Laura Street Trio in Trouble? Updated status of six key Downtown projects

[KenFSU]

$50 million total has been freed up for CIP via the City Council's scrubbing of the books:

http://www.jaxdailyrecord.com/showstory.php?Story_id=545338

REALLY hope that some of the funds are appropriated to filling whatever subsidy gap might still be holding this project up.

[UNFurbanist]

Any progress or details at all with the Trio or Barnett?! It might be annoying having people ask every month with the same answer but this is an important project which never seems to have any new info.

[MusicMan]

I would say the evidence, or lack thereof, is proof this project is in trouble. It does not appear that one thing has been done since all of the fancy announcements well over a year ago. The Marble Bank supposedly signed a lease to Scotty Schwartz to put a grand southern restaurant in there. Has there been anything done at all? What did our newly elected Mayor say regarding these structures? Anything at all? Please post if you have it:)

[mtraininjax]

The Marble Bank supposedly signed a lease to Scotty Schwartz to put a grand southern restaurant in there. Has there been anything done at all?

In speaking with Scotty, my neighbor, he is excited about the possibilities, but he said it would be a good couple of years before he was open. I believe his lease is contingent on the trio opening.....so chicken and egg again....

[UNFurbanist]

The Marble Bank supposedly signed a lease to Scotty Schwartz to put a grand southern restaurant in there. Has there been anything done at all?

In speaking with Scotty, my neighbor, he is excited about the possibilities, but he said it would be a good couple of years before he was open. I believe his lease is contingent on the trio opening.....so chicken and egg again....

That's so disheartening. I really hope the new council moves forward with the city's part of some deal because unfortunately developers are so risk adverse that they "need" government incentive. It would be a huge missed opportunity if these buildings remain vacant.

[simms3]

^^^Developing LST is not even about risk aversion.  It's $$$ suicide without public subsidy.  In my opinion, and apparently those of others as well, a developer should get paid to do the developing, and should get paid A LOT to put some money at risk.  I.e. the city needs to step up big time if it wants to see a trio of decrepit, horribly designed buildings for most of today's needs in a totally dead southern downtown with no prospects be developed.  I mean that IS what we're talking about here.

If I were loaded, I'd put up a million dollars and hope to be paid 10-15, at least.  Give the city back its money + 10-15% or something like that.  These kinds of deals actually get structured every day on the private side.  Not sure what is taking so long to get this done on the public side down there.

[MusicMan]

"Privatize the profit, Socialize the risk."

[simms3]

^^^The only other way is to hold a gun to someone's head and tell them to spend time and money on doing the project, without any public help (and who in Jax has the money?).  Also, the city would still profit, if the project turned a profit.  Meaning, the city's (and taxpayer's) money isn't free, and is senior to the developer's.  But the city wouldn't be doing the work, and relatively speaking would be taking less risk (especially considering position in the capital stack).  City also benefits from an infinite investment horizon that isn't limited in scope to just the single project, but rather the city benefits in its entire infinite future from residual tangible and intangible gains it would receive from a rehabbed and improved LST (whereas the developer is trying to eek a profit out of just this one asset in the short amount of time he has to complete the project, put tenants in, and sell it).

All in all, that's a stupid way of looking at it.  The city needs a lowly individual human being to put up time and money to get the project done.  That individual human being needs the city's money, as well.  That individual will be doing all the work, and will be putting up a larger share of his own net worth up to complete the project, with financial gains limited to just this project alone, so in effect, that individual has a lot more to lose and is taking a bigger risk, and doing all the work.  That individual needs a huge payout from any profits, of course after the city receives its.

This is no different than a traditional lender financing a project with an LP and a GP (your basic capital stack).  Lender gets paid off with interest and fees first before anyone.  Then the LP (primary equity) gets paid its money back with a certain promised return (think of it as interest).  Then after the LP receives what it was promised (and what it negotiated for itself at the consummation of the deal just as a lender negotiated for itself an interest rate and other facets), the GP might make an outsized proportion of what's left relative to what it invested initially (called earning a promote).

Anyone who thinks negotiating such deals is "unfair" can come visit me in San Francisco where the city has actually F'd with the capitalist system to the point where we are now in a housing emergency because extreme liberalism thought developer profits were unfair (and thus nothing got built).

http://www.bizjournals.com/sanfrancisco/blog/real-estate/2015/06/giants-kim-mission-rock-affordable-housing-giants.html

[simms3]

And to be fair, "public subsidy" is the wrong word.  It would seem that traditional financing is not available for such a risky project.  Therefore, the City should step in as a public financier.  To the point where the City has public funds already set aside, as part of a budget, for such projects, the City should determine if some should go to this project, and if so, how much.

If you want to call that

"Privatize the profit, Socialize the risk."

, by all means, just know that there is no other way to get this project done.

[MusicMan]

Simms, in your opinion, would it be worth more if the city simply knocked down the existing structures and offered up the chance to build from scratch?

[Houseboat Mike]

Well I am not Simms but I hope you will allow me to answer- no. We have plenty of vacant lots that are littering LaVilla and other parts of downtown that could be "rebuilt". Keeping these buildings is a big part of what we all hope to accomplish. Chalk it up to nostalgia or whatever, but Damn...haven't we torn enough buildings down?

[For_F-L-O-R-I-D-A]

Part of why I think Simms idea makes sense is because these buildings are of public importance as historic buildings in need of preservation and new life. LST is part of the culture and history of this city.

[simms3]

Simms, in your opinion, would it be worth more if the city simply knocked down the existing structures and offered up the chance to build from scratch?

No.  The lot would sit empty.  I'd personally rather see a deteriorating building (unless it genuinely becomes a public safety hazard - and LST *appears* close) than an empty overgrown lot or a fresh black top for more cars.  Especially an empty or overgrown surface lot on what is supposed to be the most central, happening intersection in all of downtown (Laura and Adams).

The City doesn't need to offer anyone up a chance to build something new and grand from the ground up.  The City had an opportunity to reserve one of the most prime pieces of land in the city for something at least decent, and we got a Haskell Co tilt wall garage instead (looking at Parador).  We have other prime pieces of land, both waterfront and otherwise, small and large, cleaned and needing cleaning, with and without parking, city-owned or privately owned, that all sit empty.

IF something doesn't happen with LST soon, though, I don't know how structurally sound it will be to retrofit.  It's been looking like a Detroit building for many many years now, and those are all at the end of their useful life, at best.

[Houseboat Mike]

Simms, in your opinion, would it be worth more if the city simply knocked down the existing structures and offered up the chance to build from scratch?

No.  The lot would sit empty.  I'd personally rather see a deteriorating building (unless it genuinely becomes a public safety hazard - and LST *appears* close) than an empty overgrown lot or a fresh black top for more cars.  Especially an empty or overgrown surface lot on what is supposed to be the most central, happening intersection in all of downtown (Laura and Adams).

The City doesn't need to offer anyone up a chance to build something new and grand from the ground up.  The City had an opportunity to reserve one of the most prime pieces of land in the city for something at least decent, and we got a Haskell Co tilt wall garage instead (looking at Parador).  We have other prime pieces of land, both waterfront and otherwise, small and large, cleaned and needing cleaning, with and without parking, city-owned or privately owned, that all sit empty.

IF something doesn't happen with LST soon, though, I don't know how structurally sound it will be to retrofit.  It's been looking like a Detroit building for many many years now, and those are all at the end of their useful life, at best.

Didn't they say that years ago....hence the destruction of the sconces?

[JaxNative68]

^did you mean cornices?