The city moves to terminate the Landing's lease agreement.

[vicupstate]

Parking garages do not make money, they are giant money pits. Building one would have more than eliminated any 'discount' that Sleiman got on the purchase of the building. Then he would be saddled with the operating and maintenance costs of the garage.  Also, even with a brand new garage next door, the Landing even in 2005, needed renovations and significant work to address the long dated appearance.  Only at that point could he expect to attract better tenants.  Even when the Landing was new and fresh and had national tenants, it did not make money.

Rouse was probably glad to get Sleiman's offer and probably could not have gotten a better one.

You also have to remember that in 2005, the 2008 crash hadn't happened and 13 years of municipal mediocrity that has happened since, had not occurred yet. I think Sleiman bought the Landing thinking the city would step up to the plate. He was wrong, but that doesn't mean he is or was sitting on a gold mine that he could easily mine.   

 

[jaxnyc79]

Point isn't to make money on the Parking Structure per se, but the parking structure is a facilitator asset.  It exists to support a surge in patronage.  Came across an article citing multi-story parking structure costs of $19,700 per space.

Rouse built Landing for $37.5 million (apparently the Taxpayers contributed $20 million of that, but didn't get around to additional capital for a dedicated Parking Structure)...so Rouse was 45% of the Thing?

Assuming some straight-line depreciation on the Buildings, Landing was probably on Rouse's books at $7.9 million in 2003?  All the $5.1 million in sales proceeds from Sleiman went to Rouse, or did Rouse share that with the City of Jax in a 45/55 split?

City was a counterparty in default on the parking garage, had suffered big losses on its $20 million in contributions during construction (perhaps because of its default on the parking garage), was potentially leasing the land underneath the Building below market value so there were additional opportunity costs there, and then post-sale, Sleiman went to a broke City and asked for additional obligations from the City because without that, he would let the Thing turn into a black eye and embarrassment? 

[vicupstate]

Point isn't to make money on the Parking Structure per se, but the parking structure is a facilitator asset.  It exists to support a surge in patronage.  Came across an article citing multi-story parking structure costs of $19,700 per space.

Rouse built Landing for $37.5 million (apparently the Taxpayers contributed $20 million of that, but didn't get around to additional capital for a dedicated Parking Structure)...so Rouse was 45% of the Thing?

Assuming some straight-line depreciation on the Buildings, Landing was probably on Rouse's books at $7.9 million in 2003?  All the $5.1 million in sales proceeds from Sleiman went to Rouse, or did Rouse share that with the City of Jax in a 45/55 split?

City was a counterparty in default on the parking garage, had suffered big losses on its $20 million in contributions during construction (perhaps because of its default on the parking garage), was potentially leasing the land underneath the Building below market value so there were additional opportunity costs there, and then post-sale, Sleiman went to a broke City and asked for additional obligations from the City because without that, he would let the Thing turn into a black eye and embarrassment? 

The $5.1 mm all went to Rouse. They sold the building, the city owned the land which was not part of the transaction. The city was to receive rent for the land but did not because the parking had never been provided. That continued under Sleiman's ownership. The city was not broke in 2005, and the BJP projects were still getting underway and a few completed already. The Delaney administration was just barely in the rear-view mirror, when many things had been happening DT (11 E., The Carling, The Strand, The Peninsula, among others).  The city actually seemed to have it's shit together for the most part (yes, I know that is hard to believe).

       

[KenFSU]

Sleiman should give up his investment, ask to be made whole, and let someone else come in with financial models and wherewithal to fix the impairment issue.

Or just sell the guy the land underneath the building at market value, take the cash and move on. At that point, it would be in his best interest to make money off the site.

^This.

It's the cleanest, most sensible solution for all parties involved.

Sleiman has historically had zero interest in selling the Jacksonville Landing, nor should he be forced to under duress. He has, however, had excessive interest in purchasing the land from the city at fair market value and then redeveloping the property. Sleiman has been vocal in his demands from day one - either provide the parking guaranteed in the lease, or sell him the land, thus voiding the lease. He hasn't hidden the fact that he's prepared to wait a very, very long time for one of these things to happen before doing any renovation of the Landing.

From the Jax Daily Record, 2005:

Sleiman: Landing not for sale

by Mike Sharkey

Staff Writer

Despite upwards of a dozen offers over the past 16 months, some more serious than others, Landing owner Toney Sleiman is not at all interested in selling the riverfront mall and he'd really like to squelch that persistent rumor.

"I've had 10-12 people call me, wanting to meet with me, trying to make offers," said Sleiman. "The Landing is not for sale. I have told them I am not at that point and that I'm not interested. I don't buy properties and flip them. I'm a developer."

Sleiman is currently involved in a three-way negotiation with the Rouse Company out of Baltimore and the City to finalize a redevelopment deal. Sleiman bought the Landing from Rouse in August 2003 for $5.1 million and he is negotiating to buy the 11.2 acres the property sits on from the City (the last figure on the table was $13.2 million).

Once that deal is complete, Sleiman said he will begin not only revitalizing the Landing by remodeling it and luring big-name tenants, he has even more grandiose plans.

"I want to make the Landing the No. 1 spot in the southeast. That's my goal," said Sleiman, who also owns many other commercial properties all over the First Coast. "I am doing this for my mother who came to Jacksonville in 1917. My family has been here for 85 years. The Landing is not for sale and I am going to bring life back to downtown. That's why we are pushing for the new 4 a.m. drinking law."

Sleiman declined to provide names, but he did say he is negotiating with and has verbal agreements with several nationally-recognized retail chains and restaurants willing to set up shop at the Landing — under one condition.

"What has to happen first? I have to get some parking. Until I get more parking, the Landing will stay as it is," said Sleiman. "When I get parking, though, watch what I do. I have commitments from national retail chains and restaurants that have said they will come to the Landing when I get parking. When I get them, everything else happens."

Although the process seems to be dragging — dealing with an out-of-town owner and some public funding is certainly contributing to the length of the negotiations — Sleiman isn't in a hurry. His other properties are generating revenue and he understands how slowly the financial and bureaucratic wheels can grind. And, Sleiman has both time on his side and a proven track record to fall back on.

"I'm very patient. I've got 52 years left on my lease. I'll get impatient in 50 years," he said. "I probably buy more commercial property in Jacksonville than anyone. I have never sold anything without developing it. I have been working this deal for 16 months. It is not for sale. I do not need the money.

"The Landing is absolutely, 100 percent not for sale. Even if I got an offer for 10 times what I paid for it, it's not for sale."

The city was fully on board with selling Sleiman the land, and per legal requirements, issued an RFP for the property.

The RFP closed in December 2005.

Again, from the Daily Record:

Sleiman: The only Landing land bidder?

Landing owner Toney Sleiman doesn't expect any competition for the land underneath the Landing when bids have to be in to the City's Procurement department by next Wednesday.

"Like any other bidder, I have to submit my bid," said Sleiman, who has a multi-decade lease on the Landing and aggressive plans to renovate the riverfront mall which opened in 1987.

Opening the land to an open Request for Proposals means the parcel is open to bids from other developers. Jeanne Miller, the deputy director of the Jacksonville Economic Development Commission, said the City was required to issue an RFP for the land because it's located inside downtown's Community Development Area.

Although technically an open bidding process, the City expects Sleiman's Jacksonville Landing Investments to end up with the land.

Sleiman said the open bid process is fine with him despite the fact it's practically a foregone conclusion his bid will be selected.

"The City can't just give it to a developer," he said. "This is fair to everyone and it's a good law."

The land offered in the RFP is appraised at $15.76 million. If, as expected, Sleiman claims it, the purchase would clear the way for Sleiman to move forward with plans to expand the mall from 180,000 square feet to more than 1 million square feet.

Sleiman said he will proceed with the renovations as soon as this stage of the process is complete and he receives approval from City Council.

"I am ready to go," he said. "When I get City Council approval, I will be ready to rock and roll."

All of the proposals received will be evaluated by Mayor John Peyton's chief of staff Steve Diebenow and staff from the City's Procurement Department.

Sleiman was excited and ready to go on a $250 million redevelopment. Members of the City Council were excited and ready to go. And everyone had a finish line in sight to rally around - Super Bowl XXXIX.

Then, John Peyton basically shut the whole thing down, striking down an incentive package that was more city-friendly than others like San Marco Place, the Strand, Adam's Mark, etc, and keeping discussions off the JEDC agenda, claiming that the 500+ new jobs that Sleiman had promised for the Landing weren't up to his standards. "We are well past the days of where any job is a good job," Peyton said.

After the city's reversal, the Jacksonville Business Journal ran a poll in early 2006, and 75% of respondents sided with Sleiman.

Poll: Landing reversal will hurt City's negotiations

Voters in a Jacksonville Business Journal poll think the City will suffer in its dealings with developers because of its reversal on selling the property under The Jacksonville Landing. And the vote wasn't close.

Readers were asked if the city's rejection of the proposed deal to sell the riverfront property under The Landing to Jacksonville Landing Investments LLC will hurt future negotiations. Of the 161 respondents, 75 percent said it will hurt the city, while only a quarter said no.

"You bet it will!" wrote one reader. "After two years of moving forward on a supposedly done deal, you can't abruptly stop on one without affecting others, large or small. And that kind of negativity in business dealings gets noticed on a very broad scale."

If we're not willing to come to the table with him, just sell the guy the damn property like we were prepared to do 13 years ago.

It beats the alternative, which is to spend $100 million subsidizing adjacent, complementary projects along Laura, only to torpedo the anchor tenant.

Classic biting off your nose to spite your face.

[Snaketoz]

Bravo Ken, X 10

[KenFSU]

^The most utterly insane part of the entire story to me is that Jake Godbold personally lobbied Rouse to build a festival marketplace in Jacksonville, despite the market being half the size that Rouse typically developed in, and despite their concerns about parking and foot traffic. He ultimately sold Rouse on Jacksonville based on promises of a new convention center in the urban core, a massive parking garage, and bleeding edge public transit via the Skyway. It was all ultimately overhyped, nearly all of the original retail tenets left the minute their leases expired, and within a decade of opening, Rouse was running an average negative cashflow of $750k.

Now here we are, 30 years later, and Curry is pitching Cordish (who typically doesn't develop in markets our size) the exact same bill of goods for 2018's equivalent of a festival marketplace. No immediate parking, but a garage "down the line." A (currently nonexistent) new convention center in the urban core to draw visitors in from. JTA's new clown car system connecting the urban core to Lot J via an improved Bay Street. With a larger footprint and significantly less foot traffic than the Jacksonville Landing.

It's almost like we don't learn from our mistakes.

At the same time, Curry basically wants to give up on the Landing as a retail/dining/entertainment complex and move those efforts a mile east to the desolate stadium district, right when enough residential and hotel is finally coming online to actually give the Landing a fighting shot at success with a little TLC.

To me, there's no universe where public efforts should go toward Lot J before they go to the Landing. The Landing is downtown ground zero, and with such limited retail space in place along Laura Street and those streets running perpendicular, the Landing's role as a retail center is crucial.

Also, interesting guest editorial in the Times-Union on Sunday, pushing how important public/private partnerships will be in transforming downtown Jacksonville, all the while completely ignoring the Landing:

http://www.jacksonville.com/opinion/20180603/guest-column-partnerships-power-downtown-development

[heights unknown]

Yeah Jacob Gordon, CEO of DOWNTOWN VISION, WHERE is the landing out of all of this hoopla and success relative to downtown prosperity, success and change?

[vicupstate]

Yeah Jacob Gordon, CEO of DOWNTOWN VISION, WHERE is the landing out of all of this hoopla and success relative to downtown prosperity, success and change?

You are never going to hear a peep out of Downtown Vision about the Landing or any other issue. They are an arm of the city, so to do so would be talking back against their boss. There is no independent voice for DT land owners, residents, tenants and other shareholders. That is part of the problem.   

[Gunnar]

Rouse built Landing for $37.5 million .....
Assuming some straight-line depreciation on the Buildings, Landing was probably on Rouse's books at $7.9 million in 2003?  All the $5.1 million in sales proceeds from Sleiman went to Rouse, or did Rouse share that with the City of Jax in a 45/55 split?

It really does not matter how much it cost to build the landing or how much its book value is - if it is an investment property, the ROI is all that matters. So you have the transaction cost (purchase price + associated costs), necessary renovations and risk also needs to be priced in accordingly.

If Sleiman had purchased the Landing under value, there would afaik have been a gain on bargain-purchase on his income statement.

[lowlyplanner]

I'm not able to find the articles right now, but my recollection is that Sleiman really screwed up the RFP process back in 2005. 

His offer was that the City should give him the land for free, plus a little extra cash for his trouble...

There was a competing offer, and the City just couldn't justify giving away the property.

Had Sleiman made a good faith offer at that time, I think we'd be in a much different place right now.

[Kerry]

In my opinion what killed Jax is the Jaguars.  Drove by the stadium last night and the whole time was just thinking to myself how much public and private money has been sunk into that thing with nothing to show for it except tons of paved and grass parking lots.

[vicupstate]

I'm not able to find the articles right now, but my recollection is that Sleiman really screwed up the RFP process back in 2005. 

His offer was that the City should give him the land for free, plus a little extra cash for his trouble...

There was a competing offer, and the City just couldn't justify giving away the property.

Had Sleiman made a good faith offer at that time, I think we'd be in a much different place right now.

No. It was the Peyton-Sleiman feud.

[Steve]

I'm not able to find the articles right now, but my recollection is that Sleiman really screwed up the RFP process back in 2005. 

His offer was that the City should give him the land for free, plus a little extra cash for his trouble...

There was a competing offer, and the City just couldn't justify giving away the property.

Had Sleiman made a good faith offer at that time, I think we'd be in a much different place right now.

No, he offered to get a third party appraiser, and pay the appraiser's value of the land.

[Steve]

In my opinion what killed Jax is the Jaguars.  Drove by the stadium last night and the whole time was just thinking to myself how much public and private money has been sunk into that thing with nothing to show for it except tons of paved and grass parking lots.

Not sure we can disagree more on this. It's not like the stadium wasn't there before 1995. The city spent $53 Million in 1993-1995 to renovate for the Jaguars, and the Jaguars were responsible for overruns.

[jlmann]

GREAT TAKE KERRY