JACKSONVILLE, Fla. – The development company that was to turn the abandoned Berkman Plaza II condominium tower into a resort hotel wants to withdraw from its $112 million development contract.
500 East Bay LLC sent a letter to Mayor Lenny Curry's chief of staff, Brian Hughes, who is also interim director of the Downtown Investment Authority, saying several issues have forced the company to change its plans to develop the Northbank Riverwalk property.
Among the issues cited were the "unfortunate" loss of the historic USS Adams Museum that was to be located nearby, and contamination of land that the project planned to use for a parking garage and outdoor entertainment center that would include a Ferris wheel.
The developer said it still wants to build a “right size hotel” and residential space at the site, but the deal would have to be renegotiated.
DOCUMENT: 500 East Bay LLC letter to Brian Hughes
City Council members pointing fingers about the latest plan to develop Jacksonville's riverfront to fall apart. Some are blaming the Downtown Investment Authority for not vetting the project thoroughly.
Outgoing Councilman Matt Schellenberg said he received a cryptic text from Hughes after he criticized the failed deal. The text said, “I hope Matt get(s) everything he needs prior to June 30.”
The mayor’s office said Monday that text referenced getting him the information by June 30 -- when Schellenberg leaves office -- and in no way implied a threat to the councilman.
Work stopped on the Berkman Plaza II condominium project in 2007 after a garage under construction nearby collapsed, killing one person and injuring several others.
The Downtown Investment Authority has been pushing the Berkman deal. Hughes, its interim leader, released a statement Friday about 500 East Bay LLC's concerns.
For more than 11 years, no development team had brought forward a plan for the Berkman II property that works. Obviously, the analysis of DIA staff and the board was that this proposed development was worthy of support. First and foremost because the incentives in the project would come after development was completed and put no risk on taxpayers. At this point, the property owners will have the capacity to let the property sit idle for quite some time into the future if they choose. That’s disappointing, but we are encouraged that they have expressed confidence in the viability of a path forward though it will require modification. DIA stands ready to work with the property owners to find a plan that gets this eyesore off our riverfront."
On the phone Monday, Hughes told News4Jax that if they can't work out something with 500 East Bay LLC, the vacant tower could sit vacant another three to five years.
500 East Bay LLC's letter last week did not mention that a principal of the company is behind on paying $200,000 in property taxes on a troubled 2014 condominium project in New Orleans. The Florida Times-Union reported Tuesday that a member of the project development firm is late on paying thousands of dollars in property taxes on a condominium project in New Orleans.
The DIA hoped the Berkman development would help draw attention to downtown and spur more development. The deal called for 500 East Bay LLC to complete the project before receiving $36 billion in tax breaks.
The City Council still hadn't approved the tax incentive package. A committee was supposed to take that up at a meeting next week.
People living near the site tell New4Jax they are hot and cold on the development issue. Most say something has to be done, but question if the hotel land amusement park was the way to go.
Berkman resident Ian Latchmansingh said he would like to see something that would drive people to live downtown.
"I didn’t think it was a good use of space anyway," Latchmansingh said. “I’m kind of glad they abandoned the plan."