Armed with a new appraisal of the former Interline Brands Inc. building, which the city of Jacksonville hopes to acquire for the University of Florida graduate campus in LaVilla, the owner of the property is supporting a land swap with the city over an outright purchase.
Bryan Moll, principal of the Gateway Jax development group, said March 31 the city would benefit in numerous ways by exchanging a 1-acre parcel in Riverfront Plaza and an option on an adjacent lot for the Interline Brands property at 801 W. Bay St.
Under an agreement approved by the Downtown Investment Authority board, Gateway Jax committed to building a 17-story mixed-use property with a hotel, residences, retail, restaurants and public space on the Riverfront Plaza site.
Moll said he and his partners would still consider an outright purchase, but said the land swap would be a good deal for the city and help revitalize Downtown.
New appraisal
A new appraisal of the Interline property, obtained by the DIA, values it at $6.75 million.
That’s $1.25 million lower than an $8 million appraisal by commercial real estate firm CBRE and about $1.2 million more than a previous appraisal done for the DIA, which was for the building and not for the entire property.
Gateway Jax bought the building in November 2024 for $4 million before the site of the UF campus was announced the next month.
Moll said an appraisal from the DIA values the two Riverfront Plaza properties at about $5.5 million.
In an April 1 report, the Council auditor's office said the properties are valued at a total of $5.02 million.
The Riverfront Plaza development parcel is appraised at $3.41 million and the site east of the Main Street Bridge is $1.62 million.
He said that although Gateway has questions about the new appraisal for the Interline property, it shows that the city would be getting a favorable deal in the swap.
“I think this is great news for the swap,” Moll said of the new appraisal.
“Now we have two appraisals – one that we commissioned by CBRE and another that was done by the city – that both validate that the site is worth more than the two parcels we’re trading for. So ultimately, we still firmly believe the land swap is a great deal for the city.”
Moll said the swap would immediately put the property back on the tax rolls in the hands of a private developer, versus generating no tax revenue or the city spending additional money to integrate it into the park that is under development in the western half of the Riverfront Plaza property, the site of the former Jacksonville Landing.
The city also would not have to pay from operating reserves to purchase the Interline Brands building.
“There’s no scenario that involves zero dollars,” he said.
That includes doing nothing, he said, which would leave the city with no tax revenue on a valuable property that could draw tourists and residents Downtown and provide activities in the plaza.
Moll told the DIA board that the project would require $20 million in completion grants, in addition to other incentives.
Buying it outright
On March 25, the Jacksonville City Council voted to set aside up to $8 million to purchase the Interline Brands building outright.
In discussion before the vote, some Council members voiced opposition to the land swap, saying it would lead to Moll and Gateway Jax seeking completion grants for the tower project.
Council member Will Lahnen said March 31 the city is facing record cash incentive payouts next year for previously approved projects.
“I’m hoping we do not put ourselves into positions which would lead to more cash incentive agreements; that is why I supported the outright purchase of the building,” he said.
Moll said the Riverfront Plaza project would have to be completed and receive its certificate of occupancy before receiving any city grant money.
Council member Ron Salem, chair of the Council Finance Committee, scheduled a discussion on the Interline building at the next committee meeting, scheduled for 9:30 a.m. April 1.
The DIA board approved the land swap in February on a 5-2 vote, and Mayor Donna Deegan also supports the option.
Incentives needed
In a March 31 interview, Moll said any developer would need incentives to build on the Riverfront Plaza site because Downtown’s current economic situation makes the tower project financially infeasible.
He said the city would receive $1.50 to $1.75 long-term from every $1 of public funding it provided for the development.
“One day, those types of incentives won’t be necessary,” he said.
“But you have to build critical mass and demonstrate the ability for Jacksonville to be able to produce the room rates and the rental rates to do these types of projects and get the equity and debt you need without any kind of assistance from the city," he said.
“So whether it’s us or someone else, you’re going to need that.”
Moll said that through a hotel room surcharge and a homeowners association fee on condominiums, the development at Riverfront Plaza could generate about $300,000 a year for programming and maintenance at the park.
Moll said there have been conversations with hotel brands about the Riverfront Plaza property.
“They are very interested and specifically working with us on this site because they worked with us before they’ve seen what we’ve done before,” Moll said. “They trust us they believe we can execute and do a fantastic job here.”
Moll’s previous projects include the $3.5 billion Water Street redevelopment district in downtown Tampa and the multibillion-dollar Amazon HQ2 National Landing site near Washington, D.C.
He said brands he has worked with include Marriott and IHG Hotels & Resorts.
Moll said the swap would put the property in the hands of a developer with the experience and resources to build the tower. Moll’s partners in Gateway Jax are JWB Real Estate Capital and DLP Capital.
The Gateway Jax portfolio of Downtown properties spans 30 acres and, if fully built-out, would involve more than $2 billion in investment. The first building in the Pearl Square phase of the project is under construction.
“We can do this. We have the track record. We have a team and the resources to be able to execute on this,” Moll said.
If the land swap 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.
“The city has the right to buy it back at a discount,” Moll said. “The city is protected if we can’t execute.”
The UF campus site
In December 2024, the UF Board of Trustees announced it had selected the area around the Prime F. Osborn III Convention Center as the site for its proposed campus.
The city announced that long-range plans for the campus called for it to include the Florida Semiconductor Institute and offer degrees in numerous subjects.
The Council committed $50 million in the spring of 2023 to bring the campus to Jacksonville and Deegan committed an additional $50 million in conjunction with the university announcing plans for the Florida Semiconductor Institute to be part of the campus.
UF says enrollment could reach 20,000 or more. Full development, which includes the construction of several buildings at and near the convention center, could take up to 20 years.
The Interline building is among six parcels that the city is seeking to provide for the UF campus.
UF said the city’s acquisition of the Interline building would allow the university to begin offering an architecture master’s program on the campus as early as fall 2025. That program currently operates out of the Groover-Stewart Building at 25 N. Market St.
The Florida Semiconductor Institute would be in the Interline building in the near term before being moved elsewhere on the campus.
This story has been updated with the city report on the value of its two riverfront properties.