JACKSONVILLE, Fla. — The Laura Street Trio development team has put a new proposed deal on the table that drops a controversial request for the city to guarantee repayment of private loans for bringing hotels and apartments to the high-visibility downtown corner where boarded-up buildings and lots stand behind a chain link fence.
The city still would have a large financial stake in SouthEast Group's plan for reviving the three buildings, which date back to the decade after the Great Fire of 1901, and building two new 11-story buildings next to them.
The latest request by SouthEast asks for nearly $49 million in cash grants, $22 million in Downtown Preservation and Revitalization Program loans, and another $2 million forgivable loan from the city. The proposal also would rebate 75% of city property taxes generated by the new development for a 10-year period.
"It is a big number," Downtown Investment Authority CEO Lori Boyer said. "It's a big city investment in the deal, and I think that's a policy decision for City Council and the mayor's office about the importance of this building and how it fits into the bigger picture of city expenditures. But from the standpoint of whether this is what it takes to get this deal done — probably."
The new proposal shows SouthEast remains interested in striking a development deal with the city and has financial backing from some large financial institutions such as Goldman Sachs Bank and JP Morgan Chase. It also removes a loan guarantee that was in a proposed deal that SouthEast asked City Council to support in a redevelopment deal that council members balked at in January.
The city's Office of General Counsel determined the Florida Constitution prevents the city from guaranteeing repayment of a loan for a private development.
While removing a city-backed loan guarantee from the latest incentive request would open the door to negotiations on a redevelopment agreement, the amount and kind of incentives sought by SouthEast still will go through review by the Downtown Investment Authority's staff.
If DIA reaches an agreement, a deal would need City Council approval before work could start on the three buildings and two new 11-story buildings where SouthEast wants to put 169 apartments and 143 hotel rooms plus restaurants and bar venues.
SouthEast pegs the total development cost at $191 million. The city previously struck deals with SouthEast in 2017 and again in 2021 for restoration of the Trio but SouthEast did not follow through on those deals, leaving the Trio vacant and deteriorating in the middle of downtown.
SouthEast is seeking a $21.175 million grant at the front end after it closes on financing for the development and another $27.5 million grant that would be paid out as construction occurs. The $22 million in Downtown Preservation and Revitalization program loans would come after the buildings are ready for use.
The DIA usually structures deal to taxpayer incentives get paid out after a development is complete. Boyer said one question DIA staff will have will be how SouthEast would use taxpayer incentives paid on the front end of the Laura Street Trio development.
"Clearly, I think there will be some conversations that we need to have with the development team about what the funds are used for and what the city's security is for performance (by SouthEast) for the money that is very upfront," she said.
