Under the latest plan for The District, the Downtown Investment Authority would buy the property, pay for more than half of the infrastructure and create special taxes levied only in the development to fund it.
Elements Development of Jacksonville LLC, led by developer Peter Rummell, has the rights to buy the property from JEA for $18.5 million.
Under the new plan, Elements would contribute $18.7 million toward the $45.1 million needed for infrastructure improvements.
In an eight-page memorandum dated Dec. 15 to the DIA board, CEO Aundra Wallace lays out a plan for JEA’s 30-acre parcel Downtown along the St. Johns River and the public infrastructure required for development of The District.
“The District Transaction Proposed Performance Based Structure Summary” includes a preface that it’s for discussion purposes only and that any agreement that might be reached will have to be approved by multiple government and public entities.
The board was expected to begin discussing the proposal Wednesday, but the monthly meeting was canceled because Wallace had a health issue.
Board Chair Jim Bailey said Wallace is the architect of the proposal and “we can’t have the discussion without him.”
Bailey would not comment on the specifics of the health issue, citing privacy, but said he anticipates the meeting will be rescheduled in January.
The proposal is the latest in a Downtown development story that began three years ago, but hasn’t progressed beyond a site plan and architectural renderings.
The closing date for Elements to buy the former Southside Generating Station site has been extended by JEA’s directors multiple times, most recently to July 16.
In November, in conjunction with granting the extension, JEA’s board authorized Rummell to assign the purchase contract to the city and the authority.
Under the terms of Wallace’s proposal, Elements would assign all of its interests in the purchase to the city no later than March 30.
The DIA would provide to JEA a $17.6 million promissory note at 2.7 percent interest over no more than 23 years.
In addition, DIA would give JEA $1.86 million in cash at the closing.
The note would be paid through an annual appropriation from the existing Southside Tax Increment District.
To prepare the site for apartments, condominiums, retail and commercial development, Elements would pay $18.7 million of the public infrastructure cost while the city would contribute up to $26.4 million. Elements would be liable for infrastructure costs above $45.1 million.
A budget submitted to DIA in December 2016 by The Haskell Co. indicates the public infrastructure could be constructed for $45.2 million, including all costs and fees.
The DIA would repay the city for its infrastructure investment with a promissory note for up to $26.4 million with the same terms as the note to JEA.
The note would be paid annually with 75 percent of the property taxes generated by the project.
That revenue would be enhanced with the city approving a “District Development Assessment” of 1.25 mills (0.125 percent of assessed value of improved property) applicable to parcels on the site.
In addition to the property taxes, each purchaser of property within The District would pay the DIA an amount equal to its district assessment for 10 years, beginning the year after the purchaser receives a certificate of occupancy for improvements.
The proposal estimates the aggregate assessed value of the residential, hotel, commercial and retail components of the finished project, as currently proposed by Elements, at nearly $290 million.
Rummell previously estimated the value of the completed project at $400 million to $500 million.
Bailey said Wednesday the board is “looking forward to discussing the terms” of the proposed agreement.”
Wallace said in the memorandum that a DIA-approved transaction agreement also must be approved by JEA’s board, the mayor’s office and City Council.
