by Bradley Parsons
Staff Writer
The Jacksonville Economic Development Commission will recommend the City Council approve $2.6 million in loans and trust funds to create a downtown entertainment and retail district similar to Tampa’s Ybor City and Las Olas Boulevard in Ft. Lauderdale.
Pending Council approval, the Bay Street Town Center project will offer investors a series of incentives including forgivable loans, tax rebates and tax credits for hiring downtown residents in an effort to lure an eclectic group of locally-owned businesses to a shopping, dining and cultural corridor stretching from Liberty Street to the Landing.
More than 80 percent of the requested funds will be used to jump start private investment into the center in the project’s first 24 months. The City will loan investors a dollar — up to $100,000 — for every $2 of private money invested. To discourage vacancies, the City will forgive those loans at a rate of 20 percent per year.
The forgivable loans were approved but Commissioner Charles Appleby, president of Advanced Disposal Services, balked at low interest rates guaranteed by the City to borrowers. The initial proposal locked in the rate at three percent, which Appleby said could cost the City money if interest rates on City-borrowed money climbed in the future.
“Just two years ago rates were four -and-a-half percent, which seems unthinkable today,” said Appleby. “We’re at historically low rates now, but if we’re back for more funding in a few years borrowing rates could be higher.”
JEDC executive director Kirk Wendland dismissed the possible point-and-a-half difference between City borrowing and lending as “not that material on a $100,000 loan.”
Downtown Development Authority manager director Al Battle pointed out that the City has similar lending arrangements with established projects such as the Carlington lofts in the old Roosevelt Hotel and the Northwest Trust Fund. However, the commission amended the proposal to tie interest rates on City-borrowed funds to interest rates on money borrowed from the City.
Wendland said the City pays four -and-a-half percent interest on the Housing and Urban Development loans, which will provide most of the incentive money designated for the project. He said rates were unlikely to rise significantly before the City exhausts the $2 million in incentives.
“This is not going to be a 10-year program. The funding for this project will establish the timetable,” said Wendland.
In addition to the forgivable loans, the City will provide $10,000 facade renovation grants to Bay Street participants and would fund half the cost of further improvements up to $10,000.
Once complete, the JEDC estimates the project will generate $9.7 million in tax revenue over the next 10 years.
Responding to other objections, Battle said the City would consider extending project incentives to businesses and investors already receiving City money through other programs. He said requests for money would be taken on a case-by-case basis and would be awarded if necessary to improve the corridor’s infrastructure and appearance.
In an attempt to prevent undesirable businesses, Battle said the project’s redevelopment agreement would allow the City to recall incentive money from offending businesses.
“ We don’t envision entertainment of poor taste,” said Battle.