Community benefits, financing emerge as potential flashpoints for Jacksonville stadium proposal

While Jacksonville’s stadium renovation appears to be on a glide path to being voted up later this month, Republicans on the City Council are pushing back over the community benefits piece of the plan, and asking questions about the implications of the finance proposal.

The legislative branch is questioning the Donna Deegan plan for $300 million in shared costs between the city and the NFL Jaguars, money that would go into parks (both downtown and in Council districts), affordable housing, homelessness initiatives, and workforce development.

The CBA is backed by the Jacksonville Chamber and Jacksonville Civic Council, but despite those institutional bulwarks, it is encountering resistance.

While the $150 million governmental share of that cost pales in comparison to the $775 million in renovation costs (which include $625 million of new costs and $150 million in deferred maintenance), concerns about the scope of the spending, the extraordinary nature of the community benefits proposal, and its movement of normal budget items into this deal animated Thursday’s discussion and seemed to set up an amendment before the deal is ratified June 25.

Republican Rory Diamond led off with a question about the financing mechanism, wondering how long the plan to defer pension payments out of the current 1/2-cent Better Jacksonville Plan (BJP) sales surtax would take, and the impact on pension plans.

“This isn’t free,” Diamond said, noting that under the proposal, $520 million would be put into stadium costs rather than legacy pension costs as authorized by the Lenny Curry administration, which sought to phase out BJP obligations in favor of stadium investment.

Diamond also suggested that “opportunity costs” would be incurred, but Council Auditor Kim Taylor noted that given debt costs, the rate of return from market investments roughly matches the cost of borrowing under today’s interest rates.

She also noted that the tax would be extended for “2-4 years,” but that voters were aware of that when they voted for the pension reform referendum in 2016. Additionally, she contended the vote was not binding on the City Council; rather, it just delineated a path to defray the roughly $5 billion in legacy pension obligations.

Regarding the community benefits agreement, which polling says is the most popular part of the proposal, city negotiator Mike Weinstein noted the Jaguars wanted the city to “stand up and do all we can” for downtown, and that Deegan saw the CBA as a way to “do something bold and something big.” That led to the proposal moving from $100 million of team money to $150 million on each side (with the Jaguars having a couple of decades to pay their part of it).

In his phrasing, the downtown investment could be an “economic engine,” revitalizing downtown with riverfront development.

Weinstein noted that the effort lives up to the bygone “Bold New City of the South” slogan, allowing government to be a “change agent,” before arguing that putting the spend in a budget is a bad idea because doing it this way “locks (the spending) in” and fulfills the “promise” of consolidation for neighborhoods neglected from 1968 on.

Jaguars President Mark Lamping stressed that the CBA was a “unique opportunity” to benefit the community at large, with parks funding a “powerful message” that the city was supportive of downtown development. That said, Lamping noted the Jaguars would spend the $100 million even if the City Council didn’t want to commit to $150 million to trigger the extra $50 million match from the team, and that $100 million would be the biggest community benefit agreement by any NFL team.

Council President Ron Salem raised fiscal concerns, noting that city revenue is declining year over year (by an estimated $100 million) even as proposed pension reforms would raise city obligations for fire and police unions, and previous commitments from the Downtown Investment Authority encumber roughly $70 million more.

Additionally, UF Health wants an additional $20 million from the city to add to current operational costs of $40 million, and UF’s campus downtown will require even more money.

“I am concerned about moving forward with this kind of spending without it moving through the budget process. I want to see Mayor Deegan’s budget (due in three weeks),” he said.

Diamond noted, meanwhile, that while “nobody wants to lose Jaguars money,” the team would still put its money in and the city could match over time without committing to the spend this month.

Republican Nick Howland, who says he’s “undecided” on the CBA, expressed “fiscal” concerns over the proposed city commitment. He also worried that the stadium vote is very close to the budget vote that must be taken before Oct. 1, suggesting these matters should be considered during the larger budget deliberation rather than as part of the stadium deal.

Republican Raul Arias questioned the amount of money steered toward downtown in the “150 for 150 match,” suggesting it would be better dispersed countywide, and that District 7, which contains the stadium, would derive disproportionate benefit from the scheme.

Lamping noted that downtown money would augment downtown investments from Jaguars owner Shad Khan, which include a Four Seasons hotel concept.

Republican Joe Carlucci zeroed in on the Jaguars controlling their proposed $150 million CBA commitment without city approval or appropriation, which negotiator Weinstein said didn’t matter, as in the end “all of it would be commingled” and appropriated legislatively.

“I don’t think it is like that,” Carlucci countered. “I’d rather you guys just give us the money … to pick winners and losers.”

Even inside the same biological family, however, there are disagreements.

Republican Matt Carlucci, the longest tenured member of the Council and Joe Carlucci’s father, extolled the administration and the Jaguars for the “amazing … package they have put together for Jacksonville.”

“We have a package. I don’t want to see it taken out of the stadium agreement,” the at large legislator said, saying that this is a “time for legacy” and an opportunity to “score a touchdown not a field goal.”

Changes to the deal, he added, would put city leaders “on the wrong side of history.”

But there are those who take a more holistic view than those on either side of the community benefits discussion.

Incoming President Randy White noted that despite all the conversation about the CBA, there are no questions about the stadium deal itself, which should be heartening to the Jaguars. Indeed, Jacksonville legislators seem uniquely unified when it comes to forging a deal without negotiating concessions from the team, removing much of the drama seen in other cities during similar negotiations.