Khan, Jaguars expect Lot J development to begin early 2020

[Ken_FSU]

^Entire meeting is available here:

It's long, but the video is chapter-marked.

https://jaxcityc.granicus.com/player/clip/2600?view_id=1&redirect=true

[Charles Hunter]

Councilmember Danny Becton has issued six pages of questions about the Lot J deal, and the Council Auditor's report on the deal:
https://www.dannybecton.org/cm-becton-submits-questions-and-concerns-after-careful-review/

Some good questions in there. Will there be good answers?

There is a lot of information at that link:

Lot J Conceptual Site Plan
Original Bill 2020-648 and Exhibits
2020-648 Fact Sheet
2020-648 Bill Summary
Developmental Agreement
Council Auditors Report of Nov. 5
Q&A from the Council Committee as a Whole meeting of Nov. 4
Summary of Jaguars Lease Amendments
C/m Becton's Questions of 11/16

[jaxlongtimer]

By my math, and I've done a lot of it, it's going to cost Jacksonville between $500 and $540 million in public contribution to get a long-term lease extension from the Jags. This is based on median public contribution for all NFL franchises that have gotten long-term lease extensions in the last 15 years, adjusted for inflation.

All emotion aside about Khan's personal wealth, or Jacksonville's other priorities, or the JEA scandal, or Curry's backdoor talks, or who was or wasn't on Khan's yacht, the simple fact is, the NFL club comes with a high price tag, and $500-$540 million is what we should expect and plan to spend across the Jags portfolio if we think it's worth keeping the team here beyond 2029. It's not personal or outwardly unfair. It's simply us being treated like any other NFL market.

Khan ain't gonna build us a new stadium. He's not going to privately finance all of Lot J. He's not going to remediate the Shipyards at his own expense.

But, to me, he's also proven that he's not going to up and move the team if Jacksonville is willing to play by the same rules as the other 31 NFL cities.

Wish it was different, and wish NFL cities got a cut of the television money for providing the stadiums, but that's just not the reality, and bashing Khan for that is akin to hating the player, rather than hating the game.

To me, the simplest approach would be to just sit down with the Jags, agree on an all-in figure that it's going to take to get a 20-30 year lease extension, cap the number of London games at 1 per season, sign the deal, and then figure out how to appropriate that cash together as you go.

Like I've said all along, if it's going to take Jacksonville kicking in ~$500 million to subsidize $~1.2 billion in projects to get a lease extension from the Jags, I'd personally rather see that $1.2 billion in development spread across 365-day uses at Lot J, Met Park, and more moderate stadium upgrades (like at Hard Rock in Miami) rather than sinking our full investment into a brand new, $1 billion+, amenity-rich, revenue-driving stadium that's only going to be used 10 times a year.

Best scenario, of course, is letting the public vote on whether we want to commit that much money to keep the Jags, and how we want to fund it.

I am not a betting man, but, if I was, I would quickly wager with you that $500 million is a low ball number by the time Khan and company are finished "negotiating" with the City.  I am going to figure the minimum is $1 billion or higher.  We saw this same game when the stadium was originally built for the Jags.  The final costs were multiple times the original "estimates" used to "suck" the City into the project.  Same for the Courthouse and many other City capital projects (see, for example, projects not built from the Better Jacksonville plan due to cost overruns).  Bait and switch will be back, mark my words.  It's standard operating procedure with those asking for favors from the City and this will be another Exhibit A.  Once the City is on the hook, just reel in the taxpayers for more.

[Charles Hunter]

So, to flog the deceased equine, your $500 million is "all in" and includes the $250 million we are about to invest; thus the next 'ask' for stadium upgrades and Metro Park will be only another $250 million?  I share jaxlongtimer's skepticism about the total.  I expect the upgrades/metro package to be around $500 million from the City.  And that's if it is indeed a "package" and the Metro Park (4 Seasons Park?) development doesn't come as another separate development deal.

[marcuscnelson]

I think a few of us have been saying for some time that by the time all is said and done (Lot J, TIAA Bank, Metro Park, and stuff like Hart Ramps), we will likely have spent well over a billion dollars on this football team over the course of ten or so years.

In a wiser city (perhaps a wiser state and country), this would likely be cause for a frank conversation on how much we truly value having an NFL team, and if the cost presented is truly worth it to do so. We have plenty of other teams, between the Armada, Jumbo Shrimp, Icemen, and probably some other smaller teams I'm forgetting right now. Maybe billions of taxpayer dollars to prop up an NFL team that isn't even performing on the field, while so much else is struggling isn't the right thing to do.

But alas, this is Lenny Curry's Jacksonville.

[Ken_FSU]

So, to flog the deceased equine, your $500 million is "all in" and includes the $250 million we are about to invest; thus the next 'ask' for stadium upgrades and Metro Park will be only another $250 million?  I share jaxlongtimer's skepticism about the total.  I expect the upgrades/metro package to be around $500 million from the City.  And that's if it is indeed a "package" and the Metro Park (4 Seasons Park?) development doesn't come as another separate development deal.

It probably got lost, but my main point was that, based on NFL precedent, we aren't going to get a lease extension for less than $500 million to $540 million in public subsidy. It's patently absurd and demonstrates an overall lack of awareness about the age of our stadium and the current NFL landscape for City Council members to demand a 25-year lease extension based on a $200 million contribution to an ancillary mall. A 30-second Google search should demonstrate that that's not how stadium leases work.

The danger obviously, and the reason the negotiations have been so backward, is that we're kind of putting the cart before the horse here in terms of negotiating the ancillary stuff before we negotiate stadium improvements and subsequent lease extension. If we negotiated everything as a package, inclusive of stadium upgrades, I think we could get an extension through at least 2049 for less than $600 million as a city. In exchange for the Jags agreeing to play nice and finance half of the stadium upgrades ($500-$600 million), we'd agree to play nice and subsidize a portion of the ancillary projects up to $XXX, with any additional ask having to go through City Council. The lease extension would be signed, and we wouldn't have this looming threat in 2029 shifting the balance of future negotiations.

The problem with piecemealing Lot J, and potentially Met Park, before stadium upgrades is that we obviously lose a lot of that negotiating leverage when the stadium talks do happen. I don't think the Jags are going to up and leave the market in 2029 after pumping so much private investment into these other projects, but I do think it'll be easier for them to squeeze us for either a larger contribution to the stadium upgrades, or a grander, more expensive upgrade plan.

I don't think it'll be a billion dollars, but I do think we're on track for about $700-$750 million in the next ten years with the way things are going:

- $233 million for Lot J
- $100 million for Met Park
- $50 million for the Shipyards park
- $300 million for stadium upgrades
- $80 million for Lot J Phase II

Still fine with Lot J moving forward (in whatever form City Council approves), as I think it's a good project that will have positive externalities beyond what the auditor is projecting, there's still almost a decade on the stadium lease, and it makes sense to get the project going when the sports complex is quiet from the pandemic and the Jags can't move home games to London because of construction, but would love see anything else negotiated as a package.

To Marcus's point above, and the point everyone has been making for a long time, we do need to have a conversation as as city sometime though about whether being an NFL city is worth the huge public investment that's necessary to remain in the game. Will never happen. No City Council member or mayor is going to lose the NFL on their watch. But it would be nice.

[tufsu1]

It's patently absurd and demonstrates an overall lack of awareness about the age of our stadium and the current NFL landscape for City Council members to demand a 25-year lease extension based on a $200 million contribution to an ancillary mall. A 30-second Google search should demonstrate that that's not how stadium leases work.

how about a 5-year extension?

With all of the $ handed out recently (including the Landing) the City will be hard-pressed to come up with $500 million for stadium improvements in the next decade. A lease extension would give residents some assurances from the team and give the City more time to get financing in order for major stadium upgrades.

[Steve]

It probably got lost, but my main point was that, based on NFL precedent, we aren't going to get a lease extension for less than $500 million to $540 million in public subsidy. It's patently absurd and demonstrates an overall lack of awareness about the age of our stadium and the current NFL landscape for City Council members to demand a 25-year lease extension based on a $200 million contribution to an ancillary mall. A 30-second Google search should demonstrate that that's not how stadium leases work.

The danger obviously, and the reason the negotiations have been so backward, is that we're kind of putting the cart before the horse here in terms of negotiating the ancillary stuff before we negotiate stadium improvements and subsequent lease extension. If we negotiated everything as a package, inclusive of stadium upgrades, I think we could get an extension through at least 2049 for less than $600 million as a city. In exchange for the Jags agreeing to play nice and finance half of the stadium upgrades ($500-$600 million), we'd agree to play nice and subsidize a portion of the ancillary projects up to $XXX, with any additional ask having to go through City Council. The lease extension would be signed, and we wouldn't have this looming threat in 2029 shifting the balance of future negotiations.

The problem with piecemealing Lot J, and potentially Met Park, before stadium upgrades is that we obviously lose a lot of that negotiating leverage when the stadium talks do happen. I don't think the Jags are going to up and leave the market in 2029 after pumping so much private investment into these other projects, but I do think it'll be easier for them to squeeze us for either a larger contribution to the stadium upgrades, or a grander, more expensive upgrade plan.

EXACTLY

This is like needing a house, but building a garage first. We build a garage then the builder says, "well construction prices have risen so your house is going to cost a lot more now"

Exactly why I've been saying that this wrapped up WITH the stadium improvements will necessitate a MUCH larger investment, but we then have real leverage to ask for something in return (lease extension, max of 1 exported game, etc.)

[Ken_FSU]

It's patently absurd and demonstrates an overall lack of awareness about the age of our stadium and the current NFL landscape for City Council members to demand a 25-year lease extension based on a $200 million contribution to an ancillary mall. A 30-second Google search should demonstrate that that's not how stadium leases work.

how about a 5-year extension?

With all of the $ handed out recently (including the Landing) the City will be hard-pressed to come up with $500 million for stadium improvements in the next decade. A lease extension would give residents some assurances from the team and give the City more time to get financing in order for major stadium upgrades.

With the upgrades and new stadiums we're seeing across the league, I just don't think TIAA Bank field is going to be a competitive NFL stadium for another 15 years without a major renovation adding protection from the elements and maybe the widened concourses that are rumored to be involved with the stadium upgrades.

I just don't think the Jags (or the NFL) would agree to a five-year lease extension that isn't tied to stadium upgrades.

What I do think is 100% fair though, however, is agreeing to cap London games at one per season through the life of the lease (2029). If local revenue struggles are the reason for the London games, and Lot J is a proposed solve for local revenue issues, then tie the two together and make the Jags promise not to try to move a second home game to London if we co-finance Lot J.

To me, it seems like the more reasonable ask.

[tufsu1]

^ better yet - no London games once the entertainment complex is open

[marcuscnelson]

^ I could see the city asking for that and the Jags countering with a 1-game cap that gets agreed on. That is, assuming Curry doesn't force people in line.

The danger obviously, and the reason the negotiations have been so backward, is that we're kind of putting the cart before the horse here in terms of negotiating the ancillary stuff before we negotiate stadium improvements and subsequent lease extension. If we negotiated everything as a package, inclusive of stadium upgrades, I think we could get an extension through at least 2049 for less than $600 million as a city. In exchange for the Jags agreeing to play nice and finance half of the stadium upgrades ($500-$600 million), we'd agree to play nice and subsidize a portion of the ancillary projects up to $XXX, with any additional ask having to go through City Council. The lease extension would be signed, and we wouldn't have this looming threat in 2029 shifting the balance of future negotiations.

That seems at least in part to be the Jags' fault. I saw in an article that they started talking about the Shipyards like 5 years ago. Yet somehow Lamping said at I think the DIA meeting that they've only just completed Phase 1 of a multi-phase process to figure out what is going to be asked for in a stadium reno. Which implies that they spent all of their time looking for money on everything but the actual building they play games in.

To Marcus's point above, and the point everyone has been making for a long time, we do need to have a conversation as as city sometime though about whether being an NFL city is worth the huge public investment that's necessary to remain in the game. Will never happen. No City Council member or mayor is going to lose the NFL on their watch. But it would be nice.

In which case maybe someone who isn't in City Hall should be starting that conversation, and discussing what alternatives there are to this expenditure.

[edjax]

JUst saw where Hazouri had some not so positive  comments about the deal.   Something along the lines of the developer is getting the uranium mine and the city is getting the shaft.

[Ken_FSU]

JUst saw where Hazouri had some not so positive  comments about the deal.   Something along the lines of the developer is getting the uranium mine and the city is getting the shaft.

Saw this too.

The one question that I don't see anyone asking that I'd love to know the answer to is:

Who is the expected tenant for the 40,000 square feet of Class-A office space included in the project?

If you read the term sheet and ordinance closely, the $100 million Live! venue with restaurant and bars that the city is contributing half toward ($50 million) also includes that 40,000 in office space. Per the agreement, the city will actually own this office space.



This is 100% pure speculation, but if you've been to the Jags business offices in the stadium, you know that they're pretty damn crowded. Three, four, five, sometimes six people crammed into a single windowless room.

Would be pretty hilarious if the city fronted half the costs of the office space and the Jags turned around and moved their business operations across the parking lot into the publicly subsidized Lot J office space.

[thelakelander]

Interesting. Why would the city want to own speculative office space in this development when there's tons of empty Class A office space all over downtown? To fill this, it will likely be stealing a tenant from an existing space. So would this mean, the city would undercut a private sector entity to get it leased?

[Captain Zissou]

I was at the town hall in San Marco last night and I left feeling so insulted by the city.  The rep for the mayor's office, Jordan Elsbury, kept talking about how the development was essential to bring in larger scale events and conventions.  The mayor's office has been actively tanking our prospects as a convention destination for the past few years.  I couldn't tell if he knew this and was lying to me, or he generally didn't understand the impacts of what his office has done with the Ford on Bay RFP.  Additionally, calling this downtown development is a laugh.  The reps from the Jaguars were at least calling this "a new neighborhood" that would provide jobs for people living in the eastside, but the city is arguing that this will help the actual CBD.  He also touted the demolition of the landing as progress toward activating our waterfront.  Again.... is he straight lying to us or does he just not get it?