Jaguars President Mark Lamping says he is confident that a licensing agreement will be reached with the luxury hotel chain before a groundbreaking in June 2022.
As of now, some of the highest room rates in Jacksonville-area hotels are $373 to $564 per night, although one of the highest is listed at $5,000 per night for the club level, one-bedroom presidential suite at The Ritz-Carlton Amelia Island.
Jacksonville Jaguars owner Shad Khan will challenge those rates if his deal works to develop a Four Seasons hotel on the Downtown riverfront.
The Four Seasons Resort at Walt Disney World, the closest to Jacksonville, is listed at $1,015 per night.
“If we didn’t think it could be successful, Shad certainly wouldn’t be investing this amount of money and Four Seasons wouldn’t be interested in coming here,” Jaguars President Mark Lamping told the Meninak Club of Jacksonville on June 28.
“If executed properly, it can be successful.”
Lamping says he is confident his organization will have a licensing agreement with the Four Seasons hotel brand before the team’s development company breaks ground on the proposed Downtown luxury hotel in June 2022.
Lamping told Downtown Investment Authority board member Oliver Barakat during a June 25 committee meeting that Khan expects at least a 10-year commitment from the Four Seasons corporate arm for the proposed 176-room hotel and 25 for-sale luxury condominium project on the former Kids Kampus site along the St. Johns River south of TIAA Bank Field.
“Four Seasons is a publicly held company, so they don’t comment on speculative projects like this,” Lamping said.
“We would expect a long-term agreement with them. They would expect a long-term agreement from Shad.”
Lamping said that Khan, as owner of the Four Seasons in Toronto, has insight into how the chain negotiates and has relationships “at the highest levels” of the company.
Lamping also said he has had talks with representatives who handle Four Seasons licensing agreements.
The team president has been fielding questions from DIA members and civic groups about the viability of Four Seasons in Downtown Jacksonville since Khan announced plans June 3 to build one.
The DIA is considering a $114 million city incentives deal for the first phase of the Shipyards redevelopment. It comprises the proposed $321 million Four Seasons, a companion six-story office building and a city-owned marina. The deal must be approved by City Council.
The proposed term sheet, scheduled for a vote July 7 by the full DIA board, says Khan and his development company, Iguana Investments Florida LLC, have agreed to a minimum $301 million private investment.
According to DIA documents, the hotel and condominium development itself will be a minimum of $241.4 million.
The amount Khan plans to spend on a hotel and condo project is a bullet point Lamping is using to convince the DIA, attendees at the Jaguars’ Northeast Florida “community huddles” and area civic groups that a Four Seasons can work Downtown.
Downtown hotel market
Khan and Lamping’s view is supported by a Downtown hospitality market study by CBRE Hotels in Atlanta that Iguana commissioned and submitted to the DIA.
It found that a Four Seasons could be successful Downtown under the right conditions and with some caveats.
The study was based on 2019 average daily room and occupancy rates before the COVID-19 pandemic.
A summary in the DIA’s staff report says the six existing Downtown hotels don’t serve the luxury market targeted by Four Seasons.
“(The hotel) will bring new visitors and residents to the area not currently being served,” says a DIA summary of the CBRE report.
The report says that market includes “non-price-sensitive corporate travelers who prefer luxury hotels and currently avoid staying in Downtown Jacksonville.”
Asked at Meninak if Four Seasons would work Downtown, Lamping said:
“We believe so. The market study suggests we can.
“The reason for that is, if you break up all the people who come to Jacksonville and stay at hotel rooms, there’s a sliver, it’s actually about 10%, who are looking for hotel rooms in Downtown that are not price sensitive.
“They just want to get the best place that’s close to where they want to be.”
CBRE’s analysis puts average daily rates for a Downtown Four Seasons at $411 per night in 2025, rising to $462 by 2029.
Three of Florida’s Four Seasons hotels had room rates as high as $1,335 per night and suite prices topping at $8,400 at the Four Seasons Resort at Walt Disney World Orlando, according to a June 29 survey of online booking and hotel websites.
The closest comparable Four Seasons in Florida by rate is $459 to $995 per night on Brickell Avenue in Miami near the Miami South Channel waterfront.
CBRE estimates the Jacksonville Four Seasons would have 57% occupancy when it opens and could reach 70% by 2029.
According to the DIA summary, Downtown Jacksonville hotels had occupancy rates of 75.2% in 2018 and 73.5% in 2019.
The report said area competition to the Four Seasons include The Ritz-Carlton Amelia Island, the Cloister at Sea Island and the Ponte Vedra Inn & Club.
Rooms at the Ponte Vedra Inn & Club ranged from $373 to $564 per night in June.
CBRE also said Downtown Jacksonville could support as many as 79 Four Seasons residences and that Khan’s initial plans for 25 significantly lessens the project risk.
“We’re not adding to other condominium projects in Downtown Jacksonville because these are going to be really, really high-end,”Lamping told Meninak.
“The market for that product is limited.”
Without city assistance, the DIA summary of the study shows the hotel/condo project would be unable make enough money to cover its debt service or a positive cash on cash return within the first 10 years of operation after selling the condominium units.
CBRE’s estimated $56.5 million funding gap likely would be filled by the proposed $47.68 million Recapture Enhanced Value Grant, $25.83 million completion grant and $12.45 million hotel land donation from the city.
The CBRE report says the hotel and residences would otherwise have to reduce construction costs to reach that level of return, but that calculation does not include the $85.9 million in city cash, land and tax incentives for the hotel and office building.
Khan’s 20-year property tax incentive in the city development agreement is tied to the quality of the hotel and brand.
If Council approves the deal as written, the hotel will open as a Four Seasons.
Lamping said June 25 the Jaguars do not anticipate a need to change the hotel flag, but the agreement gives Khan that flexibility under certain conditions.
If Khan or the owner of the hotel parcel at the time wants to change the flag from a Four Seasons, the term sheet states the DIA must approve it to “ensure that the hotel continues to be operated by a luxury brand” — a four- or five-star product determined by Forbes Travel Guide or “other respected source in the hospitality industry.”
If the DIA does not approve the flag change, the hotel landowner can still change the brand but will lose remaining REV grant money.
Lamping said this could be useful should Four Seasons change its corporate name.
Barakat said knowing negotiations are active with Four Seasons and the city would receive “a certain quality hotel experience” for its investment made him feel better.
“My concern is that we provide this incentive to build this building, the flag leaves, then we bring in a three-star flag that competes with our existing inventory which would not be best practice for us.”
In Clay County, Karrie Massee owns The Club Continental and Azaleana Manor hotels, with room rates from $115 to $259 per night.
Massee has seen demand rebound for higher-quality hotel products as the pandemic eases.
She thinks there is a market for a Four Seasons in Jacksonville.
“People are coming from New York, Connecticut, New Jersey and California and are used to such high rates and that’s what they expect to pay,” she said.
“When they don’t, they almost get concerned about the quality of the hotel.”
Massee said her guests at Azaleana and Club Continental are of all ages, but she has seen high traffic from those in their 30s house hunting in Northeast Florida and that “money doesn’t seem to be much of an object for them.”
She also has booked Mayo Clinic patients, a customer category Khan wants to attract to the Four Seasons.
Lamping says the hotel could cater to medical tourists coming to Jacksonville for treatment.
The Jaguars want to expand that market with its partnership with Baptist Health to build a 42,000-square-foot orthopedic medical center adjacent to the Four Seasons in the second phase of Shipyards development.
The term sheet gives the Jaguars until Dec. 31, 2024, to supersede any other offers the city receives for the 4.96-acre site.
Despite the uncertainty and financial risk associated with bringing a speculative five-star hotel to market in Downtown Jacksonville, Lamping said the language in the deal with the city shows Khan’s commitment to it.
“The fact that we stipulated it would be a Four Seasons hotel in our term sheet should give you an indication of how confident we are,” Lamping said.
Associate Editor Max Marbut contributed to this report.
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