Khan, Jaguars expect Lot J development to begin early 2020

[Steve]

https://www.jacksonville.com/story/news/local/2020/10/30/city-council-members-want-jaguars-extend-lease-get-lot-j-money-jacksonville-downtown/6082956002/

I just don't see a universe where the Jags concede to a lease extension based on Lot J alone.

I've heard that one council member suggested a 30-year extension if Lot J is approved.

This is patently absurd considering the very real issues our stadium has in terms of battling the Florida elements.

Further show how much more sense it would have made to package Lot J, Stadium upgrades, and Met Park into one agreement tied to a long-term lease extension and guaranteed ceiling on games played in London.

Exactly why they should package this with a stadium renovation and a lease extension.

[Ken_FSU]

https://www.jacksonville.com/story/news/local/2020/10/30/city-council-members-want-jaguars-extend-lease-get-lot-j-money-jacksonville-downtown/6082956002/

I just don't see a universe where the Jags concede to a lease extension based on Lot J alone.

I've heard that one council member suggested a 30-year extension if Lot J is approved.

This is patently absurd considering the very real issues our stadium has in terms of battling the Florida elements.

Further show how much more sense it would have made to package Lot J, Stadium upgrades, and Met Park into one agreement tied to a long-term lease extension and guaranteed ceiling on games played in London.

Exactly why they should package this with a stadium renovation and a lease extension.

I've been in touch with several city council members about this very issue.

Within city council specifically, I get the sense that there isn't a very deep understanding of NFL economics, where our stadium currently stands in age and revenue-driving amenities versus the rest of the NFL, how that effects the other 31 teams that share revenue with us, and the broader local revenue challenges that make Jacksonville a difficult market where creative solutions are necessary.

Expecting a long-term lease extension from the Jags for a $200 million Lot J project removed from the stadium reflects a fundamental lack of understanding about the NFL lease landscape over the last 20 years.

By my math, and I've done a lot of it, it's going to cost Jacksonville between $500 and $540 million in public contribution to get a long-term lease extension from the Jags. This is based on median public contribution for all NFL franchises that have gotten long-term lease extensions in the last 15 years, adjusted for inflation.

All emotion aside about Khan's personal wealth, or Jacksonville's other priorities, or the JEA scandal, or Curry's backdoor talks, or who was or wasn't on Khan's yacht, the simple fact is, the NFL club comes with a high price tag, and $500-$540 million is what we should expect and plan to spend across the Jags portfolio if we think it's worth keeping the team here beyond 2029. It's not personal or outwardly unfair. It's simply us being treated like any other NFL market.

Khan ain't gonna build us a new stadium. He's not going to privately finance all of Lot J. He's not going to remediate the Shipyards at his own expense.

But, to me, he's also proven that he's not going to up and move the team if Jacksonville is willing to play by the same rules as the other 31 NFL cities.

Wish it was different, and wish NFL cities got a cut of the television money for providing the stadiums, but that's just not the reality, and bashing Khan for that is akin to hating the player, rather than hating the game.

To me, the simplest approach would be to just sit down with the Jags, agree on an all-in figure that it's going to take to get a 20-30 year lease extension, cap the number of London games at 1 per season, sign the deal, and then figure out how to appropriate that cash together as you go.

Like I've said all along, if it's going to take Jacksonville kicking in ~$500 million to subsidize $~1.2 billion in projects to get a lease extension from the Jags, I'd personally rather see that $1.2 billion in development spread across 365-day uses at Lot J, Met Park, and more moderate stadium upgrades (like at Hard Rock in Miami) rather than sinking our full investment into a brand new, $1 billion+, amenity-rich, revenue-driving stadium that's only going to be used 10 times a year.

Best scenario, of course, is letting the public vote on whether we want to commit that much money to keep the Jags, and how we want to fund it.

[Charles Hunter]

Does your ~$500 million include the ~$200 million from the City for Lot J, or is it on top of it? Is this an argument for doing a comprehensive package - Lot J, Stadium Upgrades, Metro Park - for a lease extension?

The cynic in me says, a couple years or so after we sign the ~$200 million Lot J deal, the Jags come back with a ~$500 ask for stadium upgrades for a lease extension.

[Ken_FSU]

Does your ~$500 million include the ~$200 million from the City for Lot J, or is it on top of it? Is this an argument for doing a comprehensive package - Lot J, Stadium Upgrades, Metro Park - for a lease extension?

The cynic in me says, a couple years or so after we sign the ~$200 million Lot J deal, the Jags come back with a ~$500 ask for stadium upgrades for a lease extension.

The figure is all-in to total public contribution tied to long-term lease extension.

Which, to your point, is why in a perfect world we'd negotiate everything as a package.

Grossly simplifies the conversation as well.

It's significantly easier to sell a ~$500 million package to the city under the auspices that it will lock the Jags in for 7-8 home games per year through 2059 than it is sell them on ~$200 million under the auspices that Buffalo Wild Wings will sell enough garlic parmesan wings to cover the interest on a 30-year bond.

[Steve]

To me, the simplest approach would be to just sit down with the Jags, agree on an all-in figure that it's going to take to get a 20-30 year lease extension, cap the number of London games at 1 per season, sign the deal, and then figure out how to appropriate that cash together as you go.

Like I've said all along, if it's going to take Jacksonville kicking in ~$500 million to subsidize $~1.2 billion in projects to get a lease extension from the Jags, I'd personally rather see that $1.2 billion in development spread across 365-day uses at Lot J, Met Park, and more moderate stadium upgrades (like at Hard Rock in Miami) rather than sinking our full investment into a brand new, $1 billion+, amenity-rich, revenue-driving stadium that's only going to be used 10 times a year.

This. The investment is one thing; it's what's the return on it that's the issue.

[thelakelander]

https://www.jaxdailyrecord.com/article/dia-committee-to-consider-dollar12-5-million-lot-j-tax-incentive

[Ken_FSU]

Really interesting meeting thus far with the full council.

Cordish and Lamping have presented really well, IMO.

[Ken_FSU]

A couple of notes from the meeting thus far:

- Lamping directly addressed stadium upgrades during the meeting. The Jags, the City, and outside consultants and stakeholders (including UF and UGA, it seems) are in the process of a five-phase analysis of what will be needed for the stadium long-term. Phase I has been completed. Primary findings seemed to suggest that the existing stadium is structurally sound and that upgrades, rather than a new stadium, will probably be the way we go. All stakeholders are "ahead" of those discussions, but it will be a couple of years before an exact price is known. Lamping confirmed that, whatever is needed at the stadium, Khan/the Jaguars would be putting "significant' private capital into the upgrades.

- Cordish, rather than the city, will be responsible for all capital improvement and maintenance costs across the new Lot J development, including the Live! Arena. I believe this is new information.

[Ken_FSU]

Really thorough job now by the Auditor's office picking apart the proposed legislation.

Auditor's projected ROI is $.44, Brian Hughes' and team estimated $1.69.

[marcuscnelson]

~1/4 of the estimate? That seems like a significant departure from expectations.

Lamping directly addressed stadium upgrades during the meeting. The Jags, the City, and outside consultants and stakeholders (including UF and UGA, it seems) are in the process of a five-phase analysis of what will be needed for the stadium long-term. Phase I has been completed. Primary findings seemed to suggest that the existing stadium is structurally sound and that upgrades, rather than a new stadium, will probably be the way we go. All stakeholders are "ahead" of those discussions, but it will be a couple of years before an exact price is known. Lamping confirmed that, whatever is needed at the stadium, Khan/the Jaguars would be putting "significant' private capital into the upgrades.

So they just don't know? It seems we were all expecting upgrades vs a new stadium, so I guess them agreeing is a good thing. But it's rather disappointing that they're so early in the process that it'll be years before they have solid numbers on what taxpayers will have to pitch in. Personally, "significant private capital" means basically nothing to me. Are they not putting significant private capital into Lot J? Or should we also expect to pay ~half of whatever the cost for the upgrades will be?

Cordish, rather than the city, will be responsible for all capital improvement and maintenance costs across the new Lot J development, including the Live! Arena. I believe this is new information.

Is this a change, or did we just not know about this?

[Ken_FSU]

~1/4 of the estimate? That seems like a significant departure from expectations.

I'd guess that the true number probably lies somewhere in the middle.

Though, realistically, any 30-year ROI calculation for a deal like this probably isn't worth the napkin it's drawn on.

So they just don't know? It seems we were all expecting upgrades vs a new stadium, so I guess them agreeing is a good thing. But it's rather disappointing that they're so early in the process that it'll be years before they have solid numbers on what taxpayers will have to pitch in. Personally, "significant private capital" means basically nothing to me. Are they not putting significant private capital into Lot J? Or should we also expect to pay ~half of whatever the cost for the upgrades will be?

We should definitely expect to pay up to half for stadium upgrades if we want to secure a long-term lease extension. It's a city owned facility, we're a small market, and a 50/50 split seems to be the precedent that's been established with all of these Jags projects. Would expect the city contribution to be $250-$350 million in 2020 dollars, assuming there isn't some magical way to get the state to kick in like we see with a lot of other NFL cities (Florida might have prohibited this a few years ago, I think).

Cordish, rather than the city, will be responsible for all capital improvement and maintenance costs across the new Lot J development, including the Live! Arena. I believe this is new information.

Is this a change, or did we just not know about this?

I believe this was a concession made by Cordish, though I could be mistaken.

[Fallen Buckeye]

Within city council specifically, I get the sense that there isn't a very deep understanding of NFL economics...

Expecting a long-term lease extension from the Jags for a $200 million Lot J project removed from the stadium reflects a fundamental lack of understanding about the NFL lease landscape over the last 20 years.

Wish it was different, and wish NFL cities got a cut of the television money for providing the stadiums, but that's just not the reality, and bashing Khan for that is akin to hating the player, rather than hating the game.

I say why are we playing their game at all? NFL economics are divorced from reality, and unless cities refuse to play ball the NFL will continue to take advantage of them. We can't separate issues like the better uses for public money because resources are limited. We'll be paying interest on the bonds taken to fund this project at the expense of other priorities.

[thelakelander]

Contrasting views on economic impact of Lot J development

The City Council Auditor projects a lower return on investment for the $450 million project than the mayor's office.

Council Auditor Kim Taylor projected that the city would receive a return of 44 cents for every $1 invested in the project. The mayor's office, through the Office of Economic Development, calculated a return of $1.69 for every $1 invested.

Taylor said a financial analysis provided by Chicago-based C.H. Johnson Consulting Inc. was used as a basis for both ROIs. She said competing calculations came down to "a difference in philosophies."

Full article: https://www.jaxdailyrecord.com/article/contrasting-views-on-economic-impact-of-lot-j-development

[marcuscnelson]

Chief Administrative Officer Brian Hughes, who said Nov. 5 he was the city's lead negotiator on the Lot J deal, defended the Curry administration's ROI calculations.

[marcuscnelson]

There are a lot of interesting tidbits here.

During prepared remarks, Curry praised the Jaguars, Cordish and the proposed public-private partnership. "There is no line of people waiting and willing" to invest more than $200 million in private capital Downtown, Curry told the Council.

"But let's be clear, we are absolutely at a crossroads for Downtown. Local, national and global development interests are watching the decisions we're about to make. They want to know, are we ready to be bold. Are we going to be bold?" Curry said. "When it's time to push the button — the green or the red — again, vote your conscience but understand we're sending a very clear message to the economic community at large."

Curry bringing back some of his "are we bold enough?" hits from the failed RNC debacle.

Council Finance Committee Chair Matt Carlucci went further than DeFoor. He filed emergency legislation Nov. 4 that would contract Orlando-based Robert Charles Lesser & Co. LLC for an independent analysis and an economic market assessment of Lot J and the development agreement.

If approved at the Council meeting Nov. 10, the city would pay the firm $26,500 to determine Lot J's market viability in Jacksonville as part of the city's due diligence.

This seems... like due diligence. $26k is nothing at all compared to the $200m of the whole project.

RCLCO Managing Director Gregg Logan said at the meeting the he performed market assessments for Jacksonville developer Peter Rummell as co-lead of the proposed $600 million Downtown Southbank project The District.

Speaking of large and questionable public investments...

DeFoor wants to tie the Lot J deal to an extension of the Jaguars' stadium lease, which runs through 2030.

"The only way this project makes any sense at all is if the Jaguars' stadium lease is extended at least 25 years and then they commit to a certain number of home games. All the rest can be on mutually agreeable terms," she said.

DeFoor going hard. Could be an "Art of the Deal" angle here, "making sense" doesn't mean "this is non-negotiable".

Hughes and Jaguars President Mark Lamping said in their Council comments that the Lot J deal should be separate from a stadium lease renewal. Lamping said entities like the TaxSlayer Gator Bowl Association and the Universities of Florida and Georgia also have a stake in stadium improvements but not directly in Lot J.

"We have 10 seasons left on our lease, including this year. Sitting here today, it would be really difficult for us to accurately predict what the stadium may need, not only 10 years from now, but the expectation is a lease extension," Lamping said.

Makes me wonder when exactly they expect to have a prediction.