Baptist Health is planning to add a 15-story, nearly $110 million hotel to its campus on the Downtown Southbank, a representative told a Jacksonville City Council committee Jan. 12.
Land-use and governmental affairs attorney Steve Diebenow of Driver, McAfee, Hawthorne & Diebenow, who is representing Baptist, said the 226-room hotel is planned at Palm Avenue and Gary Street.
The 1.82-acre site at 1051 Palm Ave. is now a parking lot.
In a presentation to the Special Committee on the Future of Downtown, he said Baptist Health would own the hotel and North Carolina-based Concord Hospitality Enterprises would operate it.
Concord partnered with the Whitman Peterson private equity firm of California to build the Hilton Jacksonville at Mayo Clinic, which opened in September 2025.
A presentation slide listed the development cost of the hotel at $109.7 million. Plans include a 5,000-square-foot rooftop restaurant and terrace open to the public, plus 130 parking spaces.
Diebenow said the hotel partner would be a single company with multiple brands.
He said property would include an extended-stay element and a four-star boutique hotel, operated under dual brands. He said Baptist Health was close to announcing an agreement with a brand that “everybody will recognize.”
Diebenow said rooms would be offered to families of patients receiving care in the Baptist Health campus, but the hotel would be marketed to anyone wanting to stay Downtown.
Downtown Investment Authority CEO Colin Tarbert said he envisioned the hotel as primarily being an amenity for Baptist. But he said it would benefit Downtown by generating property tax and filling a need for four-star, full-service accommodations on the Southbank.
Will seek $21 million incentives package
Diebenow and Tarbert said Baptist Health would seek a $21 million incentives package to develop the property, comprising a $12.9 million Recapture Enhanced Value Grant and an $8 million completion grant that would be divided into two $4 million payments.
The DIA board is scheduled to consider the incentives package at its Jan. 21 meeting.
Diebenow said Baptist Health first approached the city about the project in the spring of 2025, initially requesting a $27 million incentives package that included a $9 million REV Grant, a $3 million loan and a $15 million completion grant.
With that package in place, he said, the hotel was projected to generate a 17% internal return on investment. Diebenow told the special committee that a typical developer would want a 20% return to pursue the project.
After discussions with the DIA and Council member Joe Carlucci, the chair of the special committee, Baptist Health reduced its incentives ask to $21 million.
Diebenow said the reduced incentives would generate a 10% return on investment. He said Baptist Health’s mission to support the growth of Downtown and Northeast Florida in general made the lower rate acceptable.
A REV Grant is a refund on ad valorem tax revenue generated by a new development or property enhancement. The REV Grant sought by Baptist would provide a 75% refund over 20 years.
Talk of ending incentives
The proposal comes as Council members have initiated discussion on whether to reduce or discontinue offering incentives for Downtown redevelopment, particularly completion grants.
Unlike REV grants, completion grants are paid out through drawdowns of the city general fund, which pays for a wide range of city services. Some Council members say the city budget is being strained as commitments for completion grants that were made in years past are coming due.
Committee member Ron Salem asked if the completion grants for the hotel could be reduced or replaced by loans.
Diebenow said the developers had considered some loan options before settling on the version of incentives that didn’t include them. He said Baptist Health would weigh them again as the package enters the approval process.
If approved by the DIA, the incentives would go to Council.