One of the most expensive public-private partnerships in downtown Jacksonville hasn’t restored historic buildings or turned vacant land into apartment towers.
Our Florida Times-Union news partner reports that the hefty cost to taxpayers, running in the tens of millions of dollars, is for three privately owned parking garages.
The city of Jacksonville has doled out $47 million in loans to assist the owner of the garages near the county courthouse and the arena. Theoretically, the owner will repay the loans when the parking garages turn a profit, but the garages continue to lose money, so a deal approved in 2004 will require the city to keep shelling out millions of dollars a year.
It wasn’t supposed to be that way. When City Council approved the deal for private construction of a parking garage for the new Duval County Courthouse plus two garages by the new Jacksonville Veterans Memorial Arena, financial projections showed the city would only need to provide roughly $19 million until the private owner reached the break-even point for the garages.
Instead, the current $47 million figure is on track to keep escalating. There is no maximum amount in the agreement for the city’s obligation, leaving open-ended what the city’s costs will end up being.
The proposed 2018-19 city budget contains $4.2 million to cover the taxpayer obligations for the garages next year. The city is on the hook for additional annual payments until the agreement ends in 2030, so unless something changes, the city could see its costs increase by tens of millions of dollars based on the financial trends so far.
City Council Finance Committee Chairman Greg Anderson, who will lead the review of the proposed 2018-19 budget, said it’s “time to take a hard look” at how the agreement has panned out and what the outlook is for coming years.
“You would think that we would be getting closer to break-even,” he said of the garages.
The biggest reason for the city’s mounting costs is that actual revenue from people paying to use the garages is half of the financial projections made in 2004. The city must make up those shortfalls by giving loans to Metropolitan Parking Solutions, the owner of the garages.
“I’m disappointed the city has had to put in that kind of money,” said Lad Daniels, who served on City Council when it approved the agreement with Metropolitan Parking Solutions.
Daniels later joined council member Warren Alvarez in trying to repeal the deal so the city could redo the terms, but that legislation never came up for a vote.
“We felt like the terms of the deal were just a little too rich for the developer versus the city,” Daniels said.
He said it appears the parking garages were ahead of their time.
“We may have gotten the cart before the horse,” he said. “It was sort of build it and they will come — build the parking garages and all the other stuff would happen — as opposed to let the other stuff happen and then let’s figure out a way to solve the parking problem.”
The ongoing cost for the parking garages directly impacts the finances of the Downtown Investment Authority, the agency in charge of improving downtown.
The Downtown Investment Authority wasn’t in existence when the council approved the parking deal during John Peyton’s tenure as mayor. But the authority inherited the financial burden because the money comes from a community redevelopment area that is controlled by the authority.
That community redevelopment area will have about $11 million in the 2018-19 fiscal year to invest in the Northbank of downtown, but $4.2 million of that would go to fulfill the obligation for the parking garages.
