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Local
City finds some funding to support $18 million Landing settlement package
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City finds some funding to support $18 million Landing settlement package

City finds some funding to support $18 million Landing settlement package

City finds some funding to support $18 million Landing settlement package

The Jacksonville Landing is poised to move to City ownership, and demolition won’t be far behind.

WOKV first reported last month that Jacksonville Mayor Lenny Curry and Jacksonville Landing Investments had reached a deal to terminate the existing lease on the Riverfront property. The overall package is $18 million- $15 million for the settlement, $1.5 million for subtenant payouts, and $1.5 million for demolition and site restoration. Initially, the proposal was to borrow that money, but the Finance Department has since found a few million dollars in available funds, to offset the price tag.

The deal is now pending final approval by the Jacksonville City Council Tuesday night.

The City already owns the land, but is in a lease agreement with JLI through 2056, where JLI owns and operates the building on the parcel. Both parties have been locked in litigation on varying issues, which most recently centered on a claim by JLI that the City wasn’t providing the promised maintenance and security, and the City counter-claiming that JLI wasn’t operating the Landing as the first-class facility they promised. This lease agreement settles this dispute and- for a $15 million payout- puts the entire property in the hands of the City.

AUDIO: What you want to see for the future of the Jacksonville Landing

The cost of that deal is something the Administration believes is fair, according to Curry’s Chief of Staff Brian Hughes. As this settlement moved through committees, he told lawmakers that they received expert feedback and assessed the long term value of re-developing the site in the future, in establishing the figure.

“Every year that something’s not done to put that area to its best and highest use, is another year sort of lost,” Hughes told the Neighborhoods, Community Services, Public Health and Safety Committee.

He says there was no formal appraisal done as part of their negotiations, which was a point of contention for Councilman Garrett Dennis, who was the only “no” vote in the two committee stops the bill made. Instead, Hughes says the value of this deal- beyond the property- is ending the ongoing legal dispute and associated fees.

“This is about what is the value to us of re-acquiring control of the property. It is not about the value of an orange structured building that is owned by the Landing, that we intend to demolish,” says Councilwoman Lori Boyer.

This does not completely end the legal challenges over the property, though. Under the settlement, the City would take over full ownership, however litigation would continue for an east parking lot parcel- which is a long-running case. Jacksonville’s General Counsel Jason Gabriel says, at this point, the matter is all on paper, dealing with the question of how much the parties may owe each other over the purchase and operation of that lot. That matter is scheduled for trial in July, but, under the deal, the City’s takeover of the parcel is immediate and not dependent on the outcome of that case.

In addition to the $15 million specifically for the settlement with JLI, the Administration is asking for an additional $3 million. Half of that would be used for demolition and site restoration, and the other half for dealing with sub-tenants.

Hughes says, as of the date this agreement was reached, the Landing had 31 active subtenants. 27 of those are on short-term month-to-month leases, according to Hughes. Of the remaining four, Chicago Pizza is already in the process of being evicted by JLI because of back rent. Two of the other three- Fionn MacCools and Hooters- have specific buyout options in their lease, and Hughes says the last, Compass Bank, appears to be willing to work with the City. With all of the subtenants, Hughes says the City and Downtown Investment Authority intend to approach them about opportunities to re-establish in other areas of Downtown, although he says they will not start those conversations until the settlement agreement is approved.

The other $1.5 million is for demolition of the existing building and subsequently grassing the lot.

“The site represents a 1980’s shopping mall, and the retail model that exists not just on our Riverfront, but basically throughout the United States, is that the old ‘70’s, ‘80’s model of a shopping mall is an outdated model. It’s not a successful sort of component of the retail environment these days. Add to that the fact that it’s centrally located in our Urban Core, on our greatest asset- the St. Johns River- the Administration believes that some higher purpose for that property is due,” Hughes told the NCSPHS Committee.

Jacksonville Mayor Lenny Curry has previously put forward a concept where the property becomes largely public access park space, but also houses two structures for development.

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Rendering of Jacksonville Landing

Hughes told the Council’s Finance Committee that the City has already received some inquiries about the possibility of developing the property.

Some Council members expressed concerns about doing the demolition so quickly, before the future use of the property is determined. Hughes said the City intends to do community outreach and speak with the Council about the best use- and any development deal would ultimately have to come through the DIA and City Council- but the Administration doesn’t believe that future involves the building either way.

“In its time, it was great, and unfortunately, it has eroded to where it is today. And I think we’re making the right decision. This is the iconic part of Duval County’s Downtown,” says Councilman Tommy Hazouri.

The City would physically take over control of the Landing in 45 days or less of the settlement agreement being approved, if that happens. Hughes says they hope to have demolition done within about six months, although that is dependent on the termination of the subleases.

Initially, the legislation had the City borrowing all $18 million required for the settlement, demolition, and tenant closeouts, but since that time the Finance Department found $3.5 million in cash-on-hand to use toward the package. Chief Financial Officer Joey Greive says the money is from Downtown Economic Development funds set aside for a 2010 parking lot deal which ultimately fell apart.

WOKV will follow Tuesday night’s vote by the City Council, and the next steps for the Riverfront property.

Read More

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