The Downtown Investment Authority board voted unanimously Dec. 17 to recommend approval of a $49.66 million incentive package for a proposed Publix-anchored mixed-use development in Gateway Jax’s Pearl Square.
The board voted 9-0 in favor of DIA Resolution 2025-12-02, which contained the incentives for the project at 119 W. Beaver St. With the board’s action, the financial assistance for the project goes to Jacksonville City Council for final consideration.
With Council approval, Gateway Jax would receive a 75%, 17-year Recapture Enhanced Value Grant of up to $21.41 million and a $28.25 million completion grant for its 14-story tower. A DIA staff report on the project lists the total development cost at $147.95 million. It is planned on the site of the former First Baptist Church main auditorium, which would be demolished to make way for the tower.
Under a term sheet for the proposed redevelopment agreement between the city and Gateway, the tower would include 21 studio units, 207 one-bedroom units and 31 two-bedroom units. A minimum of 37,000 square feet of retail space would be required.
Board Chair Patrick Krechowski said having a full-service grocery store in the historic core of Jacksonville would boost Downtown and the entire community. He said the store would draw from beyond the eight districts that make up Downtown, adding that he’d spoken with several Springfield residents who were excited about the project.
Gateway Jax is a partnership between principal Bryan Moll, JWB Real Estate Capital and DLP Capital. It announced in September it had reached an agreement with Publix to open a store on the ground floor of the Beaver Street development, also known as Gateway Jax N7.
Protecting the city
Board discussion focused on financial protections for the city in the event the project didn’t reach completion as planned, including the possibility that Publix could back out or close.
Steve Kelley, director of Downtown real estate and development, said the city’s redevelopment agreement with Gateway Jax required the developers and Publix to have a minimum 10-year lease to receive the incentives.
Citing another protection, Kelley said the completion grant would be offered only when the project is finished, with none paid up front or in phases as construction hit stages.
Moll said the partners and Publix had agreed to a 20-year lease. He said that while there was no guarantee that Publix would remain in the building throughout that term, the lease included provisions designed to ensure the space remained occupied by a brand similar in quality if Publix pulled out.
Board member Scott Wohlers asked Moll if Gateway would consider structuring the completion grant as a percentage of the investment as opposed to a set dollar amount.
Wohlers cited the possibility that Gateway could spend less than projected on construction, based on indicators that building costs may be tapering off. Those indicators include recent reductions in interest rates.
Moll said lenders prefer a set amount over a percentage. He said a guarantee of city funding gives lenders more confidence in projects and increases their likelihood of backing them on favorable terms.
“There are a lot of benefits on the capitalization side, especially on the debt side, in having a hard number,” he said. “It is helpful in our ability to capitalize the deal.”
The $28.25 million grant remained intact in the resolution approved by board members.
On to City Council
Now the question is whether Council will support it.
Some Council members, particularly Will Lahnen and Nick Howland, have pressured the DIA and the city Office of Economic Development to rein in completion grants.
Those incentives involve payments that directly draw down the city’s operating reserves. They differ from REV Grants, which are refunds on ad valorem tax revenue generated by a new development or property enhancement.
REV Grants involve the city forgoing a portion of tax revenue, while completion grants require direct payments from the general fund.
“I’m hopeful we can reach a REV-grant only solution instead of using unbudgeted general fund dollars that are funded by all of Jacksonville’s taxpayers,” Lahnen said in response to the vote.
Lahnen said the city is facing a projected $80 million cumulative deficit over four years, which is likely to increase with upcoming negotiations with unions representing city employees.
Of that $80 million, he said, about $75 million is due to completion grants awarded to Downtown projects over several years.
“Nearly $40 million of these are for the Gateway N4, N5, N8 and N11 projects which have not been completed yet,” he said, referring to block numbers for elements of Pearl Square.
Critical to Pearl Square
In November, DIA CEO Colin Tarbert told members of the special Downtown committee that N7 is critical to Pearl Square and, with the inclusion of Publix, to Downtown revitalization overall. He said that if Council limited completion grants, the project would be at the top of his priority list.
The DIA’s revitalization strategy hinges on attracting residents to create greater demand for restaurants, retail, nightlife and attractions while encouraging more employers to locate Downtown.
Downtown advocates say the addition of a full-service Publix with a pharmacy would help draw residents.
In December 2024, the DIA board endorsed a $2.1 million incentive package aimed at incorporating the grocery into the Block N7 project. The vote came on a resolution comprising a $1.36 million Retail Enhancement Program grant and a $741,000 REV Grant.
Downtown-area groceries
The Publix would be the fourth grocery store open or planned in the eight districts that make up Downtown.
Fresh Market opened in 2014 at 150 Riverside Ave. in Brooklyn. A Whole Foods Market is nearing completion at 1 Riverside Ave. in the One Riverside retail, apartment and park development on the Downtown Northbank at the base of the Acosta Bridge.
Germany-based grocer Aldi Inc. is renovating the former Harveys Supermarket at 777 N. Market St. to convert part of that space to its brand.
Of those, only Publix has a pharmacy.
Corner Lot and JWB Real Estate Capital bought the 103,016-square-foot First Baptist auditorium and adjoining parking garage as a joint venture in 2022.
That same year, the two companies spent nearly $750,000 to prepare the auditorium for “Beyond Van Gogh: The Immersive Experience.” The space, which was renamed the NoCo Center, later hosted the “Beyond King Tut” exhibit.
Property records show 712 Hogan Street North LLC bought the auditorium for $2.3 million through 119 Beaver Street West LLC and paid $6.09 million for the adjoining parking garage.
State records list Moll as a title member of 119 Beaver St W LLC.