Both options for the city of Jacksonville’s proposed acquisition of the Interline Brands Inc. building are moving toward the Jacksonville City Council after the Downtown Investment Authority submitted a request April 18 to file legislation for a land swap of city-owned parcels for the property.
The DIA’s request to the Mayor’s Budget Review Committee comes on the heels of City Council member Ron Salem filing a bill that would direct the DIA and city administration to purchase the building outright as opposed to the land swap. Salem’s Resolution 2025-0291 is set to be fast-tracked on a schedule that would allow it to be considered alongside the DIA legislation.
The city aims to acquire the Interline property to provide for the proposed University of Florida graduate campus in LaVilla. UF plans to invest $7 million to convert the two-story, 38,136-square-foot building into classrooms on an aggressive schedule that would see instruction begin in the fall of 2025.
The Gateway Jax development partnership, comprising principal Bryan Moll, JWB Real Estate Capital and DLP Capital, purchased the Interline property in October 2024 for $4 million. Moll said the purchase was part of the group’s plan for a $2 billion-plus Downtown development across more than two dozen properties.
The trade option
The swap is the preferred option of the DIA board, Mayor Donna Deegan’s administration and Gateway Jax. Supporters say it would allow the city to obtain the property without dipping into reserve operating funds, put the Riverfront Plaza parcels back on the property tax rolls and set the stage for development that would help energize the Downtown core by attracting visitors and local residents.
As part of the exchange agreement, Gateway has committed to building a 17-story tower that would include a hotel, condos, restaurants, retail and public spaces that would complement the park under construction on the western half of the plaza, the former site of the Jacksonville Landing.
The DIA’s proposal for the swap is scheduled to be presented during the April 21 meeting of the Mayor’s Budget Review Committee. If it is approved – which is highly likely, given Deegan’s support for the option – the DIA would be authorized to submit legislation to Council to consider the swap. The request filed April 18 by the DIA says the legislation will also mention the proposal to purchase the property outright.
In March, the DIA received an appraisal that valued the Interline building at $6.75 million. That amount was in the middle of two appraisals previously obtained by the DIA and Gateway Jax.
A compilation of appraisals for the various properties, supplied by City Council auditors, shows the values of the city-owned properties at a total of $5.02 million. The Riverfront Plaza development parcel is appraised at $3.41 million and the site east of the Main Street Bridge is $1.62 million.
The purchase option
Salem said he had heard from former DIA board members, staffers and other callers that the exchange would favor Gateway over the city, allowing the developers to obtain valuable riverfront property and a handsome return on the $4 million investment they made six months ago on the Interline building.
Another criticism is that the land wouldn’t be the city’s only contribution to the deal, given that Gateway’s tower development would require public incentives. Moll told the DIA board that the partners would need $20 million in completion grants to bring the project to fruition.
The DIA’s request for the swap says its legislation will cap any completion grants at $20 million.
Salem said Recapture Enhanced Value grants also would be needed. A REV grant is a refund on ad valorem tax revenue generated by a new development.
Unlike REV grants, completion grants must be paid out through the city’s general fund, which provides for across-the-board city services.
Council members, particularly member Will Lahnen, have been sounding alarms in recent months over the city’s commitments for incentives in light of projections by Council auditors that the city is facing deficits of as much as $105 million in the next four years.
With $74.1 million in payments for completion grants looming in the 2025-26 fiscal year, Lahnen calls the grants a “cash incentive cliff” for the city and, along with other Council members, has urged his colleagues to tighten the reins on incentive requests.
Salem’s resolution would order the city to abandon the swap and purchase the Interline building. On March 26, Council approved a related piece of legislation, Ordinance 2025-0135, provided up to $8 million for the purchase. That amount was based on an earlier appraisal obtained by Gateway, before the DIA’s $6.75 million appraisal came in.
Salem said the city’s payment for the building would be replenished in the fall of 2025 when city utility JEA makes its annual contribution to the city budget. JEA is finalizing plans to provide a record amount, including a $40 million one-time infusion.
UF’s plan
UF announced in December that it had selected LaVilla as the site of its Jacksonville campus, where it plans to offer degree programs in such fields as architecture, engineering, computer science, an MBA tailored toward working professionals, and artificial intelligence-supported biomedical and health science.
The city is preparing to offer several city-owned parcels for the campus, including two vacant sites directly north and northeast of the historic Jacksonville Terminal train station. Those two properties will be the site of UF’s first new construction.
The city also plans to provide the new portion of the Prime F. Osborn III Convention Center, which is attached to the train station, and the train station itself. UF says it will retain the station as an adaptive reuse development that will include restaurants, retail and other uses. The newer part of the convention center would be demolished to make way for new construction.
In addition, the city is considering swapping city-owned property for a 2.04-acre lot along West Bay Street adjacent to the convention center parking lot. That property, which is owned by multifamily housing developer Vestcor, would be the last to be provided by the city for the UF project.
What’s next
Under a timeline submitted by the DIA to the Council Finance Committee on April 15, the Gateway swap legislation would be filed to Council on April 21 on track for final action June 10.
On April 24, the DIA and UF have scheduled a brunch-and-learn workshop on the campus project, with speakers set to include Mori Hosseini, chair of the UF board of trustees; David Norton, vice president of research; and Dwan Courtney, director of the Office of Small Business Relations; plus other UF and DIA staff.
The session is scheduled for 10 a.m. in the Lynwood Roberts Room at City Hall and will be live-streamed. For the streaming link, visit https://dia.jacksonville.gov/meetings/dia-meetings.