As the Gateway Jax Pearl Square project progresses with its initial phase of vertical construction, attention is turning to the neighboring blighted buildings currently facing foreclosure. These neglected structures include the fenced-off Ambassador Hotel at 420 N. Julia St., the dilapidated Central National Bank at 403 N. Julia St., and the Independent Life building at 233 W. Duval. All three properties, characterized by missing windows and debris cluttering their surroundings, are owned by PEP10 LLC and Axis Hotels LLC, along with Axis 404 Julia LLC.

Timeline of Purchases:

-On 7/12/18, 404 N Julia Street LLC Etal sold the Central National Bank and Ambassador Hotel together to Axis Hotels LLC for $5,400,000.

-On 9/30/19 the Independent Life building was purchased by PEP10 LLC for $3,700,000.

-On 12/17/19, Axis Hotels LLC sold the Central National Bank parcel to Axis 404 Julia LLC for $100.00 while Axis Hotels LLC maintained ownership of the Ambassador Hotel.

PEP10 LLC was formed in 2019 as a joint venture between DLP Real Estate Capital and Axis Income, a subsidiary of Augustine Development Group. DLP Real Estate Capital also sponsors the Gateway Jax projects.

To sort the LLC ownership out, 'PEP10 LLC', is listed as a 'DLP AXIS' joint venture, and they along with'Good As New Ventures, LLC' use the DLP Capital address at 405 Golfway West Drive. 'Axis Hotels LLC' and Axis Income use the Augustine Development Group address at 1029 A1A Beach Blvd, St. Augustine. So, simply put in 2018, Augustine Development Group bought the Ambassador and Central National Banks through LLCs. Then, the following year, a joint venture LLC was formed with their partner DLP Capital and together, they purchased the Independent Life building.

Foreclosure Details

The situation has become complicated as DLP Real Estate Capital, a principal in PEP10 LLC (that purchased the Independent Life building), has reportedly foreclosed on their partner the Augustine Development Group. In 2023, a Pennsylvania court issued a default judgment against Augustine Development Group, in favor of DLP Real Estate Capital as the property had been used as security in the litigation. This legal situation is further complicated by millions of dollars in additional lawsuits brought by vendors that weren't paid.

Then, in June 2024, DLP Capital, operating through Good As New Ventures LLC, filed a lawsuit against Axis Hotels LLC in the Duval County Circuit Court, according to the Jacksonville Business Journal. The lawsuit highlights that Axis Hotels has failed to pay a judgment amounting to $10.58 million and accruing per diem interest of $6,000. Additionally, it names 16 contractors and related entities with interest in the property. So DLP Capital a partner in the ownership of the Independent Life building through PEP10 LLC, is suing their partner while the property sits idle and in disrepair.

City Involvement and Future Prospects

Compounding this complicated scenario, the City of Jacksonville attorneys are involved due to $14 million in construction incentives for converting these buildings into apartments, which was approved by the Downtown Investment Authority and City Council. As a result, the city faces millions in financial liability tied to these projects, despite unmet construction timelines, since the Downtown Investment Authority contract did not have provisions to automatically revoke those financial commitments.

It will be interesting to see how the financial responsibilities are managed among the various LLCs. Questions linger about whether contractors will receive their due payments and whether these three properties, currently a blight overshadowing the future success of Pearl Square, could potentially end up changing hands to Gateway Jax as a result of DLP Capital's legal maneuvers and ownership stake, thus adding to Gateway's ownership of 20 blocks on 22 acres of Downtown Jacksonville. Not only are they building on old First Baptist property, but they are increasingly replacing them by reputation as one of the largest landowners downtown.