Author Topic: The District wants $26 million in public incentives  (Read 22116 times)

sanmarcomatt

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Re: The District wants $26 million in public incentives
« Reply #30 on: January 11, 2018, 12:20:41 PM »
Original plan was for Elements to purchase the property directly from JEA for $18.6 million, and then likely ask the city to provide $46 million in public infrastructure (utilities, roads, riverwalk extension, maybe public parkspace, etc.).

The actual numbers seem to be about the same.


When you put it that way (numbers about the same)it isn't as bad. However, the expectation from the beginning was for the city to kick in 46 million for infrastructure? As in the beginning of the bid process?
I am not saying you are incorrect but lets just say I am skeptical.

thelakelander

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Re: The District wants $26 million in public incentives
« Reply #31 on: January 11, 2018, 12:52:52 PM »
Originally, there were no public expectations of the city funding infrastructure for this development.
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MusicMan

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Re: The District wants $26 million in public incentives
« Reply #32 on: January 11, 2018, 01:22:30 PM »
Thanks for the clarification Lake. I don't remember any promise from the COJ to provide $46 million in infrastructure support. Can KenFSU document that?

"While DIA unanimously approved the project, members said they wanted detailed answers about the structure of the deal, the financial ability of both the master developer and its potential partners to see the project to completion, and the use of funds from the Southside TID to pay JEA."

The catch phrase above is 'the financial ability of both the master developer and it's potential partners to see the project to completion'.....
Well so far they could not even close the original deal/bid they put forth, and have all the "partners" for this deal even been identified? 

Satisfying this particular set of issues seems damn near impossible to me.

vicupstate

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Re: The District wants $26 million in public incentives
« Reply #33 on: January 11, 2018, 01:46:24 PM »
Quote
What I actually kind of like about the new proposal is that, if everyone agrees that the District as imagined would be a huge net win for the southbank, it holds all parties responsible for doing their part to get shovels in the ground quickly and make the project a success.

Considering the city is one of those partners, and would be responsible for certain aspects only it could do, that statement should not be of any comfort to anyone. 
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KenFSU

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Re: The District wants $26 million in public incentives
« Reply #34 on: January 11, 2018, 02:28:58 PM »
Thanks for the clarification Lake. I don't remember any promise from the COJ to provide $46 million in infrastructure support. Can KenFSU document that?

Shouldn't be a surprise, we've been talking about it since 2015:

https://www.metrojacksonville.com/forum/index.php?topic=23712.0

Sure, no concrete promises were ever made, no numbers were publicly specified (not to say they weren't discussed behind closed doors), but the final step was always going to be to negotiate a development agreement with the city. Do you really think anyone is going to commit to a 30-acre, $440 million riverfront development, on the Southbank, in 2018 Jacksonville, without public subsidy?

That's insane.

Particularly when, right across the river, the city was prepared to hand Shad Khan the Shipyards for free, pay $35 million for remediation, and build out the infrastructure along Bay Street, including riverwalk extension.

Atkins got an $8 million subsidy for the Trio and Barnett (~10% of project cost, similar to what we're talking above), including a similarly odd agreement involving the city paying for a parking garage and leasing it back to Atkins over the next couple decades, I believe.

The city just handed over nearly $10 million to Edward Waters College, of all places.

We ponied up $45 million for half of the $90 million in stadium improvements recently made to Everbank under the guise of splitting half the cost of an amphitheater with Shad Khan (reality check: we realistically got a $30 million amphitheater and subsidized the cost of the club upgrades and practice field). 

Cowford Chophouse? Subsidized (~10% project cost).

Carling and 11E? Subsidized.

It's the nature of the current downtown landscape.

Have zero problem with anyone thinking the benefit doesn't outweigh the cost, but surprise at the developer asking for public incentives? Come on. This ain't Manhattan, and the precedent has long since been set.



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thelakelander

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Re: The District wants $26 million in public incentives
« Reply #35 on: January 11, 2018, 03:30:38 PM »
I'd pass. It's essentially the Southbank and San Marco. It's a completely different animal (market) from the Northbank and inner city neighborhoods like Brooklyn or even EWC. Might as well give East San Marco money. But I'm a guy that would pass on the Shipyards too. I also don't see $440 million being committed to that site anytime soon. No matter how the amount of incentives, the market is the market.
« Last Edit: January 11, 2018, 03:35:09 PM by thelakelander »
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sanmarcomatt

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Re: The District wants $26 million in public incentives
« Reply #36 on: January 11, 2018, 03:44:29 PM »
I hope they pass as well. Purely for selfish reasons, I would love for it to be built as it would greatly improve the area close to where I live. However, I would prefer tax payer money be directed somewhere else.

Besides, isn't this next to where the city wants to buy properties just to demolish due to flood issues? More concrete next door doesn't seem to be the best answer.
« Last Edit: January 11, 2018, 03:46:14 PM by sanmarcomatt »

thelakelander

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Re: The District wants $26 million in public incentives
« Reply #37 on: January 11, 2018, 04:01:17 PM »
I wish them well. I just believe DT incentives are better used to fill funding gaps in areas of revitalization that the market can't support (ex. historic preservation/adaptive reuse, etc.). If COJ is paying for the land and infrastructure, why abruptly marry itself to Elements?
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KenFSU

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Re: The District wants $26 million in public incentives
« Reply #38 on: January 11, 2018, 04:07:06 PM »
It's going to be interesting to see what happens.

A ridiculous number of projects potentially competing for limited public money in the next 0-36 months.

District, Shipyards, Cordish, convention center, maybe Berkman, USS Adams, the Landing if Curry has his way, etc. 
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thelakelander

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Re: The District wants $26 million in public incentives
« Reply #39 on: January 11, 2018, 04:37:37 PM »
Which is why the pot should be used wisely. Spread it out and this phase of DT redevelopment will end up just like the rest. A few isolated new things in a sea of deadness.
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Tacachale

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Re: The District wants $26 million in public incentives
« Reply #40 on: January 11, 2018, 04:48:13 PM »
Thanks for the clarification Lake. I don't remember any promise from the COJ to provide $46 million in infrastructure support. Can KenFSU document that?

Shouldn't be a surprise, we've been talking about it since 2015:

https://www.metrojacksonville.com/forum/index.php?topic=23712.0

Sure, no concrete promises were ever made, no numbers were publicly specified (not to say they weren't discussed behind closed doors), but the final step was always going to be to negotiate a development agreement with the city. Do you really think anyone is going to commit to a 30-acre, $440 million riverfront development, on the Southbank, in 2018 Jacksonville, without public subsidy?

That's insane.


I'm not against incentives, but there are legit questions about this project, and some of the others you mentioned.


Particularly when, right across the river, the city was prepared to hand Shad Khan the Shipyards for free, pay $35 million for remediation, and build out the infrastructure along Bay Street, including riverwalk extension.


That was a terrible deal negotiated by the previous administration. We'd have been crazy to take it.


Atkins got an $8 million subsidy for the Trio and Barnett (~10% of project cost, similar to what we're talking above), including a similarly odd agreement involving the city paying for a parking garage and leasing it back to Atkins over the next couple decades, I believe.


This is also a historic rehab in the core of Downtown. The District is on the outskirts in the Southbank. It won't have the impact on the downtown core that projects within the core would have. The amount of money is also a totally different story.


The city just handed over nearly $10 million to Edward Waters College, of all places.


It was $8.4 million, and half of it went to an athletics field for community use. Even looking at the whole $8.4 million it's a fraction of the cost of the District.


We ponied up $45 million for half of the $90 million in stadium improvements recently made to Everbank under the guise of splitting half the cost of an amphitheater with Shad Khan (reality check: we realistically got a $30 million amphitheater and subsidized the cost of the club upgrades and practice field). 


This one was for buildings the city actually owns, and the Jags paid half. And like you say, the amphitheater itself would have cost $30 million or more, but it's worth the cost (or it would be if they'd ever book anything but dad rock from the last century). Not really a comparable situation.


Cowford Chophouse? Subsidized (~10% project cost).

Carling and 11E? Subsidized.


All historic rehabs in the downtown core, and the incentives were a fraction of this cost.

[/quote]


It's the nature of the current downtown landscape.

Have zero problem with anyone thinking the benefit doesn't outweigh the cost, but surprise at the developer asking for public incentives? Come on. This ain't Manhattan, and the precedent has long since been set.

The fact that incentives can be good doesn't mean they're always good. It needs evaluation on a case-by-case basis.
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KenFSU

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Re: The District wants $26 million in public incentives
« Reply #41 on: January 11, 2018, 06:47:58 PM »
^Don't get me wrong, I totally see where you're coming from, and it's a sound argument, but I'd counter that even though the public ask is multiple times more than the Trio, or Edward Waters, or Cowford, the potential economic impact is magnitudes higher. If Elements is contractually committed to - as they should be before full public investment is potentially made - building out 1,200 residential units, a 200 room hotel, a 125-slip marina, 200,000 square feet of office space, and 285,000 square feet of retail, including restaurants new to the market, a movie theater, a supermarket, a drug store, etc, then of course the incentives would be higher than a single restaurant, or a community field/dorm.

We're talking hundreds more residential units than the Laura Street Trio, Lavilla Lofts, Lofts at Monroe, Houston Manor, the Carling, the Strand, 11E, and the Peninsula COMBINED. A short walk from the southern terminus of the Skyway. Connected to the riverwalk with large areas of public greenspace. And a river taxi across from the sports district. No, it's not in the central business district, but it's on the Southbank riverfront, and would all but certainly have positive externalities on the downtown region.

More positive impact than any of the other projects vying for public dollars? That's up to those in charge to decide.

But personally, I don't think the ask is out of line with the scale of what Elements is proposing.
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jaxnyc79

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Re: The District wants $26 million in public incentives
« Reply #42 on: January 11, 2018, 07:19:18 PM »
Thanks for the clarification Lake. I don't remember any promise from the COJ to provide $46 million in infrastructure support. Can KenFSU document that?

Shouldn't be a surprise, we've been talking about it since 2015:

https://www.metrojacksonville.com/forum/index.php?topic=23712.0

Sure, no concrete promises were ever made, no numbers were publicly specified (not to say they weren't discussed behind closed doors), but the final step was always going to be to negotiate a development agreement with the city. Do you really think anyone is going to commit to a 30-acre, $440 million riverfront development, on the Southbank, in 2018 Jacksonville, without public subsidy?

That's insane.

Particularly when, right across the river, the city was prepared to hand Shad Khan the Shipyards for free, pay $35 million for remediation, and build out the infrastructure along Bay Street, including riverwalk extension.

Atkins got an $8 million subsidy for the Trio and Barnett (~10% of project cost, similar to what we're talking above), including a similarly odd agreement involving the city paying for a parking garage and leasing it back to Atkins over the next couple decades, I believe.

The city just handed over nearly $10 million to Edward Waters College, of all places.

We ponied up $45 million for half of the $90 million in stadium improvements recently made to Everbank under the guise of splitting half the cost of an amphitheater with Shad Khan (reality check: we realistically got a $30 million amphitheater and subsidized the cost of the club upgrades and practice field). 

Cowford Chophouse? Subsidized (~10% project cost).

Carling and 11E? Subsidized.

It's the nature of the current downtown landscape.

Have zero problem with anyone thinking the benefit doesn't outweigh the cost, but surprise at the developer asking for public incentives? Come on. This ain't Manhattan, and the precedent has long since been set.

Keep an Open Mind

While I do believe there are more pressing needs on the Northbank, I wonder if there are parts of the structure of this deal, that could serve as a template for transferring land ownership from the city (and city-chartered entities) to private development.

The District has no cash value to the COJ.  It doesn't generate tax revenue.  It's a big piece of nothing along the waterfront.  To generate cash value, the property needs to be put to private economic use.  It needs a private enterprise to put crap on it that generates cash flow, so that the cash flows can be used to pay property taxes (and sales taxes).

Elements is saying, transfer this thing of no value to our control.  We will be the trigger that puts it to private economic use, so that it starts creating taxable value.  The city can then take a slice of all that future value, and use it make the JEA whole on its transfer of this huge piece of nothing.

As for the city's responsibility to spend money NOW on infrastructure...


The District land looks like a big, barren field that could be in the middle of nowhere.  It's never been "urbanized," and yet we want to make it a downtown neighborhood.  It needs narrow streets (preferably grid-patterned) and sidewalks to form urban blocks, it needs lamp posts, it needs parks and squares, and it needs riverfront access, plus maybe some other crap underground that I can't speak on.  These are all urban neighborhood elements that the COJ might reasonably be expected to install.

COJ buying from JEA

Well, the COJ and JEA are very much intertwined.  The COJ is in a revenue-sharing arrangement with JEA and is as close to an equity owner as you can get.  JEA funds its operations to provide services as a utility by collecting light bill payments, and borrowing from the bond markets.  It gives COJ some of those collections, and pays its people salary and bonuses.  It's community-owned.  The District property is community-owned.  The property is no longer serving its purpose as a resource for power generation for the community.  Now, it is doing absolutely nothing for the community (not even generating prop or sales tax revenue), and yet it is community-owned.  So the community should just give away to a developer who can be that trigger to give it "value" to the Community. 

Whether that's Elements, or some other developer who can build structures and create occupancy for the highest possible private economic use, is another question.

LaVilla Properties

Based on this reasoning - yes, I conclude - the city should give away properties in LaVilla.  Do your due diligence on the bidders - evaluate which ones have the most compelling ideas for the property and can demonstrate the wherewithal to actually get those ideas executed as quickly as possible - and then give the properties away to private economic use.  On the other hand, if the City's Bond Rating depends on some inflated view of property in its possession, and if giving away property for future cash flows causes the COJ to trip up some key debt ratios now, well then I can "smell" an incentive to hold on to property.
« Last Edit: January 11, 2018, 07:44:14 PM by jaxnyc79 »

MusicMan

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Re: The District wants $26 million in public incentives
« Reply #43 on: January 11, 2018, 07:36:05 PM »
I don't know or remember, but what type of money did the COJ give to the developer of The Peninsula?  San Marco Place? The Strand?

KenFSU

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Re: The District wants $26 million in public incentives
« Reply #44 on: January 11, 2018, 09:30:48 PM »
I don't know or remember, but what type of money did the COJ give to the developer of The Peninsula?  San Marco Place? The Strand?

I honestly can't remember, but all three towers were built during the pre-recession condo boom, so I'd be shocked if any major incentives were handed out. That said, all three condos should benefit from publicly subsidized infrastructure work being done in the area in the form of the $4 million Riverplace "road diet" funded by the Southbank TID, which is incidentally only $465k less than what the District proposes to take from the TID over the next 20 years (25% of the $18.6 million loan repayment to JEA = $4.65 million), interest excluded.
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