Are You Okay Investing $233 Million For Lot J?

[vicupstate]

The City will provide 50% of the cost of the development of the Live! District, up to a maximum of $50M.  If the City's 50% of the Live! District is less than $50M, the balance shall be reallocated at the Developer's discretion to other portions of the Project.

Unless this thing is made of 100% marble, there's not a 70,000 sq ft building in the world that will cost $100M.  This will end up being at least 30M that the developer can use to fund whatever use they want, depending on market demands.  Lot J is going to have 6 self storage facilities, a small entertainment venue that closes after 5 years, and maybe a car wash.

Yeah, the math never made sense. Obviously the apartment and office buildings will be subsidized with the excess funds for Live!  That way they will either make uber profits or will be able to charge mid-rise rents for high-rise buildings. 

[heights unknown]

70,000 square feet of leasable space or total? In both cases, much smaller than the Landing but significantly higher in costs.

About the size of Prime Osborne Convention center?

[Ken_FSU]

Yeah, the math never made sense. Obviously the apartment and office buildings will be subsidized with the excess funds for Live!  That way they will either make uber profits or will be able to charge mid-rise rents for high-rise buildings. 

Looking at other Cordish developments, the numbers don't seem insanely outlandish to me.

Xfinity Live! in Philly's first phase was around 80,000 square feet, at $150 million.

Ballpark Village's first phase was $100 million (in 2013 dollars) for 100,000 square feet.

It actually looks like the numbers for Lot J are nearly identical to the numbers for BallPark Village.

Phase I of ballpark village (the Live! complex + Cardinals Hame of Fame) was $100 million.

Phase II (200 room hotel (same as Lot J), 300 unit luxury apartment (same as Lot J), 117,000 sf office tower (same as Lot J)) was $260 million.

That's $360 million for the actual development, plus the $90 million in infrastructure that the Jags are asking from the city, which puts us right at $450 million.

If you want a realistic idea as to what Jacksonville would get for its $230 milion public contribution, Ballpark Village (the first two phases) is probably the closest comparable example we've got:

Phase 1 - https://www.mlb.com/cardinals/ballpark/ballpark-village/phase-1
Phase 2 - https://www.mlb.com/cardinals/ballpark/ballpark-village/phase-2

Notably absent from the Jags plan is the cool public space that typically centers these Cordish sports developments (the baseball diamond at Ballpark Village, mini football field at Xfinity Live!, etc.

Looks like the central area would be closer to Texas Live:





Also, Mike, I got a chance to listen to you on the radio this morning as I was driving into work.

I thought you did a fantastic job talking fairly about the Jags, their relationship with the city, and this project in particular without taking the bait on the either-or Landing/Shad Khan argument.

I also thought you made a really, really great point about the city's actual spend on the Jags over the previous 25 years compared to other markets.

Had to jump off halfway through, is there a replay available?

[thelakelander]

Yesterday, I reviewed roadway modifications and typical sections for US 441 and SR 438 in the proposed Packing House District in Orlando. The estimated cost for this 202-acre project is $480 million. So for $30 million more, that project adds 3,500 multifamily residential units, a 105-acre regional park (including a 40-acre urban farm) and one million square feet of retail and office space (including a food hall) to College Park (a neighborhood that is similar to Murray Hill to me). It really feels like John Q. Taxpayer in Jax is getting the short end of the redevelopment stick for the amount of money being requested.



https://packingdistrictorlando.com/

[vicupstate]

$1,428 a SF seems high to me.  Especially when the land cost is free and no infrastructure cost either.

A project here in Greenville under construction now is 140 room Hotel, 217 apartments, 80,000 SF retail, 150,000 SF Office, 18 Condominums, large plaza, and 630 spaces of below grade parking.  The land alone was over $13 mm. It is a $200 mm project.       

[jaxjags]

Another interesting comparison. Ryals Creek PUD on the southside is the retail, multi-family, entertainment and hotel district at the new Skinners development. The size is 67 acres. Infrastructure  costs estimated at $98,000,000.

Lot J is 6 acres (?) and costs was estimated at 93,000,000. This just shows what the integrated structure parking for the office, hotel and apartments is costing the city taxpayers. Why should the city be on the hook for these costs. This is more subsidy to the developer that benefits mainly there developments.

Also I don't like the bait and switch on the hotel and apartments. If we are going to spend $200+million then I don't want a five story Hilton Hotel and 2-3 low rise apartment buildings. $92,000,000 for that is not right.

Compensation should be structured based on what is eventually built.

[Kerry]

When my oldest son was little all he would eat is chicken fingers and hot dogs.  It took me a couple of months to realize that he only ate chicken finges and hot dogs because he could cover them in ketchup.  What he really wanted was the ketchup and the chicken fingers and hot dogs were just the delivery vehicle.

Lot J is the hot dog.  Access to the free flow of cash is what the Jags want.  Shipyards will be the chicken fingers.  If all the money was spent on the physical construction like in the Orlando and Greenville examples there is no ketchup money left.

And comparing costs to other Cordish Live projects is laughable.  Those cities signed off on the same crappy deal as this one.

[Adam White]

When my oldest son was little all he would eat is chicken fingers and hot dogs.  It took me a couple of months to realize that he only ate chicken finges and hot dogs because he could cover them in ketchup.  What he really wanted was the ketchup and the chicken fingers and hot dogs were just the delivery vehicle.

Lot J is the hot dog.  Access to the free flow of cash is what the Jags want.  Shipyards will be the chicken fingers.  If all the money was spent on the physical construction like in the Orlando and Greenville examples there is no ketchup money left.

And comparing costs to other Cordish Live projects is laughable.  Those cities signed off on the same crappy deal as this one.

Well, they (the Jaguars) are a business and it makes sense that they will want to look into ways to make more money and make the franchise more valuable. I guess, in an "ideal" world (not ideal for me, but for most), the Jaguars and the city would strike a deal whereby they split the cost in a reasonable way and get something mutually-beneficial out of it. What concerns me about this deal is a) I don't think the financial burden shouldered by the city could be considered "reasonable" by any stretch and b) I don't think the development will be very beneficial to the city, because it isn't integrated with the city center.

I can't say I blame the Jaguars for trying though.

[Ken_FSU]

This just shows what the integrated structure parking for the office, hotel and apartments is costing the city taxpayers.

$45 million is the ask for structured parking.

[Kerry]

When my oldest son was little all he would eat is chicken fingers and hot dogs.  It took me a couple of months to realize that he only ate chicken finges and hot dogs because he could cover them in ketchup.  What he really wanted was the ketchup and the chicken fingers and hot dogs were just the delivery vehicle.

Lot J is the hot dog.  Access to the free flow of cash is what the Jags want.  Shipyards will be the chicken fingers.  If all the money was spent on the physical construction like in the Orlando and Greenville examples there is no ketchup money left.

And comparing costs to other Cordish Live projects is laughable.  Those cities signed off on the same crappy deal as this one.

Well, they (the Jaguars) are a business and it makes sense that they will want to look into ways to make more money and make the franchise more valuable. I guess, in an "ideal" world (not ideal for me, but for most), the Jaguars and the city would strike a deal whereby they split the cost in a reasonable way and get something mutually-beneficial out of it. What concerns me about this deal is a) I don't think the financial burden shouldered by the city could be considered "reasonable" by any stretch and b) I don't think the development will be very beneficial to the city, because it isn't integrated with the city center.

I can't say I blame the Jaguars for trying though.

I do blame them.  They should have been laughed out of the office but the scary part is - THIS is the negotiated deal.  I would love to see how tone-deaf and ass-backwards their initial proposal was.  They probably wanted Jax to pay for everything.

[Ken_FSU]

What concerns me about this deal is a) I don't think the financial burden shouldered by the city could be considered "reasonable" by any stretch and b) I don't think the development will be very beneficial to the city, because it isn't integrated with the city center.

I can't say I blame the Jaguars for trying though.

To me, it all comes back to transparency, goals, and opportunity cost.

I actually disagree with you and think that, in a vacuum, Lot J is a pretty cool project that will be a net positive for the city.

I don't think Lot J competes with other businesses in the CBD for the same reason I don't think Lot J helps the CBD either - it's a mile away. We have literally 400+ events per year in the sports complex between TIAA Bank Field, VyStar Arena, the Baseball Grounds, and Daily's Place, and I absolutely think that having additional retail and restaurants in the sports complex would give people a place to go before and after games instead of rushing home.

I also think that having a hotel within short walking distance of the sports complex and entertainment options will bring net new visitors and bed taxes to Jacksonville for Jags games, and will encourage additional people traveling in for concerts and events from out of town to stay in Jacksonville and make a night of it.

Lot J and the removal of the Hart Bridge ramps should encourage development of Met Park or the Shipyards, whether by the Jaguars or someone else.

Lot J provides another revenue source for the Jaguars, shows willingness to play ball on our end as we close in on 10 years left on the stadium lease, and further vests the team's interests in Jacksonville.

It also gets about 4.5 of the 6 acres onto the tax rolls, with relatively (for Jacksonville, at least) low REV committments in the future.

Even at $230 million plus any hidden costs (how will this cannabilize concession revenues within our venues, for example, that the city often gets to keep?), an argument could at least be made (which I'm not making one way or the other) that the project makes sense and is a good investment for the city.

That said, the mayor's office isn't positioning this as a project to bring more visitors to the sports complex, provide a spark for Met Park/the Shipyards, draw in additional events and hotel guests, stabilize the Jaguars in Jacksonville, etc.

He's positioning it as the magic bullet that will finally catalyze downtown Jacksonville, driving development straight down Bay Street and solving all of downtown's woes.

This is patently absurd.

I think this is a much different, much more honest conversation if it's positioned as the former, rather than the latter.

It allows us to debate, as a city, what our highest priority is as this economic cycle winds down and responsibly decide how to best spend our discretionary capital investment dollars in a way that helps us achieve that goal.

Is the goal finally making something happen at the Shipyards/Lot J, working with the Jags, and trying to kick stadium talks down the road for another ten years with a lease extension? If that's our goal as a city, then Lot J isn't the worst idea.

But if the goal is revitalizing downtown Jacksonville, to the extent that the mayor's office has put projects at the Landing and a convention center on hold to focus on Lot J, then there are clearly much better ways to spend our money.

Just doesn't feel like we're having an honest debate about the purpose of this investment, and it's crazy that the Landing site is being mothballed for years while we focus on a project that shouldn't even be viewed in the same category in terms of downtown revitalization.

[Charles Hunter]

There's an interesting idea in a couple of these posts.
Tie the quarter-billion in funding to a 10 year lease extension.

[Ken_FSU]

There's an interesting idea in a couple of these posts.
Tie the quarter-billion in funding to a 10 year lease extension.

Personally, I love the idea.

Unfortunately, I think it's going to be more of a case of:

1) Play nice on Lot J, and the Jags only request $100-$200 million in stadium upgrades (specifically a roof) in exchange for a 10-year extension.

2) Don't play nice on Lot J, and the Jags start beating the drum for a new stadium early to make up for that lost revenue from Lot J.

[Kerry]

There's an interesting idea in a couple of these posts.
Tie the quarter-billion in funding to a 10 year lease extension.

Personally, I love the idea.

Unfortunately, I think it's going to be more of a case of:

1) Play nice on Lot J, and the Jags only request $100-$200 million in stadium upgrades (specifically a roof) in exchange for a 10-year extension.

2) Don't play nice on Lot J, and the Jags start beating the drum for a new stadium early to make up for that lost revenue from Lot J.

If they build the new stadium in St Johns County I would be all for it.   That makes me giddy just thinking about it.  It would be a circus.

[minder]

Again on here the obsession with anything within a stone's throw of the Bank of America Tower. I've no idea why people keep pigeon holing the growth of the city in this small area as if it's the be all.

Face it folks, the landing is dead, and with or without it, there's empty storefronts and failed businesses all over the centre of downtown. The focus is on Brooklyn and the Sports Complex and the best way forward now is for Downtown to organically grow as a result in the middle.