After a devastating review of the Lot J proposal found that the city actually would lose money on its “investment” in the project, the City Council should halt further progress until it is revised.
Council Auditor Kim Taylor did a meticulous examination of the proposal and declared the city would get back 44 cent for every $1 it put into the project.
That is like giving your broker $1,000 and getting back $440 – hardly a winning investment strategy.
Shad Khan, owner of the Jacksonville Jaguars, is proposing to turn Lot J, a parking lot near the football stadium, into an entertainment venue, hotel, two residential building and two parking garages.
He wants the city’s taxpayers to pick up $233.3 million of the $450 million tab.
Taylor walked council members through the complicated proposal Thursday.
While Mayor Lenny Curry had said the project would produce a return on investment of $1.69 for every $1 spent, Taylor calculated the actual return as .44 cents — $50 million less.
Taylor described the proposal as “one of the largest, if not the largest, investment in a public/private development” ever.
Although the city would own the entertainment venue and parking garages, it would get no property tax revenue from them.
Many other tiny details are troublesome. For example, there are no provisions (called “clawbacks”) to ensure the city’s contribution of free land for the hotel and residential units is recovered if the developer should sell it at a profit at some point.
Taxpayers would put $50 million into the Live! Entertainment venue and give the developer a full tax abatement, but receive none of the revenues. They also would pay most of the cost of the parking garages but get little of the revenue and no property taxes.
Khan’s representatives produced glitzy videos of the proposed development, and of others the company has done elsewhere.
There’s no doubt it would be a welcome addition to the downtown area — and little doubt that the developer would make a tidy profit.
But if the taxpayers are to be partners in the deal, they should also share in those profits.
Curry should negotiate a better deal for the taxpayers.