A third appraisal of a two-story office building the city of Jacksonville wants to acquire for the future University of Florida graduate campus puts the property’s value at $6.75 million as City Council decides whether to pay cash or swap land to get it.
Gateway Jax, which owns the property, had previously commissioned an appraisal that puts the value at $8 million compared to an appraisal commissioned by the Downtown Investment Authority that sets the value at $5.35 million.
The gap between the two appraisals triggered a third appraisal as City Council members will decide whether the city will pay cash for the property or obtain it through a land swap for other city-owned land on the downtown waterfront.
City Council member Ron Salem said with the third appraisal in hand, he plans to discuss the cash-purchase option during the meeting Tuesday morning of the Finance Committee.
City Council approved his legislation last Tuesday that that option on the table by authorizing up to $8 million for buying the office building.
“Hopefully we can get some movement here,” Salem said Monday.
Salem, who is chairman of the Finance Committee, said he’d like to end up with a sales price around $6 million “and call it a day. That’s my thinking but I want to hear from my colleagues as well.”
Gateway Jax paid $4 million in October for the property at 801 Bay St. where a 38,136 square foot building sits on 2.85 acres next to one of the city-owned parcels where the University of Florida will be constructing its planned graduate campus.
UF would covert that office building, which is vacant now but once was an office for Interline Brands, into the campus’s first building where it will start offering classes as early as the fall semester.
Mayor Donna Deegan has advocated a land swap that would give Gateway Jax ownership of a parcel in Riverfront Plaza that’s set aside for private development. Most of Riverfront Plaza is being built as a park on the former site of the Jacksonville Landing.
The land swap would not cost the city any cash to acquire the former Interline Brand building and give it to UF for the grad campus. The Downtown Investment Authority board supported that path saying Gateway Jax’s plan for a new building on that site checks off a lot of boxes for what the city is doing to develop that part of downtown.
“To me the land swap makes perfect sense,” Deegan said said last Thursday. “It allows us in a tight budget year to not spend $8 million that we don’t need to spend.”
She said the values of the property proposed for the swap is “pretty even” and the city can proceed with a development that fits what Perkins&Will envisioned when it submitted the winning design in 2021 for building Riverfront Plaza.
“It’s the best of all worlds in my mind,” she said. “At the end of the day, though, the most important thing is this University of Florida agreement move forward. Whatever way we end up doing that, I will obviously accept. That’s the priority here. So I think the land swap makes sense. Whatever council decides is what we’ll go with.”
Gatway Jax proposes to build a 17-floor tower that would have a mix of hotel rooms built to “four star or luxury boutique” standards plus residences, a 5,000 square foot sky garden terrace open to the public that would have views of the St. Johns River and restaurants alongside the terrace.
City Council members have said Gateway Jax would seek millions of dollars in taxpayer incentives for building a tower so that is a city cost that needs to be factored into the decision on whether to buy the Bay Street office building or do a land swap. Gateway Jax has said it could build its proposed tower with no more than $20 million from the city in the form of a completion grant for the project.
Salem said if the city is going to do a development deal for that parcel in Riverfront Plaza, it should be completely separate from getting the building for the UF grad campus.
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He said he was skeptical from the get-go based on how the proposal for the land swap was rolled out and the timing of the purchase by Gateway Jax in October.
He said he’s fielded numerous phone calls from developers, real estate professionals, and some former Downtown Investment Authority board members who have “reinforced to me” that a cash purchase of the office building for the UF campus is the right way to do it.
“So I’m very much in favor of the purchase,” he said.
This article originally appeared on Florida Times-Union: Follow the bouncing appraisal: Latest valuation is $6.75 million for UF campus building
Reporting by David Bauerlein, Jacksonville Florida Times-Union / Florida Times-Union
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