A.G. Gancarski
Jacksonville negotiators continue to hash out the details of stadium renovation with the NFL Jaguars, and it appears that the project will be scaled down from the team’s ambitious 2023 proposal that suggested taxpayers would be on the hook for more than a billion dollars.
Meanwhile, a novel approach to financing the deal may keep the city from having to finance the whole thing through the bond market — and that approach may help to ameliorate another long-standing issue for the local government.
As lead negotiator, Mike Weinstein told Florida Politics that the stadium district the team envisioned as part of the package is off the table.
“It’s only stadium,” Weinstein said of the negotiation, noting that the team and the city have “never had a serious conversation about the property” around the stadium.
It’s in a Community Redevelopment Area, thus necessitating “many legal steps that need to be taken.”
Among those steps would be opening up competition for development.
“It’s got to be made public,” Weinstein said, noting this agreement doesn’t contemplate “property rights” for the Jaguars or Shad Khan.
The Jaguars and the Shad Khan vehicle “Iguana Investments” previously envisioned a total investment that could cost as much as $2.068 billion, a number that could include stadium improvements costing between $1.2 and $1.4 billion, as well as between $550 and $668 million for development of a “sports district.” Jacksonville was proposed to foot the bill for two-thirds of the cost of stadium improvements, with a 50/50 cost share for the total project.
Weinstein says that’s up in the air at this point.
“We’re knee-deep in negotiations, and I can’t do it through you, but we won’t go to the public or the council without a logical and justifiable split,” Weinstein said.
Weinstein said the ultimate cost of the stadium itself isn’t known, as it’s not “fully designed” yet. And therefore, questions are open.
“It’s not fully designed until it’s really fully designed. You don’t really know how much it’s going to cost. You don’t know how many of the elements are going to cost things, and whether the temperature is gonna come down as much as you need to have it come down and how the roof’s gonna work.”
Meanwhile, the city is exploring creative financing options, including finding a way to finance some of the deal by leveraging assets from the Police and Fire Pension Fund and the General Employees pension fund, which Weinstein says combine to have $5 billion in assets that could be lent to the city for this deal and repaid at an interest rate that meets the PFPF targets.
Weinstein said this rate would be higher than that obtained by conventional financing through the bond market but would prevent the city from paying fees and other costs on the money shifted from the pension fund to the infrastructure project.
Weinstein discussed “the possibility if it becomes viable to have some of that, a small percentage of that invested in the city, which would be, instead of putting it into the land, instead of putting it into the stock market, they would put some of it and give it to the city.”
“The city would, in return, guarantee principle and interest at their AAA return target,” Weinstein said.
The agreement would also include an opportunity for the pension funds to “have a call on it, which means at any time they’re stressed for cash, they can call some of it back, which they’ll never be because they’ve got $5 billion in cash basically.”
“So they’ll be protected if they do this, they’ll meet their target, they’ll invest in the city, they’ll have the ability to call back if, if in fact, they get into a cash problem for the city, it will be a little bit more of an interest rate than we would get if we go to the bond market for this.”
“But if we go to the bond market, we have fees, and we have insurance, purchases to cover the bond, and what have you. So, we have to look at the gap between what we would guarantee to them as opposed to what we could get on the marketplace. Minus all of the fees that we also have to pay, but we’d be paying ourselves, we’d be basically helping the pension fund close quicker.”
Weinstein noted, regarding pension, that he expects the ½ penny sales tax currently allocated to Better Jacksonville Plan repayment to be shifted to paying down the city’s legacy defined benefit pension plan, closed in 2016, by Jan. 2027. That would shift $130 or $140 million a year into paying off that old debt, he said, fulfilling the pension reform agreement entered by the Lenny Curry administration.
If interest rates go down to favor borrowing from outside city funds, Jacksonville could issue its call and “put it in the financial marketplace,” Weinstein said.
This is a separate issue from labor negotiations that are ongoing with public safety unions currently, he noted, since the proposal has “zero connection” to employees and unions and since the police and fire negotiations are expected to be finished before stadium financing becomes an issue.
Mayor Donna Deegan has suggested a deal will be ready to present to the City Council this summer, which would be the transition point between the Ron Salem and Randy White presidencies.
Weinstein said the Mayor’s Office won’t rush the deal, but he expects the current President — who has been keenly interested in the process — to be part of the mix.
“Salem has the beginning of the summer. The new President, whoever that will be, will have it at the end,” Weinstein said, adding that he thinks Salem ultimately will “be the one that manages the stadium process through Council.”
Though tensions have been between the Mayor’s Office and Salem, Weinstein believes the relationship “in no way hampers or interferes with the process that we’re under.”
Likewise goes the relationship with the Jaguars, whose President, Mark Lamping, talks to him roughly once a week.
“The Jaguars want to be here, and we want them here, and I’m pretty confident we’re gonna end up with an agreement, and I have to say that it’s been a very congenial and very good process with the Jaguars.”
16 comments
MH/Duuuval
February 9, 2024 at 9:55 pm
“Jacksonville was proposed to foot the bill for ⅔ of the cost of stadium improvements,”
Really? 2/3, who agreed to that?
Defunding Florida dot org
February 10, 2024 at 4:31 am
Bwahahahahahahaha!
Tell us all that there’s “no income taxes here in floriduh!”
You were taxed but you just didn’t understand.
Sandra Myers
February 10, 2024 at 11:42 am
Lenney Curry
Charles ward
February 9, 2024 at 11:21 pm
Deegan needs to be recalled
Defunding Florida dot org
February 10, 2024 at 4:30 am
You poor troglodyte; it doesn’t work like that.
whomever
February 10, 2024 at 3:02 am
the city will go bankrupt and Khan the Con will move the team, sounds good to me, and Deegan will be a one termer
Defunding Florida dot org
February 10, 2024 at 4:29 am
Khan has played the your rubes like a skilled concert musician.
And you lined up to participate.
Then you lit up the antisemitic signs.
Chumps.
MH/Duuuval
February 10, 2024 at 10:34 pm
Deegan will probably be a one-termer in any case as her margin of victory was provided by voters disgruntled by Daniel Davis’ inept autocratic campaign and the loca primary opponent who savaged Davis first.
Defunding Florida dot org
February 10, 2024 at 4:27 am
Collectively, many of us (lenders) have stopped doing business in florida. We refuse to purchase your municipal bonds or even the corporate bonds based there.
Your rates rose as a result (more than other states by a lot).
You now borrow from your own savings as a result.
Defund Dangerous Florida.
Suuuuuure
February 10, 2024 at 6:26 am
They should move it to St. John’s county. They will bankrupt the city and they can build and pay for the Iguana nightmare and it won’t change a thing. It would be one thing if the franchise were an actual going concern, tickets sold, seats filled, and money spent, which somehow magically trickled down into the city’s coffers to offset the outlay. But Jacksonville has always been a loser. The same people who say they want the Jaguars do not go to games or downtown, period. People do not go to Jacksonville from out of town in any meaningful numbers. Why would they. So you’re going to saddle a city with at least 3 generations worth of debt for a shiny new stadium with a lifespan of less than 25 years, and you can’t even sell tickets or get people to stay downtown or spend money (it’s called tailgating for a reason). That’s not just fuzzy math, it’s piss poor economics a third grader could understand. Jacksonville “leadership” doesn’t have the balls to call SK’s bluff. They’re too busy lining their reelection pockets while the most basic city functions will go underfunded and unaddressed. Even when they raise taxes again (Duval property tax rate is now the highest in the state and one of highest in the nation, btw, with artificially inflated assessments as well) it won’t make any difference. Money flows where it already goes.
What’s clear is that despite the party change, it’s same stuff different day in COJ. But hey, good luck. Look forward to more on this, Gancarski.
All you people who defend the Jaguars franchise, own up to how much you spend on games and going downtown there. Uh huh. Right.
Michael K
February 10, 2024 at 9:10 am
It’s a rich man’s subsidy: the owners, the players, and the folks who buy the tickets. And cities that should be spending that kind of money on infrastructure can’t. And teams get fed up and leave.
Why do men’s professional sports think they are entitled to huge pubic funding subsidies? It’s never made any sense to me. But then again, I’m not a billionaire or a politician or a lobbyist.
Suuuuure
February 10, 2024 at 4:52 pm
THANK YOU. Give this man a raise. It should be 100% private and taxed like any other enterprise. It is NOT a public utility. Unless you count government-sanctioned grand larceny, breach of fiduciary obligation, and corporate welfare as public good. Some do.
William Ward
February 10, 2024 at 10:48 am
Think about this, so it will take about two years to build. After that in two years the Jaguars contract expires with the city. So the question is will they stay or go? Plus Orlando is renovating there stadium
No way
February 10, 2024 at 5:01 pm
Does anyone else wonder why the mayor’s office put this guy, their chief negotiator, out front to dangle this, (“we don’t know what the cost will be!” “The design isn’t finished until it’s finished”…) rather than owning it and presenting a unified front?
Jacksonville has a long history of selling the most trumped up idealized design at bottom barrel price tag, getting it approved, then change ordering its way to 2-3x the cost under executive purview without further oversight from council or accountability to taxpayers. Remember Veterans Memorial Arena (“the grow house” which is so poorly built performers bypass Jacksonville for St. Augustine Amphitheater), the COURTHOUSE… It’s a long list. Expect a lot of chicanery, lack of transparency, a fake price tag followed by a boondoggle with no accountability. All on taxpayers dime to make rich men richer. Because Jacksonville.
Lonnie
February 10, 2024 at 10:18 pm
Terrible idea, for many reasons-some of them legal. Pension investments MUST be invested for the beneficiaries (pensioners and future pensioners) and should be arms length transactions.
I support looking for creative financing options but this one is a no-go. Weinstein should know better.
MH/Duuuval
February 10, 2024 at 10:37 pm
Weinstein has proved to be smarter than the average bear, or jagwire, and won’t get any pension money unless the pension funds lock down future payouts.
Police and fire are today’s kingmakers — not certain neighborhoods or social groups.
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