No White Smoke
City Council and the Laura Street Trio Project
During yesterday’s Committee of the Whole meeting, City Council opted to send the proposed development deal outlined in Ordinance 2023-0876 (download below) between SouthEast Development Group, its lender Capital One Public Funding, LLC, and the City of Jacksonville to the Downtown Investment Authority, with instructions to “get to yes,” and bring a negotiated deal back to City Council for a final decision.
Council also decided not to consider this pending legislation as an “emergency” bill, meaning any amended legislation will come back to City Council after DIA’s staff and board negotiate a deal with the developer.
How long this process will take is anyone’s guess, as no timeline was stipulated.
A Too Tough Road to Hoe
Negotiating a deal that includes a City guarantee of Capital One’s $150 million, 25 year, fixed 6.8% interest rate to the developer seems incredibly problematic, given that some DIA board members previously declared that they wish “to pull the plug” on this developer, and that this deal is “reckless.”
Furthermore, in her presentation before the Committee of the Whole, DIA’s CEO Lori Boyer made it abundantly clear that she has no faith in the developer, arguing that he does not bring enough equity, that the City’s “return on investment” is inadequate, that she questions the completed project’s revenue and cash flow assumptions potentially affecting the developer’s ability to repay the loan, and that the City’s liability appears “uncapped.” She suggested the Trio’s current owner has had his chance with these buildings given previous Trio incentive deals DIA has approved that have resulted in “nothing.”
One wonders how it is, then, that this same developer, Steve Atkins, successfully completed the Barnett Bank Tower, navigating market conditions and historic building preservation challenges.
How Council’s requested negotiation will unfold between these parties is anyone’s guess.
Everyone Loves the Trio
While DIA outlined the worst case scenario and played the “Debby-downer” card, the Chief Financial Officer and City auditor shared concerns about the City’s debt rating, especially since, as they said, rather significant capital debt obligations loom ahead with the Stadium of the Future and the new jail projects in our future.
But, everyone loves the Trio project.
Seriously, not one person expressed opposition to restoring the three early 20th Century historic buildings that comprise the Laura Street Trio, nor to bringing multi-family apartments and a Marriott Autograph Hotel into the project.
They love it. And may have loved it to death.
Last evening, News4Jax reported that the restoration project may be “dead,” quoting Atkins as saying, “It’s a possibility.” According to their story, Atkins said “the next step would probably be to take the buildings down and to build something out. That would be really unfortunate. That’s certainly not what we would like to do. I think it’s too important to the city. But we may be left with no other alternative” (Laura Street Trio developer says historical buildings could come down if deal isn’t reached with city, Ashley Harding and Jim Piggott, News4Jax, January 4, 2024).
How we get to “no”
With the ball back in their court, DIA did not commit to an expedited timeline, with its CEO stating in response to a Council question that her board has in the past met on an emergency basis, and maybe could in this instance, but never said that they would. Incredibly, Council did not instruct them to.
Why does this matter?
The DIA board only meets monthly, Capital One has set a mid-January deadline for approval of the required loan guarantee, and it’s uncertain if Capital One will extend its deadline. In response to that question from Council, Steve Atkins said Capital One might be willing to extend its deadline to the end of January, but he seemed uncertain. He explained that Capital One has already sold bonds to raise the $150 million loan and needs to place that capital in a project soon.
And that folks, is how we get to “no.”
You snooze you lose.
What You Can Do
Clock is ticking folks. You might let Council members and the Mayor know that you expect the City to negotiate a deal with the lender and the developer that all parties can live with, and to do so expeditiously. Asking DIA staff and board members to negotiate in good faith with a developer they clearly do not trust seems destined for failure.
The Mayor appointed a “point person” to negotiate a stadium deal, promising to get a good deal for everyone. It might be past time for the Mayor to take control of this process, and find someone who can get us to yes. It’s hard to believe that we can in-debt ourselves to build a stadium, but we cannot help restore the center of downtown Jacksonville.
Might be our last chance before we say goodbye to the Laura Street Trio.
https://www.jacksonville.gov/city-council#open
“A Bird in the Hand”
“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 repre…
I have lived in Jacksonville for 58 of my almost 84 years. I have watched marvelous brick and incredible stone buildings razed by the tasteless, uninformed, provincial "leaders" of govt, committees of idiots, and developers. Ulterior motives abound!.I lived enough of my life in the amazing city of Richmond and so expected my new city of Jacksonville to have a somewhat similar ethic. Alas, they are polar opposites. Jacksonville will tear down a remarkable 100 year old building and then leave the lot vacant in perpetuity. Or maybe there's a great three story clapboard house in LaVilla. You turn your head and poof, it's gone. Only to be replaced -MAYBE- by some awful creations of sheet rock and fake wood. And the motives behind some of the demolished area are disgusting. All those adorable houses on Monroe were ripped away so the new palm-lined drive from I-95 to the football stadium would be more impressive. What is this ? Mesopotamia? But the real reason was racist to the core. Wayne, thank you for pulling us along on this almost unrequited quest to save what's left of the Grandmother buildings... the elders of architecture. And thank you, Sherry, for tickling our quick, stirring the pot, revving our engines. And thanks to my fellow responders below. I can count on them to rev my own engine....
"No White Smoke" - very cogent!
Perhaps if the DIA/City had not spoiled almost every entity proposing to do business in Jacksonville with the promise of "attractive incentives" then maybe those entities wouldn't be prone to keeping their hand out. Witness the comment by Council Person Ken Amaro; "If we start here, we might as well do it for every other developer who comes along". What Mr. Amaro doesn't seem to realize is that the precedent for "handouts" was set many moons ago - and those "gifts" have been getting bigger and bigger through the years. It's as if we have to continually pay out (and plead) for our dance card to have any takers.
Maybe Mr. Atkins is a little deluded in thinking he can just keep asking for more - hopefully not. But at this point the clock-is-ticking aspect of having to have an agreement signed this month might be a bridge too far.
Additionally, earlier last year, after seeing the buildings left without any window coverings, I knew that it wouldn't be long for the threat of demolition to rear its ugly head. When a building is left prey to the elements, it's life and structural integrity rapidly declines - and the Trio is probably past hospice and now on life-support (?). I truly hope not.
I think Mr. Carlucci's label of "emergency" remains apt. I also think Mr. Carlucci should find another appellation other than "damn horribles" lest the nay-sayers agree that those "horribles" win out.
Thank you very much - Long Live the Trio