Ryan Companies US Inc. extended JEA’s deadline to opt out of a lease agreement for the utility’s planned $72.2 million Downtown headquarters.
A Sept. 9 interoffice memorandum written by JEA Managing Director and CEO Aaron Zahn says the Minneapolis-based developer will give JEA until Oct. 23 to decide whether to cancel plans for the headquarters as the public utility’s board considers a possible sale or path to privatization.
The memo says the additional time will allow JEA’s financial consultants to review initial responses to an invitation to private companies and organizations to negotiate a sale. JEA issued the invitation Aug. 2.
JEA staff cited declining sales and regulatory hurdles to diversifying its business offerings as reasons to explore privatization.
The utility could scrap its Downtown plans in favor of a smaller office space in South Jacksonville should a “recapitalization” not happen.
The JEA board approved the lease for the 325 W. Adams St. building June 25, which held the utility to a Sept. 30 deadline to cancel the agreement.
City Council, which also approved the $2.6 million sale of the West Adams Street property to Ryan that same day, included a similar exit clause. Ordinance 2019-401 allows the city to repurchase the property if the developer does not break ground by Dec. 31.
Having a corporate presence Downtown is one of the minimum requirements for any organization interested in making an offer for JEA.
Utility officials want to “confirm acceptance of the minimum criterion for a Downtown headquarters.”
The memo included in supporting documentation for the JEA board meeting Tuesday says that information is expected to be delivered to JEA’s board by its Oct. 22 meeting.
Ryan is continuing its environmental review and preliminary planning on the site, according to the document.
Mayor Lenny Curry has said that at least $3 billion in proceeds expected from the sale of JEA would be used to pay the city’s outstanding $2.2 billion in debt, with the remainder placed in a fund for neighborhood infrastructure improvements.
The Downtown Development Review Board granted preliminary design approval Thursday for Ryan’s proposed 220,000-square-foot building.
In addition to JEA’s corporate headquarters, the building includes 4,900 square feet of ground-floor retail space and an 850-space parking garage.