A nearly $21 million incentive package for a dual-brand Marriott hotel on Baptist Health’s Southbank campus is set for consideration by the Downtown Investment Authority board on Jan. 21.
The incentives would help fund the 15-story hotel planned at Palm Avenue and Gary Street, which according to Baptist Health, would comprise 134 rooms under Marriott’s Tribute Portfolio boutique brand and 92 rooms under the global hospitality company’s Element by Westin brand.
According to DIA documents, other elements include 5,200 square feet of conference space, a 5,000-square-foot rooftop restaurant, a 1,000-square-foot ground-floor cafe and a 113-space parking garage.
The 1.82-acre site of the project at 1051 Palm Ave. is now a parking lot.
Baptist Health lists the cost of the project at nearly $110 million.
On Jan. 12, a representative for Baptist Health told the Jacksonville City Council Special Committee on the Future of Downtown that rooms would be offered to families of patients receiving care on the campus, but the hotel would be marketed to anyone wanting to stay Downtown.
The rooftop restaurant and ground-floor cafe will be open to the public.
Plans call for Baptist Health to own the hotel with North Carolina-based Concord Hospitality Enterprises operating 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.
The proposed city incentives comprise a $12.98 million Recapture Enhanced Value Grant and an $8 million completion grant. The completion grant would be paid in two $4 million portions, likely in 2029 and 2030.
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.
The incentives are contained in two DIA resolutions, numbered 2026-01-01 and 2026-01-02.
If approved by the DIA board, the incentives would advance to a vote by Council.
The project surfaced amid discussion among Council members on whether to reduce or discontinue offering incentives for Downtown redevelopment, particularly completion grants. Some Council members say incentive programs have achieved the objective of kick-starting Downtown redevelopment and that the city budget is being strained as commitments for completion grants that were made in years past are coming due.
Unlike REV grants, completion grants are paid out through drawdowns of the city general fund, which pays for a wide range of city services.
At the Council Downtown committee meeting, member Ron Salem asked if the completion grants for the hotel could be reduced or replaced by loans.
The Baptist representative, Steve Diebenow of Driver, McAfee, Hawthorne & 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 loan options again as the package enters the approval process.
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.
The DIA board meeting is scheduled for 2 p.m. in the main Jacksonville Public Library, 303 N. Laura St.