by Mike Sharkey
Staff Writer
In September, developers Carlton Jones, Terry Wood and John Lewis of Gateway Center Economic Development Partnership, Ltd., appeared before the Jacksonville Economic Development Commission to essentially plead their case regarding $90,790 worth of clawbacks the JEDC was imposing in connection to shortfalls at the Northside project.
As a group, Gateway asked the JEDC to waive the clawback payment, claiming the 150 job shortfall wasn’t related to the 1997 “Gateway Renovation” agreement, but rather the 1999 “Publix” agreement. Their argument: the job shortfall was the fault of Publix and the adjacent Hollywood Video, not Gateway developers. Gateway even went so far as to have City Council member Pat Lockett-Felder draft an ordinance introduced Nov. 12 that would amend both agreements with the consent of the JEDC, making the clawback payment null and void.
Last week, JEDC executive director Kirk Wendland sent the developers a letter explaining that the situation has been analyzed by a specially-appointed JEDC subcommittee and the decision was made to enforce the clawback. Wendland said he plans to introduce the clawback as an action item at next month’s JEDC meeting and said there are still several options for Gateway, but getting out of paying the clawback isn’t one of them.
“We listened to what they had to say and talked about it for a long time,” said Wendland. “My recommendation is they pay up. One thing we have offered to do is use the funds to do [landscaping] work on the property.”
Wendland said the JEDC is also willing to help Gateway refinance the original debt on the investment, which is $3 million.
“They wanted to refinance the debt on the property, but couldn’t get a good rate,” explained Wendland, adding he offered to work with the lender on language that would make it clear the JEDC was not the primary investor or developer of the property.
Wendland also indicated the JEDC was a little put out by the developers’ attempt to circumvent the JEDC, and potentially the clawback payment altogether, by going through Council to get the two development agreements amended.
“It [the letter] basically says we don’t appreciate them taking it to City Council without our approval. We are part of the process,” said Wendland, adding that an appeal to Council should only be made after all options with the JEDC have been exhausted. “I plan to take this to the Commission at next month’s meeting.”
Jones, Wood and Lewis are all well-known throughout Jacksonville. While the $90,760 figure isn’t the first or biggest clawback the JEDC has imposed, it is notable due to whom it’s being levied against. Wendland said who the developers are is irrelevant.
“A contract is a contract,” said Wendland. “It does not matter who you get into it with. We have to do what’s right.”
One of Wendland’s big concerns is that allowing the developers to seek help from Council could potentially set a precedent for the future in which any and all clawback payments could be avoided with legislative help. Wendland said Gateway has put the JEDC in a “difficult position by ignoring our process and going straight to City Council with proposals that we have not previously agreed to.”
Neither Jones nor Lewis could not be reached for comment.