Jaguars already planning Phase II for Lot J development

[Ken_FSU]

^Something like Two Light in KC is probably what we'll see, assuming it's built.

Same price tag ($120 million) and unit count (300) as what's proposed for Lot J.

https://youtu.be/YoGOUcm-Uc0

[thelakelander]

Two Light in KC? I'll believe it when I see it. More than likely, residential will be closer to the recently built multifamily stuff in the Southbank.

I still have a hard time understanding why we'd subsidize luxury housing regardless of where it is in town. That would be a historically horrible use, waste of tax dollars and a racial slap in the face in a city that has still not addressed infrastructure promises made to inner city neighborhoods 50 years ago.

Then there's the market side of things, we can give the Jags a butt load of cash for something like this but unless they're going to subsidize renters, the place will be sitting half empty. It's just really hard to image there's a demand in or near downtown for apartment units priced between $2,550 to $3,865/month for 1,098 SF to 1,212 SF of space?

[Ken_FSU]

I still have a hard time understanding why we'd subsidize luxury housing regardless of where it is in town. That would be a historically horrible use, waste of tax dollars and a racial slap in the face in a city that has still not addressed infrastructure promises made to inner city neighborhoods 50 years ago.

There's been a similar debate intensifying in Kansas City with One Light, Two Light, and particularly Three Light.

Incentivizing Three Light was so unpopular that Cordish had to also agree to convert an old office building into affordable housing units.

In tough debate, council OKs paying for Three Light garage, gets affordable housing

After a debate that turned bitterly personal for a few minutes, the Kansas City Council voted Thursday to build a $17.5 million underground garage for the developer of a luxury downtown apartment high rise.

As part of the deal, however, the city extracted some concessions from Cordish Companies, including an agreement to convert the Midland office building to 100 apartments for low and moderate income tenants.

But they were not enough for opponents of the legislation, who argued that the new vibrancy of downtown, and unmet needs in other areas of the city, made paying for the garage impossible to justify.

"The situation has changed," said Councilwoman Katheryn Shields.

By an 8-3 margin, the council agreed to stand by the key provision of a 2004 accord with Cordish, developer of the Power & Light District, to build garages for each of its new apartment towers. Its third such project, Three Light, is scheduled to begin construction later this year.

While many council members were unhappy with the 14-year-old deal, they said the city was obligated to keep its word and build the garage.

"It may not be popular. It may not be fun.....but I happen to have been brought up in a legal system where your word is your bond.......It's time to vote," said Mayor Sly James.

In a statement, Power & Light District executive director Nick Benjamin said: "Today's results were good for both the City of Kansas City and the Power & Light District, which is what you always hope for in a public-private partnership. We are looking forward to starting work on 3 Light and the Midland Apartments and to continuing to invest in our rapidly growing downtown."

The measure appeared to be a done deal a until few weeks ago. But two council members, Shields and Alissia Canady, raised persistent questions about the rich package of tax breaks and subsidies provided to Cordish under the 2004 agreement, along with the absence of affordable apartments in Three Light.

The two members led a move to prod City Manager Troy Schulte to renegotiate parts of the agreement with Cordish, which was struck when downtown Kansas City was a moribund collection of aging office buildings. In exchange for taking a gamble on downtown revitalization, the company secured a rich package of subsidies and incentives, including the city's responsibility for the garages.

The company held fast on the question of low-income units in Three Light, contending that they would make project unworkable financially. Cordish agreed to convert Midland as part of building Three Light at the corner of Truman Road and Grand Boulevard.

The renegotiated deal also relieved the city of operations and routine maintenance of the two existing Cordish garages and the one to come with Three Light. The company and the city agreed to secure approval of a new 1 cent sales tax for the central business district and split revenues estimated at about $1 million a year.

City officials estimate that those two provisions, in addition to higher rental payments to the city from Cordish, will come close to covering the $1.4 million in annual debt service on the bonds that will finance the Three Light garage. The pact also cuts the 99-year term of the 2004 deal by half and caps the city's obligation to build garages when Cordish builds its sixth apartment tower downtown — if it ever does.

But Canady and Shields excoriated the deal, arguing that the city was still giving away the store. They pointed out that the city's future obligations to Cordish — three garages and additional money to support parking at Midland — could cost the city at least $80 million.

The two members also pointed out that the Midland deal is contingent on Cordish receiving an exemption from paying sales taxes on construction materials for rehabbing the 1920s-era building. Such exemptions are routinely granted, but Canady said it reflected a lack of good faith on the company's part.

"Cordish essentially said, give us $80 million and we'll build you 100 affordable units," said Canady.

The debate over Three Light took a nasty turn at the council business session that precedes the formal legislative meeting. Canady accused the mayor of negligence in supporting the agreement, and not acting in the best interests of the whole city.


"It's all about the financials," she said, not housing or code enforcement or other unmet needs.

"I always act in the best interests of the city," James retorted. "And I was acting in the best interests of the city before you got your law license."

Cordish is also seeking a 100 percent tax abatement for 25 years on Three Light because it is located in an area declared blighted. With a 25-year abatement, the Kansas City School District would receive $2.7 million in taxes from Three Light. Without the subsidy, KCPS would receive an estimated $14.7 million during the same period.

Other government jurisdictions dependent on tax revenues are contesting the abatement. "My position is based on the ethical premise that public funds should not be used to subsidize luxury housing," Bruce Eddy, executive director of the Jackson County Community Mental Health Board, said in a letter to a special advisory board that will meet next month to consider the proposal.

As part of its application for the tax abatement, Cordish described the amenities that will be available to Three Light tenants, including an eighth floor club room, management office, theater room, demonstration kitchen, outdoor pool, deck, conference room and fitness center.

"Each residential unit will include floor-to-ceiling glass, luxury finishes, materials and appliances, including quartz counter tops, stainless steel appliances, luxury vinyl flooring, washer-dryer in each unit, tile in bathrooms, and similar finishes and materials."

https://www.kansascity.com/news/article206278979.html

[Kerry]

It's just really hard to image there's a demand in or near downtown for apartment units priced between $2,550 to $3,865/month for 1,098 SF to 1,212 SF of space?

If that is the price point they are targeting no one will live there.

[thelakelander]

^That's the leasing rates of the KC example Ken_FSU used as what the residential component at Lot J could resemble.

I just question anything at the Sports District being comparable to the Power & Light District because the surrounding context is dramatically different than anything in Jax, especially a stadium surrounded by surface parking lots. The urban core of KC is walkable, vibrant and has been for years. The P&L sits dab smack in the middle of a lot of things that were already happening.

Jax's downtown is podunk in comparison, in terms of density, population and scale. All of those things play a significant role with market conditions. At this point, we're simply not there and no matter how much money we throw at Khan and the Jags, that's an issue that can't be resolved overnight, no matter how many billions someone is worth.

[Kerry]

^That's the leasing rates of the KC example Ken_FSU used as what the residential component at Lot J could resemble.

I just question anything at the Sports District being comparable to the Power & Light District because the surrounding context is dramatically different than anything in Jax, especially a stadium surrounded by surface parking lots. The urban core of KC is walkable, vibrant and has been for years. The P&L sits dab smack in the middle of a lot of things that were already happening.

Jax's downtown is podunk in comparison, in terms of density, population and scale. All of those things play a significant role with market conditions. At this point, we're simply not there and no matter how much money we throw at Khan and the Jags, that's an issue that can't be resolved overnight, no matter how many billions someone is worth.

Jacksonville needs to get serious about who our peer cities actually are as it relates to downtown.  We need to learn to crawl before we can run.

[thelakelander]

In terms of where downtown (I mean the Northbank) is today and not where it was 40 or 50 years ago, cities like Dayton, Grand Rapids, Raleigh, Rochester, Norfolk, Buffalo, Omaha, Louisville, etc. would be in the range moreso than the Kansas City, Nashville, Charlotte, Austin, Columbus, etc.  Back in the 1990s they may have been applicable but we didn't tilt the needle much during the 2000s and they did. So what we see in these places are the result of a 20-30 year head start. So, in regards to a Live! or Cordish mixed-use development, it would be interesting to see how they've done in some of these other places with smaller DTs.

[Kerry]

I wouldn't include Omaha in that list.  Downtown Omaha is pretty amazing with lots of development going on for the past 15 years.

https://www.eomahaforums.com/viewforum.php?f=11

[Bativac]

Two Light in KC? I'll believe it when I see it. More than likely, residential will be closer to the recently built multifamily stuff in the Southbank.

I still have a hard time understanding why we'd subsidize luxury housing regardless of where it is in town. That would be a historically horrible use, waste of tax dollars and a racial slap in the face in a city that has still not addressed infrastructure promises made to inner city neighborhoods 50 years ago.

Then there's the market side of things, we can give the Jags a butt load of cash for something like this but unless they're going to subsidize renters, the place will be sitting half empty. It's just really hard to image there's a demand in or near downtown for apartment units priced between $2,550 to $3,865/month for 1,098 SF to 1,212 SF of space?

I live in a one bedroom luxury apartment in Los Angeles and actually pay LESS than that for a similar amount of space. They have lost their minds if those are the actual prices.

[Ken_FSU]

Hearing that the public ask might decrease a bit in the final development agreement that goes to DIA and City Council.

Or, more accurately, shifted a bit to Phase II.

Office component seems to be out for Phase I, Live component might be slightly larger, and instead of a second 300-unit apartment tower replacing the office component for a total of 600 units, Phase I will be closer to 420 apartment units across multiple buildings.

Preliminary environmental testing is all but done, and the Jags want the agreement to be ready for review by end of month.

[thelakelander]

Apartment towers or stick frame mid-rise, similar to 220 Riverside and the recent Spandrel proposal? Wish Khan would really put his money and where his mouth is (like Dan Gilbert did with his companies in Detroit) and make Flex N Gate the office tenant.

[vicupstate]

Between Lot J and The Ford on Bay, the city will heavily subsidize low-rise stick built apartment buildings that are being built in droves everywhere else in the country WITHOUT tax concessions and grants.

[thelakelander]

They're also being built in Jax's urban core without incentives. Subsidizing market rate things at the expense of those doing it with their own money is the ultimate example of a game of winners and losers.

[Tacachale]

They're also being built in Jax's urban core without incentives. Subsidizing market rate things at the expense of those doing it with their own money is the ultimate example of a game of winners and losers.

Pretty sure Vestcor's not losing any sleep over that, considering that the city just finds ways to give them bids.

[Ken_FSU]

Even though the total is still exorbitant, I feel like the optics might have been slightly better if the Jags asked the city to put $100 million into the Live! arena and entertainment complex that will be publicly owned, plus $92 million in infrastructure for the larger Lot J development (utilities, sidewalks, roads, parking, etc), rather than asking the city pay to pay half of the $100 million construction cost for the Live! complex, along with a vague $60 million grant to facilitate development of the private residential and hotel components.

405 residential units is the latest number, btw.

I think it's less about a decision to subsidize housing, and more of a larger conversation about how comfortable we are as a city subsidizing the Jaguars over the coming decades. Take emotion out of it, and Khan and Lamping aren't wrong. 60% of gate revenue from Jags games goes to the organization, with the other 40% going into the NFL's revenue share. As more and more new mega-stadiums are built and local revenue around the league increases, there's going to be more and more pressure on the Jags to get gate receipts for that 40% share up (probably a disproportionate amount of pressure, as their merchandise share is probably bottom of the league as well). And as local revenue for all these other teams goes up, so will the salary cap, putting more and more pressure on the Jags to increase their own share of local revenues to stay competitive in terms of spend.

Jacksonville is a challenging market for the NFL that extends past simple attendance numbers to corporate sponsorships, PSLs, merch sales, ticket pricing, etc. Seeking out these alternate revenue sources like Daily's Place, Jacksonville Live!, and land development makes all the sense in the world for the Jags, and is legitimately as big of a risk for the Jags as it is for the city.

But the NFL ain't cheap, and I really do think we need to have a serious conversation as a city about what we're willing to spend to lock the NFL in for another 25 years and what it would take to make that legally binding. Seems patently absurd to invest so heavily in Lot J without assurances that the Jags won't bolt five years after it's completed when the stadium lease expires. Would love to see Lot J and stadium improvements packaged into one agreement, tied to a lease extension and a guarantee to keep X number of home games in Jacksonville each season, with a funding mechanism identified, that the public could vote on.

"The City of Jacksonville will provide $_____ million in incentives, funded through _____ in tax abatements, ______ in bed tax, _______ in upfront cash, and a one-cent sales tax in the sports and entertainment district; the Jaguars will develop a sports and entertainment complex, 405 residential units, a 200-room hotel, upgrade the stadium to 2020 NFL Standards, and extend the stadium lease to year __________ with at least __________ regular-season home games played in Jacksonville through end-of-lease."

Put all the cards on the table now and let the people have their say.

Opportunity cost is going to be pretty high, needs to be more than a one-man decision.

Let's collectively decide now, before we start piecemealing hundreds of millions of dollars here and there without any protection on our end.