by Max Marbut
Staff Writer
The possible default involving an agreement between the City and LandMar Group, LLC to develop the property on the Northbank near the Sports Complex has become the “hot topic” of discussion lately. At Thursday’s meeting of the Jacksonville Economic Development Commission, Executive Director Ron Barton used his time of the agenda to explain the situation to commissioners.
Barton sent a memorandum via e-mail Wednesday evening to City Council members and provided copies to commissioners at their meeting. The document details where LandMar currently stands in terms of the contract conditions as well as the City’s recourses and cures.
While it’s public record that LandMar is in default on paying the 2008 ad valorem taxes on the site, Barton said it’s not shocking that LandMar is in this position.
“These are unprecedented times in economics and in real estate. This developer, like others developers, is under duress,” he said.
Barton reminded the group that the City’s agreement with LandMar had nothing to do with constructing high-rise luxury condominiums, rather it was, “To build improvements. To take a Brownfield and make public improvements to increase the value of the property and build the tax base.”
He pointed out that while the assessed value of property in the urban core is about $3 billion, half of that property is exempt from taxes because it’s city, state or federal office space, church property or owned by nonprofit organizations.
Another part of the agreement that LandMar is in default over is a $900,000 mechanic’s lien which has been placed on the property by Meisner Marine Construction, the subcontractor LandMar hired to build the bulkhead on the property.
“The bulkhead is 99 percent done,” said Barton, “But in the last 50 feet Meisner cut the JEA line under the river. JEA is reinstalling the line and LandMar withheld payment due to the bulkhead not being finished.”
He also told the commissioners it is too soon to speculate on what the final outcome of LandMar’s default position will be and to expect the process to take as long as 45 days.
In the meantime, the City is working with the developer to come up with mutually amicable solutions.
“It takes no great talent to terminate an agreement,” said Barton. “It takes talent to come up with a solution.”
In other news from the JEDC meeting:
• Commissioners unanimously approved a lease agreement between the City and the Boeing Company to allow Boeing to relocate its maintenance and repair facility for the F/A-18 military jet aircraft from Mesa, Ariz. to Cecil Commerce Center.
The relocation would bring as many as 60 full-time jobs with an average wage of $60,000 and a $3.3 million investment in new construction and renovations and manufacturing and technology equipment.
JEDC Business Development Chief Lindsey Ballas pointed out the $2 per square foot lease rate and added, “If there were such a thing as Class-D warehouse space, this would be it.”
Boeing has agreed to invest $500,000 to rehabilitate the 1950s-era military warehouse to bring it up to modern standards. Improvements will include air conditioning and bathrooms, said Ballas.
The lease also includes a $150 per month common area maintenance fee and a 3 percent per year escalator clause. The term is for five years with two additional five-year renewals.
Boeing will receive a lease credit of $223,600 and Ballas said she wanted to make it clear that “No money is being exchanged (from the City to Boeing). This is a true reimbursement of Boeing’s expenses to improve City property.”
• Also approved unanimously was Downtown Vision, Inc.’s 2009-10 budget. DVI Executive Director Terry Lorince said the $1.2 million budget was about equal to last year’s figure. The organization’s budget is based on an additional ad valorem tax assessment for property within the 90-block Business Improvement District and Lorince said the budget was prepared with current property value trends in mind.
Commissioners expressed concern that DVI’s $45,000 per year expenditure to Catholic Charities to provide trash pick up and cleaning in the district was too low. Lorince said that to ensure that Downtown is “always spotless” it would require an annual budget of $200,000 or more.
After approving the budget the commissioners instructed JEDC staff to work with the City and perhaps volunteer organizations to find ways to supplement DVI’s grounds maintenance effort.
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