With the Jacksonville City Council poised to consider two options for the city to acquire a LaVilla office building to provide for the University of Florida graduate campus, proponents of both approaches are laying out their arguments.
Here is a look, through the eyes of leading supporters of each alternative, at the pros and cons of a plan to purchase the Interline Brands Inc. building outright and an alternative exchange of city-owned property in Riverfront Plaza, the park under construction at the former Jacksonville Landing site.
As part of the park’s design, the northeast section of the property includes a parcel for commercial development.
First, some background.
How we got here
UF’s December 2024 announcement that it had selected LaVilla as its campus site came with the provision that the city provide property for the project.
The city’s plan involves providing five city-owned parcels, including the historic Jacksonville Terminal rail station and the new portion of the Prime F. Osborn III Convention Center, plus the Interline building at 801 W. Bay St. and another private property owned by multifamily developer Vestcor.
For the Interline building, one option is to exchange the 1-acre development parcel in Riverfront Plaza plus an option for an adjacent property to the east to the building’s owner, the Gateway Jax development partnership.
The Downtown Investment Authority board voted in February to recommend that option, and Mayor Donna Deegan also supports it.
So does Gateway Jax, which committed to building a 17-story mixed-use tower on the Riverfront Plaza parcel. The development partnership comprises principal Bryan Moll, JWB Real Estate Capital and DLP Capital.
Gateway Jax is developing the $400 million-plus first phase of Pearl Square in Downtown, a project that could grow to a more than $2 billion investment over the next decade.
The purchase option came from City Council member Ron Salem, who filed two pieces of legislation to bring it about.
Ordinance 2025-0135, approved by Council in March, provides up to $8 million for the purchase. Resolution 2025-0291, which Salem introduced April 22, would direct the DIA and Deegan’s administration to purchase the building under the $8 million cap established by the ordinance.
Both camps say they are fully in support of the UF campus, which involves redevelopment of the Interline building and the historic Jacksonville Terminal rail station along with new construction across 25-plus acres appraised at $30.22 million to $31.62 million.
Basics of the swap option:
Under terms of the redevelopment agreement in the land swap deal, Gateway Jax would have 15 months to finalize an incentive deal with the city for the Riverfront Plaza tower project. If a deal can’t be reached, the city has the option buy back the Riverfront Plaza property for $6.75 million.
Gateway has not said how much it expects the project will cost but said it would likely require a $20 million completion grant, along with other incentives.
Other terms include a three-year deadline for substantial completion of the project after commencement of construction.
Two separate six-month extensions are built into all of the deadlines as options that can be exercised by the DIA CEO and the DIA board without City Council approval.
Under the exchange, the city would begin collecting property tax from Gateway Jax on the Riverfront Plaza parcel while the Interline property would drop off of the tax rolls.
The case for purchasing
Salem believes the land swap favors the building’s owner, the Gateway Jax development partnership, over the city.
Among his arguments:
• The DIA board voted in February to recommend the land swap, but Salem notes the board was given no alternative and two members, Scott Wohlers and Cameron Hooper, voted against it. The vote was 5-2.
• The board’s action allowed the DIA to put the Riverfront Plaza parcels up for disposition, which drew a proposal from Gateway Jax and no other parties. Salem says the DIA’s request for proposals favored the developers because it included a requirement to provide property in LaVilla for the UF campus. Salem would like to see the parcels put up again, without the requirement for the LaVilla property, to even the playing field.
Otherwise, Salem said, “We’ll never know if somebody else could have done it (the Riverfront Plaza development) cheaper.”
The Gateway Jax plan is the second offer to develop the space. In 2022, American Lions proposed a $166.6 million residential project there and the DIA approved $36.9 million in incentives for it. By 2024, that project died because of increased costs.
• Salem says the extensions in the redevelopment agreement between the city and Gateway Jax could lead to the property remaining undeveloped for years. And with the buyback provision, Gateway Jax could walk away with a $6.25 million payout for a still-undeveloped lot. That amount translates to a $2.25 million return on the $4 million that Gateway Jax spent on the Interline Building.
• A bone of contention about the swap is that it would eventually involve completion grants, along with other incentives.
Supporters of the swap say the option picked up steam when the DIA board voted in April to set aside funding generated by tax revenue within Downtown to pay for the completion grants, meaning the money would not have to come out of the city’s general fund, which pays for across-the-board services.
Salem says it’s immaterial where the money comes from.
“They’re taxpayer dollars nonetheless,” he said.
• As designed by Salem, whatever portion of the $8 million the city would spend on the Interline building would be replenished in the general fund when city utility JEA makes its annual contribution to the city in the fall of 2025. The utility is finalizing a record contribution that includes a one-time $40 million payment.
• Salem said two former DIA board chairs contacted him to privately express opposition to the land swap.
• Salem has requested a list of Gateway Jax’s investors, saying he wants to check it to see whether calls he’s received in support of the swap are financially backing the developers. Moll has asked Salem to instead send him names of callers and said he would vet them. This, plus other issues about how the land swap proposal came to light, are a concern for Salem.
“The process has not been as open and honest as it could have been,” he said.
The case for the swap
During an April 22 interview, Moll said the newly proposed redevelopment agreement between his team and the Downtown Investment Authority reinforces the swap as being the more favorable option for the city.
Among Moll’s points:
• The city’s cost of the outright purchase goes beyond the Interline property. That’s because, according to the DIA, the city would need to spend $5 million to $10 million to mesh the Riverfront Plaza development site into plans for the adjacent park. Those expenses include grading the site and creating of a “back of house” area for deliveries, trash storage and other needs for a beer garden and restaurant planned on the eastern half of the park. Under plans for the park, the “back of house” area was initially intended to be part of a private development on the 1-acre site.
• The tower development would generate $700,000 per year over 30 years for maintenance and programming of the Riverfront Plaza park, needs for which the city has yet to designate a funding source. Gateway would generate the funding through a hotel room surcharge and an HOA fee on condo units.
• The tower would generate $1.16 million per year in property taxes from the hotel and condos, plus $35 million in incremental ad valorem tax revenue.
• To provide for $20 million in completion funds that would be needed for the tower, the DIA has set aside $12 million from the Downtown Community Redevelopment Area (CRA) and would add to that amount in future years to cover the entire incentive. CRAs were established through a Florida law that allows tax revenue from those areas to be reinvested as opposed to being spread across municipalities at large. Setting aside the $20 million from the CRA would eliminate the burden of the completion grants from the city’s general fund, which is used for across-the-board city services and operations.
• Appraisals obtained by both parties place the value of the riverfront properties at a combined $5 million and the Interline property at $6.25 million to $8 million.
“That alone would suggest that this is a really great deal for Jacksonville taxpayers,” he said.
Moll said the swap would generate $56 million in tax revenue and related funding over the 30-year term of the redevelopment agreement.
• Deegan, Boyer and other swap supporters say the option supports a core mission of the DIA to put city-owned property back into the hands of private developers so it can again produce tax revenue. Moll said the direct purchase would remove a private parcel from the tax rolls – the Interline building – and keep the Riverfront Plaza properties dormant.
• Moll says the swap’s value to Jacksonville goes beyond the direct benefits.
“Getting $56 million over 30 years is not too shabby,” he said. “And not only do you get the great return for taxpayers, but then you get other benefits. You get all kinds of things that can help Downtown. Where you’ve now got a number of office buildings that have relatively high vacancy you get, you get a wonderful activating use with food, beverage, a world class-style hotel and world-class park.”
What’s next
The DIA is preparing to submit legislation to approve the swap and transfer a total of five properties to UF. They are the Interline building, the train station, two lots directly north and northeast of the station, and the newer portion of the convention center plus its parking lot.
The final piece, the Vestcor property, will be handled separately. The city is considering a land swap for that lot as well, among other options.
Moll said that regardless of what happens in coming months, the Interline building will be available to UF. He said he and his partners had already reached a deal giving access to UF to begin preliminary work on its retrofit.
“I had someone ask me the other day, if, for some reason you didn’t have the sale or the land swap finalized, would you let UF start classes in there?” Moll said. “And the answer is, absolutely. We’re going to make sure that UF gets into that building one way or another when they want to get in. That’s the most important thing.”
Moll stresses that the campus is in Gateway Jax’s interests. The partnership has begun vertical work on a Downtown redevelopment that, if fully built out, would eclipse $2 billion in investment.
Under the DIA’s timeline, legislation for the five initial properties would be submitted to Council on May 27 on a course for final action June 24.
Salem introduced his resolution to purchase the Interline building on an emergency basis, but said he would likely defer it to provide time for Council auditors to examine the issue. Several Council members have voiced a desire to consider the two proposals side-by-side.
Salem said that if his colleagues eventually approve the swap, he’s fine with that. But in proposing the outright purchase, he said his motivation was to prompt a full debate on more than one option.