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Jax Daily Record Tuesday, Jun. 21, 202205:08 PM EST

DIA board moves Iguana closer to buying Four Seasons office parcel

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Jacksonville Jaguars owner Shad Khan’s development company wants to purchase, rather than lease, as part of its $370 million project.
by: Mike Mendenhall Associate Editor

Jacksonville Jaguars owner Shad Khan’s bid moved forward June 21 to buy, rather than lease, land from the city for a six-story Class A office building as part of its $370 million Four Seasons Hotel-anchored project.

The Downtown Investment Authority board voted 6-0 to issue a 30-day notice of disposition for the property before staff completes negotiations with Khan’s Iguana Investments Florida LLC, the Jaguars real estate arm, for the purchase.

Board members Craig Gibbs and Stephanie Burch were absent for the vote.

City code requires the procedural action. Putting the property on the market allows other developers or buyers to submit proposals for the riverfront property.

DIA CEO Lori Boyer told the board June 21 that the city agency would analyze any offer that came in for its tax benefit from the city, the development plan and how it fits within the authority’s goals for Downtown.

The office parcel is a key component in City Council’s agreement with Iguana approved in October to redevelop the Kids Kampus.

DIA documents show Khan’s company would pay at least $3.2 million for the parcel on the Shipyards site southwest of TIAA Bank Field.

That was the appraised value as of March 7.

The existing $114 million public incentives package for the Four Seasons plan had Iguana leasing the office parcel for $36,000 per year.

An attorney for Iguana told a DIA committee June 15 that owning the 1.05-acre site would make it easier to finance the office building and possibly allow tenants to buy rather than lease space.

Driver, McAfee, Hawthorne & Diebenow partner Cyndy Trimmer said Iguana was concerned when negotiating terms of the expected 40-year ground lease with the city.

“Now that we’ve gone forward with the deal and are talking to investors, working on putting together the final financing structure and also talking to potential tenants, there is some interest in potentially having some condominium-type ownership,” Trimmer said.

“On the financing side, there are concerns with the ground lease. And we believe we’ll be able to put everything together more efficiently and effectively with the fee-simple ownership structure — getting additional investment in Downtown and (the project) off the ground and running,” she said.

Iguana’s plans show a 174-room, 12-story hotel, expected to be a Four Seasons; a parking garage; a 25-unit, 12-story residential building; and a six-story office building.

The disposition stipulations would require Iguana’s project or any developer to invest at least $48.5 million at the site with a minimum 150,000-square-foot building with no less than 9,000 square feet of ground-floor retail space.

DIA board member Oliver Barakat said staff negotiators should conclude how a purchase agreement would affect the city’s return on investment in the deal.

Boyer said June 15 that Iguana’s office project likely will exceed $50 million.

Boyer told the committee that “at a high level,” the city would receive a better return on investment by selling the land as opposed to leasing it.

It likely would produce more tax revenue, but Boyer said Iguana could return and ask to change the deal’s tax incentive structure.

Jaguars President Mark Lamping told reporters May 11 that Iguana intends to ask the DIA and Council to raise the cap on the approved 75% city property tax refund as the project cost rose from $321 million to $370 million since October.

The existing Recapture Enhanced Value Grant is a maximum of $47.68 million over 20 years.

Council would have to sign off on an amended agreement including shifting from a lease to a sale.

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