Officials said a slip in the city’s ROI on the $99 million project was a “typo.”
A Downtown Investment Authority board committee recommended 3-0 to add more than $1 million in tax incentives for a Miami-based developer’s proposed RD River City Brewery apartments Downtown.
The DIA Strategic Implementation Committee, which voted April 16, wants the full board to approve an increase to Related Group’s requested Recapture Enhanced Value Grant from $11.9 million to $12.99 million.
Committee members Oliver Barakat and Bill Adams and DIA board Chair Ron Moody voted in favor of the additional incentives.
DIA staff said design changes by the city Downtown Development Review Board and the increased cost of materials caused the price of the Southbank apartment project to increase $6.84 million to $99.16 million.
The larger tax refund would bring the city’s total investment in the proposed Southbank apartments to $18,274,679, including grants, site infrastructure and marina improvements, according to a DIA staff report released April 9.
Related Group plans to demolish the River City Brewing Co. restaurant at 835 Museum Circle to build an eight-story apartment building with a 535-space parking garage and a stand-alone restaurant.
Related Group also told DIA officials it will reduce the planned number of apartment units from 335 to 327 because of design changes. It also will not repair one of the docks at the site.
Related Group and Miami-based architect MSA Architects redesigned the apartments after feedback from the Downtown Development Review Board and DIA staff that it did not fit “contextually” along the St. Johns River.
DIA Director of Real Estate and Development Steve Kelley said a staff report released April 9 that showed a dip in taxpayer return on the deal was a typo.
According to Kelley, the city’s return on investment will increase from $1.02 on every $1 spent to $1.04. The report showed a drop from $1.05 for every $1 spent to $1.04.
Barakat said he does not want the DIA to make a habit of increasing incentive payouts after a deal has been approved.
“I’m sympathetic to the increase in cost,” Barakat said.
“We do need to be careful moving forward,” he said. “This is not a course we typically want to go through.”
Barakat suggested the city consider moving the design board reviews to the start of the process before an incentive deal is drafted.
DIA CEO Lori Boyer told committee members that previous DIA incentive deals likely also saw increases to the maximum property tax refund as costs increased without returning for board consideration.
She said the difference is that the refund amount used to be detailed in staff reports, not in the legally binding term sheet.
The $99.16 million project cost elevates the amount eligible for the property tax incentive from $75.01 million to $82.49 million. That boosts the city’s total refund to Related Group by about $1.09 million.
The grant’s structure of a 20-year, 75% refund on the property’s tax growth is unchanged.
The city owns the River City property but Related Group also is negotiating with site leaseholder, Maritime Concepts.
The developer plans to buy Maritime’s interest in the property and buy out the remaining 77 years of its long-term land lease with the city.
If the full DIA board approves the modified deal when it meets April 21, City Council must approve it before Related Group can receive the taxpayer-backed benefits.