The Ford on Bay

[jaxoNOLE]

On the $9.6 million completion grant, based on the amount of the REV grant, the property is expected to generate $36 million+ in tax revenue over the next two decades. After the REV grant, that leaves a good $10 million+ in incremental tax revenue during the REV window. So the city will ultimately break even on the completion grant too, right?

Even the discount on the land might knock $4.6 million off the balance sheets as an asset - but it's not coming out of the general fund.

Is it inaccurate to suggest that this "$41 million in taxpayer money" isn't really costing the city much of anything in the long-run, aside from opportunity cost that something better will magically come along?

As a member of a development organization, I think it is inaccurate to call it taxpayer money.  These properties aren't currently on the tax roll, so even at a discounted rate, it's a net positive in ad valorem tax revenue to the city.  The structure of the incentives also puts almost all of the risk on the developer.  If they don't complete what they promise, they receive no completion grant and the REV grant is also at risk.  It makes a better headline to say that the city "gave them $41m", but that is not an accurate depiction of the incentives.

It appears to me that this may be a bit too simplistic.

Property taxes are to pay for city services related to the property's use, using property value as a best estimate of such costs.  It appears that often we only look at that we gave up $X taxes as an incentive in return for collecting greater $Y taxes in the future to more than pay back the $X we gave up.

However, during the tax abatement period, we need to recognize that additional city services will be needed for the increased intensity (especially when talking about vacant or unused properties) of the use of the property.  On this basis, the taxpayers are losing as we are now subsidizing those city services out of pocket until the abatement period ends.  And, when such abatement period ends, if the value of city services consumes the full property taxes, there is little or nothing left from the property taxes to pay for other incentives, such as grants, property discounts, etc.

Good point that incremental costs need to be considered. At the logical extreme, $1 of additional tax revenue for a massive development is obviously not a net gain to city cashflow.

However, I wouldn't lean too heavily on the assumption that our property tax rates are so precisely calibrated as to reflect the true cost of city services to a particular parcel. There's a lot of judgmental allocation/cost accounting going on there, not to mention the judgment inherent in assessing the property value itself (complicated further in downtown as absent a number of competitive bidders, there isn't really an independent "market" value to the land).

I think the ROI calculations looking at the deal specifics are likely to be more useful than assuming the standard property tax rates and underlying assessed value are accurate representations of the cost to serve the property. That assumption works well in aggregate, city-wide, but doesn't hold when broken down to an individual property.

To your point, though, we accept projects with ROIs under 1.00. I'd be interested to see where this one comes in.

[acme54321]

Can this disaster of a topic be unpinned so we don't have to think about it anymore?

[marcuscnelson]

I dunno, it's pretty funny that in six years we got three different RFPs and all of them have amounted to zilch. Is that a Jacksonville masterclass or what?

Seriously though, it seems like we've kind of come full circle and the simplest outcome would probably be using the two blocks (and not the marina) for exhibition space plus whatever mixed use the market and city incentives for Hyatt will bear, and the jail site can be ancillary work and other development whenever we find a billion dollars for that. We've wasted too much time and money on pie in the sky fantasies and probably can't afford to do much else.

[jcjohnpaint]

I can't understand why that site became obsolete for a convention center or why the conversation stopped. I remember some really good plans, but all of a sudden it was like we have to move the jail or there will be nowhere for a convention center. Did that all come from Lori Boyer? I think the plans are probably in the archives on this site.

[thelakelander]

^It never became obsolete. It simply was the desire of the decision makers at the time to force feed a convention center on the jail site. That's why the talk stopped. Ultimately, the jail isn't going any where any time soon and even when it does, we'd still be a decade plus away from being able to put a convention center there....even if we already had funding and market for it.

My prediction is that things are moving so fast in LaVilla that they are going to force us to address the obsolete convention center there sooner rather than later. If its not a logical, cost effective replacement like the Hyatt site, it may be better to just abandon the business altogether than have that albatross slowing things down in LaVilla.

[marcuscnelson]

As I recall it, the original 2018 plans were scrapped officially because the city realized it wasn't ready to build a new center yet but reportedly because Shad Khan wanted to build it near the stadium (the Four Seasons evolved out of this), and sometime after that the jail conversations began and presumably Boyer decided to try and kill multiple birds with one stone, which then ran into the roadblocks of the post-COVID real estate market, Hyatt's right to the Annex parcel and the city's broader fumbles. I understand on a very basic level that the jail site is about double the size of Ford on Bay, but that doesn't really mean much if we can't really afford to leverage that anyway (and would probably be larger than the market really justifies for the foreseeable future).

[thelakelander]

^Yeah, the jail site is larger but it really doesn't matter because our market is nowhere close to supporting a large convention center that would also require another convention center sized hotel to be subsidized to be attached to it. We can barely book the Prime Osborn now, so even if all we built was an exhibition hall a the same size or a little larger than what the Prime Osborn is today, it would likely support our market for the next 20-30 years anyway. We just have to get past dreams and plan for our reality.

[jaxlongtimer]

^Yeah, the jail site is larger but it really doesn't matter because our market is nowhere close to supporting a large convention center that would also require another convention center sized hotel to be subsidized to be attached to it. We can barely book the Prime Osborn now, so even if all we built was an exhibition hall a the same size or a little larger than what the Prime Osborn is today, it would likely support our market for the next 20-30 years anyway. We just have to get past dreams and plan for our reality.

I am not going to believe Jax can become a bigger convention host anytime soon but I blame that more on the incompetent City leadership governing Downtown and surroundings, not the convention market*.  If we had our act together, a larger convention center, or at least a smaller one designed to be significantly expanded over time, might draw more conventions.  It is "chicken and egg."

* FYI, I talked to some of the thousands of Green Bay Packer fans that came here this weekend, many for the first time, and they were thrilled to have an excuse to visit us so it is clear we can be a desirable destination for visitors under the right circumstances.

[thelakelander]

^The funny thing is that adding an exhibition hall on the back of the Hyatt would result in an expansion of the convention center. At this point, we have to accept the mistakes that have been taking place since Haydon Burns blew up the wharve-Embarcadero-like setting we had for 1960s riverfront parking lots.

We have what we have today, but we also don't have to start from scratch. Instead of swatting at hornest's nests, there's honey laying all over and around downtown. In this case, we've already invested in a convention center sized riverfront, full service hotel with more meeting, ballroom space and F&B than the Prime Osborn. It simply lacks the exhibition hall that the Prime Osborn has. Yet, we have two big city-owned vacant lots to accommodate an exhbition hall that could be at least double the size of the Prime Osborn's.

Logic and opportunity is all around us with this one. Partner up with Hyatt-ownership, use the COJ-land as part of an incentives package and PPP and get it done!

[marcuscnelson]

The DIA has decided they want to play this game for the third (fourth?) time.

https://www.jaxdailyrecord.com/news/2024/nov/08/the-ford-on-bay-property-downtown-could-be-offered-up-for-new-proposals/

Up for approval at Wednesday's DIA Board meeting.

[heights unknown]

Maybe GATEWAY would be interested in SOMETHING? Who knows.

[Ken_FSU]

The DIA has decided they want to play this game for the third (fourth?) time.

https://www.jaxdailyrecord.com/news/2024/nov/08/the-ford-on-bay-property-downtown-could-be-offered-up-for-new-proposals/

Letting Lori Boyer and the DIA oversee another disposition on Ford on Bay after the first three failed is the rough equivalent of giving Doug, Trent, and Press another season in 2025 to run bubble screens and punch it up the gut.



You hate to see things put on ice, but I'd almost rather table this prime piece of real estate until we transition in a new DIA team after Boyer's retirement.

[landfall]

^It never became obsolete. It simply was the desire of the decision makers at the time to force feed a convention center on the jail site. That's why the talk stopped. Ultimately, the jail isn't going any where any time soon and even when it does, we'd still be a decade plus away from being able to put a convention center there....even if we already had funding and market for it.

My prediction is that things are moving so fast in LaVilla that they are going to force us to address the obsolete convention center there sooner rather than later. If its not a logical, cost effective replacement like the Hyatt site, it may be better to just abandon the business altogether than have that albatross slowing things down in LaVilla.

I didn't agree with you when you took this stance before with this site, but I am on board now for exactly all of the reasons you've detailed. I just don't trust that it's a consideration for the decision makers sadly who seem obsessed with vanity projects.

[Steve]

Unless they're thinking mixed use, with a convention center below residential or something like that, I continue to not understand this. If you build a no frills building on both blocks (old City Hall and old Courthouse), it would give you about 200k SqFt, not counting what the Hyatt already has. This would put you in the market for a significant number of conventions.....plus IF you did this and IF in 10 years there was demand for more space, then you could connect it via SkyWalk (one of the rare times you'd hear me call for one of those) to the JSO/Jail site.

[thelakelander]

^Thats the common sense and logical approach. I've struggled to understand how anyone could rationalize any other site, which would immediately also require taxpayers to subsidize another convention center size hotel as well.