Jacksonville's DIA Just Advanced Another $74 Million for Gateway Jax. Its Own Board Is Talking About Risk.

John Hawley

Sep 16, 2026

The Development Divide: Part IX

Jacksonville's Downtown incentive debate moved another step forward September 16. In a single meeting, the Downtown Investment Authority board recommended nearly $59.4 million in public incentives for Gateway Jax's proposed Riverfront Plaza Hotel & Residences and separately recommended a $15 million low-interest public loan for Gateway's Hotel Merrydelle.

That's roughly $74 million in public assistance advanced toward City Council in one afternoon. But those dollars aren't all the same, and neither package has received final City Council approval.

Riverfront Plaza's package includes nearly $39.4 million in a 20-year Recapture Enhanced Value Grant, or REV grant, plus a $20 million completion grant. The REV would return 75% of the incremental county property-tax revenue generated by the improved property over 20 years.

Hotel Merrydelle's $15 million is different. It is a repayable development loan at 1% interest, structured as interest-only during its 20-year term, with the outstanding principal and accrued unpaid interest due at maturity.

That distinction matters, particularly as Jacksonville debates how much public assistance Downtown development still requires. It's also why The Development Divide has followed the same rule throughout this investigation:

Count everything. Categorize everything. Conflate nothing.

Jacksonville's DIA Board Wasn't Just Talking About Incentives. It Was Talking About Risk.

The September 16 meeting was significant for more than the dollar amounts. DIA board members openly questioned some of the financial assumptions supporting Gateway's Riverfront Plaza proposal before ultimately voting 8-0 to recommend the incentive package to City Council.

The proposed $271.5 million project would place a 20-story hotel and residential tower on a development pad at Riverfront Plaza, the former Jacksonville Landing site. One assumption attracted particular attention: Gateway projects that the development's 51 condominiums could sell for $1,400 per square foot.

DIA board member Scott Wohlers described that projection as “very optimistic.” Board member Carrie Bailey provided another comparison, pointing to the nearby Four Seasons Hotel & Residences project, where seven of 26 residences had been presold as that project approached completion.

Gateway Jax CEO Bryan Moll defended the Riverfront assumptions. He pointed to his experience with Tampa's Water Street development, where he said condominium sales significantly exceeded the top of that market.

Wohlers then crystallized the decision facing the DIA board: “We can always find a reason why it won't work, but we have to decide as a board if we want to take this risk together.” The board decided it did.

That word—risk—deserves attention.

DIA Projects a $2.94 Return for Every $1 of Public Funding

DIA staff calculates that Riverfront Plaza would generate a $2.94 return for every $1 of public funding. That sounds compelling, but it is important to understand what that number represents.

It is a projected return, not a realized return.

Financial models necessarily make assumptions about future property values, sales, hotel performance, tax generation and other variables. Some assumptions ultimately prove conservative, some prove remarkably accurate, and others do not.

The DIA board discussion illustrated that uncertainty in real time. One of the assumptions supporting the proposed development involves condominium values that one board member considered very optimistic, while Gateway's developer believes those values are achievable.

There are also protections built into the proposed agreement. More than half of the project's condominium units would have to be presold within 21 months after final approval of the redevelopment agreement.

Those provisions help manage risk. They don't eliminate it.

What Does a Projected Jacksonville Downtown ROI Actually Tell Taxpayers?

This is where the September 16 decision intersects with a larger question The Development Divide has been examining. Jacksonville has increasingly sophisticated financial analysis on the front end of Downtown development agreements.

DIA calculates projected revenues, evaluates development costs, analyzes financing gaps and estimates public returns. That's exactly the sort of analysis taxpayers should expect before public resources are committed.

But a projection answers only one question:

What does Jacksonville expect to happen?

The equally important question comes years later:

What actually happened?

If DIA approves an investment based on a projected return of $2.94 for every public dollar, what was the actual return five or ten years later? Did the project produce $3.50, $2.94, $1.50—or less?

The existence of uncertainty doesn't mean Riverfront Plaza is a bad investment. Nor does it establish that previous Downtown incentives failed.

It means taxpayers need both halves of the equation.

A projected return can justify an investment. Only an actual return can validate it.

Hotel Merrydelle Shows Jacksonville's Incentive Strategy Can Change

The second Gateway Jax vote September 16 illustrates something else: Jacksonville's incentive structure isn't fixed. Earlier this year, DIA approved a $10.1 million incentive package for Hotel Merrydelle, Gateway's planned redevelopment of the former Ambassador Hotel.

That structure included $8.08 million in forgivable loans and a $2.02 million deferred-principal loan. City Council asked DIA to renegotiate.

DIA CEO Colin Tarbert told the board that Council expressed a preference for repayable loans instead of forgivable, grant-like assistance. DIA returned with a substantially different proposal.

Gateway could now receive $15 million instead of $10.1 million, but the entire amount would be structured as a loan carrying 1% interest. The financing would be interest-only for 20 years, with the principal and accrued unpaid interest due when the loan reaches maturity.

Gateway therefore gains access to more public capital and unusually inexpensive long-term financing. Jacksonville, meanwhile, retains a contractual claim to repayment.

Those economics are fundamentally different from an $8.08 million forgivable loan. They're also fundamentally different from a $15 million grant.

That's precisely why every public incentive shouldn't simply be added together and described as though Jacksonville wrote developers one giant check.

The Riverfront Plaza Completion Grant Didn't Disappear. Its Funding Source Changed.

Riverfront Plaza raises another important distinction. In February, Tarbert told a City Council committee that DIA's goal was to eliminate the completion-grant program as soon as possible, while acknowledging that financial gaps still existed in the Downtown market.

At the time, DIA estimated that 10 known Downtown projects could generate between $145.62 million and $224.72 million in completion-grant requests over three to five years. Tarbert also emphasized that DIA didn't expect every project to receive one.

Traditional completion grants have created concern because of their potential impact on City finances. REV grants work differently because they return a portion of future incremental taxes generated by the improved property rather than functioning like the same kind of direct cash payment.

Riverfront Plaza now presents another variation. Its proposed $20 million completion grant would come from the Downtown Northbank Redevelopment Trust Fund, which receives a portion of tax revenue generated within the Downtown redevelopment area.

The City Council has yet to approve the Riverfront Plaza package. Yet the proposal demonstrates that the completion-grant mechanism remains very much alive even as Jacksonville reexamines how those grants should be funded.

That raises a policy question Jacksonville will increasingly need to answer:

Is Jacksonville reducing its reliance on completion grants—or finding different revenue streams from which to fund them?

Scott Wohlers Has Raised the Gateway Jax Concentration Question Before

The September discussion also wasn't the first time Wohlers raised questions about the City's exposure to Gateway Jax. When DIA considered the earlier Hotel Merrydelle package in May, he questioned the amount of public assistance becoming concentrated with a single development organization.

His concern involved diversification: what happens when substantial public commitments accumulate with one development group and something doesn't go according to plan? That didn't make Wohlers an opponent of Gateway's projects.

His September position demonstrates something more nuanced. He questioned a major assumption behind Riverfront Plaza, acknowledged the risk and then voted to advance the project.

That matters because the DIA board isn't being asked merely to determine whether Gateway Jax can build attractive projects. It is being asked to determine whether the public participation necessary to make those projects happen represents an acceptable risk and return for Jacksonville.

The September 16 discussion put that decision unusually clearly into public view.

Gateway Jax Is Becoming a Bigger Part of Jacksonville's Downtown Investment Strategy

These two projects also can't be viewed entirely in isolation. Gateway Jax is developing Pearl Square, the more than $750 million mixed-use district planned across multiple blocks of Downtown's NorthCore.

Jacksonville previously approved significant public assistance for Gateway's first Pearl Square phase. Another major Gateway proposal—the Publix-anchored Block N7—has involved an incentive package approaching $50 million, although its structure has been under reconsideration by City officials.

Riverfront Plaza now adds another proposed public-private partnership on one of Downtown Jacksonville's most prominent pieces of publicly controlled riverfront land. Hotel Merrydelle adds public financing for redevelopment of a long-vacant historic property.

Each project has its own agreement, financial structure and risk profile. Each should therefore be evaluated on its own terms.

Taken together, however, they create a broader question about concentration.

The question isn't whether Gateway Jax should receive assistance simply because it has received assistance before. Nor should a developer automatically be excluded because it has become a major Downtown participant.

The relevant question is whether Jacksonville is measuring its aggregate exposure alongside the projected return of each individual project.

That's the diversification issue Wohlers previously raised.

Seven Months After DIA's $225 Million Forecast, the Debate Is Becoming Real

In February, Tarbert presented City Council with a significant projection. DIA knew of 10 Downtown projects that could collectively seek as much as $224.72 million in completion grants over the following three to five years.

Tarbert emphasized that DIA didn't expect every project to receive a grant. He also said DIA wanted to eliminate completion grants as Downtown's private market strengthened.

Seven months later, Jacksonville isn't looking at exactly the same incentive pipeline Tarbert described. Some deals are changing, some are being restructured as loans, some involve REV grants, and others involve redevelopment trust funds.

And proposed completion grants remain very much alive.

That doesn't make Tarbert's February forecast wrong. It makes an updated forecast increasingly valuable.

Jacksonville should be able to see not only how much public assistance could be requested, but what form that assistance is taking and how much long-term public exposure has already accumulated.

The Development Divide Is About More Than How Much Jacksonville Spends Downtown

The easiest way to tell this story would be to add every incentive together and announce an enormous number. It would also obscure some of the most important facts.

A 20-year REV grant isn't economically equivalent to a $20 million cash completion grant. A $15 million loan that must be repaid isn't equivalent to a $15 million grant.

Public land has different economics again. So does infrastructure, and an authorization to negotiate isn't the same thing as an executed development agreement.

That's why the accounting has to remain disciplined:

Count everything. Categorize everything. Conflate nothing.

The larger question isn't simply whether Jacksonville is spending money Downtown. It's whether the City's evolving collection of grants, rebates, loans, land and infrastructure is accomplishing its stated purpose: creating a Downtown private market that eventually requires less extraordinary public support.

If Jacksonville's Downtown Strategy Is Working, When Should the Training Wheels Come Off?

Jacksonville doesn't have to assume Riverfront Plaza will fail to ask whether the incentive strategy is working. The opposite should be true.

If hundreds of millions in public commitments are successfully helping produce billions in private investment, completed buildings, residents, businesses and taxable value, that success should eventually change the economics of the next project.

Private lenders should perceive less risk. Developers should see greater demand, while land values and market activity should increasingly reflect a functioning Downtown.

And extraordinary public assistance should become less necessary.

That is essentially the destination Tarbert described when he told Council that DIA wanted to eliminate completion grants as soon as the market allowed it.

Yet on September 16, DIA determined that Jacksonville should accept additional public exposure to help two more Gateway Jax projects move forward. The board may ultimately prove correct.

Riverfront Plaza may exceed its financial projections. Hotel Merrydelle may repay every dollar, and Gateway's growing portfolio may help create exactly the Downtown ecosystem Jacksonville has been trying to establish for decades.

But those outcomes shouldn't merely be assumed. They should eventually be measured.

DIA's board decided September 16 that these latest risks were worth advancing to City Council. Now Jacksonville needs an equally visible way to determine whether the risks it took five, ten and twenty years ago actually paid off. Because before taxpayers finance the next projected return, they deserve to know what happened to the last one. A projected return can justify an investment. Only an actual return can validate it.