by Bradley Parsons
Staff Writer
The mayor’s policy chief raised some eyebrows on the City Council’s Finance and Audit committees Monday when he said the City would give away a $3.5 million land parcel as part of a deal to build a parking garage.
In giving the land to an unnamed private company, Steve Diebenow said the City would not have to raise the capital to build the garage and would later benefit from property tax revenues it generated. The parcel is one of seven the City bought for the construction of the new Duval County Courthouse. Mayor John Peyton has pointed to land costs exceeding $25 million as the primary reason that the project’s budget has swelled $20 million to $232 million.
“The City’s not in the business of building and operating parking garages,” said Diebenow. “Having the block owned and operated by a private company would benefit the City in terms of property taxes generated.”
Courthouse project manager Chris Boruch said the City paid $3.5 million for the land, which is bordered by Clay, Forsyth, Pearl and Adams streets. The City bought the land with courthouse funds.
Diebenow later said he was unsure whether the land “would be contributed by the City or purchased.” That decision, he said, would be made as part of ongoing negotiations between the company and the Jacksonville Economic Development Commission. He said the mayor’s office was confident that JEDC Director Kirk Wendland and Downtown Development Authority Managing Director Al Battle would secure a good deal for the City.
Wendland said the land would likely be contributed according to the terms of the year–old Request for Proposals.
“When the RFP went out, we said we would contribute the land. That’s what everybody bid on. Anything is negotiable, but our negotiations all along have been that we contribute the land,” said Wendland.
Parking garages often operate at a deficit said Wendland, so asking companies to buy the land would make it more difficult to attract qualified operators.
“Everybody assumes that garages make a lot of money, but that’s not necessarily the case,” said Wendland. “They earn revenue, but they don’t make money.
“Collectively, the garages will operate at a deficit; if we say, ‘you have to buy the land,’ there’s another impediment.”
According to the deal being negotiated, Wendland said the City would agree to underwrite the company’s operating deficit, but would also share in the profits.
Several Council members questioned Diebenow about the deal. Diebenow reminded them that any agreement would need Council approval.
Finance Committee chair Warren Alvarez said his committee would examine the land deal closely.
“Remind Kirk [Wendland] as he’s negotiating that we’ll be taking a hard look at this,” said Alvarez.
Council member Jerry Holland questioned the wisdom of proceeding with work on the courthouse without having a parking agreement in place. The building’s foundation is scheduled to be poured in March. How could the administration guarantee that the project would not exceed $232 million if it didn’t know how much the garage would cost, asked Holland.
“Would you build a house without knowing if you were going to have a driveway?” Holland asked Diebenow.
Holland further questioned whether proceeding with courthouse construction would put the City at a disadvantage in its negotiations with the garage builder.
Diebenow said it was essential to begin work soon to keep the project on schedule. Starting work now, he said, would allow the City to take advantage of a “relatively soft construction market,” saving taxpayer dollars.
“There’s an optimism that the preliminary bids will come in a little better than anticipated; that’s why we need to move on this,” said Diebenow. “Would it be nice to have a parking garage deal in place? Certainly. Does it hurt our ability to negotiate if the project is underway? I don’t think it does.”