JACKSONVILLE, Fla. — Just days before the legislation authorizing the city to bond millions in taxpayer subsidies to support the proposed Lot J project is introduced at city council, Mayor Lenny Curry's office has released the economic analysis used to substantiate claims about the development's viability.
The study, done by firm Johnson Consulting (JC) on behalf of Jags owner Shad Khan's development team, lays out the expected fiscal impact of the project. Johnson has done reports for similar Cordish Companies projects in the past.
Following months of back and forth, Curry presented a finalized deal to develop the parking lot next to TIAA Bank Field in a presentation at Daily's Place on October 5. The deal, if approved by council, would give $152.7 million in direct investment, along with a $65 million "breadbox" loan.
The summary of the study is dated Oct. 21, more than two weeks after the deal was first presented.
"This report assumes the full development plan outlined in this report," the summary states. "If the analyzed plan does not proceed in full, projections will not be achieved, as calculated in the report."
The report also notes the impact of the COVID-19 pandemic globally that cannot be fully accounted for, but says assumptions were made based on previous economic disruptions.
On Wednesday, First Coast News reported the city was not able to provide documents to back up claims of the project's economic viability, notably the claim that the development would generate $100 million in annual output.
According to the "total impact" section of the JC report, Lot J would support 1,070 permanent jobs on site following build-out. The report also projects $402.2 million in total tax revenues over a 30-year period.
During a press conference Thursday, Mayor Curry defended claims about the project's local impact to reporters.
"It's big, it's bold, it's visionary, it's like nothing we've seen in downtown in decades," Curry said. "When I stated the jobs and the economic impact, that's gravy. This deal is a city-owned facility where a private developer is putting hundreds of millions of dollars of their money into it, and we will lease it back to them."
The city-owned portion of the project Curry is referring to is the "Live!" entertainment center, along with the parking and infrastructure on site.
Because the city will own a portion of the project, Curry said the city did not have to perform it's own return on investment (ROI) calculations. During Tuesday's Finance Committee meeting in Jacksonville City Council, Council Auditor Kim Taylor was asked whether the Mayor's Office had provided ROI calculations, along with the parking agreement for the project and other documents.
"The council auditor has asked for an ROI, so we're gonna give them one," Curry said. "But that's not part of our investment policy because a return on investment calculation based on a facility that we own is just not in the course of ordinary business."
Finance Committee Chairman Matt Carlucci told First Coast News Thursday afternoon he still has a number of questions about the project, even after reading the JC study.
"It's better than nothing, but this is a huge project. And I think what information they sent us was not thorough enough," Carlucci said. "We need a deeper dive on an analysis."
"Now that it's in the body of the council, we're the ones that need to start asking the hard questions. And we need to ask for concessions on behalf of the taxpayer."
Carlucci again reiterated his concern surrounding what would become of the Lot J development if the Jaguars do not renew their lease. He provided a letter given to Chief Administrative Officer Brian Hughes Thursday with a number of questions:
- Where is the Jacksonville-oriented market analysis on the viability and sustainability of the Lot J project with or without the Jaguars remaining in Jacksonville?
- Where is the back-up information on construction costs with complete details regarding this project here in Jacksonville?
- Could you tell me who in the Administration is responsible for negotiating this agreement with Mr. Khan and the Jaguars organization?
- What other options to the $65 million loan were pursued?
- Since the City will have a debt to service, what is the revenue return-on-investment (ROI) from Lot J to Jacksonville in the immediate future and the long-term for the finished product to pay for this debt service?
- Who is the personal guarantor of the Lot J project? Is it a corporation or is it personally backed by Mr. Khan or one of his corporate interests?
- Has there been any consideration to developing Lot J and a new covered stadium with a guaranteed lease extension, thus making one large project investment?
- Have you explored environmental considerations with a development in this particular section of Jacksonville?
Carlucci and Councilwoman Randy Defoor are holding a town hall meeting on the proposed development next Thursday. Information on how to join can be viewed here.
The JC study can be viewed below, underneath the Tweet embedded in the story.
