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Jax Daily Record Tuesday, Oct. 20, 202010:10 PM EST

Lot J development financial projections still being calculated

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City Council Auditor Kim Taylor is waiting on the administration and the administration is waiting on the Jaguars.
by: Mike Mendenhall Staff Writer

Mayor Lenny Curry’s administration said Oct. 20 it is waiting on analysis from the Jacksonville Jaguars and the city Finance and Administration Department before it can produce full financial projections for the public investment in the proposed $445 million Lot J development. 

The status of the projections came up at the Council Finance Committee meeting Oct. 20, where City Council Auditor Kim Taylor was asked for an update on the Jaguars’ Lot J project.

Taylor said Curry’s staff has yet to produce the full financial projections her office needs to vet Ordinance 2020-0648 and provide Council members a review. 

Paul Harden, who represents team owner Shad Khan’s development company Iguana Investments Florida LLC, and another attorney for the Jaguars, attended the meeting, Taylor said.

The legislation would authorize a project development agreement with the city and $208 million in taxpayer-backed debt to pay for the public contribution to the mixed-use Lot J. 

Khan wants to build offices, apartments, a hotel, retail and entertainment venues in parking Lot J west of TIAA Bank Field Downtown.

Council President Tommy Hazouri declined to introduce the bill Oct. 13 because administration officials did not include a parking agreement that’s part of the deal with Jaguars subsidiary Gecko Investments and development partner The Cordish Companies of Baltimore. 

Taylor said it’s typical for city departments like the Office of Economic Development and the Downtown Investment Authority to have a full financial analysis of an economic development agreement and a project cost breakdown before legislation is filed.

Taylor said she “may have presumed wrong” that this information was already available for the Lot J deal.

Curry Chief of Staff Jordan Elsbury said in an Oct. 20 email responding to Taylor that he expects the Jaguars to provide the return on investment calculations for Lot J and the projected revenue and expenses for the city-owned project components.

The email said the mayor’s office still was calculating the annual and total debt service costs for the city-funded portion of the project.

Under the deal with the Jaguars, the city would pay $77.4 million for infrastructure improvements, including a 700-space surface parking lot and parking garages totaling 700 spaces.

Taylor also said she is waiting on expected property tax revenue from the mayor’s office linked to a 20-year, 75% market rate Recapture Enhanced Value Grant in the deal. 

The grant will give the developer up to $12.5 million on two planned mid-rise residential buildings totaling 400 units.

The Council Auditor also was asked for information supporting the legislation’s projected $2 billion in local economic impact from direct and indirect salaries; the $100 million in annual economic output; and the creation of 2,300 construction jobs and 1,000-plus permanent jobs.

“We anticipate releasing a summary of the economic impact report,” Elsbury wrote. “The report will contain an estimated range of wages for the permanent jobs made possible by this project.”

Administration officials did not give Taylor a date when to expect the information, she said.

Job creation and economic impact were key talking points at Curry, Khan and Jaguars President Mark Lamping’s Oct. 5 announcement of the Lot J term sheet and the final project design.

In addition to the infrastructure, Curry is asking for city debt to pay $50 million of the proposed $100 million Live! District entertainment venue that will be owned by the city. The proposed bill says the Live! District will have 75,000 square feet of restaurant and retail space and 40,000 square feet of Class A office space.

The deal offers a $12.5 million completion grant for Lot J’s proposed 150- to 250-room hotel.

The city would be responsible for up to $15.1 million in cost overruns for the publicly owned portions of the Lot J project. That expense is factored into the debt financing in the bill. 

Gecko Investments and Cordish, collectively referred to in the bill as Jacksonville I-C Parcel One Holding Company LLC, would pay for all other project cost overruns. That could bring the total city investment to $233.1 million.

Council concern

Finance Committee Chair Matt Carlucci said he will encourage Hazouri to delay any vote on the bill until the Jaguars and Curry’s staff provide the information to the Council Auditor.

Taylor said she has a meeting with Curry administration officials scheduled Oct. 23. 

It’s unclear if that will give Hazouri time to introduce the bill and stick to his schedule to hear it. The Council president wants a public hearing at the Oct. 27 Council meeting and a hearing by the Committee of the Whole the following week, tentatively scheduled Nov. 5.

Carlucci wants the Council Auditor’s Office to review the viability and sustainability of Lot J. 

 “What are we getting in return? Are we getting anybody to say the Jaguars are going to be here for so many years? This is a two-way street,” Carlucci said. “I know the NFL usually wins these things, but I’d like to have some concessions. I think that’s extremely important and that’s what I’ll be looking for.”

Vice Chair Randy DeFoor said during the Oct. 20 meeting that she worries the city and taxpayers are “paying significantly more than what we think” for Lot J.

“They should have a complete understanding of the construction costs, the net operating income, which we need to see from the developer side,” she said. “Because I want to understand exactly what percentage we are paying for all of this.”
 

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