by Bradley Parsons
Staff Writer
The City and the Police and Fire Pension Fund reached a redevelopment deal late last week that will allow the Fund to renovate three historic downtown buildings using $5 million in City money.
Now all that is needed is City Council approval.
That could come Tuesday when the full Council meets. The Feb. 28 meeting is one day ahead of the Fund’s deadline to reach a redevelopment agreement with the City. The Fund plans to renovate the historic Laura Street Trio, three crumbling buildings on the corner of Laura and Forsyth streets, turning them into offices, residences and retail space.
The City and Fund have also filed an extension request just in case. It would give the parties more time if the Council votes against the deal.
But members of the Council’s Finance Committee sounded generally amenable to the deal’s terms. The sticking point in negotiations until last week centered on the $5 million in City assistance, said Ron Barton, executive director of the Jacksonville Economic Development Commission, who helped negotiate the deal.
“The issue was, where are we going to find $5 million?” said Barton.
That was smoothed over when the City and Fund agreed that the money would count toward the Fund’s unfunded liability. That’s the gap between the Fund’s assets and what it owes for members’ future pension payments.
The City helps the Fund make up that difference. This year, the City paid out more than $30 million. Counting the $5 million toward the unfunded liability reduces the gap between assets and payments. That leaves a smaller financial hole for the City to help fill, said Fund Administrator Richard Cohee.
“In this deal, everyone comes out a winner,” he said.
During negotiations, the Fund also conceded to let the money be paid out in $1 million increments spread over five years. The last two payments won’t be made until the Fund shows the City a Certificate of Occupancy. The document essentially proclaims a finish to construction.
Cohee said the Fund would have benefited financially from a lump sum payment up front or a reimbursement on the back end, but agreed to the annual payments to move along negotiations. Cohee estimated the annual payments will cost the Fund about $382,000.
Finance Committee chairman Daniel Davis said he had “a couple of questions” about the deal. But said he thought the deal could be approved prior to the March 1 deadline.
Davis and Council Vice President Michael Corrigan said they had questions about the possibility of the Fund flipping the properties — that is, renovating them and quickly selling for profit.
“Real estate prices being what they are, they might receive an offer they can’t refuse,” said Davis.
Cohee said the Fund’s policy is to “buy and hold” property. The Fund has no intent to sell the properties, he said. Still, Davis and Corrigan said they wanted the issue vetted.
It was a busy day for downtown development in the Finance Committee. It also approved a lease deal that would allow Robert Pavelka to build a parking lot on a vacant lot on the corner of Market and Forsyth streets.
Pavelka plans to turn his family’s Churchwell Building on Bay and Market streets into 21 luxury lofts, but has been waiting for parking to become available. Late last year, Pavelka said the lofts could be on the market by late 2006 if parking was settled early in the year.
City planners expect the project to provide a shot in the arm to the lagging Bay Street entertainment corridor. The parking lease still requires full Council approval. That could also come Tuesday.