Jacksonville’s former Southside Generating Station was the subject of a City Council “lunch and learn” Monday.
Specifically, the proposed District redevelopment, four years in the making, with construction proposed to wrap by the end of 2022.
The proposal was described as a “labor of love” by the head of the Downtown Investment Authority, but which was not regarded quite so uncritically by Jacksonville City Council members, many of whom questioned the fundamentals of the proposal, which seemed to socialize costs and privatize profits.
Politically connected developers Peter Rummell and Michael Munz have a deal, as of January, to buy the land for $18.6 million from the JEA Board. However, there are a number of stumbling blocks to the deal, not the least of which is City Council approval of what amounts to a public-private partnership.
Councilwoman Lori Boyer, liaison to the Downtown Investment Authority, noted there were “questions and concerns” about the process in January, and that the meeting Monday was to “share where we are, get input, answer questions.”
“The structure that we’re talking about is very traditional,” Boyer said, with a $30 million capital improvement plan and a Rev Grant (75 percent for 22 years capped at the lesser of $56.025 million or $30 million).
Boyer noted that there are other 75 percent Rev grants in the city.
“Those were essentially gap [monies] … in this case, we’re asking them to do the infrastructure itself and bond it,” Boyer said in response to a question.
The total post construction assessed value is expected to be just shy of $216 million.
Capital improvements would include $25 million of infrastructure work, per Aundra Wallace of the DIA. As part of the deal, there would be three riverfront parks and a marshfront park on the south of the property ($4.469 million total, and these would be city lands).
Other project costs would include $6.361 million for a riverfront bulkhead, a $3.488 million Riverwalk extension, $1.597 million for a board walk, $1.035 for an overland trail. As well, a $1.025 million extension of Prudential Drive, $405,600 for Broadcast Place, and $1,158 million for Riverside Drive are in the mix.
Design costs of $2.931 million and a contingency allowance of $3.371 million are also in the mix.
“All cost overruns would be taken care of by the developer,” Wallace said.
Developers must close on property by June 30 with final closing by mid-July per Wallace. The park property would have to be conveyed to the city, and the developers would have to get their financing right via $29.46 million in bonds (which an advisor said was lined up pending city approval of the deal).
Boyer noted that the property would be a community redevelopment district, but the development itself would have to support construction of infrastructure, including internal roads and utilities.
“The community redevelopment district can issue its own bonds … like an obligation, an assessment on the property,” Boyer said.
Jacksonville City Council and DIA Board members pushed back on the Rev Grant question, questions of the timeline of the deal, and other issues.
Wallace noted that the ROI after 25 years would be 1.39. If money had to be borrowed, up to $21 million, it would be 2.66 percent with a debt payment of $1.4 million — which would fit comfortably in the $4 million Southbank CRA.
“We can do this and we can do other projects as well,” Wallace said.
“We want to hear what people want in these agreements … the goal is to see if this is the right direction,” Boyer said regarding financing and the like.
Council consensus remains to be seen; it didn’t surface in the meeting Monday.
Councilman John Crescimbeni said “there’s a lot of paper in front of us,” regarding the pitch, suggesting a follow up meeting after Council members digested the details of the pitch.
Crescimbeni was skeptical about the mechanism that would pay the city back for the money floated. And he was also doubtful of the parking for public parks actually being used for the public, rather than for more developer projects. And he questioned the city’s handling of construction issues, citing the library and Riverwalk as concerns.
Councilman Greg Anderson noted “questions around timing,” including the timing of the purchase and the dispensation of the JEA Board.
DIA Board member Jack Meeks said his board voted for the deal, citing Wallace’s “masterful job” of “protecting the city’s interests” in a previous proposal, but noting that changes of the proposal may require Wallace to re-present the deal.
Councilman Tommy Hazouri wanted validation from the city finance department or the Council Auditor.
Councilman Danny Becton wanted assurances that what was proposed would be built.
Councilman Matt Schellenberg, meanwhile, wanted to know if development was contingent on City Council approval. Schellenberg has been a critic of the slow unfolding of this deal, which was originally expected to have been done and constructed years ago.
Schellenberg noted that the project has been stalled out for four years; Wallace noted that’s not unprecedented, citing a four year timeframe on the Laura Street Trio.
Missing from action: Council President Anna Brosche and Finance Chair Garrett Dennis, who likely would be pivotal to the deal clearing Council.
Expect another meeting on this subject in the first week of April.