“A Bird in the Hand”
City Council and the Laura Street Trio
“A bird in the hand is worth two in the bush.”
Translation: “it is better to hold onto something one has than to risk losing it by trying to get something better” (Merriam-Webster).
An apt understanding of legislation filed Wednesday by Matt Carlucci, city council member at-large, and Michael Boylan, district six representative. The Carlucci-Boylan bill proposes the City fund a critical gap in the developer’s “capital stack” necessary to restore three historic properties, and construct two additional 11 story buildings in historic downtown.
When completed, the multi-building project will include 165 apartments, 140 hotel rooms, a rooftop restaurant and bar, and a private dining room and wine cellar.
No Doubt
Retrofitting and repurposing the three buildings known lovingly as the Laura Street Trio no doubt must happen if we are to ever achieve that vibrant historic downtown Jacksonville we hear so much about.
The TRIO serves as lynchpin to so much: more folks living and enjoying historic downtown, our creating that sense of history and place we yearn for, the downtown civic pride we lack, and the catalyst we absolutely need to spur additional development, especially affordable downtown housing.
The Deal
That said, the “deal” is complicated, especially for lay people not versed in financing development deals.
To make it simple, know this: the total project cost is estimated at $175 million, with the City being asked to commit roughly $38 million in the form of loans and grants paid out over years that extend well beyond constructing this five building project. That’s a little less than 22% of the total cost.
By comparison, and according to the Daily Record, the Gateway Jax Pearl Street District multi-block project is estimated to cost $500 million with developers quoted as saying they will seek $145 million from the City in incentives. That’s roughly 29% of the total estimated cost, for a project that does not include historic restoration of 120 year old buildings. Nor do we know how many rental apartments will be affordable to working folks, though the District will include some “workforce housing.”
The TRIO project, we know from the legislation and its attachments, will include 165 apartments, roughly 50 of which will rent at affordable monthly rates calculated not to exceed 80% of the area median income, for 30 years no less. Translation: teachers, police officers, restaurant workers, and recent college graduates can afford to rent these apartments.
And the TRIO project will save the three most important buildings in Downtown Jacksonville, where those fighting the 1901 Great Fire took a stand saving what was left of the fire-ravaged city, and where Jacksonville’s renaissance began.
Heartburn
Here’s where it gets difficult.
In addition to the $38 million in City incentives, the legislation calls for a $22 million City funded reserve account to be held by the project lender, Capitol One Public Funding, LLC. The amount equals “one year of principal and interest payments of the construction loan.” In exchange for this loan guaranty, the City will, “upon substantial completion of the Project,” “receive twelve percent” of the net cash flows for the duration of the guaranty (a maximum of 25 years), and if the project is refinanced or sold, the City will receive 5% of the net proceeds.
In addition, should the developer draw down more than $22 million from the guaranty, “the City may elect to take title” to some of the project. The City may not want to, but it may if it wishes.
Why is this difficult?
Because the City is not in and doesn’t wish to be in the business of guaranteeing loans to private developers. And if the City does guarantee this loan, will it in fact create an unwanted precedent? That’s a key question.
Maybe a precedent is only a precedent if one decides it’s a precedent; maybe it’s not a precedent at all, but maybe an exception to a rule.
Maybe it’s called coloring outside the lines.
Regardless
For some of us, this is simple: we wish to see the Laura Street Trio refurbished and put into productive use before we leave this planet. Before we die. We ain’t getting any younger, and neither are The Laura Street Trio of buildings, an architectural contribution historian Wayne Wood calls “our Picasso.”
Given the deteriorating condition of historic downtown’s most promising half-block, given historic downtown’s empty and place-less feeling, maybe it’s past time to take a leap of faith. A $22 million guaranty pool, admittedly unprecedented and tough to understand, might just be worth it.
Is it risky? Sure.
Is it risky to do nothing? You bet.
Is there another better deal in the offing? Unknown.
This deal: a bird in the hand.
What Happens Next
This is an opportunity that requires a leap of faith.
Soon we will discuss the merits of making roughly a $1 Billion taxpayer investment in a publicly-owned Stadium of the Future, one that includes no affordable housing; is seldom occupied; episodically frequented by visitors, not full-time residents; and contributes nothing to restoration and vibrancy of historic downtown.
What You Can Do
If restoring the TRIO is something you care about, you can:
Show up Tuesday, December 12, for the public comment section of City Council’s next meeting, when the bill will be introduced. Public comments occur from 5-6:30 pm.
Contact Council members before January 9, 2024, when Council will vote on the bill, urging their approval: http://apps2.coj.net/City_Council_Public_Notices_Repository/Council%20Member%20Roster%202022%2007%2001.pdf
Sources:
If the City Council does not act, we may lose the Laura Street Trio.
Sherry Magill's message is spot-on. Please share this urgent message with everyone who cares about historic preservation and Downtown revitalization.
As is typical, Sherry is right on. How long must numerous mayors, city council members and the DIA chase the latest shiny, new project or the next rendering? The Laura Street Trio project is iconic and will serve as a transformational stepping stone to further smart, creative projects. Some say this is an additional precedent of doling out incentives to encourage development. Heck, Duval has been doing this for years, so the precedent is already set. But maybe, just maybe this project if done so well will change the trajectory and quality developers and projects will come to us without the demand for a handout. Wishful thinking? Maybe, maybe not.