Metro Jacksonville

Quote from: Jax_Developer on November 16, 2023, 08:42:25 AM
Pretty sure the Trio is being held hostage...the entire cluster of projects was once only $90M, per Atkins himself.

^Going to move this to a separate topic.

I too was wondering how, even when accounting for high interest rates and inflation, the $45 million Laura Street Trio project floated by Southeast in 2017 quadrupled in price to $175 million in 2023, with public incentives for the project increasing by 11x from $5.8 million to $64 million.

So I went ahead and read through the prior incentives packages at lunchtime over some pancakes at First Watch, and thought I'd share some notes early evening while still fresh in mind.

2017 Proposal & Incentives

To your point above, the original project was estimated to cost $90 million, but what I had forgotten was that sum also included the Barnett (now finished) and a planned 550-space garage (never built, VyStar took over, I believe Southeast lost their Barnett incentives as a result).

When the original 2017 incentives deal was given, only $44.6 million was scoped to transform the historic Laura Street Trio structures into a hotel, restaurant, bodega and rooftop bar. The project would be pure rehab, bringing these beautiful, historic structures back to life as they originally stood. And, to help that happen, the city would pay Southeast a $4 million grant upon completion of the Trio.

When the deal was signed, Southeast reported that construction on the Trio would begin in mid-2018, approximately six months after construction at the Barnett began.

Here are some details of the 2017 scope: https://www.jaxdailyrecord.com/news/2017/feb/01/time-finally-right-barnett-bank-building-and-laura-street-trio-projects-dia-approves/

2021 Proposal & Incentives

Three years after the Laura Street Trio was set to begin construction, Southeast went back to the DIA for a new incentives deal after the previous deal lapsed. In place of the $44.6 million project that was strictly historic rehab came a $70 million project that would also include the addition of a new 8-story hotel expansion adjacent to the Bisbee Building:

(https://www.jacksonville.com/gcdn/presto/2021/01/20/NFTU/8a618852-b1ba-4cf4-8287-aba468b3f319-DHA_LT_View_02_05_DHA_Edit_Pink_Clouds.jpg)

Of the $70 million in project costs, approximately $55 million were estimated to be in support of rehabbing the original Trio, and $14 million were estimated for new construction. The DIA signed off on a $26.7 million incentive deal, the largest in city history, that was almost exclusively cash (historic preservation grants, forgivable loans, etc.).

When the deal was signed, Southeast claimed that construction was imminent and would begin by early 2022.

Here are some details of the 2021 scope: https://www.firstcoastnews.com/article/news/local/laura-street-trio-restoration-gets-final-approval-for-267-million-incentive-deal/77-98ef3be3-9a5d-4c1b-afd3-ea9c9a295fe6

2022/2023 Proposal & Incentives

Over the years, Southeast had discussed wanting to add a Phase 2 to the Laura Street Trio project down the line, which would add multifamily housing adjacent to the Florida Life building. At one point, they discussed brokering a somewhat sketchy sounding deal with the Housing Authority, which fell through. And then, in 2022, for whatever reason - economies of scale, viability, etc - Southeast decided that it made more sense to fold Phase 1 and Phase 2 into a single private project.

So, in 2023, they were once again back in front of the DIA.

What was first a $44.6 million historic rehab of the Laura Street Trio buildings, and then a $70 million rehab with new construction of an 8-floor hotel building, has now become a $175 million rehab + 11-floor hotel + 169-unit multifamily project.

You can see the new addition here:

(https://snipboard.io/05F9vW.jpg)

Here's the incentives package that went before the DIA earlier this year, inclusive of an eye-watering $63 million request for incentives.

https://dia.coj.net/getattachment/07ced934-1f88-476d-b54e-3e05797d587b/.aspx

As a quick reminder, the DIA ultimately "bunted" the decision to City Council. At the time, I was critical of the DIA not making a recommendation either way, but looking at the decision in more detail, I think it actually made sense. Southeast had asked the DIA to calculate its incentives based on $27.7 million in equity they planned to ask City Council for in cash. With no City Council approval for those completion grants in hand, the DIA's hands were tied in terms of the incentives they could offer. Further, the DIA (rightfully, in my opinion) worried that it would set a terrible precedent to allow developers to come first through the DIA for max benefits, and then move on next to City Council asking for more. So, they documented everything, and ultimately left it up to City Council.

Anyway, what stands out to me, over the years, is that the idea of "Saving the Laura Street Trio" seems to have become increasingly conflated with the idea of "Subsidizing Ancillary New Construction for Southeast."

Thus, when we look at our limited resources as a city and want to have a frank, earnest discussion about whether we should spend historic boatloads of city money to "save and restore the Laura Street Trio," we kind of need to understand what the ask is from a historic preservation perspective, what the ask is for components that are more or less new construction, and why the project cost keeps creeping.

The knee-jerk reaction when we see the price climb from $45 million to $175 million in six years is to point to increased construction costs, inflation, high cost of borrowing, etc. But if you look at the actual project costs from the agreements and isolate just the historic rehabilitation elements, you see that really isn't the case. Estimates are up maybe 20% from 2021, but they certainly haven't doubled or tripled.

(https://snipboard.io/qXaQdf.jpg)

Instead, we've seen more and more other new construction being tacked on top of "saving the Trio."

(https://snipboard.io/zH3QoC.jpg)

Which leads to the obvious question:

I think we can all universally agree that the city should chip in to restore the Trio, whether that be through existing DIA programs or even a rare additional completion grant from City Council if that's what it takes given the importance of these structures, but should we also be subsidizing the $113 million in new construction above and beyond normal levels to "Save the Trio"? That's a tough call without knowing the viability of the project with or without the add-ons.

Anyway, if anyone's interested in specifics of the proposed incentive deal, and what we're actually subsidizing, I'll include some info below.

Hotel & Restaurant

Collectively known as the "hospitality" portion of the project, the Hotel and Restaurant component comprises three buildings:

1) The Marble Bank Building (to become a restaurant with basement cellar for the hotel)
2) The Bisbee Building (to become the hotel lobby and 56-62 guest rooms)
3) The new 11-story hotel add-on (to become 71-84 additional hotel rooms)

In the incentives agreement, the Marble Bank Building and Bisbee Building are treating collectively as historic building stock, while the 11-story hotel addition is treated as new construction.

For the Marble Bank Building and Bisbee Building, the stated project cost is $46 million. $24 million would come from Southeast, $16 million would come from the DIA in cash, and $6 million would asked of City Council in the form of a completion grant.

For the new 11-story hotel add-on, estimated to cost $43 million from Southeast, $5.7 million would be refunded in the form of a REV grant from the DIA, and $6 million would be asked of City Council in the form of a completion grant.

(https://snipboard.io/Y6J2vR.jpg)

Multi-Family Component

The Multi-Family component of the project comprises two buildings:

1) The Florida Life Building (to become 18-20 housing units)
2) A new multi-family mid-rise (to become 140-149 housing units)

For the Florida Life building, estimated to cost $16.5 million to rehab, $6 million would come from DIA cash handouts, and an amount not-yet-specified would be asked of City City Council in the form of a completion grant. For whatever reason, Southeast didn't share what they'd ask the city for on the Florida Life building.

For new construction of the multi-family tower, estimated at $69 million (the largest single component of the project), Southeast is asking the DIA for $8.9 million in REV grant, and is asking the city for a staggering $15 million for a completion grant.

(https://snipboard.io/j2YZJp.jpg)

Across the full Trio project, here's how the private/public funding would be split for both the historic rehab and the new construction.

(https://snipboard.io/isgZAF.jpg)

Not necessarily advocating for anything at the moment, just trying to better understand the numbers, but a couple of quick knee-jerk reactions:

1. Someone in a previous thread mentioned that it was apples and oranges to compare the Trio incentives package to the Gateway Jax incentives package. I agree with that sentiment for the historic aspects of the project, but I do think it is fair to compare incentives when it comes to the new construction portions. In that regard, I think it's pretty obvious that the proposed Southeast incentives package is pretty wild. Southeast is asking for the public to cover 32% of new construction, 19% with cash. Those percentages are 48% higher than Gateway Jax overall (22% for their project) and 111% higher than Gateway Jax on the cash front (9% of their project cost).

2. The single biggest ask of the entire project, a $15 million completion grant from City Council on top of nearly $9 million in DIA tax incentives, for the new construction of less than 150 housing units, might be the hardest component to justify on its own. This might be the Laura Street Trio equivalent of the Jags' breadbox loan that brought down Lot J. If anyone looks close enough.

3. If the requested incentives are too much for the City to swallow, I wonder if there's an opportunity to decouple the multifamily aspect and move it back to a later Phase 2. And just focus on the Bisbee and Marble Bank hotel and restaurant conversion first as Phase 1? It might be more palatable to go to City Council first for a $12 million completion grant on top of DIA incentives, do a bang-up job on Phase 1, and then go back later to try to get additional incentives for Phase 2?

Really great analysis, thanks for digging in on that.

Great analysis, Ken.  You should team with Nate Monroe on all the investigative stories you are researching/documenting.

I note that you show $69 million in new construction for 140 to 149 apartments.  Using a best case of 149, this comes out to about $463,000/unit.  This, too, seems way out of whack. 

You show new construction of $43 million for 71 to 84 rooms.  Using a best case of 84 rooms, this comes to about $512,000/unit.  Also seems out of whack.

I also note that the Marble Bank building was completely renovated and modernized by Jacksonville National Bank in the early 1980's so any rehab there should not be anywhere close to rehabbing the much older, never renovated buildings adjacent.

What we don't have is a detailed breakdown of the developers construction costs and rate of return they are promoting with their financial partners.  DIA and the City should require this information given they are likely putting up at least as much as any leading investor would.  Not sure what the going rate of return is for developers nowadays, but the City should benchmark their promoted ROI against industry averages.

I agree with your conclusion, incentivize the historic buildings and worry about the rest separately or later. 

Really great analysis! They need to find a way to restore the historic structures, without the new construction component. I'm all for phasing it, but agree with jax in that they really need to be sharing costs & returns for certain projects.

I feel like if projects are requesting a certain % of incentives or cash grants, they can't just be giving us "their" numbers and there needs to be transparency.

Not as well versed as you guys as this is not my field of expertise, but it does appear something is being hid, and there's no transparency. You never know nowadays whether people are pocketing money, especially when it comes to cash and it appears no one (they, them whoever) are basically not really being held accountable. Don't know (or understand) the legalities of all of this, but IMO legally you should be able to hold developers, (or anyone in this type business) etc. accountable for building and completing and if there's a problem, i.e., construction cost increases, inflation, high cost of borrowing, etc., THEN and only THEN come back to Momma (DIA), lay out the problem, bring viable solutions to the table to solve the problem, and if asking for more money, in that regard and instance is the only viable solution, then if City/DIA feels that that is the solution, and the money is there, then give it, loan it, grant it, etc. BTW, how does Mayor Deegan feel about the Laura Trio debacle? How does she feel about all of this? Anyone heard anything from her about this huge problem?

https://www.jaxdailyrecord.com/news/2023/dec/12/new-laura-street-trio-incentives-deal-includes-22-million-city-loan/


Gut reaction, I like the city loan idea more, given that the city has recourse if promises aren't fulfilled. The return in theory sounds nice. Can we get a part 2 Ken? haha..

Quote from: Jax_Developer on December 12, 2023, 10:37:10 AM
https://www.jaxdailyrecord.com/news/2023/dec/12/new-laura-street-trio-incentives-deal-includes-22-million-city-loan/


Gut reaction, I like the city loan idea more, given that the city has recourse if promises aren't fulfilled. The return in theory sounds nice. Can we get a part 2 Ken? haha..

My immediate knee-jerk reaction is that a $22 million loan repaid over 25 years is better than the $27 million cash completion grant originally proposed. But, like anything else, the devil will be in the details once the ordinance is published. I joked above about the cash grant potentially being the Lot J "Bread Box Loan" equivalent for the Trio incentives package, in reference to the proposed loan that brought down the Lot J project. First blush, this might not be that much different in practice. A wonky zero-interest lump sum, disguised as a "loan" to shield Southeast from having to pay income tax on a grant, paid back over decades through odd mechanisms. "Net cash flows" feels pretty broad/easy to manipulate too.

Interested to learn more, but what I do like - depending on the language - is that, at least with how the arrangement is described in the article, if Southeast fails to deliver on the project and defaults on the $22 million from the city, at least we get the Trio back under our control. Still don't love essentially paying ~$60 million in subsidies for a ~$60 million historic rehabilitation with $113 million in new construction tacked on, but something's gotta be done with the property, as it's holding the rest of the CBD back.

Looking forward to seeing the full agreement.

I wonder what Capital One sees in this.

With this now moving to hearings, it'll be interesting to see if Council is ultimately going to bite on the deal.

https://www.jaxdailyrecord.com/news/2023/dec/12/hearings-planned-for-new-laura-street-trio-funding-package/

Quote from: marcuscnelson on December 16, 2023, 09:16:03 PM
I wonder what Capital One sees in this.

With this now moving to hearings, it'll be interesting to see if Council is ultimately going to bite on the deal.

https://www.jaxdailyrecord.com/news/2023/dec/12/hearings-planned-for-new-laura-street-trio-funding-package/

Particularly interesting because, as recently as like two months ago, Capital One seemed to be aggressively trying to dump risky commercial loans.

Still want to see what the actual ordinance looks like on this one.

And, even though we collectively know these buildings as the "Laura Street Trio," I still think it makes more sense to split this into two separate phased projects, each having their own incentive structure:

1) The Bisbee + Marble Bank Hotel & Restaurant (52% historic rehab/48% new construction)
2) The Florida Life Multifamily (19% historic rehab/81% new construction)

It's such a strawman argument that, as a city, we need to subsidize $113 million in new construction to make a $63 million rehab feasible.

With so many big asks coming from the general fund in the coming years, I think there's a slam-dunk case for putting significant public dollars behind converting the Bisbee & Marble Bank building into a hotel, restaurant, and rooftop bar right in the heart of the CBD. I'm a little more skeptical that, in order to "save" the Florida Life building by converting it into 20 housing units, we should also be on the hook for Southeast wanting to build 150 apartments beside it. That ain't "saving the Trio," it's "building shit beside it." Not saying that's not a not good thing, but we shouldn't conflate the two in terms of desperately tossing incentives at them in the name of historic preservation.

If you isolate the multifamily component, the multifamily plan with the Florida Life building really isn't that much different than what Vestcor is doing with Lofts at Cathedral in terms of rehab/new construction, and we sure as hell aren't throwing $20+ million in cash at Vestcor.

RE: Broken Window Theory, I'd almost rather finish the hotel and restaurant, give Southeast a grant to restore the Florida Life facade, and then wait to see what happens with the private market once some of the other nearby projects come online. I don't think having the Florida Life building unoccupied for another few years is a terrible thing for Downtown Jax. It's just bad that it looks like a Ukrainian outpost.

^Has the plan changed from the previous renderings? Its hard to keep track these days. What's the latest for new construction multifamily/hotel verses adaptive reuse? Are the Bisbee and Florida Life going to be hotel, apartments or both? Can construction be phased or is the new construction needed to make those narrow structures usable for modern standards?

Not a whole lot out on it now, but from some surface level info it appears to be the same product proposed in the latest incentives proposal, earlier this year. Only reason I say that is because they mentioned something about the time window on their construction debt expiring soon.. making me think that they are trying to push what they previously got a deferral on from the DIA. This seems to be a city council-led act to push it through.

QuoteCouncil member Matt Carlucci, the ordinance's lead sponsor, said the $22 million loan guarantee was designed to be used if SouthEast failed to make its principal and interest payments on the construction loan over its first two years.

This is just mind boggling to me.  If the developer can't make their payments on a construction loan, they have no business taking on the project.  It's one thing if operating assumptions turn out not to materialize and 5 years down the road they default on the perm financing, but to not even have the funds to build it is just absurd.  This is a boondoggle.  I only blame the city for continuing to believe a grifter.  Atkins should be forced to sell.

QuoteDIA wants to review Laura Street Trio incentives deal before Council vote

The DIA wants to review and offer an opinion on the terms before a Council vote. The resolution states that:

"The DIA expresses its position that the action taken in Resolution 2023-06-02 should not be construed as applicable to the pending legislation before Council which differs materially from the Proposal reviewed by DIA in June."

The resolution also suggests that "City Council consider referral of this new proposal to the DIA board for review and recommendation."

After the meeting, DIA board member Braxton Gillam said the loan guarantee would be like writing Atkins a blank check.

"Every time they come to us and we approved this project, like three or four times, they're going to come back with requests for more money," Gillam said.

Board member Craig Gibbs voiced concerns that it might be time for a new developer.

Full article: https://www.jaxdailyrecord.com/news/2023/dec/21/dia-wants-to-review-laura-street-trio-incentives-deal-before-council-vote/

Funny timing Captain. Seems Gibbs in the DIA agrees with you - as do I.

A $2 million loan is the difference between "we're sending this but don't want to make a recommendation" and "actually the developer should give up?" Strange.

That aside, it does seem like the financial capability on the developer's part isn't actually there. Not even sure you can chalk this up to interest rates like the Hardwick, Related, or Riverfront Plaza projects.

I'd hate to put the Trio on a back burner waiting for a new developer, but at some point this is just a public project with a private manager for no good reason. The Pearl Street District actually has private skin in the game while still including some adaptive reuse, so clearly the market isn't completely dead.

Hmmm - would the Pearl Street developer be interested in the Trio?

1) The Laura Street Trio undergoes a lengthy DIA review process
2) The DIA doesn't recommend the project one way or the other, and "bunts" it to City Council
3) The City Council puts the incentives package on the agenda for December to decide on
4) City Council President punts the decision to January, with two additional meetings to be held to discuss
5) The DIA, after bunting on the project, now wants the City Council to refer the project back to the DIA for re-review

All madness related to this specific project aside, you can certainly see why things take forever in this city.

I could be wrong, but IMO Atkins/Southeast should have somehow been held accountable. I get the feeling a lot of money was pocketed because VERY LITTLE to NOTHING was started let alone done. Hold him (them) accountable somehow and legally if any more money is "doled" out to SE/Atkins. I smell a dead fish in this pond. Stop giving out to these developers free and clear incentives with NO accountability for getting the job done.

Quote from: heights unknown on December 21, 2023, 05:48:03 PM
I could be wrong, but IMO Atkins/Southeast should have somehow been held accountable. I get the feeling a lot of money was pocketed because VERY LITTLE to NOTHING was started let alone done. Hold him (them) accountable somehow and legally if any more money is "doled" out to SE/Atkins. I smell a dead fish in this pond. Stop giving out to these developers free and clear incentives with NO accountability for getting the job done.

To be clear, to the best of my knowledge, no city money has been given to Southeast re: The Laura Street Trio yet. The bigger problem is that Southeast has been sitting on the property for over a decade now with no progress to show for it, and not enough capital/skin in the game to find a lender willing to provide a commercial loan for the project. Hence the need for the city to guarantee the repayment of a $20 million loan from Capital One because Southeast can't.

The warning signs were there dating all the way back to 2016 when Southeast defaulted on their loan from Stache Investments and Shad Khan repossessed The Barnett.

They eventually did a good job with the Barnett, but realistically, it feels like they bought the Laura Street Trio for a few million dollars, and are looking at the state (through historical preservation credits), the DIA (through REV grants), and the city (through grants/loan guarantees) to foot the bill and take on the risk for a needlessly bloated Trio renovation/new construction projects, while assuming very little risk themselves.

Question for those smarter about these things than I am:

Does Jacksonville/has Jacksonville ever considered levying a vacant property or blight tax in the CBD?

Washington, D.C., for example, raises commercial property tax rates from $1.85 for $100 in assessed value to $5 per $100 when the property is vacant. Property considered blighted is taxed at $10 per $100 of assessed value.

You hate to penalize developers who are trying to invest in the CBD, but you also want to disincentivize properties like the Laura Street Trio, Jones Bros Furniture, Independent Life, Big Pete's from falling into vacancy/blight - particularly at street level - for years and years and years on end.

Feels like a vacancy/blight tax after X number of years would be a good way to dissuade people like Steve Atkins from sitting on a property for ages waiting for the right deal to come along.

Quote"Reckless": Laura Street deal ripped by downtown board chairman

The incentive deal for restoring the Laura Street Trio in downtown Jacksonville has drawn fire from the Downtown Investment Authority board's chairman as "reckless and financially irresponsible" while the sponsor of the legislation says its terms are still undergoing changes and deserve a fair hearing.

Downtown Investment Authority board Chairman Jim Citrano's criticism came during a DIA meeting Thursday when the board unanimously approved a resolution that asked City Council to send the deal to the the board for its recommendation before City Council votes on it in January.

The stakes are high for taxpayers and for downtown's future development in its historic core. The $175 million project would rejuvenate the Laura Street Trio, which dates back to the city's rebirth after the Great Fire of 1901, and add two new 11-story buildings for a boutique hotel, apartments, stores and restaurants.

Citrano said he opposed an earlier proposal by the developer in the summer because he thought it asked too much of taxpayers. He said the latest version would expose the city to even more financial risk by effectively guaranteeing it would make good on construction loans for the project if the developer cannot repay them.

City Council member Matt Carlucci, who introduced the legislation, said it left him "hurt and disappointed" that DIA board members criticized the legislation without him being able to respond during the meeting.

"It's not a fair representation, particularly of a project that is still under review, still in collaboration and not in its final form yet," Carlucci said.

Full article: https://www.jacksonville.com/story/news/local/2023/12/26/laura-street-trio-deal-heads-to-jacksonville-city-council-vote/71999766007/

Quote from: thelakelander on December 26, 2023, 10:22:04 AM

Quote"Reckless": Laura Street deal ripped by downtown board chairman

The incentive deal for restoring the Laura Street Trio in downtown Jacksonville has drawn fire from the Downtown Investment Authority board's chairman as "reckless and financially irresponsible" while the sponsor of the legislation says its terms are still undergoing changes and deserve a fair hearing.

Downtown Investment Authority board Chairman Jim Citrano's criticism came during a DIA meeting Thursday when the board unanimously approved a resolution that asked City Council to send the deal to the the board for its recommendation before City Council votes on it in January.

The stakes are high for taxpayers and for downtown's future development in its historic core. The $175 million project would rejuvenate the Laura Street Trio, which dates back to the city's rebirth after the Great Fire of 1901, and add two new 11-story buildings for a boutique hotel, apartments, stores and restaurants.

Citrano said he opposed an earlier proposal by the developer in the summer because he thought it asked too much of taxpayers. He said the latest version would expose the city to even more financial risk by effectively guaranteeing it would make good on construction loans for the project if the developer cannot repay them.

City Council member Matt Carlucci, who introduced the legislation, said it left him "hurt and disappointed" that DIA board members criticized the legislation without him being able to respond during the meeting.

"It's not a fair representation, particularly of a project that is still under review, still in collaboration and not in its final form yet," Carlucci said.

Full article: https://www.jacksonville.com/story/news/local/2023/12/26/laura-street-trio-deal-heads-to-jacksonville-city-council-vote/71999766007/

Looks like it's time for another study! Maybe by the end of the decade, it'll catch fire or something so we won't have to worry about it anymore.

The DIA had their chance to provide their recommendation seven months ago, and instead chose not to do so, knowing full well that it was a bum deal with non-finalized commitments from the city that would require abnormally high levels of public subsidy to make work. You don't get to come back the next year, derail the whole thing, undermine the work of a guy like Matt Carlucci who's been fighting to restore the Trio for 30 years, and potentially set the decision back another six months after you already decided to "bunt." Feels like the REV grant and historic preservation funding from the DIA won't dramatically change, and the main difference here between what they saw last year and is now on the table is how the general fund will fill in the capital gap for Southeast.

The Trio in its current form is like the stadium deal. To a person, we all know it's a shit deal for the city to have to pump so much public money into the project. But, the short-term cost of pinching our nose and doing something above beyond what's "fair" might be cheaper than the long-term cost of letting our most strategically important urban corner be anchored by Chernobyl for another 30 years.

As someone who routinely has to walk out of town clients and visiting coworkers from other offices by it, the Trio is an insane black eye on the city that is contributing to blight in the CBD that is actively costing Jacksonville new and existing business. Look no further than those poor owners of Mag's 2.0. Bobby invests his life savings into a restaurant on Laura Street based on all the big promises of revitalization and gaslighting about $4 billion pipelines by entities like the DVI, and ultimately ended up packing up shop when he learned the hard way that the emperor wasn't wearing any clothes.

I still think it makes more sense to phase construction and incentives between hotel/restaurant and multifamily, and to try to squeeze the Southeasts of the world with a vacancy tax, but it's a new year, and we need to get this thing done one way or the other now, rather than holding out for the perfect deal five years down the road. Cost of doing nothing is too high when we're putting so much investment in elsewhere to bring the CBD back to life. Give City Council the chance to vote it up or down in the next two weeks as planned, make sure we gain ownership of the Trio in the event of a default, and get dirt turning if it's a yes.

Last thing I'll say is that I'm hearing a lot of news commentators referring to the proposed $20 million subsidee/guarantee to Steve Atkins for the Trio as "unprecedented." Quick reminder that we paid $23 million in cash when all was said and done to buy out Toney Sleiman and remove the perceived "blight" of the Jacksonville Landing. And when we talk about opportunity cost, the true cost there was probably much higher when you think of all the displaced businesses (and foot traffic) and consider how quickly proposed developments like the adjacent Hyatt Place hotel disappeared when the Landing was razed. And, when we talk about how there's a cost associated with doing nothing, had we agreed to Alvin Brown's $12 million renovation of the Landing in 2017, do we really think we'd be in this spot now where the Trio required this level of subsidy?

All that to say, if we can afford $100 million over the last 8 years to remove downtown malls, pedestrian ramps, restaurants, annexes, courthouses, and an entire city block, SURELY we can find $20 million - as bad of a deal as it might be - to solve a 50-year problem in an additive way. We don't have to love it. It's not an endorsement of Southeast. It can't set a set a precedent for future deals. But the Trio HAS to get done for downtown to move forward.

Quote from: Ken_FSU on December 26, 2023, 08:42:26 PM
The DIA had their chance to provide their recommendation seven months ago, and instead chose not to do so, knowing full well that it was a bum deal with non-finalized commitments from the city that would require abnormally high levels of public subsidy to make work. You don't get to come back the next year, derail the whole thing, undermine the work of a guy like Matt Carlucci who's been fighting to restore the Trio for 30 years, and potentially set the decision back another six months after you already decided to "bunt." Feels like the REV grant and historic preservation funding from the DIA won't dramatically change, and the main difference here between what they saw last year and is now on the table is how the general fund will fill in the capital gap for Southeast.

The Trio in its current form is like the stadium deal. To a person, we all know it's a shit deal for the city to have to pump so much public money into the project. But, the short-term cost of pinching our nose and doing something above beyond what's "fair" might be cheaper than the long-term cost of letting our most strategically important urban corner be anchored by Chernobyl for another 30 years.

As someone who routinely has to walk out of town clients and visiting coworkers from other offices by it, the Trio is an insane black eye on the city that is contributing to blight in the CBD that is actively costing Jacksonville new and existing business. Look no further than those poor owners of Mag's 2.0. Bobby invests his life savings into a restaurant on Laura Street based on all the big promises of revitalization and gaslighting about $4 billion pipelines by entities like the DVI, and ultimately ended up packing up shop when he learned the hard way that the emperor wasn't wearing any clothes.

I still think it makes more sense to phase construction and incentives between hotel/restaurant and multifamily, and to try to squeeze the Southeasts of the world with a vacancy tax, but it's a new year, and we need to get this thing done one way or the other now, rather than holding out for the perfect deal five years down the road. Cost of doing nothing is too high when we're putting so much investment in elsewhere to bring the CBD back to life. Give City Council the chance to vote it up or down in the next two weeks as planned, make sure we gain ownership of the Trio in the event of a default, and get dirt turning if it's a yes.

Last thing I'll say is that I'm hearing a lot of news commentators referring to the proposed $20 million subsidee/guarantee to Steve Atkins for the Trio as "unprecedented." Quick reminder that we paid $23 million in cash when all was said and done to buy out Toney Sleiman and remove the perceived "blight" of the Jacksonville Landing. And when we talk about opportunity cost, the true cost there was probably much higher when you think of all the displaced businesses (and foot traffic) and consider how quickly proposed developments like the adjacent Hyatt Place hotel disappeared when the Landing was razed. And, when we talk about how there's a cost associated with doing nothing, had we agreed to Alvin Brown's $12 million renovation of the Landing in 2017, do we really think we'd be in this spot now where the Trio required this level of subsidy?

All that to say, if we can afford $100 million over the last 8 years to remove downtown malls, pedestrian ramps, restaurants, annexes, courthouses, and an entire city block, SURELY we can find $20 million - as bad of a deal as it might be - to solve a 50-year problem in an additive way. We don't have to love it. It's not an endorsement of Southeast. It can't set a set a precedent for future deals. But the Trio HAS to get done for downtown to move forward.

Recent Florida Times Union news and article on the Laura Street Trio: https://www.jacksonville.com/story/news/local/2023/12/26/laura-street-trio-deal-heads-to-jacksonville-city-council-vote/71999766007/?utm_source=timesunion-dailybriefing-strada&utm_medium=email&utm_campaign=dailybriefing-headline-stack&utm_term=hero&utm_content=nftu-jacksonville-nletter65

Quote from: Ken_FSU on December 26, 2023, 08:42:26 PM
The DIA had their chance to provide their recommendation seven months ago, and instead chose not to do so, knowing full well that it was a bum deal with non-finalized commitments from the city that would require abnormally high levels of public subsidy to make work.

I think the main reason they didn't weigh in is because the financial amount requested was beyond their purview.

The first hearing was today. According to Nate Monroe there were some quorum issues (https://twitter.com/NateMonroeTU/status/1742911497519386694?s=20) at the start.

General Counsel Michael Fackler told Council (https://twitter.com/NateMonroeTU/status/1742948916587307324?s=20) that any Duval County taxpayer could bring a suit against the city if it guarantees the Laura Street Trio loan because of constitutional concerns. There's also (https://twitter.com/NateMonroeTU/status/1742950022868591010?s=20) some degree of hot potato regarding who exactly is negotiating with Southeast.

Meeting today sounded like your typical, unhinged Jacksonville shitshow.

And a nice Throwback Thursday if you were starting to feel nostalgic for the Lot J legislation:

1. An "emergency" meeting to try to speed through legislation for a development agreement still being drafted? Check.
2. Weird conditions on private development that risk leaving Jacksonville with uncapped liability and a damaged municipal bond rating? Check.
3. Numerous versions of the redevelopment agreement circulating on the Council floor that all contradict each other? Check.
4. Widespread confusion about who's actually negotiating a guaranteed loan for tens of millions of dollars on behalf of the city? Check.
5. The DIA taking a stand, after not taking a stand? Check.
6. Kim Taylor, who should have a 0 added to her salary every time she has to referee one these circuses, once again being the human embodiment of the Jags fan meme, shaking her head in complete befuddlement that an emergency vote was being considered for a deal that had not yet been fully negotiated? Check.
7. A City Council President declaring, "Never again. This will never happen again."? Check.

Bonus points for family drama, with Joe Carlucci apparently questioning his own father's deal.

As a city, we've got to find a way to get the Trio finished, even if it means - gasp- just restoring three historically important, blighted buildings to their former splendor without duct-taping $100 million in new suburban apartments and hotels to the sides of the buildings. But it's becoming increasingly clear, and increasingly tragic, that Southeast can't pay for it, the DIA can't negotiate it, and the City can't see the fallacy of giving Southeast $60 million+ in incentives to unnecessarily convert three beautiful buildings into a weird FrankenTrio that Capital One will just barely sign off on. Maybe. With an uncapped loan from the city. Possibly.

If Southeast refuses to sell, the best solution remains phasing the development, beginning with the Hotel and Restaurant. That brings both of the buildings along Laura Street back online, much more affordably, with a larger focus on historic rehab vs. new construction. From there, Southeast can figure out what they want to do with the remaining building and proposed multifamily portion of the project.

Shouldn't be all or nothing when the City is the one footing such a huge portion of the bill.

Quote from: Ken_FSU on January 04, 2024, 04:46:35 PM
Shouldn't be all or nothing when the City is the one footing such a huge portion of the bill.

This mindset has totally killed Jax over the years. We try to eat the whole turkey in one bite and choke instead of eating it a bite at a time. Seems like the areas we're seeing organic infill are the places where the city has the least involvement. I'm seeing new housing popping up all over Murray Hill and Lakeshore for instance. Not to mention the growth of the Edgewood Ave commercial corridor.

Annnnnnd we've jumped the shark.

https://www.news4jax.com/news/local/2024/01/04/city-council-to-discuss-funding-for-laura-street-trio-redevelopment/

Atkins threatening to demolish the buildings if the city doesn't guarantee his construction loans, which I can't possibly imagine he has the ability to do given their protected stature.

Can't demolish without a permit.

Quote from: Ken_FSU on January 04, 2024, 04:46:35 PM
As a city, we've got to find a way to get the Trio finished, even if it means - gasp- just restoring three historically important, blighted buildings to their former splendor without duct-taping $100 million in new suburban apartments and hotels to the sides of the buildings. But it's becoming increasingly clear, and increasingly tragic, that Southeast can't pay for it, the DIA can't negotiate it, and the City can't see the fallacy of giving Southeast $60 million+ in incentives to unnecessarily convert three beautiful buildings into a weird FrankenTrio that Capital One will just barely sign off on. Maybe. With an uncapped loan from the city. Possibly.

If Southeast refuses to sell, the best solution remains phasing the development, beginning with the Hotel and Restaurant. That brings both of the buildings along Laura Street back online, much more affordably, with a larger focus on historic rehab vs. new construction. From there, Southeast can figure out what they want to do with the remaining building and proposed multifamily portion of the project.

Shouldn't be all or nothing when the City is the one footing such a huge portion of the bill.

Is there a logical reason why both buildings (Florida Life and Bisbee) can't be a part of the hotel as originally planned?

Tsk tsk tsk. Oh yes Jax piddles, twiddles, and resolve, not one damn thing do they solve!

I suggest a nonprofit "historic restoration" trust be created, akin to a land trust, to raise funds and get these restorations done.  Once completed, the trust can operate the facilities using any income to put toward future restorations and/or sell the buildings to reinvest in other buildings needing restoration.  This model is not just used by land trusts but also mimics Habitat for Humanity.

As a nonprofit, it will be easier to get the City to throw money at these projects, to obtain grants from the State, Feds, etc., to offer tax credits and to raise funds from the donor class to create enough "investor" equity to make the project feasible to service the balance as a loan.

It is becoming pretty obvious that a for-profit entity can't pull this off in a manner that works for the developer, investors, lenders and the City so it is time to take another tack.

QuoteOn Thursday, the owner and developer told News4JAX that the buildings might have to come down because he is not getting anywhere with the city about redevelopment plans.

That takes some Jax-level hubris to say when he has secured multiple deals from the City to redevelop the Trio and then done absolutely nothing. Who's to say he would ever break ground even if the City gives him this deal as he's envisioned it? He dreams up a new vision every 6 months.

If in fact those buildings do collapse all on their own, the City should hold him accountable for damages, cleanup, and restoration. It's his property and he's utterly failed to care for it. Under no circumstance should he be permitted to build a new structure on that property if the buildings become unsalvageable due to his neglect.

JWS seems to be the only entity that can do these historic restorations on time and budget. Maybe they can buy Southeast's interest in the properties.

^It doesn't appear that Southeast is interested in selling.

From the Daily Record:

Quote"Dammit, let's find a way to make this happen, and let's not keep finding and parading the damn horribles," [Matt Carlucci] said during the meeting, referring to complaints.

"Let's have a can-do attitude and put the horribles aside."

Most projects that come before the council don't contain "horribles" that can be paraded.  I still struggle to see how this project costs $175M and it's blatantly obvious that Atkins does not have the financial capability to perform.  I hate this idea a little less, but why not give him a Sleiman style buy out and take the property back?  RFP the property and then give it to a capable developer with a number of construction milestones on an expedited schedule that insure prompt performance?

Quote from: Captain Zissou on January 05, 2024, 10:14:04 AM
From the Daily Record:

Quote"Dammit, let's find a way to make this happen, and let's not keep finding and parading the damn horribles," [Matt Carlucci] said during the meeting, referring to complaints.

"Let's have a can-do attitude and put the horribles aside."

Most projects that come before the council don't contain "horribles" that can be paraded.  I still struggle to see how this project costs $175M and it's blatantly obvious that Atkins does not have the financial capability to perform.  I hate this idea a little less, but why not give him a Sleiman style buy out and take the property back?  RFP the property and then give it to a capable developer with a number of construction milestones on an expedited schedule that insure prompt performance?

It's ironic that Matt Carlucci was one of the most vocal critics of Lot J, said that "voters will never forgive us if we pass this," and tried repeatedly to shoot it back to the DIA. Now, he's the one pushing through emergency legislation and almost single-handedly championing a clearly half-baked deal that could expose those same voters to hundreds of millions in liability.

Ok, I'm done with Atkins now...he's declared war here.

Quote"It's a possibility," Atkins said when asked if the project could be dead. "And unfortunately, the next step would probably be to take the buildings down and to build something out. That would be really unfortunate. That's certainly not what we would like to do. I think it's too important to the city. But we may be left with no other alternative."

Atkins said it doesn't matter that the buildings are historical.

"I mean, everything's got a lifespan," he said. "Even if they're historic buildings, it doesn't preclude the opportunity for them to have to be demolished."

Atkins that's a reality, not a threat.

"Well, or they're going to fall down. I mean, we've got issues structurally with the building, has to be done within a certain amount of time," Atkins said.

The city has come to the table to try to approve incentives packages that it can for a larger deal, and he's saying this stuff.  He's not willing to sell and he's not willing to propose smaller chunks.  And now he's making threats about tearing these things down.  He does not have good will with him at this point.

What I'm insanely curious about is what happened over the last couple of months to change the deal from:

1. The city provides Atkins a pretty insane, but capped and finite, $20+ million in cash grants.

to

2. The city guarantees all of Southeast's $20+ million construction loans to Capital One.

Kind of terrifying that Southeast couldn't get this across the finish line with historic preservation credits from the state, REV grants and preservation grants from the DIA, AND $20 million in public grants.

So it's basically when an 18-year-old wants a loan and needs a cosigner?

Quote from: Ken_FSU on January 05, 2024, 03:00:33 PM
What I'm insanely curious about is what happened over the last couple of months to change the deal from:

1. The city provides Atkins a pretty insane, but capped and finite, $20+ million in cash grants.

to

2. The city guarantees all of Southeast's $20+ million construction loans to Capital One.

Kind of terrifying that Southeast couldn't get this across the finish line with historic preservation credits from the state, REV grants and preservation grants from the DIA, AND $20 million in public grants.

Sounds like a lot of bad advice.

Really, really good stuff again by Nate Monroe here, framed around the Trio but also striking at the core of the problem with DT Jax in general. Great details too about the infamous developers meeting a few years back that I don't think ever got out in the press anywhere else.

https://www.jacksonville.com/story/news/columns/nate-monroe/2024/01/05/nate-monroe-laura-street-trio-fight-reveals-downtown-dysfunction/72120429007/

Quote from: Ken_FSU on January 06, 2024, 12:00:51 PM
Really, really good stuff again by Nate Monroe here, framed around the Trio but also striking at the core of the problem with DT Jax in general. Great details too about the infamous developers meeting a few years back that I don't think ever got out in the press anywhere else.

https://www.jacksonville.com/story/news/columns/nate-monroe/2024/01/05/nate-monroe-laura-street-trio-fight-reveals-downtown-dysfunction/72120429007/

Bring back the old, but independent, Downtown Development Authority.

Monroe's review of the DIA/City Council/Mayor relationships parallels the Confederate Monument path.  The City Council abdicates to others to take the hit when making a decision might be a political hot potato but then also wants to be able to criticize that decision after it is made.

Monroe describes DIA as a tool of the Council where the Council wants its cake and eat it too.  If they follow DIA advice and it doesn't work out, it's on DIA.  If they don't like making a decision kicked to them by DIA, they don't want to lead on resolving it, so they kick the can back down the road.  The whole arrangement Monroe describes is likely by design, albeit it holds the City back.  It is all about the politicos protecting their own interests, not serving the citizens that elected them.

In the end, the Council is specializing in avoiding making any decision that might be the least bit daring.  Better to bat it around until it dies from frustration and futility, no decision having been made.

This isn't unique to the Council.  The reason we have so many citizen led constitutional amendments on our ballots is because the Legislature often does the same thing.

We live in a world where elected leaders often no longer lead and non-accountability is the end goal.

The Jaguars are the Trio. Just one giant pipe dream everyone wants to succeed but reality keeps kicking it in the balls.

Quote from: WarDamJagFan on January 08, 2024, 09:24:39 AM
The Jaguars are the Trio. Just one giant pipe dream everyone wants to succeed but reality keeps kicking it in the balls.

I think Lori Boyer is Press Taylor in this scenario?

For every ten trips to the red zone, she puts 3 points on the board.

Quote from: Ken_FSU on January 08, 2024, 08:17:48 PM

Quote from: WarDamJagFan on January 08, 2024, 09:24:39 AM
The Jaguars are the Trio. Just one giant pipe dream everyone wants to succeed but reality keeps kicking it in the balls.

I think Lori Boyer is Press Taylor in this scenario?

For every ten trips to the red zone, she puts 3 points on the board.

Lori Boyer is Shad Khan. Just spinning around the hampster wheel chasin' that cheese without the slightest clue as to why the cheese remains unreachable.

Quote from: Charles Hunter on January 06, 2024, 12:44:48 PM

Quote from: Ken_FSU on January 06, 2024, 12:00:51 PM
Really, really good stuff again by Nate Monroe here, framed around the Trio but also striking at the core of the problem with DT Jax in general. Great details too about the infamous developers meeting a few years back that I don't think ever got out in the press anywhere else.

https://www.jacksonville.com/story/news/columns/nate-monroe/2024/01/05/nate-monroe-laura-street-trio-fight-reveals-downtown-dysfunction/72120429007/

Bring back the old, but independent, Downtown Development Authority.

Indeed. There was more progress in that setup. You can thank Mayor Peyton for getting rid of it, btw.  That's the peril in putting a inexperienced Trust Fund baby in charge of the city.

Deal is dead (https://x.com/natemonroetu/status/1777737071563571585?s=46&t=vkOnzVgzGQzmKS--73ASSg). Atkins says he intends to proceed somehow:

(https://pbs.twimg.com/media/GKvKcbZWQAEFDAO?format=jpg&name=medium)

Propose renaming DIA, here's a few options:

Downtown Isn't Alive
Development Isn't Allowed
Don't Invest Atkins

You'd think an agency interested in the revitalization of downtown would actually want to see something get built, but alas...

At some point the terms of the agreement aren't in the best interest of the city.  I forget what his ask was but if I recall, it was pretty massive.  Hopefully the DIA has some sort of strategy with this and they aren't just throwing in the towel.  Hopefully.  Maybe.

Quote from: acme54321 on April 09, 2024, 09:03:10 PM
At some point the terms of the agreement aren't in the best interest of the city.  I forget what his ask was but if I recall, it was pretty massive.  Hopefully the DIA has some sort of strategy with this and they aren't just throwing in the towel.  Hopefully.  Maybe.

All of this is accurate.

Before the Bob Dylan concert last month I was having dinner with some friends at Bellwether and started chatting with this gentleman at the table next to us. He mentioned that his group had attempted to purchase the Trio, but lost out to Atkins. I really wish that hadn't been the case....

Councilman Peluso this morning (https://x.com/jimmyforjax/status/1778029946130083953?s=46&t=vkOnzVgzGQzmKS--73ASSg) calling for eminent domain of the Trio.

DIA staff called the proposals from SouthEast "untenable":

https://www.bizjournals.com/jacksonville/news/2024/04/09/laura-street-trio-untenable.html

This is gonna get ugly for sure lol...

Quote from: marcuscnelson on April 10, 2024, 10:07:45 AM
Councilman Peluso this morning (https://x.com/jimmyforjax/status/1778029946130083953?s=46&t=vkOnzVgzGQzmKS--73ASSg) calling for eminent domain of the Trio.

DIA staff called the proposals from SouthEast "untenable":

https://www.bizjournals.com/jacksonville/news/2024/04/09/laura-street-trio-untenable.html

There is some precedence for this....thinking of the building that now houses Cowford Chophouse. The issues there were a little different as that guy was trying to actively demolish the building and Atkins does not.

This is frustrating because I believe Atkins really wants to do the right thing here and develop the buildings. But, he clearly doesn't have the money to do it and he doesn't want to take on another investor.

Atkins firing back with blame on Lori Boyer's leadership:

https://www.bizjournals.com/jacksonville/news/2024/04/10/atkins-responds-trio-resolution.html

One part of note:

(https://pbs.twimg.com/media/GK0_7vCWUAAHxDQ?format=png&name=medium)

This comes as Nate Monroe calls for Boyer's ouster (https://www.jacksonville.com/story/news/columns/nate-monroe/2024/04/10/downtown-jacksonville-needs-new-leadership-after-years-of-failed-projects/73273822007/) from the DIA.

Quote

Mayor Donna Deegan said DIA presented "three very good options" to Atkins and the clock is ticking on getting the Trio restored.

"The reason we wanted to be very intentional about presenting those options to Mr. Atkins was to say look, this is our best final effort to get this in a place where we can get it done," Deegan said. "And from here, if we cannot get it done (with Atkins), we're going to move quickly to whatever our next options are because time is really crucial when it comes to these buildings."

(https://photos.smugmug.com/Other/Miscellaneous/i-nHWLSwG/0/C3wLSpjXdBQCD7gsPNnv9GtcSxvXX5QD3jmSqJDGk/S/michael-jackson-eating-popcorn-gif-S.gif)

Both are culpable. Boyer has allowed the city to get into bed with questionable developers like Atkins. I was happy for the city to do a deal which was a bad deal financially on this as I feel its so important to the momentum of Downtown, but its now past the point of no return for me.

The Ford on Bay another total disaster. Sadly feel all these developments should now go on hold until Boyer is out and we can somehow start a fresh and wash the cities hands of these cowboys pitching their fantasy proposals.

^Atkins had possession of the Trio well before Boyer joined the DIA.

It's way past time for Lori Boyer to retire, collect her gold watch and ride off into the sunset. The DIA hasn't accomplished much under her leadership. Atkins isn't much better. He's like Lucy holding the football - just when you think he's been given an incentive package that will enable him to get started on the project, he yanks the football away and demands a sweeter deal. Downtown will be better off when both are no longer involved in its renewal.

Quote from: Steve on April 10, 2024, 11:10:34 AM

Quote from: marcuscnelson on April 10, 2024, 10:07:45 AM
Councilman Peluso this morning (https://x.com/jimmyforjax/status/1778029946130083953?s=46&t=vkOnzVgzGQzmKS--73ASSg) calling for eminent domain of the Trio.

DIA staff called the proposals from SouthEast "untenable":

https://www.bizjournals.com/jacksonville/news/2024/04/09/laura-street-trio-untenable.html

There is some precedence for this....thinking of the building that now houses Cowford Chophouse. The issues there were a little different as that guy was trying to actively demolish the building and Atkins does not.

This is frustrating because I believe Atkins really wants to do the right thing here and develop the buildings. But, he clearly doesn't have the money to do it and he doesn't want to take on another investor.

One point I was mistaken on. The Bostwick Building wasn't taken through Eminent Domain. It was taken through a code enforcement lean.

If the restoration of the trio was isolated, then the discussion would be much different. Having a new construction portion to the project really should be "another" project all together.

Moreover, if the buildings were in that much disrepair, & the community wanted them saved, he could just be completely transparent on the engineering & condition of the building(s). It's not the finishes that sway project costs so drastically. Hard to imagine there isn't some reporting to justify a crazy high budget per door.

Letting Aundra Wallace go over to the C of C seems like a big mistake at this point.  Getting someone with the credentials that Nate Monroe wants is going to be difficult. DT JAX has a decades long history of failure that preceded Boyer. Anyone seeking the position would have to think it is a systemic problem. And the thing is, they would be right to think that. I think Deegan has a real shot to get the ball rolling but she won't be in office but seven more years and that is if she is lucky. 

DIA committee keeps door open to future negotiations with SouthEast Development

QuoteA Downtown Investment Authority committee opted not to recommend closing the door on conversations with the developer of a project to resurrect the Laura Street Trio.

The Strategic Implementation Committee voted 5-0 on April 12 to defer a resolution aimed at ending negotiations with Steve Atkins, principal of SouthEast Development Group, on his most recent proposal to redevelop the cluster of historic buildings in the heart of Downtown Jacksonville.

Instead, the committee directed DIA staff to amend the resolution to emphasize that it applied only to the current proposal and would not preclude further negotiations with Atkins on the project. The full DIA board will consider the revised resolution at its next monthly meeting, scheduled for April 17.

https://www.jaxdailyrecord.com/news/2024/apr/12/dia-panel-leaves-door-open-for-atkins-on-laura-street-trio-redevelopment/

New proposal from SouthEast:

https://www.jacksonville.com/story/news/local/2024/05/09/developer-makes-new-request-for-laura-street-trio-in-jacksonville/73585217007/

No more loan guarantee, but the ask is for $49 million in cash grants (including $21 million that would be paid upon closing of financing), $22 million in Downtown Preservation and Revitalization Program loans, and another $2 million forgivable loan, as well as a 75% property tax rebate for 10 years.

Overall project cost is now $191 million.

Well, it looks to be less than the 50% contribution the Jags are asking regarding the stadium so, obviously, a good deal for the City  8).

I want the Trio to be restored but hope the City is doing proper due diligence on terms and costs of the project.  Paying $21 million upon closing financing seems over the top... should be paid out as the City's portion of percentage-of-completion payments approved up by a third party assessor and invoices from the design and construction vendors with 10% retention.

Quote from: marcuscnelson on May 09, 2024, 11:34:06 AM
New proposal from SouthEast:

https://www.jacksonville.com/story/news/local/2024/05/09/developer-makes-new-request-for-laura-street-trio-in-jacksonville/73585217007/

No more loan guarantee, but the ask is for $49 million in cash grants (including $21 million that would be paid upon closing of financing), $22 million in Downtown Preservation and Revitalization Program loans, and another $2 million forgivable loan, as well as a 75% property tax rebate for 10 years.

Overall project cost is now $191 million.

It's a lot of public money ($50 million in cash), and very risky/potentially sets a bad precedent to pay Southeast $21 million upfront upon them securing financing.

RE: Lori Boyer's quote here:

Quote"It is a big number," Downtown Investment Authority CEO Lori Boyer said. "It's a big city investment in the deal, and I think that's a policy decision for City Council and the mayor's office about the importance of this building and how it fits into the bigger picture of city expenditures. But from the standpoint of whether this is what it takes to get this deal done — probably."

If it's the best we can do and this is what it will take, I think we've got to pinch our nose and do it, just to get this thing done and avoid restarting from scratch or letting the property get tied up in litigation for years.

It's obvious that it's a lot of city money to build it.

What's less obvious but equally important is how much money we're losing, both in opportunity and in high subsidies, by having this blight in the heart of our CBD.

Do what we gotta do, get her done, and then move on from Southeast.

Costs and wackiness aside, it's a great mix of uses, will bring life to Laura Street and complement our investments on periphery, and is a fifty times better use of $40-$50 million dollars than subsidizing the Related high rise on the Southbank.

Quote from: Ken_FSU on May 09, 2024, 12:20:07 PM
Costs and wackiness aside, it's a great mix of uses, will bring life to Laura Street and complement our investments on periphery, and is a fifty times better use of $40-$50 million dollars than subsidizing the Related high rise on the Southbank.

Atkins owes Related a huge favor, because their ask makes his request seem reasonable. The up-front cash is concerning, and something along the lines of jaxlongtimer's suggestion seems very reasonable. Outside of that, it's time to get the Trio going and move on. The Related deal can wait if need be.

Quote from: jaxoNOLE on May 09, 2024, 03:14:24 PM

Quote from: Ken_FSU on May 09, 2024, 12:20:07 PM
Costs and wackiness aside, it's a great mix of uses, will bring life to Laura Street and complement our investments on periphery, and is a fifty times better use of $40-$50 million dollars than subsidizing the Related high rise on the Southbank.

Atkins owes Related a huge favor, because their ask makes his request seem reasonable. The up-front cash is concerning, and something along the lines of jaxlongtimer's suggestion seems very reasonable. Outside of that, it's time to get the Trio going and move on. The Related deal can wait if need be.

Totally agree.

You do these five things well:

Riverfront Plaza with a restaurant and cafe
VyStar garage retail (Brewery + Pizza Restaurant)
Laura Street Trio
Hemming Park Redesign (hopefully a better version than what we've seen)
Main Library Retail bays reopening

That's a really, really solid start, and you can probably start backing off tossing cash completion grants at everything in the vicinity.

Are they seriously looking at the library retail bays? I always thought they were designed stupidly-no reason the doors on either side of the center door couldn't open directly into the retail bays so they could keep separate hours from the library.

Quote from: Steve on May 09, 2024, 06:18:22 PM
Are they seriously looking at the library retail bays? I always thought they were designed stupidly-no reason the doors on either side of the center door couldn't open directly into the retail bays so they could keep separate hours from the library.

Wishful thinking on my part, but nothing that I know.

Same with Snyder Memorial.

Should be JWJP's showpiece restaurant/bar. Instead, it's sitting off the taxrolls in the city's possession for decades.

If I were voting on this I would approve it, if I knew that this was it. by that I mean it's finally going to get done and in a timely manor, and without additional asks or 'value engineering' or reduction of uses/scope.  But there is no such guarantee, especially with this developer. 

Quote from: vicupstate on May 10, 2024, 08:35:45 AM
If I were voting on this I would approve it, if I knew that this was it. by that I mean it's finally going to get done and in a timely manor, and without additional asks or 'value engineering' or reduction of uses/scope.  But there is no such guarantee, especially with this developer.

If we're writing Southeast a $21 million check upfront, I think they should be wiling to put the Trio up as collateral.

If the project isn't completed or stalls mid-way, the city takes ownership of the property.

Quote from: Ken_FSU on May 10, 2024, 09:04:41 AM

Quote from: vicupstate on May 10, 2024, 08:35:45 AM
If I were voting on this I would approve it, if I knew that this was it. by that I mean it's finally going to get done and in a timely manor, and without additional asks or 'value engineering' or reduction of uses/scope.  But there is no such guarantee, especially with this developer.

If we're writing Southeast a $21 million check upfront, I think they should be wiling to put the Trio up as collateral.

If the project isn't completed or stalls mid-way, the city takes ownership of the property.

That I'd be on board with.

Why is there a $21M upfront check anyway? That doesn't make a whole lot of sense. Is that a bail out of existing sunk costs?

Could a deal be close?

https://www.news4jax.com/news/local/2024/05/22/laura-street-trio-developer-city-close-to-possible-67m-deal-on-redevelopment-project-sources-say/

Would be expensive, but if it gets the Trio done while protecting the city, seems like a far better use of the money than the Related project.

Light at the end of the tunnel? Hope springing eternal? Finally something might start, get done, and get finished?

https://www.msn.com/en-us/money/other/sources-city-of-jacksonville-developer-reach-75m-agreement-in-principle-on-laura-street-trio/ar-BB1mVKve?ocid=msedgntp&pc=U531&cvid=bfefce786bc94d62a6257871d5849b0e&ei=49

Another new proposal from SouthEast:

https://www.jaxdailyrecord.com/news/2024/may/31/draft-term-sheet-for-laura-street-trio-deal-includes-8723-million-in-city-incentives/

QuoteA new financial proposal to resurrect the Laura Street Trio of historic buildings in the heart of Downtown Jacksonville includes $87.23 million in city incentives, according to the most recent draft term sheet delivered by the developer to the Downtown Investment Authority.

The draft from SouthEast Development Group calls for the city to provide $42.48 million in completion grants, $22.03 million in historic preservation grants, a $14.42 million senior construction loan and $8.3 million in economic development loans.

Along with an adaptive reuse of the historic properties, SouthEast plans to add in new construction to create a mixed-use development that would include a hotel, apartments and a restaurant and bar.

The draft term sheet lists the project's total cost at $190.62 million, divided between $99.2 million for the hotel and $91.42 million for the apartments.

The draft is dated May 24.

Quote from: marcuscnelson on May 31, 2024, 07:52:29 PM
Another new proposal from SouthEast:

https://www.jaxdailyrecord.com/news/2024/may/31/draft-term-sheet-for-laura-street-trio-deal-includes-8723-million-in-city-incentives/

QuoteA new financial proposal to resurrect the Laura Street Trio of historic buildings in the heart of Downtown Jacksonville includes $87.23 million in city incentives, according to the most recent draft term sheet delivered by the developer to the Downtown Investment Authority.

The draft from SouthEast Development Group calls for the city to provide $42.48 million in completion grants, $22.03 million in historic preservation grants, a $14.42 million senior construction loan and $8.3 million in economic development loans.

Along with an adaptive reuse of the historic properties, SouthEast plans to add in new construction to create a mixed-use development that would include a hotel, apartments and a restaurant and bar.

The draft term sheet lists the project's total cost at $190.62 million, divided between $99.2 million for the hotel and $91.42 million for the apartments.

The draft is dated May 24.

Someone smarter than me feel free to correct, but I believe the article is wrong in classifying $22 million in historic preservation grants as "city money." Wouldn't that money come from the state?

If yes, I believe local incentives would be $65 million, not $87 million as the story and headline claims.

^The DIA has a historic preservation program that I'm 100% sure they are tapping into. SouthEast isn't a nonprofit, so they aren't likely eligible for state or federal grants. However, it could be possible for them to get federal tax credits on top of what's mentioned in this article.

Quote from: thelakelander on May 31, 2024, 10:35:10 PM
^The DIA has a historic preservation program that I'm 100% sure they are tapping into. SouthEast isn't a nonprofit, so they aren't likely eligible for state or federal grants. However, it could be possible for them to get federal tax credits on top of what's mentioned in this article.

Thanks Lake!

I don't envy City Council on this one.

That's a LOT OF MONEY when a lot of other people are looking for incentives too.

But also, the cost of doing nothing is just astronomical for the Trio as well.

https://www.actionnewsjax.com/news/local/itd-be-awesome-87m-proposal-bring-jacksonvilles-laura-street-trio-back-life/QHZ4S6HH5FDCLPAVVOBZZ3WO64/

Perfect example of everything wrong with the incentives thrown around DT.

- $2M "forgiven" for "other" expenses thus far
- $6.2M for paying off an existing bridge loan
- $2M in escrow for developer "cost overruns"
- Out of the $42M completion grant, the developer has the right to "keep" excess funds on the balance sheet
- COJ Taxpayer essentially 100% funding the construction of the hotel (bc of completion grant)
- $8M+ valuation for the land (lol)
- $5.5M for "predevelopment expense"

For being such a free-state, you sure wouldn't think that with the incentives DT. Are we are paying for a developers mistake & time? It's a tough business, and clearly if this deal falls though, Southeast will have some 7-figure notes being called. I want the trio revitalized too, but it shouldn't be the taxpayer's responsibility to pay for the errors of a private market venture.

Quote from: Jax_Developer on June 04, 2024, 08:45:02 AM
Perfect example of everything wrong with the incentives thrown around DT.

- $2M "forgiven" for "other" expenses thus far
- $6.2M for paying off an existing bridge loan
- $2M in escrow for developer "cost overruns"
- Out of the $42M completion grant, the developer has the right to "keep" excess funds on the balance sheet
- COJ Taxpayer essentially 100% funding the construction of the hotel (bc of completion grant)
- $8M+ valuation for the land (lol)
- $5.5M for "predevelopment expense"

For being such a free-state, you sure wouldn't think that with the incentives DT. Are we are paying for a developers mistake & time? It's a tough business, and clearly if this deal falls though, Southeast will have some 7-figure notes being called. I want the trio revitalized too, but it shouldn't be the taxpayer's responsibility to pay for the errors of a private market venture.

That basically reads like a judgement for a Bert J. Harris claim where the government was found responsible for taking away a property owner's development rights. 

Quote from: CityLife on June 04, 2024, 09:20:24 AM

Quote from: Jax_Developer on June 04, 2024, 08:45:02 AM
Perfect example of everything wrong with the incentives thrown around DT.

- $2M "forgiven" for "other" expenses thus far
- $6.2M for paying off an existing bridge loan
- $2M in escrow for developer "cost overruns"
- Out of the $42M completion grant, the developer has the right to "keep" excess funds on the balance sheet
- COJ Taxpayer essentially 100% funding the construction of the hotel (bc of completion grant)
- $8M+ valuation for the land (lol)
- $5.5M for "predevelopment expense"

For being such a free-state, you sure wouldn't think that with the incentives DT. Are we are paying for a developers mistake & time? It's a tough business, and clearly if this deal falls though, Southeast will have some 7-figure notes being called. I want the trio revitalized too, but it shouldn't be the taxpayer's responsibility to pay for the errors of a private market venture.

That basically reads like a judgement for a Bert J. Harris claim where the government was found responsible for taking away a property owner's development rights.

Not when you are trying to develop a 11-story hotel with little to no market for it while forcing the "deals" (as Southeast refers to them as) to be tied together (& 11-story apartments - not cheap). If this was just the historic buildings, the project would have already been approved.

I thought the historic buildings were supposed to be the hotel. Did the plan change again?

Quote from: Jax_Developer on June 04, 2024, 09:48:01 AM

Quote from: CityLife on June 04, 2024, 09:20:24 AM

Quote from: Jax_Developer on June 04, 2024, 08:45:02 AM
Perfect example of everything wrong with the incentives thrown around DT.

- $2M "forgiven" for "other" expenses thus far
- $6.2M for paying off an existing bridge loan
- $2M in escrow for developer "cost overruns"
- Out of the $42M completion grant, the developer has the right to "keep" excess funds on the balance sheet
- COJ Taxpayer essentially 100% funding the construction of the hotel (bc of completion grant)
- $8M+ valuation for the land (lol)
- $5.5M for "predevelopment expense"

For being such a free-state, you sure wouldn't think that with the incentives DT. Are we are paying for a developers mistake & time? It's a tough business, and clearly if this deal falls though, Southeast will have some 7-figure notes being called. I want the trio revitalized too, but it shouldn't be the taxpayer's responsibility to pay for the errors of a private market venture.

That basically reads like a judgement for a Bert J. Harris claim where the government was found responsible for taking away a property owner's development rights.

Not when you are trying to develop a 11-story hotel with little to no market for it while forcing the "deals" (as Southeast refers to them as) to be tied together (& 11-story apartments - not cheap). If this was just the historic buildings, the project would have already been approved.

Correct. We all know there is nothing close to a government taking here, so I was pointing out how crazy it is for a government to punish itself for the mistakes of a developer.

Quote from: thelakelander on June 04, 2024, 09:56:55 AM
I thought the historic buildings were supposed to be the hotel. Did the plan change again?

Assuming it ever happens, both portions of the project (hotel & residential) will be a mix of historic building stock and new construction.

Hotel & Restaurant Portion

1) The Marble Bank Building (to become a restaurant with basement cellar for the hotel)
2) The Bisbee Building (to become the hotel lobby and 56-62 guest rooms)
3) The new 11-story hotel add-on (to become 71-84 additional hotel rooms)

Multi-Family Portion

1) The Florida Life Building (to become 18-20 housing units)
2) A new multi-family mid-rise (to become 140-149 housing units)

Quote from: CityLife on June 04, 2024, 10:02:25 AM

Quote from: Jax_Developer on June 04, 2024, 09:48:01 AM

Quote from: CityLife on June 04, 2024, 09:20:24 AM

Quote from: Jax_Developer on June 04, 2024, 08:45:02 AM
Perfect example of everything wrong with the incentives thrown around DT.

- $2M "forgiven" for "other" expenses thus far
- $6.2M for paying off an existing bridge loan
- $2M in escrow for developer "cost overruns"
- Out of the $42M completion grant, the developer has the right to "keep" excess funds on the balance sheet
- COJ Taxpayer essentially 100% funding the construction of the hotel (bc of completion grant)
- $8M+ valuation for the land (lol)
- $5.5M for "predevelopment expense"

For being such a free-state, you sure wouldn't think that with the incentives DT. Are we are paying for a developers mistake & time? It's a tough business, and clearly if this deal falls though, Southeast will have some 7-figure notes being called. I want the trio revitalized too, but it shouldn't be the taxpayer's responsibility to pay for the errors of a private market venture.

That basically reads like a judgement for a Bert J. Harris claim where the government was found responsible for taking away a property owner's development rights.

Not when you are trying to develop a 11-story hotel with little to no market for it while forcing the "deals" (as Southeast refers to them as) to be tied together (& 11-story apartments - not cheap). If this was just the historic buildings, the project would have already been approved.

Correct. We all know there is nothing close to a government taking here, so I was pointing out how crazy it is for a government to punish itself for the mistakes of a developer.

Ah yes, agreed! I can see a weak argument if it was just the historic buildings, but yes Lake... Ken has broken down the components in such a clear format, it became apparent that they have slipped in a new construction component for both projects.

Thank you again Ken.

Quote from: Jax_Developer on June 04, 2024, 10:20:57 AMThank you again Ken.

You got it buddy!

Despite the stadium catching headlines as the biggest decision City Council has to make this summer, I think the Trio - if this incentive package makes it to Council - will be an infinitely harder decision to make.

On the surface, to your point, it's a comically dreadful deal for the city.

On the other hand, it's also comically dreadful to have what appears to be the remnants of a WW2-era Tokyo Fire Bombing hanging out for another 30 years dropping concrete on passersby as we try to revitalize our downtown.

Deeply dislike both options, and neither is fair to the taxpayer.

Real Sophie's choice.

DIA staff now recommending negotiations end until SouthEast is able to provide more equity.

https://www.jacksonville.com/story/news/local/2024/06/26/jacksonville-board-could-end-talks-on-restoring-laura-street-trio/74215868007/

Quote from: marcuscnelson on June 26, 2024, 12:01:18 PM
DIA staff now recommending negotiations end until SouthEast is able to provide more equity.

https://www.jacksonville.com/story/news/local/2024/06/26/jacksonville-board-could-end-talks-on-restoring-laura-street-trio/74215868007/

Here we go. so...these buildings will probably just sit there and rot for the next 10 to 30 years I would guess. If nothing is going to be done, just raze the buildings (whoever owns them), and build something else in their place. No, I don't think they are a pure eyesore, but its embarrassing that these buildings have sat like this, proposal after proposal, rendering after rendering, promises after promises, and NOTHING done; NOTHING at all.

Good grief. Did the DIA honestly expect Southeast to magically come back to the table with $50 million in additional equity? I think it's myopic and stupid for the DIA to compare Trio restoration incentives to the pie-in-the-sky Related Tower (which may or may not ever get built), and use those discrepancies as justification to shut down talks with Southeast. The importance of the two projects are worlds apart. This needs to go in front of City Council. Let them make a strategic decision as elected representatives of the taxpayers, rather than having the DIA shut it down because the ROI doesn't reach the required threshold for their phantom projects that never materialize.

This just seems like a pissing contest between DIA and Southeast, and the Trio is unfortunately being used as leverage. Dissolve DIA and eminent domain the Trio. Get these clowns out of here and put this project into capable hands.

Quote from: marcuscnelson on June 26, 2024, 12:01:18 PM
DIA staff now recommending negotiations end until SouthEast is able to provide more equity.

https://www.jacksonville.com/story/news/local/2024/06/26/jacksonville-board-could-end-talks-on-restoring-laura-street-trio/74215868007/

Good for them - I am not in favor of continuing to negotiate in futility with SouthEast

Quote from: Ken_FSU on June 26, 2024, 07:10:55 PM
Good grief. Did the DIA honestly expect Southeast to magically come back to the table with $50 million in additional equity? I think it's myopic and stupid for the DIA to compare Trio restoration incentives to the pie-in-the-sky Related Tower (which may or may not ever get built), and use those discrepancies as justification to shut down talks with Southeast. The importance of the two projects are worlds apart. This needs to go in front of City Council. Let them make a strategic decision as elected representatives of the taxpayers, rather than having the DIA shut it down because the ROI doesn't reach the required threshold for their phantom projects that never materialize.

I could be wrong, but I get the feeling that this is being done to the trio on purpose; why? Well, it appears that DIA (and others) really want this related project; and maybe the trio is or will be a "sacrificial lamb" so to speak to free up some stuff for Related. Could be wrong. But who knows?

How much equity is Southeast currently proposing to put into the deal? How does that percentage compare with other recently completed adaptive reuse projects in downtown?

Atkins... also endorsing an end to negotiations.

https://www.jaxdailyrecord.com/news/2024/jun/27/laura-street-trio-developer-agrees-with-dia-that-further-talks-are-pointless/

QuoteSteve Atkins, the owner of the Trio and principal of SouthEast Development, said June 27 that he believed there was no point in continuing to negotiate with the DIA in the long-running effort to revive the buildings. Instead, Atkins says he and his team want to deal directly with the Jacksonville City Council, which has final authority on deals negotiated through the semi-independent DIA.

Atkins' comments came a day before the DIA board was scheduled to consider a resolution from the authority's staff to halt negotiations on the latest proposal for incentives for the project.

"For me, the bottom line is we want to get the project done," Atkins told the Daily Record.

"In my mind, there's nothing more important for Downtown. Now that the stadium deal is done, this is front and center. And the only way I think something is going to happen is if we work directly with the Council."

Council President Ron Salem has signaled that he feels similarly, saying June 27 that he had directed the Special Committee on the Future of Downtown to explore options for moving the project forward.

Salem said the special committee's chair, Council member Kevin Carrico, contacted him after learning that the DIA staff was recommending cutting off the latest round of talks with Atkins and SouthEast.

"He just asked to have it said he wanted to explore all options," Salem said during an appearance on the WJCT Public Media talk show "First Coast Connect." "And I said, 'Fine, Kevin, I'll send it to your committee.'"

Atkins said he supported the move.

Also the price of this project has continued to rise, at the end of May it was $190.62 million with $87.2 million in incentives:

QuoteDIA documents show the total project cost at $194.2 million, with SouthEast requesting $89.9 million in city incentives.

A staff report accompanying the DIA's proposed resolution says the funding structures in SouthEast's proposal would "place the City at risk in multiple ways."

The cost is larger than the CBA council could not stomach.

You guys know more about this stuff than I do, but DIA/Boyer is worthless IMO. Don't know whether her hands are tied (or DIA as a whole), but it just appears that she is doing little to nothing to put a fire under all concerned and get this project going. Along with that, sometimes it appears that Atkins is money hungry for money, incentives, etc., and I understand that the price of all of this keeps going up and sky high; but IMO, Atkins could have had this done years ago; didn't he or hasn't he already received money, incentives, etc. a few times in the past for the Trio? Approach Gateway (someone, some thing), and see if they are willing to take the Trio onboard and do the "right thing" with these jewels of downtown Jacksonville (they certainly can be if they now are not).

I understand DIA's problem. It is clear based on the articles online today, Southeast has no capital to invest. Their own contribution is only around 13% and some of that is the value of the land. They essentially want the city to finance their project. Keep in mind this is different than the stadium. The stadium is owned by the city and regardless of the Jaguars is a city asset. The Trio is a private project. Totally different.

I certainly understand the DIA's point on this one. It would be one thing if getting this project done was just a question of having enough city money behind it: take the tough pill and pony up $90M to get one of the most important downtown projects behind us.

But there's legitimate reason, IMO, to think Atkins is just in over his head. Every month there's a new cost estimate and a new incentive ask. How many times has the design been changed? Not to mention, he had a prior deal passed, signed, sealed, and delivered, that was supposed to start construction in Fall of 2021, and he failed to fulfill his end of that deal. That project included $27M of city incentives.

Now he asks the city to provide $89M in incentives, which are very front-loaded. It's fair to wonder how safe an investment that would be given his history of moving goalposts on this project.  Any deal involving cash grants to fund construction before the buildings are complete should include terms that turn ownership of the property over to the City if the project isn't finished.

If City Council engages in direct negotiations with Atkins and passes a version of this deal, it would really beg the question: what is the point of the DIA?

If this deal dies, it's time to start racking up the blight fines a la Regency Square Mall. He has rights as a property owner not to develop the buildings, but he's also subject to the same blight ordinances as the rest of us.

Is the city levying fines against these buildings for their current condition?  I'm starting to think the city needs to approach this like the Bostwick Building.

It seems like Southeast did a fine job on the Barnett building but this has been dragging on for too long for such a high profile property.

Quote from: Ken_FSU on June 26, 2024, 07:10:55 PM
Good grief. Did the DIA honestly expect Southeast to magically come back to the table with $50 million in additional equity? I think it's myopic and stupid for the DIA to compare Trio restoration incentives to the pie-in-the-sky Related Tower (which may or may not ever get built), and use those discrepancies as justification to shut down talks with Southeast. The importance of the two projects are worlds apart. This needs to go in front of City Council. Let them make a strategic decision as elected representatives of the taxpayers, rather than having the DIA shut it down because the ROI doesn't reach the required threshold for their phantom projects that never materialize.

Talked to a few people today about this, and I think I've swung back on the DIA's side here. Lord knows I'm not a big fan of their inability to bring things across the finish line in recent years, but what Southeast proposed in their latest proposal was just downright stupid. Almost entirely front-loaded, with the city assuming responsibility for interest on the bonds, and Southeast seemingly having literally almost no equity into the deal aside from the land under the Trio and their historic tax credits.

Deeply pains me to say it, but even if the city puts in $90 million on the front end and early stages, I don't think we can trust Southeast to actually finish this thing. City's gonna be on the hook if something goes wrong and it turns into another Eyesore on I-4 or Berkman 2.

Agree with the above comment: gotta get this property out of Atkins' hands. He's wasted a decade of our time and resources. Even if the passion is there, the resources aren't. Give him a couple of months to come forward with a development partner, and if not, levy a blight tax on the property if you have to until you squeeze him out. Or Toney Sleiman him. Even if it's $15 million to buy him out, feels smarter than betting $90 million on Southeast.

Funny thing is someone like Sleiman could have probably pulled it off by now. Any idea why there's no desire from Southeast's side to add private equity into the mix?

Yeah, the rents & hotel rates are insane.

- NOI will be less than forecasted
- The valuation of the project is diminished because of DSCR
- The way you counteract that, is by bringing more equity to the construction stack
- But, now the equity's return is diminished because more equity is getting the same portion of free cash flow

In a free market, you would only willingly put up more equity in your construction stack, if you really really believe in the project. Need to remember that construction loans have constraints too, and one of those is equity relative to the funds distributed on the loan. Hence, this all explains why the grants are upfront & in the construction "phase." They either don't have enough money to "load" the construction equity stack or they don't believe in the project. One of the two.

Quote from: acme54321 on June 28, 2024, 02:01:58 PM
Is the city levying fines against these buildings for their current condition?  I'm starting to think the city needs to approach this like the Bostwick Building.

It seems like Southeast did a fine job on the Barnett building but this has been dragging on for too long for such a high profile property.

That, plus, do some cities declare a building historic and then have the authority to demand a minimal level of restoration, preservation, maintenance?  If done here, at some point, maybe the owner would feel the pain of carrying the property indefinitely and look for a buyer/the City to take it off his hands for some smaller profit.  It appears Atkins is either extorting the City or just can't admit he doesn't have what it takes to get this done due to pride.  Clearly, he isn't suffering enough economic pain dragging this out or he would be more motivated to fairly negotiate or move on.

To tie things together Jax, Atkins is asking for a cash grant to capitalize his sunk cost to date. He has millions sunk into this project, and that's why the asks are getting more ridiculous with time. Most sunk cost is not able to be capitalized into the capital stack, so he is trying to essentially do that.

Also, here are some more interesting points.

- the MF construction cap stack includes $2.75M in operating reserves right off the bat (that's a lot of loss rent)
- Atkins can capitalize any completion grant he doesn't use
- COJ contribution almost equals the senior debt position
- "Predevelopment Expenses" are his development costs to get the deal executed, which the taxpayer is also paying for

Really makes me wonder why this isn't just a COJ project? You have to have a lot of balls to ask for all of this in writing. Then again, this is Jacksonville.

Ron Salem, Reggie Gaffney, and Joe Carlucci all seem open to the option of demolition for the Trio.

https://www.bizjournals.com/jacksonville/news/2024/07/22/laura-street-trio-special-committee.html

Truly unbelievable.

^Not exactly. They're asking, if the two towers are really so bad off that this level of city incentives is the only way to save them, are there any other routes to save the Marble Bank? It raises serious questions about the condition of the buildings and what's really needed to save them. Either way it's an academic question as demolition is a non-starter, as Atkins was not interested in that and more to the point, a demolition permit would not be awarded.

Why not remove the new construction component all-together & spend the extra $$ to save the historic structures. Let the new construction be "Phase 2." Corner Lot is doing the exact same thing with the Jones on Hogan. To let those skyscrapers go would be a tragedy... up there with the Ford Plant. These buildings have national or state level significance.

New Construction here doesn't make any more economic 'sense' than restoring them do. Also how can "we" trust the figures presented for new con? Does council realize that any BID now will be wildly inaccurate compared to actual costs w/o engineered plans?

It might be cheaper.

^ I think the argument has been that the footprint of the towers is too small to do anything meaningful - necessitating the adjoining new construction

I thought the initial construction idea was no adjoining new construction. I think the original 100 room autograph hotel was only existing structures?

Quote from: tufsu1 on July 23, 2024, 01:55:15 PM
^ I think the argument has been that the footprint of the towers is too small to do anything meaningful - necessitating the adjoining new construction

That's where I'm not following the owner's logic. If the property was single use, hotel especially, then the new construction component is (potentially) unnecessary.

Per DIA documents on 6/21/2023 & I understand #'s have changed but these documents break down the costs/scopes really well:

Hospitality

- Marble Building: 14,180 SF
- Bisbee Building: 50,539 SF
- New Hotel Building: 58,096 SF

Budget: $89,302,000 (total) | $30,332,600 or $469/SF (historic) | $58,969,400 or $1,015/SF (new)

MF

- Florida Life Building: 23,613 SF
- New MF Building: 161,877 SF

Budget: $85,795,700 (total) | $13,212,100 or $560/SF (historic) | $72,583,600 or $448/SF (new)

So, if you add the SF of only the historic structures, it's a difference of 88k vs. 122k SF. (Maybe you throw in incentives for a hotel addition.)
But, are we prepared to knock down these structures because the site isn't suitable for retail, hotel & MF use? We can't leave it at only retail & hotel use?

The idea that the historic structures are making this project not feasible, makes very little practical sense & seems like the same story we hear time & time again. If the combined structures are "too small" for a hotel, I think a lot of people would rather see a functional & smart new construction component added to the hotel - in lieu of demolition to force MF use on a site.

Was thinking the same thing

Quote from: Jax_Developer on July 23, 2024, 04:52:21 PM

Quote from: tufsu1 on July 23, 2024, 01:55:15 PM
^ I think the argument has been that the footprint of the towers is too small to do anything meaningful - necessitating the adjoining new construction

That's where I'm not following the owner's logic.

following the logic would be an exercise in futility

If COJ is going to be the bank, then we can throw market rate feasibility right out the window. May as well renovate both into a certain number of boutique hotel rooms and lease the thing out to an operator. If the operator isn't funding the adaptive reuse, their numbers will likely work just fine. Neither building is in danger of falling down, so demolition talk makes no sense.

Quote from: Ken_FSU on July 22, 2024, 06:57:22 PM
Ron Salem, Reggie Gaffney, and Joe Carlucci all seem open to the option of demolition for the Trio.

https://www.bizjournals.com/jacksonville/news/2024/07/22/laura-street-trio-special-committee.html

Truly unbelievable.

And then what's going to go in the vacant space? An empty parking lot? Another Park? (as if we need more Parks). I guess it'll sit vacant for the next 30 years or so.

QuoteAnother possibility for the Trio emerged when committee member Joe Carlucci challenged Atkins to provide an offer to sell the property to the city.

In an interview afterward, Elsbury said that if Atkins were interested, he would recommend listing the property at $85 million.

The last large property sale Downtown was Wells Fargo Center and two parking garages in April for a combined $46.35 million.

https://www.jaxdailyrecord.com/news/2024/aug/12/council-looking-at-taking-over-on-laura-street-trio-negotiations/

What a joke.

Quote from: Jax_Developer on August 13, 2024, 08:43:04 AM

QuoteAnother possibility for the Trio emerged when committee member Joe Carlucci challenged Atkins to provide an offer to sell the property to the city.

In an interview afterward, Elsbury said that if Atkins were interested, he would recommend listing the property at $85 million.

The last large property sale Downtown was Wells Fargo Center and two parking garages in April for a combined $46.35 million.

https://www.jaxdailyrecord.com/news/2024/aug/12/council-looking-at-taking-over-on-laura-street-trio-negotiations/

What a joke.

He's already lined his wallet, pockets, etc. with money that he's not used (hardly/barely) towards the trio (I could be wrong but this is what I see). Yes the DIA is a joke IMO, but HE is a bigger joke. He cares nothing about the trio, downtown, Jacksonville, or the prosperity of our city as a whole; he only cares about lining his wallet, pockets, and his selfish interests.

LOL, in what world is that property worth $85 million, in its current state?

Is this the expected profit to be made, if the city served as the bank for this project? Tossing out a number like that is a big red flag.

If he could get the property appraised for anywhere close to $85M, he would have all the equity he needs to get this deal done.  He's lucky if the property is worth $8.5M in its current state.

In my opinion, if you want to seem like a credible and capable developer, don't bring in Jordan Elsbury to speak on your behalf. 

Quote"Everything we've been asked to do we've done, and frankly, I'm getting tired of working with the City of Jacksonville, and certainly for this project. I have been working on it for years, and have done everything that I could do to make it happen. I have invested millions of dollars out of my own pocket," Steve Atkins, principal and managing director of SouthEast Group, said.

Speaking to the Special Committee on the Future of Downtown, Atkins said the historic buildings have sat empty because of unsuccessful negotiations with the Downtown Investment Authority. Now, he says he's done working with the DIA.

"I'll either sit and wait until we can do a deal with the city, or if the city wants to buy me out, they can do that," Atkins said.

https://www.firstcoastnews.com/article/news/community/developer-says-he-wont-work-downtown-investment-authority-jacksonvilles-historic-laura-street-trio/77-3954c8f8-c929-4ad3-b060-5cba62555925 (https://www.firstcoastnews.com/article/news/community/developer-says-he-wont-work-downtown-investment-authority-jacksonvilles-historic-laura-street-trio/77-3954c8f8-c929-4ad3-b060-5cba62555925)

"Everything we've been asked to do we've done..." That would be, except those two prior development deals you negotiated and the city passed in good faith that you utterly failed to uphold your end of the bargain on, Mr. Atkins? Playing the victim card while holding a blighted historical property hostage for $85M (roughly equal to the requested incentives for construction) is more than slightly disingenuous.

The Laura Trio is the perfect metaphor for what ails Downtown and why it is in the condition it is in. It literally has every element of the issues that have been dealt with all across DT.

Historic structures, mega incentives, multiple plans and even multiple developers that have all fallen through. The city has been trying to get this redeveloped since 1998, and it is no closer to doing so today than it was then.

We have precedent on how to deal with this situation from the Bostwick building. 

Do that.

Atkin is now clearly operating in bad faith. I think City Council needs to start coming up with a plan to rip ownership of the Trio away from Atkins. I'm sure there will be a legal dispute, that will probably settle, but it won't cost the City 85 million dollars.

Quote from: Jax_Developer on August 13, 2024, 08:43:04 AM

QuoteAnother possibility for the Trio emerged when committee member Joe Carlucci challenged Atkins to provide an offer to sell the property to the city.

In an interview afterward, Elsbury said that if Atkins were interested, he would recommend listing the property at $85 million.

The last large property sale Downtown was Wells Fargo Center and two parking garages in April for a combined $46.35 million.

https://www.jaxdailyrecord.com/news/2024/aug/12/council-looking-at-taking-over-on-laura-street-trio-negotiations/

What a joke.

Is there anything more Jacksonville than Jordan Elsbury offering to sell the Laura Street Trio to the City for $85 million?

Not commenting on Atkins but I am wondering, for any developer working on the Trio, would they have a better chance of raising private equity dollars if the Trio was part of a viable, sustainable, thoughtful master plan for Downtown rather than a one-off with uncertainty about what may infill around it over time?  I see Downtown as a ship adrift with no real captain, destination, or way to propel itself. How does that attract investment for any developer on any decent scale?

It will be interesting to see if the Gateway project goes forward.  I would think one thing it has going for it is its size is such that it will create its own ecosystem, not dependent on poor City planning in the rest of Downtown.  It appears to me Khan would be doing the same thing if he builds out an entertainment district at the stadium.

The District on the Southbank fits this same mold.  A somewhat self-contained ecosystem not dependent on City meddling.

These self contained "micro developments" say much about the failure of the City to create Downtown infrastructure to support "wide open" development outside of them.

I think this is beyond fixing now, be as well cutting their losses. Be as well demolishing it and putting out a RFP for a 5 over 1 at this point.

Those concrete buildings aren't in danger of falling down. Even in their decayed state, they'll last longer than the junk we build today. Demolition shouldn't even be a part of the discussion.

Should rephrase, I just don't think it has the interest to make it financially workable anymore. They're continually scrapping and being held to ransom by an unreliable developer. That shows how desperate things are to me. Things are past the point of return I feel.

Quote from: landfall on August 14, 2024, 11:49:01 AMBe as well demolishing it and putting out a RFP for a 5 over 1 at this point.

Jax needs to fully excuse itself from the speculative demolition business.

Quote from: landfall on August 14, 2024, 12:19:42 PM
Should rephrase, I just don't think it has the interest to make it financially workable anymore. They're continually scrapping and being held to ransom by an unreliable developer. That shows how desperate things are to me. Things are past the point of return I feel.

What happens if the unreliable developer is removed from the equation?

Quote from: thelakelander on August 14, 2024, 09:40:14 PM

Quote from: landfall on August 14, 2024, 12:19:42 PM
Should rephrase, I just don't think it has the interest to make it financially workable anymore. They're continually scrapping and being held to ransom by an unreliable developer. That shows how desperate things are to me. Things are past the point of return I feel.

What happens if the unreliable developer is removed from the equation?

Depends on the situation. I don't see a line of willing parties wanting to renovate the bones of the current building. We all know there's a reason they've given Atkins so many chances. They clearly have no leverage.

Quote from: landfall on August 15, 2024, 10:55:58 AM

Quote from: thelakelander on August 14, 2024, 09:40:14 PM

Quote from: landfall on August 14, 2024, 12:19:42 PM
Should rephrase, I just don't think it has the interest to make it financially workable anymore. They're continually scrapping and being held to ransom by an unreliable developer. That shows how desperate things are to me. Things are past the point of return I feel.

What happens if the unreliable developer is removed from the equation?

Depends on the situation. I don't see a line of willing parties wanting to renovate the bones of the current building. We all know there's a reason they've given Atkins so many chances. They clearly have no leverage.

The buildings are private property, owned by Atkins so he's the only option at this point.  There's no line of willing parties (that you know of publicly) because they buildings aren't for sale.

So in essence, and being that nothing has been done by him, and millions of dollars have generally gone nowhere, he has been using his private ownership of the trio and the trio property as pawns, IMO, to probably line his pockets. As someone said in a previous post, maybe the City, (DIA), should buy the property from Atkins and MAYBE that might get things moving; and MAYBE this is what he has been and is hoping for all along; never intending to develop anything, just line the holes in his pants pockets and his wallet.

Quote
City of Jacksonville files foreclosure lawsuit to force sale of Laura Street Trio

City of Jacksonville attorneys this week asked a Duval County circuit judge to order a foreclosure sale on the Laura Street Trio, the historic buildings in the heart of downtown that have been the center of city debate for years.

Attorneys argue in the lawsuit that the developer failed to address code compliance issues with the property, resulting in a lien of more than $800,000. The proceeds of the sale would go toward paying the fines.
[...]
The city alleges in the foreclosure suit that the buildings have not been brought into compliance with safety and maintenance code since 2015, growing the fines by $250 per day. It was not immediately apparent which parts of the code were violated.

https://www.jacksonville.com/story/news/local/2024/08/23/jacksonville-files-foreclosure-lawsuit-against-laura-st-trio-developers-southeast/74918266007/ (https://www.jacksonville.com/story/news/local/2024/08/23/jacksonville-files-foreclosure-lawsuit-against-laura-st-trio-developers-southeast/74918266007/)

I have been wondering for some time if these violations were being assessed, and I am glad to see they have been.

Lol, what part of municipal code are those things not violating?

Hell yes, we've got to rip these buildings away from the current owner. An owner who has failed to do anything with them for over a decade, an owner that wants to let them deteriorate for another decade, unless the city pays his ransom of $80 million.

Here here, yay yay! Finally it seems (or appears) that the Developer will be held responsible, accountable, and punished/reprimanded for his actions which cover over a decade (or more). I often wondered, and posted out loud, WHEN they would bring him and his entourage into account.

Curious, could Adkins pay the fine and tear down the buildings to avoid future fines as a result of this action?

Quote from: jaxlongtimer on August 23, 2024, 06:43:37 PM
Curious, could Adkins pay the fine and tear down the buildings to avoid future fines as a result of this action?

No. They would still need a demo permit from the City and the City would not grant it because it's historic.

To get the fines up to $800k, there must be several violations as you can only charge $250 per day, per violation. It's easy to stop the foreclosure by simply paying the fine. In this case, the buildings are clearly worth more than $800k. However, the code violations have to be remedied in order to stop the foreclosure. Put simply, COJ may have Atkins by the balls because curing the violations likely means renovating the buildings. So you either renovate the buildings or lose the property to COJ.

It's funny, I had typed up a post in this thread, but didn't post it,  saying COJ only has 2 ways to pressure Atkins. 1. Foreclose on code violations 2. Take them by eminent domain, which is a grey area legally for historic buildings and also ties the cities hands on future use. Foreclosure is the easiest path forward, especially with serious violations and fines that are $800k.

Good to see the City finally playing hard ball, but it also makes me wonder why it took this long.

https://www.jacksonville.com/story/news/local/2024/09/09/jacksonville-might-drop-lawsuit-over-historic-laura-street-trio/75141018007/

More from the Daily Record.  It'll be interesting to see where this goes. 

https://www.jaxdailyrecord.com/news/2024/sep/09/committee-chair-new-developer-in-the-drivers-seat-in-laura-street-trio-project/

QuoteThe city's dismissal of Laura Street Trio lawsuit puts negotiations back on front burner

The city moved Monday to dismiss a foreclosure lawsuit it filed a month ago against the owner of the Laura Street Trio, clearing the way for another round of negotiations on a redevelopment deal that would save the historically valuable but vacant buildings in downtown.

If the city had moved forward with the foreclosure suit and been successful, it would have resulted in a public auction when another entity could possibly have bought the Trio.

But SouthEast Development Group, which has owned the Trio since 2013, recently brought in a new financial partner in Paul Bertozzi, the founder and CEO of Live Oak Contracting. That sparked talks among SouthEast, Bertozzi, Mayor Donna Deegan's administration, the Downtown Investment Authority, and City Council member Kevin Carrico about pursuing a deal rather than fighting in court.

https://www.jacksonville.com/story/news/local/2024/09/16/jacksonville-drops-foreclosure-lawsuit-on-historic-laura-street-trio/75247059007/

Quote from: Tacachale on July 23, 2024, 08:21:23 AM
^Not exactly. They're asking, if the two towers are really so bad off that this level of city incentives is the only way to save them, are there any other routes to save the Marble Bank? It raises serious questions about the condition of the buildings and what's really needed to save them. Either way it's an academic question as demolition is a non-starter, as Atkins was not interested in that and more to the point, a demolition permit would not be awarded.

An Op-Ed in the Times-Union this week is furthering a concept for demolishing the towers. Personally, it strikes me as highly speculative to assume that any replacement structures would be taller.

https://www.jacksonville.com/story/opinion/columns/guest/2024/10/17/opinion-marble-bank-is-key-to-laura-street-trio-redevelopment/75664471007/

Yeah, I'm not sure why anyone would think that something taller would be built as a replacement.

Don't be so cynical. Without speculative demolition, we wouldn't have the world class private developments we now have at the Landing, Courthouse, Annex, Greyhound Station, and River City Brewing Company sites.

So that was all a waste of time, apparently.

https://www.jacksonville.com/story/news/local/2024/11/12/jacksonville-downtown-laura-street-trio/76232476007/

Came here to post the same.  Ohh boy can't wait to watch this shit show unfold  ::)

Really sucks, but it's clear Southeast isn't the right developer to push this one across the finish line.

They've had like ten years.

That's plenty of time, and their inability to move on the Trio is hurting our downtown investment elsewhere.

Get it into the hands of a developer who's willing and able to turn dirt yesterday.

How did it go from $194 million and $89 million in incentives requested in June, to $212 million and $96.8 million in incentives requested in October? If the June numbers were a no-go, the priority should have been to decrease the amount requested from the public. I just don't get it.

I'd give Gateway a call to see if they want to put their best foot forward on this project.

Quote from: Jagsdrew on November 13, 2024, 08:13:45 AM
I'd give Gateway a call to see if they want to put their best foot forward on this project.

I would put a lot of money that they city is getting behind the scene indications from other developers, whoever it might be, that they want to take on this project.