by Mike Sharkey
Staff Writer
Within a few months, the City should finally take legal possession of the Shipyards. However, before that happens, City Council is expected to approve legislation to convey current contracts associated with the project and owned by LandMar Group LLC and Northbank Developers LLC to the City.
The legislation was introduced in Council Tuesday.
The City will own the property through a foreclosure process taking place in Austin, Texas. John Germany of the Office of General Counsel explained there still are a handful of creditors owed money by LandMar and Northbank Developers. Germany said the two owners are going through Chapter 11 bankruptcy reorganization.
“Part of Chapter 11 is you have to file a plan of reorganization. There was a confirmation hearing in Austin to approve that plan,” he said.
Germany said part of the plan is the potential assignment of various contracts to the City. He said the City has identified the contracts it wants to assume and the debtors — LandMar and Northbank Developers — have the right to agree or disagree with that decision.
“The ones in the legislation are the ones we want to assume,” said Germany, adding there are about a dozen contracts within the language of the bill.
One of those contracts is with SMG, which uses the Shipyards for parking for Jaguars games and other major events at the Sports Complex. Germany said that contract is terminable with a 30-day notice. Another contract involves a mechanics lien placed on the property by the company that did work on the bulkhead, but Germany said that has been paid.
“The LandMar attorney has said that has been taken care of,” said Germany.
One of the major issues the City will have to tackle once it assumes ownership of the Shipyards is the environmental condition of the property.
Germany said the property has been declared a brownfield site. He said LandMar and Northbank Developers have environmental agreements with the state, but the City could “start from scratch” with the state from that perspective.
However, Germany said that decision wouldn’t be wise, based on the money spent on the environmental issues so far.
Once Council approves the legislation, the Jacksonville Economic Development Commission will oversee the assignment of the contracts. Ron Barton, executive director of the JEDC, said he and his staff have discussed the property and the possibilities once the City is the owner.
“We’ve got time,” said Barton.
The market, Barton said, will dictate what happens with the Shipyards and when.
“We are going to get the property back and discuss the role the Shipyards will play in the development of Downtown,” he said.
“I can’t overstress it’s about the post-recession. What was going to happen three years ago has nothing to do with it. We will redefine the development and react in a whole new way. We will be very thoughtful because it’s a very important piece of the puzzle.”
Germany said the city could take ownership in as little as a few months, depending on the length of the foreclosure hearing. Once it does, it may be a few years before there’s anything on site. The property will require environmental remediation, permitting, design work and planning and more.
“It’s about the right time, the right concept and the right partner,” said Barton. “There’s no need to rush the discussion. Land-banking the site is not a bad decision.”
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