DIA Committee Proposes $36 Million Incentive Deal for American Lions Tower | Jax Daily Record | Jacksonville Daily Record

A committee of the Downtown Investment Authority’s board of directors voted unanimously Sept. 15 to advance a $35.88 million city incentives deal for American Lions’ proposed 44-story residential tower LLC at the old Jacksonville Landing.

The 5-0 vote virtually ensures passage by the full board next week. The Jacksonville City Council will make the final decision on whether to provide the incentives and additional public funding of $27.576 million for the estimated $166.6 million project.

New York-based American Lions is a joint venture between Fetner Properties and the Lions Group.

American Lions and international architect Bjarke Ingels Group are launching a 480-foot-tall tower with 332 apartments, 15,000 square feet of resident amenities, 5,000 square feet of outdoor patio open to the public, and 31,000 square feet of space retail and catering. It will fit into a new Riverfront Plaza, the park that will take up most of the former Landing space.

Left to right, Fetner Property Acquisitions and Development Associate Alex Fetner; CEO Hal Fetner; and COO Damon Pazzaglini.

Incentives

The incentive program includes property tax refunds, grants and land.

Board members praised the term sheet negotiated by DIA staff as well as the “creativity” of the public lending structure.

Board member Jim Citrano said the size of the proposed investment in the city was exceeded by the more than $50 million investment from American Lions.

“I think it’s important to note that. We have a significant capital investment in the upcoming project,” Citrano said.

“We’re talking about a large incentive package here, but we have 30% of the cost coming from project equity.”

An analysis by DIA staff shows that the city would receive $1.06 for every $1 of public investment.

The deal would give American Lions a one-acre, city-owned parcel on the northeast corner of the former landing site at 2 Independent Drive worth $3.48 million to build a tower up to 480 feet high. The site is next to the Main Street Bridge.

According to DIA CEO Lori Boyer, the return on investment did not include a profit sharing clause in the deal because it is too speculative and market conditions after 2027 would be difficult to predict.

The DIA would earn 10% on a 23% initial rate of return if the tower is sold and 15% on a 30% return, according to the term sheet.

The city would provide a construction loan estimated at $27.576 million to be repaid over 20 years with an option to extend for 10 years.

Here’s how the incentive package breaks down:

• An enhanced value recovery grant capped at $28.557 million in the form of a 75% property tax refund over 20 years.

• The DIA will cover interest payments on the loan for two years during construction, valued at $1.344 million.

• A $2.5 million completion grant based on the Sky Garden Terrace paid upon substantial completion.

• Land valued at $3.48 million.


The residential tower would change the skyline of downtown Jacksonville.

The term sheet allows the city to provide a larger construction loan, capped at $29 million.

The agreement states that American Lions should receive final design approval from the Downtown Development Review Board by June 1, 2024 and begin construction by September 1, 2024.

The American Lions would have until December 31, 2027 to complete construction.

The full DIA board is expected to hold a final vote on the term sheet on Sept. 21.

The financial gap

In its initial response to the city’s request for proposals to build the tower, American Lions asked the city to reimburse all property taxes, including the school boards’ share.

The city does not have the authority to grant that request, and Boyer said it resulted in a $30 million financial gap in the negotiations.

The agreement requires American Lions to resell or provide an easement for the city to use the tower’s Sky Garden terrace above the parking lot as a public space. The element creates a connection with the proposed civic stairs that lead to the park’s master sculpture and a 1,500 square foot cafe.

The terrace also has a 5,000 square foot plaza that faces multiple retail suites.

“The combination of the completion grant for the Sky Garden Terrace that would be returned to the city and the loan is how we close that gap,” Boyer said.

The American Lions could take advantage of the city’s lower borrowing costs compared to interest on a market-rate loan, but Boyer says it would create a better return on investment for the city and a more secure position.

“If you think about it, if we had been able to provide that REV (property tax rebate) grant, that money would never have come back to us. In this case, by giving it out as a loan, the city actually gets a payback for 20 years into the future,” she said.

The developer predicts rental rates for residential would range from $2.45 to $2.80 per square foot, or up to $2,240 per month for an 800 square foot apartment. This is higher than today’s rates. According to Downtown Vision Inc.’s 2021-2022 annual report, the average monthly residential rent downtown was $1,579 per month.

Rates for retail space in the tower are projected at $60 per square foot. Kelley called this “the area of ​​greatest speculation”.


An aerial rendering shows a small waterfront parcel in the southwest corner that will be marketed for sale to a restaurant developer at a later date.

The park connection

The building’s proposed physical connection to the 7-acre park at the former Landing, now Riverfront Plaza, is the most important part of the tower’s design, according to DIA and city officials.

Council is set to approve $25 million on Sept. 27 for construction of the park as part of the city’s capital improvement plan for the 2022-23 fiscal year.

Boyer said that was enough money to fully fund the job. The city hopes to begin soliciting construction bids by January 2023 and begin construction no later than June.

The DIA CEO showed an aerial rendering for the park that reserves a small southwestern corner waterfront parcel that will be marketed for sale to a restaurant developer at a later date.

The render also has an updated look at the park playground, event lawn, beer garden, and the Riverwalk/Emerald Trail connection to the park and Main Street Bridge.

Fetner Properties CEO Hal Fetner said his company was working on a project on Jackson Avenue in New York where the city allowed the developer to integrate two buildings adjacent to an overpass with a public park.

“When the tender (in Jacksonville) came, and we saw that it was basically about building a building and integrating a park into the building, there were a lot of symmetries between the two projects. . We generally thought we knew how to do this,” Fetner said.

The developer said American Lions and the architect will invite Riverfront Plaza designers to Perkins & Wills meetings to incorporate designs for the project.

DIA Board Chair Carol Worsham praised the combined tower and park plan, design coordination, and the city’s contractual rights to protect some of the design features. emblematic”.

“Which is always something that worries us as a board. We see the beautiful renderings and schematics, and then when it comes to design development, we know things are changing,” Worsham said.

“I was happy to see the protections we have in there and the design team’s experience working in really incredibly tight urban spaces.”

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