Now that the Downtown Investment Authority has named a master developer for the vacant Shipyards property, the hard part begins.
At the DIA board meeting Tuesday, members approved Jaguars owner Shad Khan-backed Iguana Investments of Florida to redevelop the 70-acre property along the Northbank, which includes Metro Park and the former Shipyards site.
The first phase of Iguana’s plan would develop the land that is now Metro Park with rental and private residences, a hotel, office space, and retail and restaurant spaces.
Iguana will now enter contract negotiations with the city to develop the land. The process could take up to 18 months.
After Tuesday’s meeting, Iguana Investments Vice President Mark Lamping said he thinks this process would move along much quicker than that.
“One of the ways you avoid cost overruns and delays in projects is you streamline the approval process,” said Lamping, who is president of the Jacksonville Jaguars.
He says it has worked that way with prior projects in which the team has partnered with the city.
“There’s going to be a lot of give and take,” said Lamping. “But, I think there’s more common ground than not”.
A large part of that discussion will hinge on what Khan’s group is willing to pay for the site.
In the proposal presented to the DIA in March, Iguana suggested it would pay fair market value for the land.
Lamping says the site has not yet been appraised.
“We need to do that in conjunction with the city,” he said. “To do an appraisal at this point in time without knowing all of the conditions of the development wouldn’t make a lot of sense.”
DIA board member Ron Moody, who was part of the evaluation committee, said 45 acres of the site were appraised at $26 million in 2016.
“Current bids will of course add to that valuation,” he said.
Another area of negotiation will likely be the city’s financial involvement in the development.
Iguana’s proposal calls for the city to pay for infrastructure upgrades to Bay Street and A. Philip Randolph Boulevard, the proposed Hogan’s Creek Greenway, expansion of the Riverwalk, and costs and maintenance of public marina slips and bulkheads.
Those costs have yet to be determined.
During Tuesday’s discussion, DIA member Brenna Durden raised concerns over some stipulations Iguana proposed when it comes to purchasing the contaminated shipyards portion of the site.
In the proposal, Iguana says any land purchase offer would take into consideration “the infrastructure deficient nature of the property and the environmental condition” of the site.
“You can’t have it both ways,” she said. “You can’t reduce the value of the property and then expect the city to clean it up”.
Aundra Wallace, CEO of the Downtown Investment Authority, said that concern along with others would be considered during the negotiations.
In the past, estimates have run into the tens of millions to clean up the site.
“The cost of remediation really depends on the vertical construction proposed in that area,” said District 13 City Council member Bill Gulliford.
Ultimately council members will need to approve any development agreement that is reached.
“In our current financial position, I don’t see the city making a huge investment, but we’ll see,” said Gulliford.
Now that the DIA has selected a master developer, Gulliford says he’ll look for more specific details on what exactly Iguana wants out of the deal.
“If we provide incentives, what’s the return there? It would be nice to get some ROI outside of just property taxes,” he added.
Council member Jim Love, who represents District 14, echoed those sentiments, saying that any deal must be fair for all involved.
“If for example, the developer proposed not paying real estate taxes for the next 20 years, then I’d probably be inclined to say no,” said Love.
“Part of redeveloping this area is about increasing the tax base, so there needs to be some compromise when it comes to incentives,” he said.
Love said he’d be surprised if Iguana proposed something out of the ordinary during negotiations with the DIA.
Two other projects also were also submitted to the DIA board for the site.
Texas-based Presidium Group wanted to build a 1,000-foot Sea Glass Tower within a mixed-use development.
While the evaluation committee liked the vision, members ultimately decided the offer of $20 million for the property was too low.
There also were concerns with the costs of running an aquarium and fine arts museum, both of which would be the public’s responsibility.
Wess Holdings and Mission One Global’s proposal to build the JaxONE Innovation District also was praised by several board members.
According to some, the proposal didn’t offer enough specifics, and many members didn’t think 70 acres along the Northbank was an appropriate site.
“I think we’re going to have some more conversations with (Wess Holdings) about other possible sites Downtown,” Wallace said.
All three proposals were screened by the evaluation committee to score each bidder on its qualifications, vision for the site, and financial capacity.
Iguana Investments took the top spot, with a total score of 85.5.
Presidium Group ranked second, with 66.8 points.
Wess Holdings scored the lowest, with 52 points.
The next step will be for the DIA, Iguana and members of Mayor Lenny Curry’s administration to come up with a term sheet to present to the DIA board in the coming months.
After further amendments to that term sheet are agreed upon, and a development agreement is drawn up, the council would need to sign off.
Construction for the first phase of Khan’s vision would take about three years.
Phase 1 of Khan’s Plan
Development would start at the area that is now
Metro Park:
• 50-100 multi family rental and or residential units
• 200-250 room five-star hotel with restaurant
• Structured parking and amenities
• 75,000 square feet of office space, restaurant and retail
• Public Infrastructure and associated public space
• Relocation of Metro Park further west.
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