The District wants $26 million in public incentives

[KenFSU]

A little more granular detail from the Daily Record:

First, the DIA would fund $26.4 million in public infrastructure.

The DIA would build three riverfront parks totaling 3.5 acres, another 1-acre pocket park, a 1,900-foot expansion of the Southbank Riverwalk and bulkhead construction, a walking trail around the development, a parking lot for 100 public spaces and the expansion of three roads for public access.

While Elements plans to buy the property from JEA, it would need to convey the land marked for public use to the city – free of any loans or other encumbrances – before it could begin development.

Wallace said the DIA has $5 million allocated for public infrastructure costs set aside for the project and about $4 million more earmarked over the next two fiscal years.

Wallace said Mayor Lenny Curry's administration advised him the city would provide a loan to the DIA to make up the difference, about $16 million to $20 million, at an interest rate of 2.66 percent over 20 years. That would need council approval.

"Under this scenario, we can afford to do The District and other projects as well," said Wallace in response to a question from council member Tommy Hazouri.

Wallace said the loan would be repaid from tax revenue generated in the Southside Tax Increment Financing District, which encompasses part of the Downtown Southbank.

He said the fund has enough cash to cover the loan obligation and assist other projects on the Southbank during that time.

https://www.jaxdailyrecord.com/article/dollar26-4m-deal-for-the-district

[Steve]

I'd like to know if the $26.4M is for this, and only this:

"The DIA would build three riverfront parks totaling 3.5 acres, another 1-acre pocket park, a 1,900-foot expansion of the Southbank Riverwalk and bulkhead construction, a walking trail around the development, a parking lot for 100 public spaces and the expansion of three roads for public access."

If so, no issue with that part of it. I do think the City should be on the hook for these items. Save for the "walking trail around the development" and the "1-acre pocket park" which is probably a small percentage anyway, the rest of the items could legitimately be used by anyone in the city.

(I find it unlikely that someone would make their way over there to enjoy a small pocket part or a walking trail around the place).

[JBTripper]

I believe the walking path around the development will be part of a shared-use path through San Marco, the Southbank, and connecting with Riverside across the Fuller-Warren. It certainly can and will be used by anyone in the city.

[thelakelander]

Yes, it's intended to be a part of the loop CW Boyer has been working on over the last few years.

[jaxnyc79]

Here's my understanding of the new framework, based on the JBJ and T-U's reporting today:

1) Elements buys the land outright from JEA, at the $18.5 million originally agreed upon.

2) The city loans the DIA $26.4 million to spend on infrastructure for the project, specifically to develop parkland (a riverfront park up to 5 acres, a seperate park, a walking trail around the development), a half-mile extension of the riverwalk, roads, public parking, etc. Ownership of the public spaces would be transferred to the city. The DIA will pay the city back over the next 20 years, exclusively using revenue from the Southside TID.

3) A Community Development District is established for the project, with $30 million in bonds being issued to jumpstart development. Elements has a financial backer on board ready to put down the $30 million (the backer hasn't been identified, but has been in talks with Aundra Wallace for the last week or two).

4) The District would pay back the $30 million in bonds over the next 22 years, via a a 22-year REV grant from the DIA.

5) No clue if it's binding, but per the timetable given to the City Council, the entire project - 725 apartments, 147 hotel rooms, 200 condominiums, 25 townhomes, 125 marina slips, plus 134,600 square feet of retail space and 200,000 square feet of office space - would be built-out by 2022.

The City Council would need to agree to the loan to the DIA, and because the REV grant exceeds 15 years, the council would also need to sign off on that too.

Aside from the CDD aspect, and the switch back to Elements purchasing the property outright, I think the biggest difference I've seen here is the post-purchase transfer of ownership of the riverfront greenspace (4-5 acres) back to the city.

I love governmental fund accounting: "The City lends money to the DIA:)"  I mean, the DIA is essentially the City, no?  So how about, the City is spending 26.4 million on infrastructure, and expects a return on investment in the form of private property on the tax rolls yielding tax revenue.

I do agree with the City building urban infrastructure (including public waterfront space) on this plot of land, however, because the city should be in the business of building and upgrading infrastructure for the direct benefit of the city residents at large.  Frankly, this new infrastructure should be built in such a way that the it outlasts this entity called the Elements. 

Personally, I don't think the Elements will actually get this project done.  Given the time spent already, and the PR mess in December, I think these guys are above their skis.  But brand new infrastructure on a vast waterfront dirt patch should make this said dirt patch an  attractive piece of urban real estate to some developer somewhere out there.

[thelakelander]

I think the market and economy will stop full build-out from happening by 2022. However, Elements will turn out fine. Most of the risky proforma budget blowing factors are being eliminated or greatly diminished. Elements sounds more like a master developer or land flipper to me.  Seems like other entities will come in and pay Elements for parcels to build their own financed projects on them.

[jaxnyc79]

I think the market and economy will stop full build-out from happening by 2022. However, Elements will turn out fine. Most of the risky proforma budget blowing factors are being eliminated or greatly diminished. Elements sounds more like a master developer or land flipper to me.  Seems like other entities will come in and pay Elements for parcels to build their own financed projects on them.

Let's wager a bit.  My prediction: Infrastructure gets built, then Elements fizzles/fades, and someone else brought in to get the hotel built.  Economic slowdown or real estate tapering puts everything on pause and then who knows.  Win-win for me.  If I'm right, I can celebrate being right.  If I'm wrong, that's good for downtown:). 

[Steve]

I believe the walking path around the development will be part of a shared-use path through San Marco, the Southbank, and connecting with Riverside across the Fuller-Warren. It certainly can and will be used by anyone in the city.

Then I agree - no issue spending tax dollars on this as then that is truly something everyone can use. I didn't connect the dots.

[Steve]

I think the market and economy will stop full build-out from happening by 2022. However, Elements will turn out fine. Most of the risky proforma budget blowing factors are being eliminated or greatly diminished. Elements sounds more like a master developer or land flipper to me.  Seems like other entities will come in and pay Elements for parcels to build their own financed projects on them.

I agree - I have no issue with the city funding infrastructure - lord knows we do it for master planned communities on the southside every day.

What skin does Elements have in the game besides Rummel and Munz's name?

[Steve]

And.....now this:

Jacksonville businessmen Michael Munz and Peter Rummell's names appeared Saturday in a full-page paid advertisement in The Wall Street Journal calling on lawmakers to support a package of gun law reforms.

Americans for Gun Safety Now! paid for the advertisement featuring the names of 21 individuals, including lawmakers, government officials, business leaders and professional athletes.

https://www.jaxdailyrecord.com/article/munz-rummell-appear-in-ad-backing-new-gun-laws

I'm definitely not trying to start a gun debate here and yes, Rummell and Munz are free to do what they wish. With that said, what amazing timing - jump into a divisive issue like gun control when trying to get many millions out of a city government.....wow.

[KenFSU]

^Some issues are more important than apartments and hotels.

Hats off to anyone willing to risk a business opportunity to stand up for what they believe in.

Feel the same way about Shad Khan, who is in a similar position of seeking public incentives from the city for the Shipyards, yet is still willing to take a strong stand on important social issues.

I'll take a strong, reasoned opinion (in either direction) ten times out of ten over something like Curry refusing to take any stance at all, or even sign, the HRO.

If our local politicians are willing to veto funds for new development in our city because they can't handle the developer holding the opinion that a person should have to be 21 years old and pass a rigorous background check to purchase a deadly weapon, or that bump stocks and armor-piercing bullets shouldn't be on the streets, then Jacksonville deserves to remain a backwards city.

For a city that's long been controlled by the churches and socially conservative to a fault, I'm glad to see some diversity of opinion finally start to emerge, particularly from the business community, in the last decade.

[MusicMan]

AMEN!

[JBTripper]

So, what is the consensus around here now? Are we on board with public incentives, as long as they are used for parks and infrastructure?

[Steve]

^Some issues are more important than apartments and hotels.

Hats off to anyone willing to risk a business opportunity to stand up for what they believe in.

Feel the same way about Shad Khan, who is in a similar position of seeking public incentives from the city for the Shipyards, yet is still willing to take a strong stand on important social issues.

I'll take a strong, reasoned opinion (in either direction) ten times out of ten over something like Curry refusing to take any stance at all, or even sign, the HRO.

If our local politicians are willing to veto funds for new development in our city because they can't handle the developer holding the opinion that a person should have to be 21 years old and pass a rigorous background check to purchase a deadly weapon, or that bump stocks and armor-piercing bullets shouldn't be on the streets, then Jacksonville deserves to remain a backwards city.

For a city that's long been controlled by the churches and socially conservative to a fault, I'm glad to see some diversity of opinion finally start to emerge, particularly from the business community, in the last decade.

That wasn't my point. My point is Jacksonville is a fairly split between Republican and Democrat (evidence being the last few Presidential elections. Regardless of whether or not I agree with his statement (or for that matter, the importance of the national debate), it seems like an odd choice to make a comment that likely, at best, 35% of the public won't agree with when you're trying to persuade a City Council to get land to develop at next to zero risk.

[thelakelander]

Showtime (again) for The District

Can Jacksonville pull it off? That's the question Downtown Investment Authority CEO Aundra Wallace hears from his counterparts in other cities when they react to the huge planned development called The District.

If actually built on the Southbank as proposed, The District would be larger than anything ever done in downtown Jacksonville with 950 residences, 147 hotel rooms, 134,600 square feet of retail space, 200,000 square feet of office space and a 125-slip marina.

The first attempt to pull together a development agreement disintegrated in January amid criticism about the city stepping in to buy the 30-acre tract as part of its financial support for the deal with Elements of Jacksonville, LLC.

The second attempt will officially start Wednesday when the Downtown Investment Authority board is scheduled to vote on terms that would stake the city to spending as much as $26.4 million for investments on public areas at the site. The financial framework also would enable the developer to get up to $56 million in property tax rebates over a 20-year period.

http://www.jacksonville.com/news/20180406/showtime-again-for-district