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Jax Daily Record Thursday, Aug. 9, 201805:20 AM EST

Convention crossroad: What's next as developers prepare competing visions for a new Jacksonville convention center

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Shad Khan’s Iguana Investments wants it near stadium, while other developers work on plans at site of former Duval County Courthouse.
by: David Cawton Associate Editor

If Jacksonville Jaguars owner Shad Khan has his way, the city’s new riverfront convention center will be the first phase of a larger development near the sports and entertainment venues.

Khan’s Iguana Investments of Florida and Rimrock Devlin DeBartolo Jacksonville LLC proposed their project Aug. 2 to the Downtown Investment Authority.

The proposal sets up a major decision because the city previously issued a request for proposals seeking developers for a possible convention center project at the city-owned site of the former Duval County Courthouse and City Hall Annex. That East Bay Street location also sits along the St. Johns River.

Three bidders responded. Iguana Investments did not, instead submitting its own plan on property closer to TIAA Bank Field.

Iguana Investments, owned by Jacksonville Jaguars owner Shad Khan, envisions a convention center complex to replace Metropolitan Park.

Iguana’s proposal

Rimrock Devlin DeBartolo Jacksonville LLC is a partnership between Jacksonville-based Rimrock Devlin Development LLC and Tampa-based DeBartolo Development.

It and Iguana submitted a 73-page package to the DIA that includes each company’s credentials and details about the plan.

The Jacksonville Convention Center, as it is referred to, would be a 490,000-square-foot building with 200,000 square feet of exhibition space, 45 breakout rooms and a 40,000-square-foot ballroom with space for expansion.

The group plans to build a 350-room, full-service hotel with 44,000 square feet of meeting and ballroom space, ground-floor retail and restaurants next door.

The hotel includes a 462-space parking garage, which would be in addition to a separate parking structure for convention-goers on what is parking Lot J outside of TIAA Bank Field.  

Iguana’s development team

In Iguana’s package, its partners detail individual accomplishments, credentials and examples of work.

Expansion of the Orange County Convention Center in Orlando, construction of the Jekyll Island Convention Center in South Georgia and the development of the JW Marriott Convention Center Hotel in downtown Austin, Texas, are among the 44 project examples listed.

Rimrock Devlin Development states it has completed $1.5 billion worth of projects and that it is the “preferred developer for Starwood Hotels & Resorts Worldwide.”

In Jacksonville, Rimrock lists the $200 million Deerwood Lake project, a mixed-use development in South Jacksonville.

It also lists its work with Jacksonville University to build the North Hall dormitories and the Academic Health and Science Building.

“As a Jacksonville, Florida-based company, Rimrock Devlin Development is deeply rooted in its local community and takes great pride in the city that serves as its home,” according to a company description.

President and CEO Micah Linton and founder Wallace Devlin are listed as “key team members.”

DeBartolo’s work includes shopping malls, residential towers and mixed-use developments over the past 70 years.

Key players include President and Chief Operating Officer Edward Kobel and Rich Hartline, who leads DeBartolo’s Honolulu division.

In that role, Hartline is overseeing the Ka Makana Ali’i, a $500 million, 1.4 million-square-foot mixed-use shopping center on the island of Oahu.

Jacksonville-based England-Thims & Miller Inc. would oversee construction and program management, urban planning, civil engineering, regulatory permitting, transportation, surveys and landscape architecture.

GAI Consultants would provide structural and marine waterfront engineering, landscape architecture and urban design services.

Iguana lists two architectural firms.

Helman Hurley Charvat Peacock Architects Inc. will oversee the architectural responsibilities for the convention center. The Orlando and Beijing-based firm states it has worked on projects in 36 countries since 1975.

HKS, a global architectural company, leads the hotel project. According to its website, the company’s HKS Hospitality Group “is known globally for architecture and design for hotels.”

Iguana’s project

Rimrock Devlin DeBartolo would oversee the entire construction process “to ensure its alignment with the vision set forth by Iguana,” according to the submission,

Its leadership team “will work closely with the city” to keep the project in line with the Downtown Master Plan.

“Our team envisions establishing a community board consisting of key community leaders and stakeholders that meet regularly with our team and are fully briefed on the details and advancements of the development.”

Before construction could start, the DIA would need to convey development rights and allow the property to be rezoned.

Iguana and RDD state that the site’s environmental issues can be managed by developing the area as a Brownfield site.

The city is likely to bear those costs.

An early timeline suggests the “predevelopment phase” consisting of the proposal’s submission, the DIA selection process, City Council approval, a due diligence period and rezoning take the project through July 2019.

Site work would start in July 2019 and the project would be completed in fall 2021.

When completed, the city could use SMG to manage the facility, like it does with its other city-owned sports and entertainment venues. Or it could allow the hotel partner, which is not identified, to manage both the hotel and the convention center.

A public-private partnership

Khan indicated the project will use public and private money.

Iguana estimates the convention center will cost $305 million to $315 million, with the team using private equity and debt service to fund its share.  

The hotel portion is estimated to cost $115 million to $125 million, paid for with private equity and debt from Iguana and from public funds. The city’s portion pays for the connecting parking garage.

“Details of the city’s participation shall be finalized at a later date based on final project cost and revenue sources,” the submission said.

The project includes the city retaining ownership and footing the bill for expanding the Northbank Riverwalk, reconfiguring the Hart Bridge expressway and Bay Street, building public infrastructure and cleaning up the Shipyards and contamination.

There are no costs outlined for those pieces.

Iguana and the city would share ownership of different elements of the convention center, hotel and parking structures.

The city would spend public money to build the parking garage attached to the hotel.

It is unclear how the city and Iguana would split the revenue generated from the project.

The city is expected to convey the property to Iguana for the convention center site and then enter a triple net  lease to occupy the building and to operate the parking structure planned for Lot J.

The NNN lease requires the tenant to pay all operating expenses.

No other incentives are outlined in Iguana’s proposal, but the company does plan to find and use other subsidies.

Those include land dedications, tax increment financing, real estate tax abatements, grants, historical tax credits, New Market Tax Credits, sales tax rebates, shared tax revenue, waiving of certain planning, permitting and impact fees and other concessions.

Three groups submitted plans to the Downtown Investment Authority to build a convention center complex at the site of the former City Hall Annex and Duval County Courthouse.

The courthouse-annex site

The day before Iguana announced its project, three groups responded to the DIA’s request for proposals to build a convention center and hotel along East Bay Street.

The specs outlined in the RFP are identical to those in Iguana’s plan.

Also, Rimrock Devlin DeBartolo was one of those bidders, along with two Dallas-based firms - Preston Hollow Capital LLC and Jacobs Project Management Co.

Jacobs Project Management Co. is a subsidiary of Jacobs Engineering Group, part of the international professional services firm that provides engineering, architecture, construction and operations along with specialty consulting.

Preston Hollow Capital is an independent specialty financial institution with “more than $800 million in permanent equity capital and more than $1.5 billion in investment capacity from a diverse investor base,” according to its website.

Details have not been made public about those submissions, but they are expected to be similar to Iguana’s plan.

The next step

The DIA will spend the next few months reviewing both the submissions to the RFP and Iguana’s proposal.

With DIA CEO Aundra Wallace stepping down from the organization to head the JAXUSA Partnership in October, it is unclear who will lead negotiations on behalf of the city.

An economic development agreement would then be drawn up, debated and ultimately voted on by the DIA board followed by City Council.

While the DIA is not bound to either site, the buildings along East Bay Street are being prepared for demolition by Environmental Holdings Group, which won the bid to tear down the structures at a cost of $7.98 million.

The city gave EHG its notice to proceed July 26.

The city has not said what would happen to that site if Khan’s team wins the project.

Mayor Lenny Curry’s Chief of Staff Brian Hughes said previously there is no shortage of prospective developers looking to invest in Downtown.

For the DIA, there also is the question of what to do with the Prime Osborn III Convention Center in LaVilla.

JTA CEO Nat Ford has said he would like to incorporate the property into the transportation authority’s future, after it completes its Jacksonville Regional Transportation Center across the street.

Those plans could involve bringing commuter rail back to the former train station, but no plans are currently available.
 

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