News Article | 6/2/2010

Hillwood, Landing clear Finance Committee


Two of the most controversial deals between the City and private developers in recent memory were approved by the City Council Finance Committee Monday.


An agreement to provide Landing owner Toney Sleiman with a $3.5 million grant to purchase a surface parking lot and an agreement to allow Hillwood to operate as the master developer of Cecil Commerce Center were both unanimously approved.


The deal with Dallas-based Hillwood will allow the company to purchase lots at Cecil from the City. In turn, Hillwood will provide the infrastructure and secure developers for the lots depending on size, location, intended purpose and several other factors.


The deal still needs the approval of the Recreation and Community Development Committee as well as the full Council. The RCD approval could come today and the full Council could approve the deal Tuesday.


“I think what you saw today was a very extensive public vetting of the deal,” said Jacksonville Economic Development Commission Executive Director Ron Barton, adding once the request for proposal went out and Hillwood was selected, it took nearly a year to negotiate the specifics of the contract.


“Frankly, everything about this deal with Hillwood is transparent. That’s what I like about it,” said Barton.


Not everyone approves of the deal, however. Jack Allen, a principal of Allen Land Group Inc., provided the Finance Committee with a private appraisal of the property. According to Allen, the raw property is worth $90,000 an acre on average. He said the property ranges in value from $60,000 an acre to $125,000 an acre.


“As we all know, an item of contention is the absence of an appraisal,” he said.


According to the deal, Hillwood will pay significantly less than that per acre. However, Hillwood will also agree to cover the costs necessary to improve and market the property, which could cost up to $75,000 an acre. That fact isn’t lost on Council member Daniel Davis.


“I know there is some discrepancy,” said Davis. “I just cannot see these parcels at $165,000.”


Davis also read excerpts from an e-mail he received from former St. Joe CEO Peter Rummell. According to Rummell, the value of the land is nothing if no one is interested in it. Rummell said only the City and Hillwood can provide the infrastructure necessary to make the land attractive to developers. However, the City doesn’t have the money or the bonding capacity, said Rummell, who added the options are to let it sit for another 10 years or allow Hillwood to market and develop the property.


“It’s time to flip the switch and move forward with this project,” said Council Vice President Jack Webb.


Finance member Ray Holt agreed.


“I feel very comfortable Hillwood is going to get development going and bring business to Jacksonville,” said Holt, a co-sponsor of the bill. “We are in an economy now where we have got to do whatever we need to do to bring jobs and this is going to do that.”


Barton said once the legislation clears the full Council, he hopes to execute the final agreement within 30 to 45 days.


“As far as I am concerned, the clock will start ticking,” he said.


Regarding the Landing, the Council Auditor’s Office offered a 14-point amendment to the legislation. Landing attorney Mitch Legler agreed to a majority of it. According to Legler, he agrees with the substance of the auditor’s recommendations and only disagrees with minor verbiage.


The only real issue seemed to be the potential sale of the land on which Sleiman intends to build a surface lot. If Sleiman decides to construct a vertical parking structure, he must find temporary parking for up to 36 months. If he sells the land, the City gets repaid with interest that will be the prime rate plus 1 percent.