An incentive package for Gateway Jax to resurrect the historic Ambassador Hotel ran into friction at the Downtown Investment Authority on May 20 before members eventually endorsed the public funding.
On a 7-1 vote, the board recommended that Jacksonville City Council approve up to $10.1 million in incentives for Gateway Jax to transform the property at 420 N. Julia St. into Hotel Merrydelle, a 109-key Marriott Tribute Portfolio hotel at a total budget amount of $24.19 million.
Member Cameron Hooper cast the no vote, and member Jill Caffey was not present.
Gateway plans a top-to-bottom restoration of the property, which has been vacant and windowless for years. Plans for the property, which Gateway renamed Hotel Merrydelle, include an Italian restaurant, Colletta, operated by the Atlanta-based Indigo Road Hospitality Group, and to reestablish the main entrance along Church Street from its current location off Julia Street.
A parking garage approved for eight stories and 480 spaces is under construction adjacent to the hotel.
The DIA board vote was on an amended version of DIA Resolution 2026-05-01, which contained the incentive. Under the amendment, DIA staff will negotiate with Gateway Jax on a public benefit payment that would provide the city with a portion of revenue from the hotel and restaurant above a to-be-determined threshold.
After those negotiations are complete, the DIA would submit Council legislation for final approval.
Under terms of a redevelopment agreement between the city and Gateway, the incentives would comprise $8.08 million in forgivable loans plus a $2.02 million deferred principal loan.
DIA staff calculated the city’s return on investment from the incentives at $1.86 for every $1 of public funding.
Questions on completion grants
Gateway Jax CEO Bryan Moll told board members that the project would help fill a void in Downtown’s hospitality options by providing a boutique hotel and would help bring in a steady stream of visitors to support retail and restaurants.
He said it was a key part of Gateway’s strategy for Pearl Square, its $750 million district of apartments, retail, restaurants and public spaces under construction in the Downtown NorthCore district near City Hall.
Moll also said refurbishment of the hotel was a factor in the successful launch of Gateway’s Vandeveer mixed-use development across Church Street.
With plans to begin leasing apartments in Vandeveer in late summer, Moll said Gateway hoped to add windows to Hotel Merrydelle and complete other work to make it weathertight in the next two to three months.
Gateway is targeting a hotel opening in the third quarter of 2027, he said.
Board members voiced support for the project, but some questioned whether the DIA was overinvesting in Gateway Jax to the possible detriment of other development.
The questions focused on completion grants, which unlike property tax rebates are drawn directly from the city’s operating funds.
Some Council members say the grants threaten to push the city into a budget deficit.
The incentives in the Hotel Merrydelle project are completion grants.
In November 2023, the board approved $38.946 million in completion grants for the first four Gateway Jax projects. In December 2025, the board OK’d an incentive package that included a $28.25 million completion grant for Gateway’s Publix-anchored 14-story tower at 119 W. Beaver St., the former main auditorium of the First Baptist Church.
The board debate
Board member Scott Wohlers said Hotel Merrydelle was “in a vacuum, a wonderful project,” but added that “we, as a city, are giving a lot of money to one entity” involved in Downtown revitalization.
Wohlers, the president of Riverplace Capital Management Inc., suggested that overinvesting in Gateway could hinder the overall Downtown effort if Gateway falters.
He said that from a risk-management perspective, “You worry from a diversification standpoint that when you have so much committed, what happens if something doesn’t go right.”
Hooper made a motion to defer the Hotel Merrydelle incentive until Gateway Jax brought forth an incentive request for another of its proposed Downtown projects, a hotel-anchored mixed-use property in Riverfront Plaza. In December 2025, Moll told the DIA board that Gateway would need an estimated $20 million completion grant for that development.
The motion failed 5-3, with Hooper, Wohlers and Fetner voting in favor.
Chair Patrick Krechowski said the city would face no loss on the completion grants if Gateway failed to deliver. Member Michael Heavener commended Gateway for having “skin in the game” by developing on property it purchased versus on city-owned lots.
‘Very reasonable’
DIA staff said that when looking at other projects for which the board approved completion grants, Miami-based The Related Group’s proposed Southbank Residences high-rise and the Four Seasons Hotel and Residences in the Shipyards area, the grants for Gateway were a value in terms of comparative residential and retail square footage.
Related is set to receive a $39 million completion grant for its 395-unit project.
Council approved $44.61 million in completion grants for the Four Seasons and the completed One Tower Court office building next door. The hotel comprises 170 rooms and 26 residences.
Both projects include retail and restaurant space, but less than the 200,000 square feet planned in Pearl Square. Plans for the district also include 1,250 residential units and 2,500 parking stalls.
“I would challenge anyone to look at the incentives per unit or per square foot that we’ve gotten compared to others, because I think they would find that what we’ve asked for is very reasonable and the city is getting a lot of benefit for it,” Moll said during an interview after the meeting.
Moll said the city’s investment in Gateway Jax would create tax revenue from its properties, many of which were producing little before the developers purchased them, and also from surrounding properties.
“What the return on investment does not calculate is the uplift in property values that everyone else around it would experience,” he said.