JACKSONVILLE, Fla. — A contentious four-hour meeting of the Jacksonville City Council to discuss the proposed Lot J project ended with the bill being deferred, but the pressure is still on to approve the deal before the end of the year.
Council President Tommy Hazouri, after a meeting split between discussion of the substance of the deal and procedural nuances, deferred the Lot J legislation, calling for a "cooling-off" period as the council considers recommendations made by both the Downtown Investment Authority (DIA) and Council Auditor Kim Taylor.
"We deserve to get answers. Our council auditor deserves to have her concerns answered, same way with the DIA," Hazouri told reporters after the meeting.
On Wednesday, the DIA board voted to recommend approval of Lot J with a number of conditions, most agreed to by the development team but some not.
Ahead of Thursday's meeting of the entire council, Taylor's office released their report, again with recommendations and areas of disagreement laid out.
In the report, the council auditor notes the enormity of the project and several concerns Taylor and her team have with the city's position.
"The City is providing one of, if not the largest, investments in a public/private development with total funding of $233.3 million," the report states. "The Jaguars have not revised their position on the extension of the lease, which expires in 10 years, which could impact the sustainability and viability of the Project."
The report notes that, while the amount the legislation would bond is $208 million, including annual debt service and interest, the city could be on the hook for up to $390.8 million when all is said and done.
"The City has still not conducted an independent market feasibility study specifically related to the Jacksonville downtown market to determine whether this project is sustainable and whether the market can support this project," the report goes on to say.
Another area of criticism in the council auditor's report is the "Live!" venue, which the city will put $50 million toward, along with a full tax abatement. The city would own the venue, and the developer would operate it at cost.
But in return, the city will not receive revenues from the venue outside of 50 percent of net ticket revenues from Florida-Georgia, and would not have access on blackout dates, like the day of Florida-Georgia.
The report from Taylor's office also criticizes the parking agreement, which is vital considering the majority of the city's revenue could come from parking fees.
"If the Developer failed to remit parking revenue owed to the City, it does not appear that the City would have the right to terminate the agreement," the report notes, stating that the city would not have a right to terminate due to a breach.
Also, the report questions why the city would cover maintenance and capital costs for both residential building parking garages and the surface parking lot, but would only receive daily transient parking revenue for the surface lot and 200 spaces in the garages."
"Financially it is still questionable why the City would agree to retain ownership of the Residential Garages, thereby foregoing ad valorem revenue, and also potentially incur a net cost in parking operations each year," the report reads.
Ultimately, Hazouri said his decision to defer the bill came down to a lack of answers to questions from the council auditor. During the meeting, several councilmembers said they needed more time to understand the changes to the bill and did not feel comfortable defending it to their constituents as it stands.
"They're asking for the impossible at the expense of giving it serious and judicious study. I blame the administration. There's no one else," Hazouri said. "I don't blame Mr. Khan, I don't blame any developer. Whether billionaires or millionaires, they're going to get the best deal they can. And they got it."
With the bill deferred, it could be until council returns from holiday break in January before a final vote is taken.
But the development team is looking for a vote at council's final meeting next Tuesday, and Mayor Lenny Curry has put on pressure for a vote as well.
"We need a vote. Stop stalling," Curry tweeted earlier in the week. "Council should go on the record this year. If this gets pushed to next year, the message will be loud and clear."
Chief of Staff Jordan Elsbury also echoed the call for a vote to take place soon.
"When we get to a policy position, council should take a vote," he said. "And I think many of them have their policy position in mind. If some are seeking to delay it without actual questions, that's unfortunate."
When asked by Hazouri whether the development team would be fine with council taking more time, Jags attorney Paul Harden said they would go back to the table with Taylor's office to find more common ground on roughly a dozen outstanding disagreements, but that they still want a vote next week.
"If it's going to take seven to nine years to build this project, what's another two to three weeks?" Hazouri said.
Harden said Khan hoped to have the project approved before the end of the year to avoid "deal fatigue" and potential changes to the tax code under a new presidential administration, which will not even be inaugurated until Jan. 20.
After the meeting, Hazouri told reporters he would be open to putting the bill on Tuesday's agenda if a number of disagreements on provisions are solved. If he declines, a two-thirds majority of councilmembers could override him to put the legislation on the agenda anyways.
The same majority would be required to approve the deal.
"We've always known that it would require a majority vote of the city council, we hope it certainly gets to that at some point but that's outside our control," Jags President Mark Lamping said.