DIA releases ‘approval with conditions’ on Lot J proposal

“As the Downtown Investment Authority, we must acknowledge the tremendous positive impact this project could have on the immediate vicinity, and all of Downtown,” the report states.

“We fully recognize that the analysis we performed, using local market data and the procedures applicable to smaller Downtown projects, fails to recognize the larger economic impact of a project of this magnitude. Furthermore, we understand that many of the recommendations we offer have been previously raised by the Administration and Office of General Counsel and rejected by the Developer. Nevertheless, it is staff’s recommendation to the Board that these recommendations be incorporated as conditions by the Board to ensure the best possible project for the City. If, when presented to City Council, the Developer does not agree, it will be up to City Council to then make the decision whether to proceed. We have provided the review and analysis requested and the DIA has forwarded a recommendation supported by this report.”

On Monday, Mayor Lenny Curry suggested in a tweet that Jacksonville needs the Lot J development in order to keep the Jaguars.

“Over 2 decades ago, we decided we wanted to be an NFL city. It wasn’t easy. But we did it. Phase 1 of the decision to remain 1 has arrived … " the mayor tweeted in part.

In the report, the DIA values the total input from the city at $245.3 million. That’s about $12 million more than past estimates of about $233 million in city incentives, when including $12 million in fair value for city owned land provided for a hotel and apartments.

The report also lists a return on investment for the city over 20 years at 40 cents for every dollar spent, which is slightly less than the council auditor’s estimate of 44 cents for every dollar. The mayor previously cited an ROI as high as $1.69.

In the report, the DIA also questions the necessity of the “breadbox loan,” the $65.5 million no-interest loan to the developers.

“Our analysis of financial feasibility and construction costs, based on the information provided, does not reveal a need for this additional incentive as currently structured. Nevertheless, we understand that this may be non-negotiable from the developer’s perspective, and actual construction and operating numbers might justify this incentive,” the report states.

The DIA also raised concerns about the city spending $92.8 million in infrastructure costs, but the DIA’s recommendations were changed in a revised report released subsequently by the agency.

The initial version of the report obtained by Action News Jax recommended the city try limiting infrastructure costs.

“Absent construction costs and project detail information, we cannot justify the full infrastructure budget inclusive of the garage and all vertical elements and would recommend reduction of the infrastructure grant (eliminating the residential garage and/or some portion of vertical amenity infrastructure),” the initial version of the report stated.

The revised version does not include a recommendation to the city on reducing infrastructure costs.

“Absent construction costs and project detail information, we cannot verify the need for the full infrastructure budget,” the revised version stated.

Action News Jax news partner WOKV obtained a statement from CEO of the DIA, Lori Byer, on why two versions of the report were released on Monday.

“The first was a working draft, which was requested in draft form as a public records request by several media members. We did want to distribute to the media before the Board, so we sent it to everyone even though it wasn’t final. The second is what we consider our final report and will be presented tomorrow,” said Byer in a statement to WOKV.

Below, you can read both the initial and revised reports from the DIA.