Bill Type and Number:
Ordinance 2005-390Sponsor: Council President at the request of the JEDC
Date of Introduction: March 22, 2005
Committee(s) of Reference: F, RDC
Date of Analysis: March 25, 2005
Type of Action: Approval of economic redevelopment agreement
Bill Summary: The bill approves an economic redevelopment agreement between the City and LandMar Group, LLC for development of the Jacksonville Shipyards property on East Bay Street, as successor to the Tri-Legacy Group. LandMar proposes to build 7.56 acres of public improvements, to include an extension of the Northbank Riverwalk to the Kids Kampus and several pocket parks, at a cost of approximately $38 million, of which the City will contribute $3.5 million in cash (from remaining bond proceeds) and LandMar the remaining $34.5 million (plus any costs overruns). The City will reimburse LandMar for up to $12 million of the cost of the public improvements from new incremental property taxes generated by private development on the Shipyards property. LandMar will immediately assume responsibility for debt service payments on the approximately $47 million in bonds issued by the City for the Shipyards project on behalf of Tri-Legacy, to be reimbursed from the proceeds of the tax increment generated on the new development. After reimbursement of the outstanding debt service obligations and $12 million in public improvement costs from the tax increment, LandMar will be entitled to a REV grant of 75% of remaining tax increment revenues for the first 14 years of the project, and 50% thereafter up to a net present value cap of $35 million.
Background Information: The redevelopment agreement contains several forms of security for the City, including a requirement that LandMar post an irrevocable letter of credit to guarantee payment of the outstanding debt service on the bonds, a requirement that LandMar maintain a net worth of at least $20 million throughout the term of the agreement, and a requirement that LandMar’s parent company – Crescent Resources, Inc. (a subsidiary of Duke Power) maintain a net worth of at least $500 million until the public improvements portion of the project has been completed. In addition, the city will retain a first mortgage on the Shipyard Property (until the third consecutive year of project stabilization) to further secure LandMar’s obligations.
Policy Impact Area: Downtown redevelopment
Fiscal Impact: The City agrees to pay LandMar $3.5 million in remaining bond principal for construction of certain public improvements, to reimburse $12 million in bond debt service and public improvement construction expenses out of tax increment revenues from the project, and to make an additional REV grant up to a net present value of $35 million from tax increment revenues. LandMar agrees to make all debt service payments on the original Shipyards project bonds (approximately $88 million over 27 years), to make $22.5 million in public improvements at its own expense, and to be responsible for any public improvement expenses exceeding a total of $38 million.
Analyst: Clements