DIA releases draft deal for $41 million in incentives for The Hardwick

The Downtown Investment Authority released terms of a proposed $41.16 million incentives deal with Atlanta-based Carter to build The Hardwick, a minimum 18-story mixed-use residential tower on the Bay Street riverfront.

Carter proposes a $150 million, 332-unit multifamily building with 25,000 square feet of retail and restaurant space in exchange for a property tax break, cash completion grant and a discounted price on the city-owned property branded The Ford on Bay.

Details of the deal are included with a DIA Retail Enhancement and Property Disposition Committee draft resolution and term sheet. 

The five-member panel is scheduled to take an initial vote on the tentative deal May 16. 

The DIA board voted 6-0 on Jan. 19 to award Carter the riverfront parcel at 330 E. Bay St. after the company scored the highest among six firms in the city’s request for proposals to redevelop the former Duval County Courthouse site. 

Here are the incentives Carter would receive from city to develop The Hardwick: 

• A 75%, 20-year Recapture Enhanced Value Grant property tax refund capped at $26.91 million. 

• A $9.64 million lump sum completion grant paid after the project is done.

• A $4.61 million discount on the 2.4-acre property appraised by the city at $9.54 million. 

Carter would pay the city $4.93 million for the property, of which $2.5 million would be considered a donation to construct the Northbank Riverwalk near the development.

The term sheet also says the city would benefit from the success of the project through a profit participation plan.

The $41.16 million in taxpayer investment may not include some of the ongoing infrastructure improvements and expenses at the site.

The term sheet says the city would design and maintain the Riverwalk and build a marina on the St. Johns River accessible at The Hardwick. 

If approved by the DIA board, legislation approving a redevelopment agreement with Carter subsidiary Carter Acquisitions LLC would have to pass City Council. 

According to the term sheet, the high-rise portion of the proposed development will have 332 residential units but is required to have at least 325 in a minimum 18-story building.

The deal calls for at least 35% of the 25,000 square feet of retail space to face Bay Street and include a minimum of 7,500 square feet for up to two restaurants facing the marina.

Carter also would build a 1,500-square-foot rooftop bar and/or restaurant on the second floor or higher.

The developer also would finance and construct: 

• 8,000 square feet of elevated plaza and green spaces.

• 120 parking spaces for marina and retail customers.

• A minimum $3.25 million in retail tenant improvements.

• A minimum $1.2 million in furniture, fixtures and equipment. 

The building will include a four- to six-story  “pedestal” from Bay Street to the St. Johns River on about two-thirds of the parcel along Liberty Street.          

The deal requires at least one-third of the property to be an open courtyard along Market Street.

The project’s name and mid-century modern architecture is inspired by the work of the late Jacksonville architect Taylor Hardwick. That helped it score the highest against competing proposals for the site in January.

The developer has since slightly modified its design but “adhered to the essential terms” of its initial proposal, according to the DIA board committee resolution.

The deal would give Carter until Dec. 31, 2026, to complete The Hardwick. Carter must break ground by April 30, 2024. 

However, the term sheet appears to give the developer leeway to exit its agreement with the city by May 31, 2023, without penalty based on site conditions and the project’s marketability. 

“Following the execution of the Redevelopment Agreement, Carter will have through May 31, 2023 (“Due Diligence Period”) to inspect and perform tests on the Property to determine its suitability for the Project, and to investigate the quality and marketability of the title it will receive from the City,” the draft term sheet says. 

“Upon notice to the City, Carter may terminate the Redevelopment Agreement and the Project any time within the period without cause and without incurring any obligations under the Redevelopment Agreement.”

DIA CEO Lori Boyer said she hoped to complete negotiations with Carter and have the deal ready for a vote by March, but she told board members in April that workflow and the need for more staff held up the underwriting process.

Carter has been in business since 1958 with a national reach, according to CBRE, which provided real estate analysis of The Ford on Bay bids.

CBRE said Carter has invested $1.2 billion in assets in the last decade, primarily in mixed-use multifamily, office and student housing projects. 

In Florida, the company will have about $300 million in multifamily development under construction this summer near Orlando, Tampa and Lakeland.

Carter President and CEO Scott Taylor said Jan. 18 that his company sees Jacksonville’s job growth rate, quality of life and “reasonable” cost of living as putting the area development market in an “upward trajectory.”

“Frankly, we believe that Jacksonville has a tremendous amount of opportunity to be that next frontier,” Taylor said.