Jacksonville’s downtown redevelopment is at a pivotal crossroads with the proposed acquisition of the Interline Brands Inc. building at 801 W. Bay St. for the University of Florida’s (UF) graduate campus. While Mayor Donna Deegan and the Downtown Investment Authority (DIA) advocate for a land swap deal with Gateway Jax, concerns regarding transparency, financial prudence, and developer incentives have prompted an alternative proposal from Council member Ron Salem.

Salem’s ordinance, which has gained committee support, would cap the city’s expenditure on the building at $8 million. The direct purchase plan, supported by Salem and Council member Joe Carlucci, aims to prevent an overpayment situation, especially considering Gateway Jax purchased the building in October 2024 for just $4 million. In contrast, Mayor Deegan and DIA CEO Lori Boyer support swapping prime city-owned riverfront property, valued at approximately $5.5 million, with Gateway Jax for the Interline site. This raises critical financial questions, as the swap would require additional city-funded incentives estimated at $20 million.

Financial Prudence and Accountability

Ron Salem’s approach to securing the Interline building through a direct purchase rather than a land swap is a fiscally responsible alternative. The insistence on appraising the property before making any commitment is a crucial safeguard for taxpayer dollars. The DIA initially valued the property at $5.35 million, while an appraisal from CBRE estimated it at $5.5 million. However, Gateway Jax contends that, with its additional land parcel, the property is worth closer to $9 million. This discrepancy underscores the need for an independent valuation to ensure fair market pricing.

Moreover, Council member Carlucci has rightly pointed out that describing the land swap as a “net-zero sum deal” is misleading. If the swap were to proceed, the city would end up financing a privately developed project at Riverfront Plaza with completion grants totaling $20 million. Carlucci’s scrutiny of this financial arrangement is commendable, as Jacksonville must be cautious in allocating its already stretched budget with potentially several billion more in expenditures coming for a new jail and convention center.

Concerns Over Developer Overleveraging

Gateway Jax’s financial position raises red flags that should not be ignored. The firm, which has launched a $2 billion-plus downtown development initiative, has acquired several high-value properties, including the Ambassador Hotel and Coastal National Bank, with financing from DLP Capital at far above the actual property value. Combined with the Interline acquisition, these purchases suggest the developer may be highly leveraged. If true, the city's financial support via incentives for this project could exacerbate risk exposure rather than stimulate sustainable downtown growth.

Transparency in Public Dealings

Questions linger regarding the timing of the Interline purchase. Gateway Jax acquired the building just two months before the city publicly announced LaVilla as UF’s preferred campus location. The possibility of pre-coordinated discussions between Gateway Jax, the mayor’s office, and the DIA is worth addressing as public skepticism is justified until these negotiations are fully disclosed.

Transparency remains a key issue in this evolving deal. The city’s reluctance to release public records regarding negotiations between the mayor’s office, DIA, and Gateway Jax only fuels speculation. Why was the land swap not publicly proposed until February 2025, despite UF’s campus location decision being announced in December 2024? What communications occurred between city officials and developers before Gateway Jax purchased the Interline building?

A Balanced Approach Moving Forward

Salem’s direct purchase proposal ensures the city does not overpay for the Interline building while keeping taxpayer interests at the forefront. His approach streamlines the acquisition process without the need for a complex land swap that could unfairly benefit private developers. Meanwhile, Carlucci’s insistence on paying only the appraised value ensures fiscal discipline.

As Jacksonville navigates this redevelopment opportunity, the city must prioritize transparency, fiscal responsibility, and fair market valuation. The proposed land swap presents too many financial and ethical concerns. A direct purchase, negotiated at a fair and verified price, is the best way to ensure Jacksonville’s growth benefits all its residents—not just select interests.