A Downtown Investment Authority committee advanced Related Group’s $92.34 million plan to redevelop the River City Brewing Co. property on the Downtown Southbank riverfront as apartments after members voiced dissatisfaction that it lacks a restaurant.
The DIA Strategic Implementation Committee voted 4-1 Oct. 9 to recommend its full board issue a 30-day negotiated notice of disposition for the city-owned property.
The notice is required before the board can consider the Miami-based developer’s request for $12.94 million in property tax refunds and be given the city-owned riverfront land at no cost for a proposed 335-unit, eight-story apartment project.
The River City Brewing Co. sit-down restaurant and marina is at 835 Museum Circle.
Committee Chair Oliver Barakat, who voted no, said a restaurant and retail at the site would benefit public use and Related Group’s future tenants.
“I’m sympathetic to having to build 20,000 to 25,000 square feet of retail. I totally agree there’s not enough room for that. But one or two small tenants and 5,000 square feet of retail I don’t think is too much to ask given the tax subsidy you’re asking this board to provide you,” he said.
Related Group negotiated a contract with River City Brewing parent Maritime Concepts to buy its interest in the property and buy out the remaining 77 years in its long-term land lease with the city.
The developer signed the contract through RD River City Brewery LLC, according to a DIA staff report.
The full DIA board is scheduled to vote on final authorization for the notice at its Oct. 14 meeting.
That gives other interested developers an opportunity to submit bids before the DIA decides on sending the term sheet and redevelopment agreement to City Council.
Related Group would demolish the restaurant. The apartment building would be built around an eight-story parking garage with 535 spaces.
The development would feature a riverfront swimming pool; courtyard and deck; a 3,500-square-foot fitness center; bike/kayak storage; a clubroom for tenants; and a boat shop to service the adjacent marina.
Maritime’s interest in the property includes its site improvements and a right-of-first-refusal option if the city decides to sell the property. The company is paying the city $40,000 annually for the ground lease signed in 1998.
The draft report states Related Group has a $70 million construction budget for the project and expects to pay $10 million for Maritime’s interest and remaining lease cost.
The remaining costs come from engineering, architectural and finance fees.
The DIA is offering Related Group a 20-year Recapture Enhanced Value Grant refunding 64% of the increase of ad valorem taxes on the 3.43-acre property.
Related requests a 75% tax refund. DIA Director of Downtown Real Estate and Development Steve Kelley said the city would net about $200,000 in annual tax revenue in the deal.
Restaurant vs. residential
DIA CEO Lori Boyer asked Barakat if he would accept a rooftop bar or restaurant as a possible compromise.
Barakat, a real estate broker with CBRE, said he did not agree with Related Group’s argument that the area lacked the market or foot traffic for profitable restaurant or retail uses.
“I don’t think I’m totally on board with the lack of demand for a midscale, sit-down restaurant experience,” Barakat said.
“I think a retail experience facing that park with the skyline in front of you as a backdrop does not exist today. It’s something that many people in Jacksonville seek,” he said, referring to St. Johns River Park.
Vice President of Development Jeff Robbins told the board Related Group would consider the request but “can’t guarantee” it will incorporate a restaurant.
Attorney Steven Diebenow, a partner at Driver, McAfee, Hawthorne & Diebenow, represents the developer in the deal. He said the site plan has gone through several iterations. One included a restaurant, but Diebenow said it was rejected for more residential units.
DIA Board Chair Ron Moody said he wished there was a way “to plug in a world-class restaurant directly on the water.”
But Moody said he thought the site might be too narrow for both apartments and an eatery.
“When you start to look at financial feasibility and a developer trying to have a return that would entice them to do this type of development, they really have to work the development in a way to bring the returns they would need,” Moody said.
Board member David Ward said that although he knows Related Group “threaded the needle” on the proposal financially, he’s concerned that it could be the city’s last chance to push for a restaurant in that area of the Downtown Southbank.
“Whatever this property ownership looks like 25 years from now, we’re going to have some push-and-pull,” Ward said.
“If there’s not any sort, however modest, of retail and restaurant space in this general (area), there’s probably not going to be any new retail or restaurant development there,” he said.
Board member Todd Froats suggested Related Group incorporate a 5,000-square-foot restaurant and return to the board to request additional taxpayer incentives to make it economically viable.
Although Related Group will be required to invest at least $300,000 to develop the proposed 1,000-square-foot boat supply shop on the site, committee members said they are worried that niche retail would not have the same public draw of a restaurant.
Board member Bill Adams said and Boyer confirmed there has been discussion that the Museum of Science and History, which is next to River City Brewing to the east, has considered relocating to the Downtown Northbank if it does not have space for its planned expansion.
He said that could open another opportunity for a riverview restaurant.
The redevelopment deal also cedes land to expand St. Johns River Park that includes Friendship Fountain, including an additional 110 feet of waterfront along the Riverwalk.
Boyer said DIA staff has suggested the 0.33-acre parcel between the park and proposed apartments could be used to attract a fish camp-style restaurant to satisfy public and board concern about losing the riverfront restaurant.
Dock and marina
The city would pay $1.143 million to pay for improvements to a marina dock and $1.65 million to construct improvements at the marina boat ramp and relocation of an underground fuel tank at the site.
In return, Related Group is required to spend at least $250,000 for improvements to the Southbank Riverwalk that borders the property.
Maritime or Related Group would restore a second dock damaged by Hurricane Irma in 2017 as a condition of the sale.
Related Group will maintain and operate the marina and provide at least 20 public slips for transient boats.
Boyer said Oct. 9 the city would own the docks and control the submerged land lease after Maritime’s control of the underwater parcel expires in 2022.
Diebenow said a finished site plan would be available in November for DIA review.