COJ and UF take first major step towards LaVilla campus

[bg904]

Can't help but to think "here we go again." I am all for not rushing things, but when Jax pauses something it tends to be a permanent pause. Or maybe that's just my failed developments PTSD talking.

[jaxoNOLE]

It's hard to imagine any competitive offers satisfying the criteria:

The DIA will have to open both city-owned sites up for other bidders to make offers before any deal is finalized, but the qualifications necessary to make an eligible offer are restrictive: Any other bidder must be able to provide at least 36,000 square feet of existing office space with at least 1.25 acres of developable land in the “southern portion of the LaVilla District near the Convention Center” or provide enough cash to the city so it can buy the Interline building from Gateway.

https://jaxtrib.org/2025/02/13/multi-million-dollar-land-swap-would-make-once-obscure-developer-major-downtown-player/

[Charles Hunter]

It's hard to imagine any competitive offers satisfying the criteria:

The DIA will have to open both city-owned sites up for other bidders to make offers before any deal is finalized, but the qualifications necessary to make an eligible offer are restrictive: Any other bidder must be able to provide at least 36,000 square feet of existing office space with at least 1.25 acres of developable land in the “southern portion of the LaVilla District near the Convention Center” or provide enough cash to the city so it can buy the Interline building from Gateway.

https://jaxtrib.org/2025/02/13/multi-million-dollar-land-swap-would-make-once-obscure-developer-major-downtown-player/

I could see a developer alleging the RFP is written to favor a single developer, though. This would delay the process for months. Does the DIA (or City) require bidders challenging the process to post any sort of bond, to protect the City/DIA from delay-induced costs?

[jaxlongtimer]

In fairness to the City, Gateway closed on the subject property very close to UF going public with its announcement.  Maybe they got lucky or maybe they had more than a suspicion on UF's choice-to-be.  Either way, flipping it quickly may not have been far from their thinking even though they now say they don't need/want to sell.

The ultimate reason Gateway should work this out reasonably with the City, such as a straight sale vs. a land swap, is they make a quick profit of a few dollars (maybe less than they could otherwise get) and they are boosting Downtown big time which will ultimately increase the value of their other investments Downtown.  If they upset the UF deal, they could be the biggest losers given they are the biggest investors currently in Downtown.

[Ken_FSU]

^Would argue that the last RFP proved that there’s no realistic demand for the Riverfront Plaza private development pad at this moment in time, and Gateway Jax is a proven commodity with Pearl Square coming out of the ground on time, Water Street in Tampa under their belt, a history of working well with the DIA, and the capital stack to pull off the project. Unlike Related, Spandrell, Carter, Southeast, American Lions, and so many others, they’ve followed through, at a reasonable ask of the taxpayer. JWB and Gateway are making things happen throughout downtown, even on projects that aren’t theirs, and without Gateway Jax, there’s a very good chance that UF ends up at the Fairgrounds and something like Brightline never happens.

God forbid we reward one the most promising, sensical partners we’ve had in 30 years downtown with a slightly favorable land swap that kills two birds with one stone rather than forcing them to sell their property.

Benefits of executing the land swap:
- UF has the Interline building to jump start their campus almost immediately.
- Gateway Jax has the willingness and ability to stage construction of their private development alongside Phase 2 of the park.

Risks of delaying the land swap and going through another lengthy disposition:
- UF falls apart with nowhere to host early classes.
- Private development stalls at Riverfront Plaza, either delaying the completion of the park in perpetuity, or necessitating its closure in the future for private construction.

We gotta be able to strike while the iron is hot. Identify and vet the incentives, agree on a buyback price if the pads aren’t developed within a fair timeline, and then hit the gas pedal.

How transformative would it be if we could flight this alongside everything else coming online by 2028?

[Zac T]

In fairness to the City, Gateway closed on the subject property very close to UF going public with its announcement.  Maybe they got lucky or maybe that had more than a suspicion on UF's choice-to-be.  Either way, flipping it quickly may not have been far from their thinking even though they now say they don't need/want to sell.

The ultimate reason Gateway should work this out reasonably with the City, such as a straight sale vs. a land swap, is they make a quick profit of a few dollars (maybe less than they could otherwise get) and they are boosting Downtown big time which will ultimately increase the value of their other investments Downtown.  If they upset the UF deal, they could be the biggest losers given they are the biggest investors currently in Downtown.

Another important piece of info from the meeting is that Gateway owns the block north of the proposed Daily's station. They purchased the 801 W Bay property with the intention to develop the parking lot fronting Jefferson Street to complement their planned development on that property. This is why their valuation of 801 W Bay is higher than what the DIA's valuation is and Gateway has no incentive to sell for less than favorable terms

[thelakelander]

Multi-million dollar land swap would make once-obscure developer major downtown player

Alex Sifakis sits atop a suburban Jacksonville empire: JWB, the company he co-founded in 2006, is a real-estate investment firm, a home buyer and seller, and a property manager, overseeing some 6,000 rental properties throughout the largest city by area in the contiguous United States. And in recent years, Sifakis, a gregarious and formerly obscure figure in city politics, has amassed influence, in the process expanding his considerable holdings to a new frontier: Downtown.

Salem, the City Council member, became a JWB investor in 2017, prior to his run for office. Over time, his JWB investment grew to more than $1 million, according to Salem’s 2023 financial disclosure. But JWB itself was becoming more deeply involved in downtown development, requiring Salem to recuse himself from votes more often. “I wasn’t comfortable recusing myself that frequently,” he said, prompting him to ask Sifakis last year to “get me out as quickly as you can.”

As of November, Salem said he’d divested himself of JWB and “never would have gotten involved” if he’d known Sifakis was going to begin pursuing major downtown projects and taxpayer incentives.

Full article: https://jaxtrib.org/2025/02/13/multi-million-dollar-land-swap-would-make-once-obscure-developer-major-downtown-player/

[thelakelander]

As of November, Salem said he’d divested himself of JWB and “never would have gotten involved” if he’d known Sifakis was going to begin pursuing major downtown projects and taxpayer incentives.

^Maybe its just me but find Salem's quote very interesting. I'm not sure what the ultimate angle is for publicly making it.

This is real simple, and the answer is about self reflection and responsibility, IMO. If you're going to take a public paid position, don't get into the local real estate investment game. It doesn't matter if the investments are downtown or elsewhere within the municipality you're elected to serve. That's the sure fire way to avoid potential conflict of interests.

Jordan Elsbury, who served as former Mayor Lenny Curry’s chief of staff and is now a lobbyist, said UF’s presence in downtown is paramount, but “a developer who frequently asks things of the city, is routinely and currently asking for things, shouldn’t be a financial beneficiary of that.”

Elsbury represented Atkins with the dead Trio deal that would have been super horrible for taxpayers. Can't take this quote serious either.

[jcjohnpaint]

And this is coming from a lobbyist?

[Ken_FSU]

Jordan Elsbury, who served as former Mayor Lenny Curry’s chief of staff and is now a lobbyist, said UF’s presence in downtown is paramount, but “a developer who frequently asks things of the city, is routinely and currently asking for things, shouldn’t be a financial beneficiary of that.”

Quote cracks me up when you think back to Curry, Hughes, and Elsbury trying to hand the keys to the general fund over to the Jags.

Also blows my mind that the sticking point for certain Council members seems to be a perceived $3 - $5 million gap in value between the Interline property ($4-$9 million in value, depending on who you ask) and the Landing pads ($6 to $10 million, depending on who you ask). Who gives a shit? Is that REALLY the hill you want to die on when UF is ready to move full steam ahead and Gateway Jax is offering to develop Riverfront Plaza concurrent to the park?

Even if there is a gap, working with Gateway is still going to be infinitely cheaper than dealing with some fly-by-night developer asking for the kitchen sink via some weird incentives request.

American Lions wants nearly $40 million, including a construction loan, for their pie-in-the-sky tower.

Related is asking for a $40 million cash grant upon completion of their $203 million Southbank project.

Southeast was asking for a $42 million cash grant on a $191 million Laura Street Trio project.

Conversely, Gateway Jax requested a mere $39 million in cash grants for their $419 million Pearl Street project. This (along with the Four Seasons) has got to be our best bang-for-the-bunk in over a decade in terms of incentives packages.

Once we have a clear understanding of the incentive ask and the clawback, let the dudes have it.

Risk of losing $3 million in a property swap to stand up UF and jumpstart private development at Riverfront Plaza is a DROP IN THE BUCKET compared to the risk of playing hardball with the most active developer in Downtown Jacksonville.

[jaxlongtimer]

What if Gateway just leased the Interline buildings until UF built their permanent ones?  No swap needed, Gateway gets quick income until something better comes along which might be after UF begins building out their campus.  Then, Gateway unlocks all the value they could ever dream of. UF gets going right away as they asked.  Everyone wins!

[Ken_FSU]

What if Gateway just leased the Interline buildings until UF built their permanent ones?

UF rejected this idea.

Weren't interested in a lease.

[heights unknown]

Yeah, UF wants the "whole hog sausage." They want Interline all for themselves right away, from the git go.

[Tacachale]

The Interline building is necessary for UF as they want to start classes ASAP and there aren’t any other available buildings that are big enough or close enough. That’s a legacy of the razing of LaVilla nearly 30 years ago, which we’re only now starting to turn around (hopefully).

Given how much underdeveloped land the city owns, a land swap is a far better deal for taxpayers than paying millions to buy the Interline building. Especially as it can kick the private development at the Landing site into gear, which as we’ve seen from previous attempts (and 5 years of empty lawn) ain’t exactly easy to pull off. But regardless, the Landing site will be put out for public bid. If a better proposal comes in than Gateway’s, so much the better, we’ll jump on that and look for other land to swap for the Interline building. It’s all about finding the best deal for the citizens and getting it moving.

[jaxlongtimer]

What if Gateway just leased the Interline buildings until UF built their permanent ones?

UF rejected this idea.

Weren't interested in a lease.

Why not?  Do they feel they need to own those parcels down the line?  If not, what is wrong with leasing?  Sometimes, decisions need to be made made on reasonable options available... we don't always get exactly what we want, especially if other options could work and the asking party doesn't have full leverage.