City’s $ 65.5 Million Interest-Free Loan to Lot J May Take 50 Years to Pay Off | Jax Daily Record | Jacksonville Daily Record
The city’s proposed $ 218 incentive program for the Jacksonville Jaguars and its project partners to develop Lot J includes a $ 65.5 million interest-free loan that would be repaid after 50 years.
The loan is part of the city’s incentive offer for the proposed $ 445 million mixed-use project west of TIAA Bank Field, home of the Jaguars.
City spokeswoman Nikki Kimbleton said in an October 6 email that the loan would be repaid through the growth of a $ 13.1 million developer-funded trust. The city cannot touch the profits of the trust until the account reaches $ 65.5 million or after 50 years.
“The collateral for the loan is held in a trust and invested, and the City takes title to the body of the trust at the earliest when the body is equal to ($ 65.5 (million) plus the expenses of the trust, that’s 50 years, ”Kimbleton, the city’s public affairs director, said in the email.
The loan structure was not included in the terms sheet released to local media after the October 5 press conference with Jaguars owner Shad Khan, team chairman Mark Lamping and Mayor Lenny Curry.
The financing option is referred to as a “Breadbox loan” in the terms sheet. The funding structure was created in response to the 2017 tax law that eliminated the use of tax-free economic development grants by government entities, according to St. Louis-based UTW Capital LLC, which promotes the program. .
Curry released a preliminary condition sheet with the Jaguars and its development partner, The Cordish Companies, in August 2019 that listed the $ 65.5 million incentive as a grant.
City general manager Brian Hughes led the administration’s negotiating team that brokered the deal with the Jaguars and Cordish.
He did not respond to a request for comment on the loan on Oct. 6 and whether either party used UTW Capital’s program as a model.
Cordish, based in Baltimore, Maryland, and Jaguars subsidiary Gecko Investments LLC are equal partners in the Lot J project, operating as the Jacksonville IC Parcel One Holding Company LLC.
A Jaguars spokesperson provided a breakdown on Oct. 6 showing which party will pay for each component of Batch J, describing a development investment of $ 445 million.
Curry and promotional material from the project presented on October 5 indicated that Lot J would be a $ 450 million project.
The development comprises two residential buildings with a total of 400 residences for rent; a hotel with 150 to 200 rooms; 75,000 square feet of street level retail space; 40,000 square feet of Class A office space; and a 100,000 square foot Live! entertainment center with bars, restaurants and indoor and outdoor facilities.
Cordish and the Jaguars would invest $ 226.8 million. According to the breakdown, the two mid-rise residential buildings and the hotel will be private properties valued at $ 229.5 million. The Live! The district, loan trust and infrastructure would total $ 190.8 million and be owned by the city.
The Jaguars and Cordish are forecasting development spending of $ 24.7 million, according to the document.
The latest list of conditions cuts the city’s infrastructure investment from $ 92.8 million to $ 77.5 million, citing a reduction in parking from the 2019 preliminary agreement.
The conditions sheet details leave room for the city’s infrastructure cost to rise to $ 92.8 million if the developer decides to build another parking structure instead of the planned 750-space surface parking lot.
That would bring the deal almost in line with the taxpayer’s $ 233 million investment Curry proposed last year.
Another scenario could increase the city’s infrastructure payment if the environmental mitigation measures at Lot J, especially on the construction of the surface lot, exceed estimates.
“The current investment of $ 77.5 million in infrastructure is based on information regarding the level of environmental contamination, subsoil conditions, requirements for construction at the retention pond site. stormwater and engineering relating to the installation of the existing guide wire, ”the terms sheet states.
“To the extent that factors outside the developers control the impact, those parts of the project infrastructure costs related to these parts of the project exceed current estimates, the city commits to allocate up to $ 15.1 million. dollars in the reduction of investments to cover unforeseen costs.
The remaining items on the Curry administration’s proposed list of taxpayer incentives include a maximum of $ 25 million in grants and completion payments for hotel and residential developments and no more than $ 50 million for Live. ! District.
Legislation containing the agreement will need to be filed and approved by city council.