The owners of the former Interline Brands Inc. building, which the city is seeking to acquire for the proposed University of Florida graduate center campus, have reduced the purchase price of the property from $8 million to $6.95 million.
The price emerged during a May 21 meeting of the Jacksonville City Council Committee of the Whole to dissect two options for the city to obtain the building, which is owned by the Gateway Jax development partnership.
Those options: Purchase the building outright or exchange city-owned property in Riverfront Plaza for it.
Gateway Jax principal Bryan Moll introduced the $6.95 million price, just less than the average of three appraisals obtained by the city and Gateway, in relation to the purchase option.
Moll partners in Gateway Jax with JWB Real Estate Capital and DLP Capital. The partners have launched a Downtown redevelopment that spans 32 acres across 25 properties, most of which are within the historic core of Downtown.
Moll had previously stated a sales price at $8 million based on an appraisal obtained by Gateway that set the property value at $9.5 million.
Gateway reduced that valuation by $1.5 million to adjust for the costs of replacing surface parking on the property with a garage.
In March and April 2025, Council approved legislation that would direct the city to buy the two-story, 38,186-square-foot building for up to $8 million.
Asked by Council member Ken Amaro if Gateway would consider selling for less than $6.95 million, Moll said he would have to consult with his partners and investors.
The $6.35 million option
Another change in the situation materialized during the meeting when Downtown Investment Authority CEO Lori Boyer announced that the proposed land swap had been revised to reduce the price at which the city would be allowed to buy the Interline Brands building if Gateway Jax opted out of the swap for due diligence reasons or could not come to an incentive agreement with the city.
That price was lowered from $6.75 million to $6.35 million.
Under the swap option, the city would offer Gateway a 1-acre development pad in Riverfront Plaza and an option on an adjacent 1.77-acre property in exchange for the LaVilla building.
Boyer said Gateway reduced that price to reflect that there was value in the opportunity to develop in Riverfront Plaza and “(they will) give us a discount for that right.”
As for the sale price on the Interline Brands building, Boyer said it was based on two appraisals by the city and one by Gateway. The average was $6.957 million, but Moll presented the price to Council as $6.95 million.
The Committee of the Whole discussion focused on ordinances 2025-0319, which contains the swap, and 2025-0339, the legislation for the sale. The committee comprises all Council members but, like standing committees, is not empowered to take final action on legislation.
Gateway plans hotel, condos
Gateway, which has owned the building since October 2024, supports the land swap along with Mayor Donna Deegan and the DIA board.
Under a prospective agreement with the city for the land swap, the Gateway partners committed to building a 17-story tower in the plaza.
Moll told Council members the project would include a 150-key hotel, 75 condominiums, 7,500 square feet of food and beverage space and a 5,000-square-foot public skyview terrace.
UF plans to invest $7 million to retrofit the Interline building for instructional use. Under the university’s timeline for establishing the campus, classes would start in the Interline building in the fall of 2025.
UF said it needed an agreement with the city on the properties by June to stay on its timeline.
The city plans to offer an initial set of five properties to UF. They are the Interline Brands building, two vacant lots immediately to the west of that property, the Jacksonville Terminal historic train station and the newer portions of the Prime F. Osborn III Convention Center that are attached to the station.
In February 2025, the DIA voted 5-2 in favor of pursuing the property exchange.
The board also voted to place the 1-acre property up for disposition, a process in which the city offers publicly owned property for disposition by inviting redevelopment proposals from private entities.
Under terms of the disposition, respondents were required to either provide property in LaVilla for the UF campus or $8 million to purchase the Interline Brands building.
Boyer said Gateway offered the only suitable bid within the deadline for the disposition.
Salem wants purchase
Council member Ron Salem, in introducing his proposal to buy the Interline property, said he believed the city could receive a better proposal on the Riverfront Plaza properties by offering them independently of the UF deal.
Under Salem’s proposal, the city’s costs for acquiring the Interline building would be replenished with JEA’s annual contribution to the city. The municipal utility is preparing to provide a record payment this year, including a $40 million one-time contribution.
During the May 21 committee meeting, discussion touched on a provision of the swap that would cap completion grants for Gateway Jax’s Riverfront Plaza project at $20 million and pay for them through tax revenue generated by Downtown properties as opposed to being drawn from the city’s general fund. That fund pays for an array of city services citywide.
Under state law, increased tax revenue within Downtown can be reinvested within the Downtown boundaries to fund property improvements.
Council members Raul Arias and Joe Carlucci questioned whether the DIA could support up to $20 million of incentives without either sacrificing support for other redevelopment projects or approaching Council for the use of general fund revenues.
“You can say you’re going to fund the (Gateway) project, that’s great, but what about the money for the rest of the projects? That’s going to come from us,” Carlucci said.
Council member Chris Miller questioned the process behind the swap, signaling he would prefer to vote on a package that included an incentive package as opposed to negotiating incentives later.
“To me, it’s almost leaning on the side of you have to vote on the bill to find out what’s in the bill,” he said.
DIA board backs swap
After the committee meeting, the DIA board approved a resolution expressing support for the swap but recommending that Council buy the property for up to $6.95 million if Council opts for the direct purchase.
“I don’t feel it’s wise to spend $6.95 million when we can trade a nonperforming asset for $5 million,” board member Micah Heavener said.
DIA board Chair Patrick Krechowski told Council members that the swap would facilitate two “catalytic” projects for Downtown revitalization in the UF campus and the Riverfront Plaza tower.
Proponents of the swap said it aligned with the DIA’s mission to place city-owned land in the hands of private developers and get it back on the tax rolls.
According to Gateway Jax, 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.
Swap supporters also said the tower development would generate $700,000 per year over 30 years for maintenance and programming of the city park being built on the plaza. Gateway would generate that funding through a hotel room surcharge and an HOA fee on condo units.
During the Committee of the Whole meeting, Salem said he preferred to discuss the sale option when all 19 members were present. On May 21, a handful of members were absent.
No support for Howland’s plan
Council member Nick Howland had offered a third alternative in which the Riverfront Plaza parcels would have been put back out for disposition with Gateway Jax being allowed a right of first refusal on any new offers.
During the May 20 meeting of the Council Finance Committee, Howland said neither side supported his proposal.
Howland, the executive director of a veteran suicide prevention organization called The Fire Watch, was in Texas at a conference related to his work with that organization and did not attend the May 21 meeting.
During the Finance meeting, he encouraged Council members to explore options for the acquisition of the Interline Brands building other than the sale or swap.
No other options emerged during the May 21 meeting.
UF’s plans for the Jacksonville campus include offering programs in artificial intelligence in medicine and health care; an MBA for working professionals; a law degree for nonlawyers; engineering; and architecture, among others.