Author Topic: A Brief Look at the Laura Street Trio Incentive Package  (Read 26665 times)

Charles Hunter

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #15 on: December 21, 2023, 04:17:26 PM »
Hmmm - would the Pearl Street developer be interested in the Trio?

Ken_FSU

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #16 on: December 21, 2023, 04:52:13 PM »
1) The Laura Street Trio undergoes a lengthy DIA review process
2) The DIA doesn't recommend the project one way or the other, and "bunts" it to City Council
3) The City Council puts the incentives package on the agenda for December to decide on
4) City Council President punts the decision to January, with two additional meetings to be held to discuss
5) The DIA, after bunting on the project, now wants the City Council to refer the project back to the DIA for re-review

All madness related to this specific project aside, you can certainly see why things take forever in this city.

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #17 on: December 21, 2023, 05:48:03 PM »
I could be wrong, but IMO Atkins/Southeast should have somehow been held accountable. I get the feeling a lot of money was pocketed because VERY LITTLE to NOTHING was started let alone done. Hold him (them) accountable somehow and legally if any more money is "doled" out to SE/Atkins. I smell a dead fish in this pond. Stop giving out to these developers free and clear incentives with NO accountability for getting the job done.
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Ken_FSU

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #18 on: December 21, 2023, 10:21:25 PM »
I could be wrong, but IMO Atkins/Southeast should have somehow been held accountable. I get the feeling a lot of money was pocketed because VERY LITTLE to NOTHING was started let alone done. Hold him (them) accountable somehow and legally if any more money is "doled" out to SE/Atkins. I smell a dead fish in this pond. Stop giving out to these developers free and clear incentives with NO accountability for getting the job done.

To be clear, to the best of my knowledge, no city money has been given to Southeast re: The Laura Street Trio yet. The bigger problem is that Southeast has been sitting on the property for over a decade now with no progress to show for it, and not enough capital/skin in the game to find a lender willing to provide a commercial loan for the project. Hence the need for the city to guarantee the repayment of a $20 million loan from Capital One because Southeast can't.

The warning signs were there dating all the way back to 2016 when Southeast defaulted on their loan from Stache Investments and Shad Khan repossessed The Barnett.

They eventually did a good job with the Barnett, but realistically, it feels like they bought the Laura Street Trio for a few million dollars, and are looking at the state (through historical preservation credits), the DIA (through REV grants), and the city (through grants/loan guarantees) to foot the bill and take on the risk for a needlessly bloated Trio renovation/new construction projects, while assuming very little risk themselves.

Question for those smarter about these things than I am:

Does Jacksonville/has Jacksonville ever considered levying a vacant property or blight tax in the CBD?

Washington, D.C., for example, raises commercial property tax rates from $1.85 for $100 in assessed value to $5 per $100 when the property is vacant. Property considered blighted is taxed at $10 per $100 of assessed value.

You hate to penalize developers who are trying to invest in the CBD, but you also want to disincentivize properties like the Laura Street Trio, Jones Bros Furniture, Independent Life, Big Pete's from falling into vacancy/blight - particularly at street level - for years and years and years on end.

Feels like a vacancy/blight tax after X number of years would be a good way to dissuade people like Steve Atkins from sitting on a property for ages waiting for the right deal to come along.
« Last Edit: December 21, 2023, 10:39:34 PM by Ken_FSU »

thelakelander

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #19 on: December 26, 2023, 10:22:04 AM »
Quote
"Reckless": Laura Street deal ripped by downtown board chairman

The incentive deal for restoring the Laura Street Trio in downtown Jacksonville has drawn fire from the Downtown Investment Authority board's chairman as "reckless and financially irresponsible" while the sponsor of the legislation says its terms are still undergoing changes and deserve a fair hearing.

Downtown Investment Authority board Chairman Jim Citrano's criticism came during a DIA meeting Thursday when the board unanimously approved a resolution that asked City Council to send the deal to the the board for its recommendation before City Council votes on it in January.

The stakes are high for taxpayers and for downtown's future development in its historic core. The $175 million project would rejuvenate the Laura Street Trio, which dates back to the city's rebirth after the Great Fire of 1901, and add two new 11-story buildings for a boutique hotel, apartments, stores and restaurants.

Citrano said he opposed an earlier proposal by the developer in the summer because he thought it asked too much of taxpayers. He said the latest version would expose the city to even more financial risk by effectively guaranteeing it would make good on construction loans for the project if the developer cannot repay them.

City Council member Matt Carlucci, who introduced the legislation, said it left him "hurt and disappointed" that DIA board members criticized the legislation without him being able to respond during the meeting.

"It's not a fair representation, particularly of a project that is still under review, still in collaboration and not in its final form yet," Carlucci said.

Full article: https://www.jacksonville.com/story/news/local/2023/12/26/laura-street-trio-deal-heads-to-jacksonville-city-council-vote/71999766007/
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jaxjaguar

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #20 on: December 26, 2023, 01:29:41 PM »
Quote
"Reckless": Laura Street deal ripped by downtown board chairman

The incentive deal for restoring the Laura Street Trio in downtown Jacksonville has drawn fire from the Downtown Investment Authority board's chairman as "reckless and financially irresponsible" while the sponsor of the legislation says its terms are still undergoing changes and deserve a fair hearing.

Downtown Investment Authority board Chairman Jim Citrano's criticism came during a DIA meeting Thursday when the board unanimously approved a resolution that asked City Council to send the deal to the the board for its recommendation before City Council votes on it in January.

The stakes are high for taxpayers and for downtown's future development in its historic core. The $175 million project would rejuvenate the Laura Street Trio, which dates back to the city's rebirth after the Great Fire of 1901, and add two new 11-story buildings for a boutique hotel, apartments, stores and restaurants.

Citrano said he opposed an earlier proposal by the developer in the summer because he thought it asked too much of taxpayers. He said the latest version would expose the city to even more financial risk by effectively guaranteeing it would make good on construction loans for the project if the developer cannot repay them.

City Council member Matt Carlucci, who introduced the legislation, said it left him "hurt and disappointed" that DIA board members criticized the legislation without him being able to respond during the meeting.

"It's not a fair representation, particularly of a project that is still under review, still in collaboration and not in its final form yet," Carlucci said.

Full article: https://www.jacksonville.com/story/news/local/2023/12/26/laura-street-trio-deal-heads-to-jacksonville-city-council-vote/71999766007/

Looks like it's time for another study! Maybe by the end of the decade, it'll catch fire or something so we won't have to worry about it anymore.

Ken_FSU

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #21 on: December 26, 2023, 08:42:26 PM »
The DIA had their chance to provide their recommendation seven months ago, and instead chose not to do so, knowing full well that it was a bum deal with non-finalized commitments from the city that would require abnormally high levels of public subsidy to make work. You don’t get to come back the next year, derail the whole thing, undermine the work of a guy like Matt Carlucci who’s been fighting to restore the Trio for 30 years, and potentially set the decision back another six months after you already decided to “bunt.” Feels like the REV grant and historic preservation funding from the DIA won’t dramatically change, and the main difference here between what they saw last year and is now on the table is how the general fund will fill in the capital gap for Southeast.

The Trio in its current form is like the stadium deal. To a person, we all know it’s a shit deal for the city to have to pump so much public money into the project. But, the short-term cost of pinching our nose and doing something above beyond what’s “fair” might be cheaper than the long-term cost of letting our most strategically important urban corner be anchored by Chernobyl for another 30 years.

As someone who routinely has to walk out of town clients and visiting coworkers from other offices by it, the Trio is an insane black eye on the city that is contributing to blight in the CBD that is actively costing Jacksonville new and existing business. Look no further than those poor owners of Mag’s 2.0. Bobby invests his life savings into a restaurant on Laura Street based on all the big promises of revitalization and gaslighting about $4 billion pipelines by entities like the DVI, and ultimately ended up packing up shop when he learned the hard way that the emperor wasn’t wearing any clothes.

I still think it makes more sense to phase construction and incentives between hotel/restaurant and multifamily, and to try to squeeze the Southeasts of the world with a vacancy tax, but it’s a new year, and we need to get this thing done one way or the other now, rather than holding out for the perfect deal five years down the road. Cost of doing nothing is too high when we’re putting so much investment in elsewhere to bring the CBD back to life. Give City Council the chance to vote it up or down in the next two weeks as planned, make sure we gain ownership of the Trio in the event of a default, and get dirt turning if it’s a yes.

Last thing I’ll say is that I’m hearing a lot of news commentators referring to the proposed $20 million subsidee/guarantee to Steve Atkins for the Trio as “unprecedented.” Quick reminder that we paid $23 million in cash when all was said and done to buy out Toney Sleiman and remove the perceived “blight” of the Jacksonville Landing. And when we talk about opportunity cost, the true cost there was probably much higher when you think of all the displaced businesses (and foot traffic) and consider how quickly proposed developments like the adjacent Hyatt Place hotel disappeared when the Landing was razed. And, when we talk about how there’s a cost associated with doing nothing, had we agreed to Alvin Brown’s $12 million renovation of the Landing in 2017, do we really think we’d be in this spot now where the Trio required this level of subsidy?

All that to say, if we can afford $100 million over the last 8 years to remove downtown malls, pedestrian ramps, restaurants, annexes, courthouses, and an entire city block, SURELY we can find $20 million - as bad of a deal as it might be - to solve a 50-year problem in an additive way. We don’t have to love it. It’s not an endorsement of Southeast. It can’t set a set a precedent for future deals. But the Trio HAS to get done for downtown to move forward.
« Last Edit: December 26, 2023, 08:59:12 PM by Ken_FSU »

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #22 on: December 27, 2023, 06:17:29 AM »
The DIA had their chance to provide their recommendation seven months ago, and instead chose not to do so, knowing full well that it was a bum deal with non-finalized commitments from the city that would require abnormally high levels of public subsidy to make work. You don’t get to come back the next year, derail the whole thing, undermine the work of a guy like Matt Carlucci who’s been fighting to restore the Trio for 30 years, and potentially set the decision back another six months after you already decided to “bunt.” Feels like the REV grant and historic preservation funding from the DIA won’t dramatically change, and the main difference here between what they saw last year and is now on the table is how the general fund will fill in the capital gap for Southeast.

The Trio in its current form is like the stadium deal. To a person, we all know it’s a shit deal for the city to have to pump so much public money into the project. But, the short-term cost of pinching our nose and doing something above beyond what’s “fair” might be cheaper than the long-term cost of letting our most strategically important urban corner be anchored by Chernobyl for another 30 years.

As someone who routinely has to walk out of town clients and visiting coworkers from other offices by it, the Trio is an insane black eye on the city that is contributing to blight in the CBD that is actively costing Jacksonville new and existing business. Look no further than those poor owners of Mag’s 2.0. Bobby invests his life savings into a restaurant on Laura Street based on all the big promises of revitalization and gaslighting about $4 billion pipelines by entities like the DVI, and ultimately ended up packing up shop when he learned the hard way that the emperor wasn’t wearing any clothes.

I still think it makes more sense to phase construction and incentives between hotel/restaurant and multifamily, and to try to squeeze the Southeasts of the world with a vacancy tax, but it’s a new year, and we need to get this thing done one way or the other now, rather than holding out for the perfect deal five years down the road. Cost of doing nothing is too high when we’re putting so much investment in elsewhere to bring the CBD back to life. Give City Council the chance to vote it up or down in the next two weeks as planned, make sure we gain ownership of the Trio in the event of a default, and get dirt turning if it’s a yes.

Last thing I’ll say is that I’m hearing a lot of news commentators referring to the proposed $20 million subsidee/guarantee to Steve Atkins for the Trio as “unprecedented.” Quick reminder that we paid $23 million in cash when all was said and done to buy out Toney Sleiman and remove the perceived “blight” of the Jacksonville Landing. And when we talk about opportunity cost, the true cost there was probably much higher when you think of all the displaced businesses (and foot traffic) and consider how quickly proposed developments like the adjacent Hyatt Place hotel disappeared when the Landing was razed. And, when we talk about how there’s a cost associated with doing nothing, had we agreed to Alvin Brown’s $12 million renovation of the Landing in 2017, do we really think we’d be in this spot now where the Trio required this level of subsidy?

All that to say, if we can afford $100 million over the last 8 years to remove downtown malls, pedestrian ramps, restaurants, annexes, courthouses, and an entire city block, SURELY we can find $20 million - as bad of a deal as it might be - to solve a 50-year problem in an additive way. We don’t have to love it. It’s not an endorsement of Southeast. It can’t set a set a precedent for future deals. But the Trio HAS to get done for downtown to move forward.

Recent Florida Times Union news and article on the Laura Street Trio: https://www.jacksonville.com/story/news/local/2023/12/26/laura-street-trio-deal-heads-to-jacksonville-city-council-vote/71999766007/?utm_source=timesunion-dailybriefing-strada&utm_medium=email&utm_campaign=dailybriefing-headline-stack&utm_term=hero&utm_content=nftu-jacksonville-nletter65
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tufsu1

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #23 on: December 27, 2023, 09:41:27 AM »
The DIA had their chance to provide their recommendation seven months ago, and instead chose not to do so, knowing full well that it was a bum deal with non-finalized commitments from the city that would require abnormally high levels of public subsidy to make work.

I think the main reason they didn't weigh in is because the financial amount requested was beyond their purview.

marcuscnelson

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #24 on: January 04, 2024, 01:58:26 PM »
The first hearing was today. According to Nate Monroe there were some quorum issues at the start.

General Counsel Michael Fackler told Council that any Duval County taxpayer could bring a suit against the city if it guarantees the Laura Street Trio loan because of constitutional concerns. There's also some degree of hot potato regarding who exactly is negotiating with Southeast.
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Ken_FSU

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #25 on: January 04, 2024, 04:46:35 PM »
Meeting today sounded like your typical, unhinged Jacksonville shitshow.

And a nice Throwback Thursday if you were starting to feel nostalgic for the Lot J legislation:

1. An "emergency" meeting to try to speed through legislation for a development agreement still being drafted? Check.
2. Weird conditions on private development that risk leaving Jacksonville with uncapped liability and a damaged municipal bond rating? Check.
3. Numerous versions of the redevelopment agreement circulating on the Council floor that all contradict each other? Check.
4. Widespread confusion about who's actually negotiating a guaranteed loan for tens of millions of dollars on behalf of the city? Check.
5. The DIA taking a stand, after not taking a stand? Check.
6. Kim Taylor, who should have a 0 added to her salary every time she has to referee one these circuses, once again being the human embodiment of the Jags fan meme, shaking her head in complete befuddlement that an emergency vote was being considered for a deal that had not yet been fully negotiated? Check.
7. A City Council President declaring, "Never again. This will never happen again."? Check.

Bonus points for family drama, with Joe Carlucci apparently questioning his own father's deal.

As a city, we've got to find a way to get the Trio finished, even if it means - gasp- just restoring three historically important, blighted buildings to their former splendor without duct-taping $100 million in new suburban apartments and hotels to the sides of the buildings. But it's becoming increasingly clear, and increasingly tragic, that Southeast can't pay for it, the DIA can't negotiate it, and the City can't see the fallacy of giving Southeast $60 million+ in incentives to unnecessarily convert three beautiful buildings into a weird FrankenTrio that Capital One will just barely sign off on. Maybe. With an uncapped loan from the city. Possibly.

If Southeast refuses to sell, the best solution remains phasing the development, beginning with the Hotel and Restaurant. That brings both of the buildings along Laura Street back online, much more affordably, with a larger focus on historic rehab vs. new construction. From there, Southeast can figure out what they want to do with the remaining building and proposed multifamily portion of the project.

Shouldn't be all or nothing when the City is the one footing such a huge portion of the bill.
« Last Edit: January 04, 2024, 05:01:08 PM by Ken_FSU »

Fallen Buckeye

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #26 on: January 04, 2024, 05:42:37 PM »
Shouldn't be all or nothing when the City is the one footing such a huge portion of the bill.

This mindset has totally killed Jax over the years. We try to eat the whole turkey in one bite and choke instead of eating it a bite at a time. Seems like the areas we're seeing organic infill are the places where the city has the least involvement. I'm seeing new housing popping up all over Murray Hill and Lakeshore for instance. Not to mention the growth of the Edgewood Ave commercial corridor.

Ken_FSU

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #27 on: January 04, 2024, 05:43:43 PM »
Annnnnnd we’ve jumped the shark.

https://www.news4jax.com/news/local/2024/01/04/city-council-to-discuss-funding-for-laura-street-trio-redevelopment/

Atkins threatening to demolish the buildings if the city doesn’t guarantee his construction loans, which I can’t possibly imagine he has the ability to do given their protected stature.

thelakelander

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #28 on: January 04, 2024, 05:52:40 PM »
Can't demolish without a permit.
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thelakelander

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Re: A Brief Look at the Laura Street Trio Incentive Package
« Reply #29 on: January 04, 2024, 06:47:54 PM »
As a city, we've got to find a way to get the Trio finished, even if it means - gasp- just restoring three historically important, blighted buildings to their former splendor without duct-taping $100 million in new suburban apartments and hotels to the sides of the buildings. But it's becoming increasingly clear, and increasingly tragic, that Southeast can't pay for it, the DIA can't negotiate it, and the City can't see the fallacy of giving Southeast $60 million+ in incentives to unnecessarily convert three beautiful buildings into a weird FrankenTrio that Capital One will just barely sign off on. Maybe. With an uncapped loan from the city. Possibly.

If Southeast refuses to sell, the best solution remains phasing the development, beginning with the Hotel and Restaurant. That brings both of the buildings along Laura Street back online, much more affordably, with a larger focus on historic rehab vs. new construction. From there, Southeast can figure out what they want to do with the remaining building and proposed multifamily portion of the project.

Shouldn't be all or nothing when the City is the one footing such a huge portion of the bill.

Is there a logical reason why both buildings (Florida Life and Bisbee) can't be a part of the hotel as originally planned?
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