Audit: City has reaped $4.3M from Hillwood deal
The city of Jacksonville has received more than $4.3 million in revenue since it entered into a development agreement with Cecil Commerce Center master developer Hillwood Investment Properties, according to the Council Auditor’s Office.
The audit also found the city never has verified the accuracy of Hillwood’s financial reports to the city.
In 2010, the former Jacksonville Economic Development Commission executed the 25-year agreement with Dallas-based Hillwood to build-out AllianceFlorida on about 4,499 acres of city property off Normandy Boulevard in West Jacksonville.
The audit includes a review of all revenue generated from the sale and development of land at Cecil Commerce Center from September 2010 to April 2017. It also reviewed the city and Hillwood’s compliance with benchmarks and other requirements outlined in the agreement.
City auditors Brian Parks, Chedly Broche and Alexandria Lee found that during that nearly seven-year span, the city received $4,389,547 from the development. Those funds are placed in the city’s Cecil Commerce Center Trust Fund.
According to the audit, Hillwood paid the city $1.86 million from selling land. It paid $1 million for two one-year extensions to benchmarks in the agreement.
The city also received $1.5 million in “additional consideration payments” from Hillwood in June 2015 from the sale of the General Electric building. The payment represents 10 percent of the industrial project net proceeds Hillwood obtained from the sale and any industrial use of the facility.
The audit also found that while the city has been reviewing the financial data provided by Hillwood, it has not audited the developer to verify accuracy.
The audit says that “increases the risk of an underpayment to the city not being detected.”
“Although the Office of Economic Development reviews the calculations on the spreadsheet Hillwood provides on a quarterly basis, the Office of Economic Development has never verified Hillwood’s expenses to source documentation to confirm accuracy and existence,” the audit says.
In response, OED said it “partially agreed” with the audit. It said in the future it would request copies of additional supporting documents for development costs shown on Hillwood’s quarterly reports.
“The supporting documents will be reviewed for reasonableness and agreed to the summary reports,” the office wrote in response.
The audit also found that Hillwood met the Phase 1 requirement to build 1.2 million square feet of space by September 2015.
GE Oil & Gas occupies a 510,000-square-foot valve-manufacturing plant and FedEx Ground Package Systems operates a nearly 300,000-square-foot distribution center
Amazon.com also occupies an approximately 1-million-square foot fulfillment center.
Solar panel manufacturer JinkoSolar (U.S.) Industries Inc. is the latest company attracted to AllianceFlorida. It plans to occupy space in a recently completed 407,435-square-foot speculative warehouse built by Hillwood at 4660 New World Ave.