The Jacksonville city council is meeting this Thursday to discuss Jacksonville Jaguars owner Shad Khan’s request for a couple-hundred-million-dollars-ish (more on that in a second) in subsidies and tax breaks for a ginormous development project in his football stadium’s Lot J, including a Live! entertainment district, office and residential buildings, a hotel, and new garages. When Khan proposed the deal last month, the subsidy figures were still kind of squishy; now the Florida Times-Union has crunched them and come up with this list:
- $50 million in city cash toward building the entertainment district
- $77.7 million in city “infrastructure improvements” (mostly the new parking structures)
- a $15.1 million city contingency fund for cost overruns on the infrastructure
- $12.5 million in cash after the hotel is completed
- a $65.5 million no-interest loan to Khan’s development team
- a complete tax exemption on the Live! district, which would be owned by the city and leased to Khans group for a nominal fee of $100 a year
This is hard to come up with a total for, since there are a lot of apples on that list and then two extremely large oranges, or maybe an orange and a quince. The first four items are pretty straightforward: $155.3 million in city cash.
The last two are trickier. The value of the no-interest loan depends on when Khan would have to pay it back and what interest rates on normal loans are right now (pretty darn low, but still nowhere near zero); if I’m calculating right, for a 30-year interest-free loan at a 3% discount rate, this would be worth about $40 million.
As for the Live! area’s property tax break, it would be 75,000 square feet, which is about 1.7 acres. The property tax rate in Jacksonville is about $11 a year per $1,000 in value; Texas Live!, the similar entertainment space next door to the Texas Rangers‘ stadium, cost about $200 million to build, which if we take that as the value for Jacksonville would be $2.2 million a year in savings, or about $30-40 million in present value. But that’s a lot of assumptions, so it could be less.
Regardless, it seems pretty clear that this is north of $200 million worth of city money that Khan is asking for. And what would the city get in return? Jacksonville’s Office of Economic Development estimated the city would get $1.69 back for each $1 it spent, which sounds good; City Council Auditor Kim Taylor estimated a return of 44 cents in revenue for each $1 spent, which sounds awful. The difference: The OED didn’t count either the $50 million in city cash payments or $92.8 million in garage costs (because reasons), and did count as a benefit the $50 million in private money that Khan’s group would be spending on the Live! project (which Taylor excluded as double-counting, since she already included the tax revenue that Live! would generate — and the city owning $50 million in private development but not getting any direct revenue from it isn’t really a net benefit).
Clearly somebody needs to sit down with a spreadsheet and figure out whose numbers are correct, and Councilmember Matt Carlucci is hoping to make that somebody the Downtown Investment Authority, which normally vets projects like this but would be excluded in the legislation being discussed. (“They were waived out and I’m trying to waive them back in,” Carlucci told the Times-Union.) Absent that, I would go with the above numbers to say that Jacksonville would be spending more than $200 million on a private development project by a billionaire NFL owner and getting back less than half that in new taxes — and that’s only if you assume that all Jacksonville Live! spending would be new, and not include some locals who otherwise would spend money elsewhere in the city.
We’ll have to check back in on Thursday to see how this goes. In the meantime, let’s enjoy some vaportecture of Jacksonville Live!:
There’s nothing too hilarious here, though I do appreciate how many people are just standing around impatiently or staring at their phones, which is indeed my experience of entertainment malls. Also, Tavern & Beer Hall features some unfortunate typography/lettering placement that makes it appear to be a Tavern & Beer Fiatt. And it’s sponsored by Professional Bull Riders for some reason? I guess it makes sense: When you think giant construction projects in football stadium parking lots funded with hundreds of millions of dollars in tax money because the city says it will pay off by resorting to dubious bookkeeping, you think professional bull.