SunTrust Tower Sold for $31.1 Million

[I-10east]

Downtown Jacksonville's SunTrust Tower is the latest high-rise building to be sold.
Mainstreet Capital Partners, a Fort Lauderdale-based real estate investment company, paid $31.1 million last week for the 23-story building at 76 S. Laura St. on the Northbank.

Mainstreet CV 76 S. Laura St. LLC bought the property from six owners, according to deeds recorded Friday with the Duval County Clerk of Court. BMO Harris Bank of Chicago issued a $27.15 million mortgage.

At the 76 S. Laura St. tower, deeds show that Mainstreet paid:

• $19.999 million for units from Parador Laura Street Offices LLC, led by Ashish Bahl.

• $8.325 million for units from Trimurti Investments Inc. of Orlando, whose vice president is Jacqueline A. Frowd.

• $1.356 million for units from Go-To-Pay LLC, whose manager is Ashish Bahl.

• $800,000 for units from National Certification Commission for Acupuncture and Oriental Medicine Inc., whose CEO is Kory Ward-Cook.

• $350,000 for units from Trimurti Investments Inc. of Orlando.

$292,374 for a condominium from CREX-McBurney LLC, led by Charles W. McBurney Jr.

Mainstreet Capital Partners, led by President and Partner Paul Kilgallon, invests in office and industrial buildings. Kilgallon started the company in 1999.

It owns and manages 3.2 million square feet of space valued at more than $407 million throughout the Southeast U.S., including seven properties in Florida, along with buildings and corporate centers in Georgia and North Carolina.

The 383,239-square-foot SunTrust Tower was built in 1989. It had been marketed as office-condominiums by Florida investor Cameron Kuhn, who bought the structure in 2005.

After the lender took title to the property in 2008, the office space that remained unsold was made available for lease. Parador Partners  bought the space in 2009.

Cushman & Wakefield announced in January it would serve as the leasing agent for the 280,000 square feet owned by Parador Partners.

The tower is the seventh Downtown high-rise office buildings sold to investors since December 2013.

On the Northbank, the Bank of America Tower sold for $88 million; Wells Fargo Center, $79 million; EverBank Center, $47 million; and the 550 Water Street building, $30 million.

On the Southbank, the Aetna Building sold for $55.5 million and Riverplace Tower for $29 million.

Last year was a big one for commercial real estate sales in Jacksonville. The Colliers International real estate company reported a record $2.9 billion in transactions took place, a "staggering" 67 percent increase from the record $1.7 billion in 2013 and more than double the total of 2012.

Colliers said the $758 million in office transactions in the metro area was up 142 percent from 2013 and seven-fold from 2012.

http://www.jaxdailyrecord.com/showstory.php?Story_id=545195

[thelakelander]

Hmm. Nice. We subsidized the construction of a garage so that those invested in the adjacent structure could sell it at a profit and skip town. So what happens to the deal with Parador to add retail to the garage currently under construction?  Does it pass on to MainStreet?

[heights unknown]

These transfers and sales mean nothing to me; will they help, in some way, with the office vacancy rate downtown so that the demand increases for more high rises and skyscrapers? Probably not.

[spuwho]

Hmm. Nice. We subsidized the construction of a garage so that those invested in the adjacent structure could sell it at a profit and skip town. So what happens to the deal with Parador to add retail to the garage currently under construction?  Does it pass on to MainStreet?

Bill Type and Number: Ordinance 2014-549

Introducer/Sponsor(s): Council President at the request of the Mayor

Date of Introduction: August 12, 2014

Committee(s) of Reference: F

Date of Analysis: August 14, 2014

Type of Action: Amendment to economic development agreement; designation of oversight agency

Bill Summary: The bill authorizes execution of a First Amendment to the economic development agreement between the City and Parador Partners, LLC/Parador Parking, LLC for construction of a parking garage on Hogan Street between Bay Street and Independent Drive to permit Parador Parking to potentially sell the garage without violating the provisions of the original economic development agreement. The Office of Economic Development is designated as the oversight agency for the first amendment and the Executive Director of the OED is authorized as the party to grant the City's consent to any assignment of the agreement to a third party purchaser.

Background Information: In 2011 the City entered into an economic development agreement with Parador Partners by which the City would contribute $3.5 million toward the cost of construction of a 500+ space parking garage at the southeast corner of Bay and Hogan Streets, which could be used to help provide for the parking needs of downtown office towers and to help satisfy the City's obligation to the Jacksonville Landing to provide a number of dedicated parking spaces for Landing patrons during the business day and an increased number at night and on weekends. The agreement contains a clawback provision stating that if Parador sells the garage within the first 5 years after completion, the City is entitled to a proportional return of its investment of 20% per year during those 5 years.

[spuwho]

The original ordinance authorizing the Parador agreement can be found here.

http://cityclts.coj.net/docs/2011-0366%5COriginal%20Text/2011-366.doc

[thelakelander]

Did Parador sell the garage as a part of this deal?

[spuwho]

Parador Parking LLC also deeded the garage parcel to Mainstreet CV 76 S. Laura St. LLC. The Parador garage is under construction at 37 S. Hogan St., next to the tower.

[fieldafm]

Hmm. Nice. We subsidized the construction of a garage so that those invested in the adjacent structure could sell it at a profit and skip town. So what happens to the deal with Parador to add retail to the garage currently under construction?  Does it pass on to MainStreet?

I predicted this would happen, said as such at DDRB and Parador specifically said they were not trying to flip the building.

THIS is the problem with downtown. The Mayor got his press conference, taxpayers subsidized a property flipper while prime downtown real estate will now be dead space for the next 30 years. Oh, and the Landing is still waiting for its additional parking 25 years later (the money used for the Suntrust Building parking garage was originally slated to provide dedicated parking for the Landing).

[JeffreyS]

Hmm. Nice. We subsidized the construction of a garage so that those invested in the adjacent structure could sell it at a profit and skip town. So what happens to the deal with Parador to add retail to the garage currently under construction?  Does it pass on to MainStreet?

Bill Type and Number: Ordinance 2014-549

Introducer/Sponsor(s): Council President at the request of the Mayor

Date of Introduction: August 12, 2014

Committee(s) of Reference: F

Date of Analysis: August 14, 2014

Type of Action: Amendment to economic development agreement; designation of oversight agency

Bill Summary: The bill authorizes execution of a First Amendment to the economic development agreement between the City and Parador Partners, LLC/Parador Parking, LLC for construction of a parking garage on Hogan Street between Bay Street and Independent Drive to permit Parador Parking to potentially sell the garage without violating the provisions of the original economic development agreement. The Office of Economic Development is designated as the oversight agency for the first amendment and the Executive Director of the OED is authorized as the party to grant the City's consent to any assignment of the agreement to a third party purchaser.

Background Information: In 2011 the City entered into an economic development agreement with Parador Partners by which the City would contribute $3.5 million toward the cost of construction of a 500+ space parking garage at the southeast corner of Bay and Hogan Streets, which could be used to help provide for the parking needs of downtown office towers and to help satisfy the City's obligation to the Jacksonville Landing to provide a number of dedicated parking spaces for Landing patrons during the business day and an increased number at night and on weekends. The agreement contains a clawback provision stating that if Parador sells the garage within the first 5 years after completion, the City is entitled to a proportional return of its investment of 20% per year during those 5 years.

The city needs to collect on this and require the retail portion still be met.

[Non-RedNeck Westsider]

The city needs to collect on this and require the retail portion still be met.

Collect what?

The agreement contains a clawback provision stating that if Parador sells the garage within the first 5 years AFTER completion, the City is entitled to a proportional return of its investment of 20% per year during those 5 years.

Last I checked, the garage is still under construction.

[spuwho]

Hate to parse words on this one but the ordinance says the clawback is effective if they flip "up to 5 years after completion" of the garage.

Garage isnt done. So I interpret that to mean the new owners are on the hook for the clawback if they sell post garage completion.

I haven't read all the ordinances supporting Parador,  but on surface it appears someone took advantage of the city snagging that hard to grab parcel next door. Wonder what the new owners think about that occupancy/retail requirement.

Dont wanna sound CSI or anything but it would be interesting to know if any work "slow downs" were done on that garage as they got closer to closing the sale.

[JeffreyS]

Looks to me as though maybe he city has given up the clawback.

  2014-549   ORD Auth 1st Amend to Economic Dev Agreemt Apvd by Ord 2011-355-E with Parador Partners, LLC as Subsequently assigned to Parador Parking, LLC, to Eliminate the Sale Clawback so as to Auth Sale of Proj Parcel & Assignmt of Agreemt to the Purchaser; Auth Director of OED to Consent to such Assignmts at his Discretion. (Sawyer) (Req of Mayor)

http://www.coj.net/city-council/events/all-events/city-council-joint-rules,-finance-teu-committee-me.aspx


not sure that this was approved.

[spuwho]

Looks to me as though maybe he city has given up the clawback.

  2014-549   ORD Auth 1st Amend to Economic Dev Agreemt Apvd by Ord 2011-355-E with Parador Partners, LLC as Subsequently assigned to Parador Parking, LLC, to Eliminate the Sale Clawback so as to Auth Sale of Proj Parcel & Assignmt of Agreemt to the Purchaser; Auth Director of OED to Consent to such Assignmts at his Discretion. (Sawyer) (Req of Mayor)

http://www.coj.net/city-council/events/all-events/city-council-joint-rules,-finance-teu-committee-me.aspx


not sure that this was approved.

The proposed amendment was sent to Finance Committee and approved. Below is an excerpt from the minutes. Paul Harden explained the reason for the change, but the person taking the minutes didn't record it. You would think that a major change in finances around an ordinance would get better recording. Meets the Sunshine Law. Guess you will have to find the reasons in the DDIA minutes.

http://apps2.coj.net/City_Council_Public_Notices_Repository/20140923%20Minutes%20Joint%20Finance-RCDPHS%20Comm.doc



2014-549 (amendment to Parador Partners economic development agreement): Council Member Boyer said that the amendment as approved by the DIA board at its recent meeting included two facets – City approval of Parador Partners taking on a new partner/investor in the garage project, and elimination of the clawback of the City grant in the event that Parador sells the garage within the first 5 years of receiving the grant. Paul Harden representing Parador Partners answered questions from several committee members regarding the purpose of the amendment and the construction progress on the garage. The committee approved an amendment as marked on the Joint Committee agenda to 1) designate the Downtown Investment Authority rather than the Office of Economic Development as the City's oversight agency; and 2) to make technical corrections.

Motion: recommend approval of the ordinance as amended – approved 8-1

[spuwho]

Here is the presentation of the amended ordinance to COJ Council.



Introduced by the Council President at the request of the Mayor and amended by the Finance Committee:


ORDINANCE 2014-549-E
AN ORDINANCE AUTHORIZING A FIRST AMENDMENT (THE "FIRST AMENDMENT") TO AN ECONOMIC DEVELOPMENT AGREEMENT PREVIOUSLY APPROVED BY ORDINANCE 2011-366-E (THE "AGREEMENT") BETWEEN THE CITY OF JACKSONVILLE (THE "CITY"), AND  PARADOR PARTNERS, LLC, AS SUBSEQUENTLY ASSIGNED TO PARADOR PARKING, LLC ("DEVELOPER"), FOR THE PURPOSE OF ELIMINATING THE SALE CLAWBACK SO AS TO AUTHORIZE THE SALE OF THE PROJECT PARCEL AND THE ASSIGNMENT OF THE AGREEMENT TO A PURCHASER OF THE PROJECT PARCEL; APPROVING AND AUTHORIZING THE MAYOR, OR HIS DESIGNEE, AND THE CORPORATION SECRETARY, TO EXECUTE THE FIRST AMENDMENT; AUTHORIZING THE CHIEF EXECUTIVE OFFICER OF THE DOWNTOWN INVESTMENT AUTHORITY TO CONSENT TO SUCH ASSIGNMENTS IN HIS REASONABLE DISCRETION; PROVIDING AN EFFECTIVE DATE.

WHEREAS, pursuant to authority granted in Ordinance 2011-336E, the City of Jacksonville ("City") and the Jacksonville Economic Development Commission ("JEDC"), predecessor to the Downtown Investment Authority ("DIA") and the Office of Economic Development ("OED"), entered into an Economic Development Agreement dated November 21, 2011, with the Developer, which provided for a payment of a $3,500,000 grant to Developer upon completion of the construction and opening of a multi-story 500 plus space parking structure at the southeast corner of Bay and Hogan Streets ("the Project"); and
WHEREAS, the Developer has indicated it may wish to sell the Project Parcel in the future, and wishes to do so without violating the sale clawback provisions in Section 7.2.2 of the Agreement, and has requested the deletion of that provision from the Agreement; and
WHEREAS, the OED has reviewed the request submitted by the Developer for amendment of the Agreement as described herein, and, based upon the contents of the First Amendment, has determined the First Amendment and the uses contemplated therein to be in the public interest, and has determined that the public actions contemplated in the First Amendment take into account and give consideration to the long-term public interests and public interest benefits to be achieved by the City; now therefore,
BE IT ORDAINED by the Council of the City of Jacksonville:
Findings. It is hereby ascertained, determined, found and declared as follows:
The recitals set forth herein are true and correct.
The authorizations provided by this Ordinance are for public uses and purposes for which the City may use its powers as a county, municipality and as a political subdivision of the State of Florida and may expend public funds, and the necessity in the public interest for the provisions herein enacted is hereby declared as a matter of legislative determination.
This ordinance is adopted pursuant to the provisions of Chapter 163, 166 and Chapter 125, Florida Statutes, as amended, the City's Charter, and other applicable provisions of law.
   First Amendment Approved.    There is hereby approved and the Mayor and Corporation Secretary are authorized to enter into a First Amendment to Economic Development Agreement (the "First Amendment") between the City and the Developer, substantially in the form attached hereto as Exhibit 1 (with such "technical" changes as herein authorized).   
   Designation of Authorized Contract Monitor.  The Chief Executive Officer of the DIA is designated as the authorized official of the City for the purpose of executing and delivering any contracts, notes and documents and furnishing such information, data and documents for the First Amendment as may be required and otherwise to act as the authorized official of the City in connection with the First Amendment and is further authorized to designate one or more other officials of the City to exercise any of the foregoing authorizations and to furnish or cause to be furnished such information and take or cause to be taken such action as may be necessary to enable the City to implement the First Amendment according to their terms.  The DIA is hereby required to administer and monitor the First Amendment and to handle the City's responsibilities thereunder. 
     Authority to Assign Economic Development Agreement to Purchaser of Project Parcel.  The Chief Executive Officer of the DIA is hereby authorized in his reasonable discretion to grant the City's consent to any assignments of the Agreement to a third-party Purchaser of the Project Parcel (as defined in the Agreement).
   Further Authorizations.  The Mayor, or his designee and the Corporation Secretary are hereby authorized to execute the First Amendment and all other contracts and documents and otherwise take all necessary action in connection therewith and herewith. The First Amendment may include such additions, deletions and changes as may be reasonable, necessary and incidental for carrying out the purposes thereof, as may be acceptable to the Mayor, or his designee, with such inclusion and acceptance being evidenced by execution of the First Amendment by the Mayor or his designee.  Such modifications shall be technical only and shall be subject to appropriate legal review and approval of the Office of General Counsel, and all other appropriate action required by law ("technical" is herein defined as including, but not limited to, changes in legal descriptions and surveys, descriptions of infrastructure improvements and/or any road project, ingress and egress, easements and rights of way, have no financial impact).   
  Effective Date.   This Ordinance shall become effective upon signature by the Mayor or upon becoming effective without the Mayor's signature.
Form Approved:

Lawsikia J. Hodges_         
Office of General Counsel
Legislation prepared by:   John C. Sawyer, Jr.

[JeffreyS]

The really bad part is he would have built the retail up front had the city stuck to its own requirements. This was always a flip job and I was there the day Feild told the board that wasthe case.