JACKSONVILLE, Fla. — The city moved Monday to dismiss a foreclosure lawsuit it filed a month ago against the owner of the Laura Street Trio, clearing the way for another round of negotiations on a redevelopment deal that would save the historically valuable but vacant buildings in downtown.
If the city had moved forward with the foreclosure suit and been successful, it would have resulted in a public auction when another entity could possibly have bought the Trio.
But SouthEast Development Group, which has owned the Trio since 2013, recently brought in a new financial partner in Paul Bertozzi, the founder and CEO of Live Oak Contracting. That sparked talks among SouthEast, Bertozzi, Mayor Donna Deegan's administration, the Downtown Investment Authority, and City Council member Kevin Carrico about pursuing a deal rather than fighting in court.
"The lawsuit was the biggest impediment of getting the deal done so with the lawsuit out of the way, that opens up the door to all of the parties working together to come up with something that everybody can agree on," Carrico said.
Representatives of the mayor's office signaled a week ago that Deegan would support dismissing the lawsuit if the development team would agree to certain conditions for going back to the negotiating table.
The city's filed its notice of voluntary dismissal "without prejudice" meaning it still has the legal option of refiling the suit in the future.
City spokesman Phillip Perry said SouthEast Development Group, the Downtown Investment Authority and Deegan's office "continue negotiations to determine the best path forward in completing renovations of the Laura Street Trio project. Current plans are to move forward without the lawsuit as agreed to by both parties."
The lawsuit, which the city's Office of General Counsel filed at the direction of the mayor's office, contends Laura Trio LLC, the name of the legal entity owning the buildings, owes about $800,000 for code violations that have been piling up since 2015 at a rate of $250 per day. The violation is for graffiti on the outside of the buildings.
The city filed the foreclosure lawsuit after a series of negotiations this year between SouthEast and the Downtown Investment Authority did not produce a proposed deal. SouthEast has owned the Trio since 2013 and two prior redevelopment agreements with financial incentives did not result in work being done on the Trio.
SouthEast's plan would restore the three buildings and construct two new 11-story buildings beside them, bringing 169 apartments, 143 hotel rooms plus restaurants and bar venues to the property.
SouthEast said in a statement it welcomes the dismissal of the lawsuit.
"We look forward to collaborating closely with Mayor Donna Deegan's administration, Jacksonville City Council, the Downtown Investment Authority and all other interested stakeholders to ensure the success of this transformative initiative," Southeast said. "Together, we can bring new life to the Laura Street Trio and honor its lasting legacy within Jacksonville."
Carrico, who is chairman of a special City Council committee examining the future of downtown, is taking an active role in working to bring legislation to the council with a redevelopment deal.
He is scheduled to meet at 3 p.m. Tuesday with the council's Personnel Committee about hiring an outside law firm with experience in public-private partnerships to assist him in putting together that legislation with a term sheet.
"This is a very important deal and a very critical deal, and there's fatigue on the development side in working within our current structure and the DIA," Carrico said.
He said the law firm will bring "fresh eyes" and experience in public-private partnerships that is "way beyond" what anyone in the city has.
"I believe we're bringing some creative solutions and innovative ideas to get the best deal possible," he said.
Deegan has said repeatedly that she wants to see restoration of the Trio, which date back to the decades after the Great Fire of 1901 and occupies a high-visibility place in the heart of downtown.
"I am every bit as focused on saving that Trio and making it everything it can be as the day I got into that office, and that will happen," she said during an Aug. 26 speech to the Rotary Club of Jacksonville.
Live Oak Contracting will be co-general partner on the Laura Street Trio redevelopment. Live Oak will be a construction partner under the leadership of Turner Construction Co. for the extensive restoration and new construction, and also be an equity investor along with SouthEast Holdings, LP and SoutEast Community Investment Fund, LLC, according to an announcement Monday of the partnership.
“Partnering with Live Oak to advance the Laura Street Trio project is a pivotal step toward realizing our shared vision for downtown Jacksonville,” Steve Atkins, principal and managing director of SouthEast Development Group, said in the announcement. "Our combined efforts are focused on delivering a project that not only preserves, but reimagines these historic structures for future generations.”
This story was first published by The Florida Times-Union.
