by Mike Sharkey
Staff Writer
When Humana Health Care announced last year that it was closing much of its Jacksonville operation, the decision left a large work force void in the urban core. They also left behind a hefty clawback tab and an unbuilt, 1,000-space parking garage, and the City is actively pursuing both.
Jacksonville Economic Development Commission executive director Kirk Wendland projects that Humana will owe the City approximately $2.2 million in clawbacks (payment due when a business fails to meet hiring or revenue expectations) as of Dec. 31. While that issue will be resolved one way or another — and both Humana and the City say amicable negotiations have been taking place — the long promised and talked about parking garage could be trickier.
Pam Gadinsky, corporate spokesperson for Humana, said the company is well-aware of both the clawback and parking obligation and intends to honor both without debate.
“We’re going to meet all our commitments to the City and the JEDC,” said Gadinsky. “We have had discussions with the JEDC and we are not aware of any issues [that would cause problems]. We have spoken on a regular basis.”
In 1998, Humana moved hundreds of employees from its Southside office to downtown. In order to facilitate that move, Humana sought financial assistance from the JEDC in order to purchase the South Laura Street building from AHL.
“It was cheaper to operate in the Southside, but they wanted a downtown presence,” said Wendland, explaining that the original deal was complicated but basically involved Humana purchasing the property and relocating employees in exchange for a $2.2 million grant.
Although there was no official incentive policy in place at the time, Humana, who brought 584 employees downtown in 1998, agreed to hire an additional 1,000 employees by the end of this year. As of Dec. 31, Humana will be assessed $1,389 for each employee under 1,584 in the downtown building.
“They [Humana] did say they have talked to their lawyers and have fully acknowledged the clawback. I don’t anticipate that being an issue,” said Wendland, adding the $2.2 million is, by far, the largest clawback the JEDC has ever had to enforce.
The parking garage issue isn’t as easy to resolve, mainly because it doesn’t just involve Humana and the City reaching an agreement. The Landing is also a player and the building’s new owners will have to contend with both the Landing and the City.
When the plan to build the Humana garage was announced a few years ago, it marked a solution to the parking agreement woes between the City and the Landing. Of the 1,000 new spaces, 375 were to be set aside for the Landing on weekends and at night with 300 guaranteed for daytime use. In order to atone for the lack of parking, about a year and half ago the City started waiving the Landing’s $100,000 per year rent.
The rent alone is an issue, but another deadline looms — February 2004. That’s the drop dead deadline for the City to provide parking for the Landing. After that, the Rouse Company, which owns the Landing, can start assessing the City for unprovided parking on a monthly basis.
“It would certainly be a challenge for us to build a garage before then, but it could be done,” said Wendland. “It’s certainly humanly possible, but I wouldn’t bet on it.”
Landing general manager John Kiddy said he’s sympathetic to City’s plight, but parking has been an issue since the Landing opened in 1986.
“I don’t believe we’ll back off that,” said Kiddy of the February deadline. “They have been obligated to us for 15 years. Everybody [the City, the Landing and Humana] entered into the deal in good faith.”
Humana, too, understands the importance of the parking garage to the success of the Landing. Gadinsky said the company, which will maintain a sales presence in Jacksonville, has completed the bid process and is evaluating those bids, hoping to complete the sale within the next couple of months — under one condition.
“We will not sell the building to anyone who doesn’t agree to build the parking garage,” she said. “We have had local interest and national interest in the building and we are quite pleased with the number of bids.
“Whoever qualifies for purchase must meet two requirements: one, be good corporate citizens and, two, also meet the requirements of the City. The garage was always in our timeline to complete and that was spelled out in the proposal we sent out. There was little interest in the garage without the building.”
That scenario should please Kiddy, who along with Wendland, said alternate sites for the garage — such as the surface lot just east of the Landing — were being considered.
“The ideal location is outside of Humana,” said Kiddy. “We want it within eyeshot of the Landing and those options are few and far between.”