Issues remain between city, Shad Khan over The Shipyards property

[Tacachale]

Sam Mousa is in charge of the deal on the city's end, so we're in good hands in that regard. Clearly the project was proposed to be as favorable to Khan as possible, and negotiations wouldn't have gone much farther under the previous administration. Now the city has the opportunity to negotiate a better deal from the people's end while still getting a good project going that will benefit Khan as well as the rest of Downtown and the city.

Clearly Khan won't accept any deal he thinks won't be good for him, and we should want a successful project due to how big it will be for downtown. As per Hiddentrack's comments, here's my opinion here are some things I'd want from the city's end:

1.The city pays for cleanup, as we will have to do that no matter what. If additional cleanup is needed later, the city and Iguana can split the cost or Iguana can do it themselves.
2. We give reasonable other concessions to Iguana along with guarantees that something actually gets built or the property comes right back to us. Either Iguana pays a fair price for the land, or we factor the value of the property into other concessions that are made.
3. Tax revenues generated by the development aren't tied only to that site, that's crazy. But perhaps tying them to greater Downtown would be appropriate.

Number 3 is already in place as things stand now. The area is already in the Northbank TIF, so any increased tax revenues will go to pay existing and future debts of that area (which goes far beyond the Shipyards property, but fully within the DT Northbank).  Of course that assumes the city itself does not 'rob' from the TIF, as it has done in the past.  What Khan is proposing is that the new revenues be only invested in the Shipyards site only.   

Does the TIF district claim all property tax revenues? Either way, there's no way tax revenues should be tied only to that site.

[RattlerGator]

But vicupstate, why are you responding as though we're at the conclusion of negotiations between the parties instead of at the beginning?

[1] Khan's proposal is the only real one, and [2] it will eventually get done (Lord willing), [3] it is good for him, [4] it is good for Jacksonville, and [5] it absolutely is the kind of game changer that Downtown Jacksonville needs.

Shad, in my opinion, deserves a certain amount of deference here and -- more importantly -- some understanding when engaging in basic business bartering (which is all that is happening right now).

[Adam White]

But vicupstate, why are you responding as though we're at the conclusion of negotiations between the parties instead of at the beginning?

[1] Khan's proposal is the only real one, and [2] it will eventually get done (Lord willing), [3] it is good for him, [4] it is good for Jacksonville, and [5] it absolutely is the kind of game changer that Downtown Jacksonville needs.

Shad, in my opinion, deserves a certain amount of deference here and -- more importantly -- some understanding when engaging in basic business bartering (which is all that is happening right now).

My only quibble is whether or not it is "good for Jacksonville". Whilst I agree that developing the shipyards is great for Jax - and I have no quibble with Khan's proposed development - I would say it is good for Jax contingent on cost. If we get raped again to line some billionaire's pockets, it's not good for us. Although we definitely need to do something with that property - and we may have to compromise - we shouldn't allow ourselves to be taken advantage of.

[Gunnar]

However the ownership and cleanup and all the other BS shake out, Khan's proposal is the only real one and it will eventually get done. Its good for him, good for Jacksonville and its the kind of game changer that Downtown Jacksonville needs.

I wouldn't bet the farm on that. Unlike if Brown had won re-election, there is now a Mayor that must run for re-election, and this deal couldn't possibly be more one-sided against the city.  If I understand it correctly, Khan's proposal is that he gets the land for free, the remediation for free, and all the taxes generated are invested either into his pocket or into the property itself (either way he will benefit).  Lastly , he gets to keep all profits.  There also doesn't seem to be a timetable or any guarantees on when he must complete the development.

If the city would do a RFP with all of the above stipulated, there would be other bidders. It has never done that.   

I would not even call that a deal, or "issues remaining"...

[KenFSU]

■ Iguana has proposed the city oversee and pay for mooring space for the USS Adams — for years, locals have suggested turning the retired vessel into a naval ship museum.

The DIA flatly rejected that idea.

"No. This will be between Iguana and USS Adams," the analysis says.

Wait, I'm confused on this point. Didn't the city already agree to facilitate and fund mooring for the USS Adams at the Shipyards, with the DIA managing the project? Hasn't this been the plan since 2013?

[vicupstate]

Does the TIF district claim all property tax revenues? Either way, there's no way tax revenues should be tied only to that site.

Generally speaking, a TIF claims all tax revenues that are generated BEYOND the level that existed when the TIF was created. In JAX's case, the TIF goes back many years, when property values were very low compared to today.

Sometimes School taxes are not included in a TIF and sometimes they are.  I don't know how that works in JAX.   

But vicupstate, why are you responding as though we're at the conclusion of negotiations between the parties instead of at the beginning?

[1] Khan's proposal is the only real one, and [2] it will eventually get done (Lord willing), [3] it is good for him, [4] it is good for Jacksonville, and [5] it absolutely is the kind of game changer that Downtown Jacksonville needs.

Shad, in my opinion, deserves a certain amount of deference here and -- more importantly -- some understanding when engaging in basic business bartering (which is all that is happening right now).

I honestly can't imagine how this so called 'proposal' could be more one-sided. It is so far from being reasonable that the city should not make a counteroffer at all. The next 'offer' should be from Khan, not from the city. 

That site is NOT critical to the redevelopment of DT JAX and if it has to sit for 10 more years while the city returns to sound financial footing, and invests in other DT projects, that is acceptable. When you can't or won't walk a way from the table, you are about to get a REALLY bad deal, and that is just what Khan is counting on.

I have seen MANY private-public partnerships in MANY cities, and I don't recall a single one where the public sector has NO means at all to recoup it's investment, even if doing so took many years or even a few decades.       

[Tacachale]

Does the TIF district claim all property tax revenues? Either way, there's no way tax revenues should be tied only to that site.

Generally speaking, a TIF claims all tax revenues that are generated BEYOND the level that existed when the TIF was created. In JAX's case, the TIF goes back many years, when property values were very low compared to today.

Sometimes School taxes are not included in a TIF and sometimes they are.  I don't know how that works in JAX.   

Well, however it breaks down, I think it could be interesting if all the tax revenues were tied to Downtown. That way it brings more funding for other projects while still helping the Shipyards, directly or indirectly.

But vicupstate, why are you responding as though we're at the conclusion of negotiations between the parties instead of at the beginning?

[1] Khan's proposal is the only real one, and [2] it will eventually get done (Lord willing), [3] it is good for him, [4] it is good for Jacksonville, and [5] it absolutely is the kind of game changer that Downtown Jacksonville needs.

Shad, in my opinion, deserves a certain amount of deference here and -- more importantly -- some understanding when engaging in basic business bartering (which is all that is happening right now).

I honestly can't imagine how this so called 'proposal' could be more one-sided. It is so far from being reasonable that the city should not make a counteroffer at all. The next 'offer' should be from Khan, not from the city. 

That site is NOT critical to the redevelopment of DT JAX and if it has to sit for 10 more years while the city returns to sound financial footing, and invests in other DT projects, that is acceptable. When you can't or won't walk a way from the table, you are about to get a REALLY bad deal, and that is just what Khan is counting on.

I have seen MANY private-public partnerships in MANY cities, and I don't recall a single one where the public sector has NO means at all to recoup it's investment, even if doing so took many years or even a few decades.       

I'm hearing that Iguana understands the current deal isn't going to fly under the current administration, and there will be more serious negotiations ahead. I'm sure all parties realize this could take some time.

Also, not trying to defend Iguana, but they're taking on a lot of risk, too. They could lose a ton of money if this project doesn't shake out, as happened with the last two at that site, so its understandable they want to reduce their risk. Conceivably, a good deal can be struck with positive long-term outcomes.

[Gunnar]

Also, not trying to defend Iguana, but they're taking on a lot of risk, too. They could lose a ton of money if this project doesn't shake out, as happened with the last two at that site, so its understandable they want to reduce their risk. Conceivably, a good deal can be struck with positive long-term outcomes.

Well, that's the nature of business, isn't it - no risk should equal no rewards. And if an investor is not willing to take any risk then... well, then he isn't an investor. This corporate socialism is really crazy.

[Tacachale]

Also, not trying to defend Iguana, but they're taking on a lot of risk, too. They could lose a ton of money if this project doesn't shake out, as happened with the last two at that site, so its understandable they want to reduce their risk. Conceivably, a good deal can be struck with positive long-term outcomes.

Well, that's the nature of business, isn't it - no risk should equal no rewards. And if an investor is not willing to take any risk then... well, then he isn't an investor. This corporate socialism is really crazy.

Even under this crazy deal it's not like Khan has no risk, far from it. From his perspective he's trying to reduce a serious risk on a property where projects consistently failed and that's been vacant for 20 years. However, that can happen without the city handing over the key to the coffers. Fortunately the city (now) has the right people on it.

[vicupstate]

^^ I don't see a lot of risk on Khan's part UNLESS he is guaranteeing that certain projects will be completed by a given deadline.  Once he has title, he will announce a building, and if it does not pre-lease sufficiently to get financing and met with his approval, he can simply drop it. Plus, he will likely simply sell parcels of land (that he got for free) to other developers. If he gets $1, it is $1 more than he paid. 

[Ocklawaha]

If Curry and the City have any sense, and if Khan really wishes to see that development skyrocket, they better address the Skyway, Streetcar or elevated pogo-stick trail to make this bloom. It will not happen on a true cosmopolitan urban scale without fixed mass transit stirred into the mix.

[Non-RedNeck Westsider]

^^ I don't see a lot of risk on Khan's part UNLESS he is guaranteeing that certain projects will be completed by a given deadline.  Once he has title, he will announce a building, and if it does not pre-lease sufficiently to get financing and met with his approval, he can simply drop it. Plus, he will likely simply sell parcels of land (that he got for free) to other developers. If he gets $1, it is $1 more than he paid.

I don't have any other info than what I've read here, but it doesn't read as if there will be any property exchange.  True, Khan is asking for the rights to the building pads, but I'm sure through the process of negotiations, that title for those parcels wouldn't transfer until there is something physically completed. 

I still think that they major hurdle to this project will be the first one - land remediation.  It's not cheap.  But the fact of the matter remains, it HAS to be done regardless of what happens afterward.  All of the other discussion of who gets what and how the taxes get spent is a pretty moot until the above gets green-lighted.

[jaxjaguar]

• Cap remediation spending at $40 million (clearly it's going to take more than $35 so let's do it right the first time)


• Make Khan responsible for any cleanup over $40 million and for the extra boat slips he wants (maybe the city has room elsewhere along the river walk)


• Property/food/alcohol taxes go to maintaining the shipyards (sidewalks, streets, facades, lighting, maintenance, landscape, aquascape, etc)


• Event/hotel taxes go to maintaining what Khan is trying to build (bring in USS Adams, upgrade stadium features, practice fields, bringing in events, whatever)


• City gets to keep parking money/small portion of event sales to help build better transportation system into the area (extend/improve skyway, rapid trasit buses to and from stadium/downtown/riverside/San Marco, 2 more parking garages (one by veterans Memorial on stadium property and one on the east side of the stadium) to replace the parking that will no longer be there.

PS I have no idea what I'm talking about so fire away if it's not possible 

[RattlerGator]

Sounds reasonable to me, jaxjaguar.

[downtownbrown]

I had been getting the impression that the City and Khan were at an impasse over remediation cost and the City investment.  But I just heard from an insider that in fact, the city and Iguana are moving rapidly to some kind of deal.  Lamping is scheduled to give his state of the Jaguars talk next month.  I'm optimistic.  And don't forget, the USS Adams folks are still full speed ahead.