Nov. 14, the city refiled a foreclosure lawsuit naming Laura Trio LLC and Red Oak Capital Fund II LLC as defendants. In the suit, the city claimed Laura Trio LLC, the owner of the buildings, owes the city $827,500 in fines for municipal code violations.
Red Oak Capital Fund II LLC is part of Charlotte, North Carolina-based Red Oak Capital Holdings. Red Oak is a commercial real estate financing and investment company.
The city filed the original foreclosure suit in August 2024 after the latest of numerous rounds of negotiations on an incentive package broke down. In the original suit, the amount owed was listed as $805,250.
Weinstein said Deegan had dismissed the suit once “and she’s not going to do it again” without the liens being addressed.
“Right now, we stand by the lawsuit,” he said, adding that the administration felt the parties were “back exactly where we were four or five months ago” dealing with largely the same developers.
The meeting ended with Bertozzi indicating he’d be willing to discuss a suggestion raised by Council member Michael Boylan to abey – or suspend – payment of the fines over several years with the city agreeing to waive them if the code violations were corrected over that time.
Weinstein told Carrico the administration would be open to the discussion if he filed his legislation as a nonbinding resolution versus an ordinance, which would become law. Acting by ordinance, he said, would raise issues about separation of powers.
Fines agreement preferred
Carrico said he would prefer that the city and Live Oak reach an agreement on the fines before the Council meeting, which would make his legislation unnecessary.
“As one of the attorneys said today, there’s a path forward with the administration agreeing to put in that abatement program, and they (Live Oak) can take that abatement back to their lender,” he said. “But I believe the answer to that (from the city) was no, not right away.”
Carrico said that if he files legislation, he will seek to invoke a provision for it to pass on a single hearing that would occur at the Nov. 26 Council meeting. The normal Council process takes six weeks. Some committee members expressed concern about the timing, saying it felt rushed.
He said he planned to file the legislation regardless.
“If we end up with an agreement before, then we can withdraw it,” he said. “We’ll see what happens in the next 12 to 24 hours.”
Several committee members praised Bertozzi for his interest in taking over the property.
Citing what he called “Laura Street Trio fatigue” among Jacksonville residents, Council member Matt Carlucci urged the administration to work out an agreement with Bertozzi and Live Oak.
“I don’t want to see us get hung up on these damn liens to the point where we can’t move forward,” he said.
Council member Ron Salem, who as Council president in 2024 established the special committee, urged Council members to support Carrico’s legislation.
“These buildings have been exposed to the elements for 30 years, and I think finally we’ve got an ability to move this project forward,” he said, adding that he was grateful to Atkins for being willing to sell the property and believed Bertozzi and Live Oak had the ability to complete it.
Years of failed starts
The Trio has been the subject of on-again/off-again relations between the city and SouthEast since Atkins purchased the buildings.
In 2017 and 2021, Council approved redevelopment deals with Atkins and SouthEast that included $5.8 million and $26.6 million in public incentives, respectively. Neither deal reached fruition, prompting Atkins to return to the table to request an increasing amount of incentives to help cover the growing cost of resurrecting the buildings.
According to a city summary of the Trio negotiations, the total development cost for the project has risen from $44.6 million in the 2017 redevelopment agreement to $211.7 million in the development team’s last proposal to the city, which came in October 2024.
As part of the October 2024 proposal, the developers sought $96.8 million in incentives, or nearly 17 times the amount in the agreement seven years ago. The total development cost in the latest proposal is 4.7 times that of the 2017 agreement.
The scope of the project has changed since 2017 to include not only adaptive reuse of the historic buildings, but new construction for the hotel and multifamily housing.
The city reported that the development team’s asks for incentives grew from 13% of the total development cost in 2017 to 45.7% in October 2024.
Atkins says he has already made a significant investment to stabilize the buildings and prepare them for reconstruction.
The Trio, built from 1902 to 1912, are among the earliest structures built Downtown after The Great Fire of 1901, which destroyed much of Jacksonville after starting when a spark from a kitchen fire ignited piles of drying Spanish moss that were used as mattress stuffing.