A proposal to provide Baptist Health with incentives to build a 15-story hotel on its Downtown Southbank campus is on its way to Jacksonville City Council after being approved Jan. 20 by the Downtown Investment Authority board.
The board voted 8-0 in favor of two DIA resolutions, numbers 2026-01-01 and 2026-01-02, that would respectively offer a $12.9 million Recapture Enhanced Value Grant and an $8 million completion grant for the hotel planned at Palm Avenue and Gary Street.
Board member Trevor Lee abstained from both votes, citing a conflict of interest.
Under the city’s governance structure, the DIA vote on the REV Grant constituted final action. The proposed completion grant advances to Council, which has final authority on whether to approve, deny or alter it because it would involve a payout from the city’s operating fund.
A REV Grant is a refund on ad valorem tax revenue generated by a new development or property enhancement. With REV Grants, the city agrees to forego some tax revenue but does not pay the grant from its operating fund.
The plan
Baptist Health wants to develop a 226-room hotel at an estimated cost of $110 million at 1051 Palm Ave., which is now a parking lot. The Jacksonville-based health provider said the establishment would be a dual-brand Marriott property, comprising a 134-room Marriott Tribute Portfolio boutique hotel and a 92-room Element by Westin extended stay hotel.
According to DIA records, 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.
Plans call for Baptist Health to own the hotel and North Carolina-based Concord Hospitality Enterprises to 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.
Baptist Health says rooms will be offered to families of patients receiving care on the campus, but the hotel will be marketed to anyone wanting to stay Downtown.
The rooftop restaurant and ground-floor cafe will be open to the public.
The REV Grant sought by Baptist would provide a 75% tax refund over 20 years on the project.
As for the completion grant, it would be paid in two $4 million portions, likely in 2029 and 2030.
Incentives debate
The project coincides with 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.
Others say curtailing or eliminating incentives puts the city at risk of losing momentum on Downtown revitalization, which has picked up steam in recent years with the start of such projects as Gateway Jax’s $2 billion development and the completion of city projects such as Lift Ev’ry Voice and Sing Park, a renovation of Friendship Fountain, a park and Riverwalk extension at RiversEdge and the first phase of the Riverfront Plaza park on the former site of the Jacksonville Landing.
A Baptist representative, lawyer Steve Diebenow of Driver, McAfee, Hawthorne & Diebenow, told Council members Jan. 12 that 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.
Project priority
In a written report, the DIA staff said it did not view the project as a high priority for a completion grant given that the hotel was “a component of a larger institutional hospital campus and is intended to function, in part, as an amenity serving hospital patients, visitors, and affiliated users.”
DIA board members commended Baptist Health for accepting the lower return and proposing a project that would fill a need for boutique lodging on the Southbank as opposed to a hotel serving only its patients and their families.
Diebenow told the DIA board the incentive package was the minimum needed by Baptist Health to make the project feasible. Without the full $21 million, he said, the project would not move forward.
Members Micah Heavener and Scott Wohlers said a key community benefit is that the hotel would put the property back on the tax rolls. It currently is exempt as a hospital property.
“I’m in full support of this,” Wohlers said. “It’s a wonderful project that will bring great value to our community, I believe.”
Board member Cameron Hooper said the hotel, which would be visible from Interstate 95, would be a sign of momentum and growth of Downtown revitalization while filling a need for more lodging on the Southbank. He noted that Baptist Health will be paying for construction with internal funds and not using a lender, meaning construction is poised to go quickly.
Hooper praised Baptist Health as a good community partner. He said that his daughter recently was taken to the Downtown campus for a health emergency, where she received excellent care during a two-day stay.
“It sure would have been nice to have a hotel where my wife could get off the battle lines for a few hours,” he said.