Holy Mackerel- Wealthy Developers want $94,000,000 of our money

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Where do I begin?  This is a long story and I don’t want to bog you down. If you hang with me on this…you’ll see the intrigue and interesting dynamics of a big deal with your tax dollars.   I will try to give you facts as we have uncovered them and alert you to a huge deal being made with your tax dollars.  And I mean YUGE!

Who are the players?

  • The Company:  Elements of Jacksonville, LLC.  The address for Elements is 2538 River Road, Jacksonville per our search at sunbiz.org.  We could not find a website address so we will provide what we know.  This is the 10,000 sq. foot home of Peter Rummell, a real estate entrepreneur, investor and businessman.
  • JEA:  Owners of the parcel of land to be sold.
  • DIA:  Downtown Investment Authority aka DIA.  See more about this entity here and note their mission and who the members of the board are.  They are key players in this deal: http://dia.coj.net/
  • City Council:  Current council members will vote on this deal soon.  See who the players are here: City Council members
  • Mayor Lenny Curry:  Keep this contact information available so you can email or call him about this deal:  Mayor Lenny Curry contact
  • You the Taxpayer:  Your tax dollars are a key piece to this story.

How it all began:

Three years ago a 30-acre site owned by JEA on the Southbank riverfront went up for sale through the bidding process.  The parcel was once the site of a JEA generating plant.  JEA put it up for sale hoping to recoup the millions they spent cleaning up the land and demolishing the plant.  That money would then be placed back into JEA’s account and the monies recouped.  Reminder:  JEA is owned by us, the taxpayers.

Elements won the bid and offered to buy the land for $18 million.  The deal, however, never closed.  The closing has been extended time and time again.  Next scheduled closing date is:  July 18.   There are many reasons why it hasn’t closed and the fact of the matter is — it hasn’t closed.  That means it could be rebid at today’s market value if Elements does not close on July 18.

Elements has proposed numerous deals with the city to redevelop this site.  As with a lot of developers, they do look for tax credits — which is norm.  However, the deal Elements has proposed just this past week is extremely YUGE which is why we are writing this story.  You need to know.

Last week I attended a Lunch & Learn about this deal with Elements.  Lori Boyer, a member of the City Council, shared a powerpoint presentation about The District and led the program.  NOTE;  WE ARE UNCERTAIN WHY A CITY COUNCIL MEMBER WOULD HOST THIS PRESENTATION VS. ELEMENTS DOING IT.  Very strange, indeed.

The presentation included these important points about Elements ask of taxpayer dollars:

  • Requested Subsidy – $93,400,000
    • $26.4 Million Direct INVESTMENT by us into infrastructure on land
    • $56 Million in Rev Grants.  See more about Rev Grants here: DIA Rev Grants
    • $11 Million for the City to maintain public areas, bulkhead, marina, and trails without contribution from Elements
      • NOTE:  2 months ago Elements asked for $45 Million.  QUESTION:  WHY HAS THE REQUEST DOUBLED?
  • Value & Cost
    • Total assessed value for this property will be $216 Million – yet Elements stated on many previous occasions “the project would be excess of $450 Million”  QUESTION: WHY THE BIG CHANGE IN ASSESSED VALUE?
    • The subsidy requested will represent 43% of the project value.  YIKES.  QUESTION: DON’T MOST PROJECTS RECEIVE BETWEEN 10-20%?
    • Elements is putting in $20 Million which represents only 10% of the project.  Taxpayers are putting in the rest.  QUESTION:  DOES THIS SOUND LIKE A FAIR DEAL FOR TAXPAYERS?
    • This is not a loan.  It is a gift.  If Elements fails, we can’t get our investment back.  If Elements is successful, we don’t get it back either.  QUESTION:  SHOULDN’T THE TAXPAYERS HAVE A CLAWBACK PROVISION?

After this presentation, a new development occurred a few days later.  The CEO of JEA, Paul McElroy, resigned suddenly and immediately.  He will be working as a consultant while the JEA Board looks for a new CEO.  In the interim, the CFO of JEA, will be managing the utility.  Keep an eye on this development.  QUESTION: COULD THIS SUDDEN RESIGNATION HAVE ANYTHING TO DO WITH THIS DEAL?

Next up:

DIA will hold a public meeting Wednesday and this project will be on the agenda and plans are to vote on this deal.  See information if you want to attend:  Wednesday, March 21, 2018 beginning at 2:00 p.m.; in the City Hall at St. James Building, located at 117 W. Duval Street, Jacksonville Florida, 32202 on the 1st Floor Lynwood Roberts Room.  If you can attend, you will enjoy watching the process and you’ll have a say in the decision-making.

If the DIA approves this YUGE deal, it will go to the City Council for a vote.  There is a push to get this in front of City Council so the deal with JEA can close on July 18.

If that doesn’t happen, JEA will have to decide if it will once again — after 3 years — extend the contract.

To give you more insights:

  • Peter Rummell is the #2 donor to Mayor Lenny Curry. That may have nothing to do with this and we will leave that to you to decide.
  • The parcel of land could be of much higher value three years later due to the Economic upswing across the country and here locally.  If the deal doesn’t close, we the taxpayers, may have a better chance to get even more money for that property in a rebidding process.  JEA could get more and the city could as well.  Just something to consider.
  • Another Southbank complex will open this summer.  It is directly next to this proposed development.  The project, Broadstone River House, is being developed by Alliance Residential Co. and the entire project is estimated at $26.6 million.  No taxpayer dollars were given to this development.  It will have a public plaza and two public-access bridges to the Riverwalk.  We appreciate the developer spending their own money for this project.
  • Presently there are approximately 200 abandoned sites in downtown Jacksonville.  Those sites do not generate any tax revenues and create an eye-sore for the beautiful city of Jacksonville. We wonder why the monies for this development on the Southbank are not being used to fix this problem.
  • What IS the Master Plan Development for Jacksonville?  Do we “willy-nilly” hand out money or do we have a strong plan for development for our city?  What’s the Vision?  One City?  What does that mean?
  • How do we decide who to hand money to and who not to?  Is the system fair?  Do we hand out these kinds of deals to other developers in our city?

There are so many questions about this development.  The project ask has more than doubled.  The fast track to get it done seems unusual.  The deal was brokered with JEA three years ago.  Really, what’s the hold up?

It just doesn’t seem right or fair to give that much money to one company who will not have to pay it back and we will take all the risk.  The developer says he is taking all the risk.  We would love to understand how that can be.  We don’t see it.

This is our opinion.  It feels like a Stink to us until all these questions are answered.

Do you think the city should be in the development business?  Do you think the DIA should approve this taxpayer handout?  Do you think the City Council should entertain this in a fast track approach?  Do you think JEA should give another extension to Elements?

What do you think?  It’s your money after all.

For more information, check out this article in the Florida Times Union.  The District: It’s Showtime Again







Billie Tucker Volpe

Billie Tucker Volpe Founder of Eye on Jacksonville and Leadership Consultant to CEOs/Executives.


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