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Awaiting the completion of an appraisal on a building the city of Jacksonville hopes to acquire for the proposed University of Florida graduate center campus in LaVilla, a City Council committee agreed to delay an ordinance calling for a direct purchase of the property as opposed to a land swap supported by Mayor Donna Deegan’s administration.
The Council Neighborhoods, Community Services, Public Health and Safety Committee opted March 17 to postpone Council member Ron Salem’s proposed Ordinance 2025-0135 while approving an amendment that would cap the city’s spending for the former Interline Brands Inc. building at $8 million.
Under the ordinance, the funding would be drawn from the city’s general fund and replenished in the fall of 2025 with a portion of JEA’s annual contribution to the city.
JEA is poised to approve an agreement providing a record $137.4 million to the city this year, with an annual 1% increase through 2029.
Salem proposed offering at least $4 million for the property at 801 W. Bay St., the price at which Gateway Jax bought it in October 2024 from HD Supply Facilities Maintenance Ltd. of Atlanta.
UF hopes to launch classes in the Interline building in August 2025 while preparing to break ground on new construction in LaVilla, the site it selected for the campus in December 2024.
The university’s selection of LaVilla triggered plans by the city to provide four city-owned parcels to the university and acquire the Interline building to also give to UF.
During the March 17 committee meeting, Downtown Investment Authority CEO Lori Boyer said the DIA was awaiting delivery of an appraisal of the 801 W. Bay St. building by Jacksonville Commercial Appraisers, which was expected to be submitted March 26.
The DIA had previously obtained an appraisal by Colliers valuing the property at $5.35 million. Gateway Jax principal developer Bryan Moll said a CBRE appraisal placed the value of the building itself at $5.5 million. But taking into account the entire property, including a developable parcel on the site, the value was closer to $9 million.
Minus an estimated $1 million in parking improvements that the property owner would need to make if new construction were built on the property, the net value would be $8 million.
Swap support
The DIA board and Deegan’s administration both support providing Gateway Jax with a 1-acre piece of land on the northeast corner of Riverfront Plaza and an option on a neighboring parcel to the east in return for the Interline building. The city values the properties in the plaza, site of the former Jacksonville Landing, at $5.5 million.
The swap would come with a commitment by Gateway Jax to build a 17-story mixed-use development with residential units, a hotel and retail space and restaurants.
That project would be in line with plans developed by Chicago-based Perkins & Will, which won the contest to design Riverfront Plaza. Perkins & Will included a conceptual plan for an L-shaped building that includes a rectangular, 17-story tower structure and an attached six-story portion.
Moll and representatives from Deegan’s office urged committee members to consider Salem’s legislation and the land swap in tandem so that both options would be before Council.
Salem says his intent with the ordinance was to scrap the exchange and instead purchase the building outright. He believes his proposal simplifies the process and saves the city from overpaying.
During the committee meeting, Salem said he believed the city was “trying to drive up the price of the Interline property in order to achieve a match for a swap.”
Waiting for appraisal
In response to a request from Salem to provide a price at which Gateway Jax was willing to sell the building, Moll said the partnership group would not commit to a price until reviewing the new appraisal and having a chance to speak with the appraiser.
Gateway Jax, which has launched a $2 billion-plus Downtown development, involves Moll, JWB Real Estate Capital and DLP Capital.
Asked by committee Chair Joe Carlucci to commit to selling the building at the price set in the appraisal, Moll said the partners would consider it provided they were given adequate time to vet the appraisal and discuss it with the appraiser.
Both Carlucci and Salem pressed for the issue to be resolved quickly, with Carlucci advising Moll to be ready to discuss the ordinance with the committee on March 31 when it will be back on the agenda.
“My concern is this is going to be pushed to a date that we’re going to have a gun to our head and we’re going to be told that if you don’t approve this swap we’re going to lose the University of Florida,” Salem said. “I have that feeling. That’s why I’m pushing to get this appraisal back.”
Funding the purchase
Committee member Jimmy Peluso said he disagreed with pulling money from operating reserves for the purchase. The land swap would allow for the acquisition without drawing down the reserve funding.
“If we’re going to touch the reserves, it had damn well better be for things that are quality-of-life issues” and other critical needs, he said, “not to buy land we don’t need to buy.”
Carlucci said it was false to describe the land swap as a “net zero sum deal,” given that Moll has estimated that it would require $20 million in city completion grants to make the Riverfront Plaza development feasible.
“We’re going to be sitting with a Riverfront Plaza property we don’t own but we’re going to have to pay $20 million to develop,” he said.
If the exchange reaches fruition, the deal says Gateway Jax would have 15 months to reach a redevelopment deal for the Riverfront Plaza property with the city. If a deal can’t be reached, the city can buy back the property for $6.75 million.
In February, the DIA board voted unanimously to place four properties up for disposition – the historic Jacksonville Terminal rail station; the adjoining newer portion of the Prime F. Osborn III Convention Center and land stretching west to Interstate 95; an unimproved lot north of the train station; and a neighboring parking lot to the east across Park Street.
The board voted 5-2 on the proposed land swap, with members Scott Wohlers and Cameron Hooper opposing.
Salem’s legislation also has been assigned to the Council Finance and Transportation, Energy and Utilities committees, which next meets March 18.
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